FX Headlines: Euro-Zone CPI, UK Jobs Data Offer Little to Help Euro, Pound
- Euro-Zone inflation remains absent in September; doesn’t mean another LTRO.
- Lackluster UK wage growth undercuts otherwise stronger labor market report.
- Best Swiss ZEW survey since May 2010.
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EURO-ZONE ECONOMIC CALENDAR
The September inflation figures paint a dim picture on the yearly side but the monthly figure would suggest that growth may be on the mend. Taking the CPI figures in context of the October German ZEW survey figures, released yesterday, it is clear that: 1) Euro-Zone growth momentum slowed midyear; and 2) growth may show signs of slight continued improvement through the 4Q’13. The Euro was mostly unchanged on the headline versus its major counterparts, and with no more significant economic due this week, the influence of US fiscal headlines on the Euro will likely uncrease.
UK ECONOMIC CALENDAR
Overall, the UK labor data released today is net-positive. Jobs growth accelerated and jobless claims – the unemployed receiving financial assistance – plunged at the end of the 3Q’13. While the data initially sparked a rally in the British Pound, the secondary but still important data – wages – prevented an upside momentum developing from the start.
Wage growth undershot estimates for August and considering that over 60% of the UK economy is consumption-based, a further stagnation in wages will ultimately hurt UK growth. In the broader context of the labor, demand is increasing which should support wages going forward; and the UK services sector just had its best quarter in 16 years in the 3Q’13, which should also prove supportive of wages down the line.
SWISS ECONOMIC CALENDAR
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--- Written by Christopher Vecchio, Currency Analyst
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