Article Highlights

  • U.K. jobs data surprises to the upside: Unemployment Rate 7.1% vs. 7.3% forecast, 7.4% previous
  • Bank of Canada monetary policy decision coming up at 3:00pm GMT
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The morning London session came alive with the positive upside surprise in U.K. employment data.  Claimant count change came down to -24K vs. -32K forecast, and the unemployment rate came within 0.1% of hitting the 7.0% target set by the Bank of England at which they would review borrowing costs.  As expected with such a surprise, Sterling jumped higher on the news against the majors: up 146 pips against the Japanese yen to break 173.00 and up 114 pips against the U.S. dollar at 1.6574.

We also got the Bank of England‘s monetary policy meeting minutes, in which the MPC stated that even if 7.0% unemployment was reached earlier than expected, there would be no need to raise rates immediately.  This statement slightly deflated the reaction in sterling as it pulls back the expectations of a rate hike in the U.K.

The major event for the rest of the London session is the Bank of Canada monetary policy decision.  This will be announced at 3:00pm GMT (10:00 am ET), with no changes expected to the overnight interest rate, currently set at 1.00%.  At 4:15pm GMT (11:15 am ET), the Bank of Canada press conference will be held, and it the thing to listen out for is how the BOC frames the recent weak economic data in Canada, and any hints on a potential rate cut.  It should be a very exciting morning for Loonie traders!

See also:

Asian Session Recap

U.S. Session Recap

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