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 November, are expected to remain unchanged at 3.3%, while ex-bonuses also, the wages are also seen steadying at 3.3% in the reported period.
The number of people seeking jobless benefits increased 20.0k in the three months to December versus 21.9k additions booked last. 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 remain watchful of the Brexit-related developments. The rates could test the 1.2754 (100-DMA) on a negative surprise. A break below the last, a test of the 1.2700 level remains inevitable.
On a positive surprise, the GBP/USD pair could stage a comeback and regain the 1.29 handle, above which the immediate resistances lie at 1.2931 (Jan 14 high) and 1.2972 (200-DMA).
“The regular pay (excluding bonuses) is expected to increase 3.3% over the year in the three months to November, confirming the strongest pay rise in the last decade. On the top of it, the total pay is also expected to repeat last month’s reading of 3.3% y/y in three months ending in November. Strong pay increases reported in December UK labor market report are set to support Sterling on the currency markets, as pay rise implication in an environment of low inflation supports real earnings growth and will see the Bank of England hike the Bank rate in the anticipation of emerging wage pressures on inflation”, Mario Blascak (PhD), Editor-in-Chief at FXStreet explains.
Key Notes
UK employment amongst market movers today – Danske Bank
UK: Unemployment rate likely to remain unchanged at 4.1% - TDS
GBP/USD Analysis: Climbs after Brexit Plan-B but lacks follow-through ahead of UK employment data
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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