UK jobs boost could prove fleeting

ANALYSIS | 07/20/2016 11:11:14 GMT

ECB uncertainty drives market indecision
UK jobs boost could be fleeting

This week has seen markets trading largely flat, as the conviction seen last week appears to have waned given the questions arising from the BoE rate freeze. This week's ECB meeting was expected to mark the second round of easing this month, with the BoE also widely presumed to act. However, the BoE inaction is now raising similar questions for the ECB, which is fuelling a degree of hesitancy which is only likely to abate upon finding out the result of Thursday's ECB meeting.

UK jobs data outperformed across the board today, in a clear heads up to the fact that many businesses were not sufficiently worried about the potential for a Brexit to shed jobs or stop hiring. A fall in unemployment and claimant count, coupled with a rise in average earnings means that in the absence of the June referendum result, the BoE would have been happily shifting towards a rate hike given yesterday's jump in inflation. Instead we find ourselves in a position where the economic data appears to be picking up just as the BoE looks set to pull the trigger, with today's jobs market strength expected to be fleeting.

Ahead of the open we expect the Dow Jones to start 62 points higher, at 18,621.

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