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| DAILY CABLE IGNORES CLAIMS BY DAILY FX |
Cable's trading was muted in the early European session as mixed data left market participants listless. Jobless claims out of the UK unexpectedly dropped 3.9K in the month of August versus consensus estimates of a 4.0K gain. Prime Minister Tony Blair clued the markets into the result yesterday, when he said, “tomorrow I think we will probably see – for the first time in some months – a fall again in unemployment.” While the claimant count and ILO unemployment rates held steady at 3.0% and 5.5%, respectively, average earnings growth (ex. bonuses) actually slowed to 3.7% in the three months through July. The lack of substantial wage growth should quell some inflation concerns following yesterday’s jump in CPI figures. The final test of the UK economy this week comes tomorrow upon the release of retail sales numbers for the month of August, which are anticipated to improve. As of 8:53GMT, GBP/USD trades at 1.8738, down slightly from Tuesday’s New York close of 1.8745.
London equities made further progress in opening trade on Wednesday, after forecast beating numbers from BAE Systems and Next helped extend gains. The FTSE 100 started the session 0.1% higher at 5,900.7, a rise of 5 points despite two constituents trading without further rights to their latest dividend payment. The mid-cap FTSE 250 was 0.3% higher at 9,634.2, a gain of 28 points fuelled by resurgent investment vehicles after a strong showing on Wall Street indices overnight. Overnight in New York, a series of strong earnings reports helped equities indices to a broad-based rally. The Dow Jones Industrial Average rose 0.9% to 11,498.1 as the Nasdaq Composite made gains of 2% to 2,215.8. Strong newsflow also gave London a boost. BAE Systems, the defense contractor, beat forecasts with news of a 39% rise in earnings of £788m. Shares in the company were 1% higher at 389¼p. Next, the fashion retail chain, defied expectations of an interim loss to report a profit of £178.9m, up 3.6% year-on-year. Current trading the high street chain also stayed positive, with like-for-like sales in its latest six week monitoring period up 0.3%. The news helped other retailers, boosting Marks and Spencer by 1.4% to 604p and Debenhams by 1.5% to 188¼p. On the downside, premium brand drinks maker Diageo fell 1.3% to 932½p as it went ex-dividend. Fellow brewer Scottish & Newcastle was 1.2% weaker for the same reason.
Prices on 10-year gilts remained buoyant at 95.540 amidst the UK employment data, as yields dipped four basis points to 4.561%.
By Terri Belkas, Junior Currency Analyst
Http://www.dailyfx.com
Email: info@fxcm.com
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