UK Jobs report overview
The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to October, are expected to remain unchanged at 3.0%, while ex-bonuses also, the wages are also seen steadying at 3.2% in the reported period.
The number of people seeking jobless benefits increased 20.2k in the three months to October. The ILO unemployment rate is expected to hold steady at 4.1% during the period.
How could they affect GBP/USD?
A drop in the UK’s wages could trigger fresh selling in the pound while markets await the meeting between the UK PM May and the European leaders later on Tuesday. The rates could test the 1.2508 (multi-month lows) on a negative surprise. A break below the last, a test of the 1.2450 level remains inevitable.
On upbeat readings, the GBP/USD pair could extend the bounce to test the 1.26 handle, above which the immediate resistances lie at 1.2650 (psychological resistance) and 1.2673 (5-DMA).
“…the total pay is also expected to accelerate to 3.0% y/y in three months ending in October, up from 2.7% y/y. Strong pay increases reported in the November UK labor market report are set to support Sterling on the currency market only temporarily as prospects of no-deal Brexit have become increasingly likely as the UK Prime Minister Theresa May canceled the UK parliament voting on Brexit deal on December 11 and rather opted for another round of discussions with the EU. ”, Mario Blascak (PhD), Editor-in-Chief at FXStreet explains.
Key Notes
Market themes of the Day: The judgment day for the Brexit deal in parliament delayed indefinitely
GBP/USD to face earnings data with Brexit vote off the table
GBP/USD Analysis: Struggles near 20-month lows as UK PM May seek changes in backstop with EU
About UK jobs
The UK Average Earnings released by the Office for National Statistics (ONS) is a key short-term indicator of how levels of pay are changing within the UK economy. Generally speaking, the positive earnings growth anticipates positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).
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