GBP

The pound has held on to most of its gains from yesterday against the euro, but is down 0.3% from yesterday’s highs against the dollar. British employers increased pay for new staff by the most since the mid 1990’s, according to a survey by the Recruitment and Employment Confederation (REC). In the survey released this morning, REC Chief Executive Neil Carberry said competition for employees was wide spread, from food processing to office jobs. The report will be studied by the Bank of England as it tries to assess how persistent the recent rise in Inflation might be. Several policymakers have said recently that there is a growing case for its first rate increase since the pandemic struck last year with inflation expected to top 4%.

ECB

The euro remains under pressure against it major peers, even though the minutes from the European Central Bank’s meeting last month showed policymakers debated a bigger cut in asset purchases and harboured greater inflation concerns than their post-meeting statement suggested. Latest data from Germany showed a reduced trade surplus in August. ECB president Christine Lagarde is due to speak later today.

USD

The dollar has been in demand in early trading, mirroring gains in bond yields. Employment data from the US will take centre stage today. The monthly Non-farm payroll report for September will be released later today and is expected to show that the economy has added 500,000 jobs last month and the unemployment rate steady at 5.1%. If the report is a strong one, it will increase the case for the Federal Reserve Bank to reduce its bond buying scheme next month and potentially raise interest rates as early as next year.

Economic Calendar

1.10 pm EUR Christine Lagarde Speech
1.30 pm US Nonfarm payrolls
1.30pm Unemployment rate