Unemployment Rates Show Promise But Election Still Dictates the Markets

It was a tough day for Jeremy Corbyn’s labour party as they saw a large scale cyber-attack on their digital platforms. These platforms not only include where particular voters are; but whether or not they will support the party. The reason for the hack is still unknown due to the relative sophistication of it – so it is not known if it is politically motivated or just someone hoping to ‘make money or cause mischief for the fun of it.’ To their knowledge no data has been leaked due to the party’s defence system, but Corbyn did share his worries as this being ‘signs of things to come’ as countries may look to try to disrupt the December election.

Nigel Farage has refused to stand down in any more seats following his decision for the Brexit Party to not compete in the 317 seats held by the Conservatives. This only means for a much closer running into the election as the Tories will still have to compete against the Brexit Party in the key marginals which they’ll need to win over for a majority. This was not only reflected in the pound with a slight drop in cable but also in the polls with the labour party rising by 3 points to 29% and narrowing the gap on the conservative party.

In terms of key UK data, yesterday’s unemployment figures showed some promise for the UK economy with rates coming in just under the consensus at 3.8%. This morning we will see CPI inflation figures out with the consensus being 1.6%, slightly lower than the previous quarter at 1.7% and well under the 2% threshold. This has been noted for potential reasoning for a rate cut but don’t expect data to have anything more than a short-term effect on the markets as it’s the election which is dictating the markets and will continue to do so.

US

Tuesday saw Donald Trump speak at The Economic Club of New York, with markets hoping for some clarity on the US-Sino trade talks. Trump used his time to outline that they were ‘close’ to a phase one deal to being done, but made it clear the ball is in their court. The outcome of the talks was that there appeared no real substance in reaching denouement. The idea that China was ‘cheating on trade’ was heard throughout and that a deal would only “accept the deal if it’s good for the United States” - if not he will simply raise tariffs even higher. Jibes were also made against the FED’s monetary policy suggesting that rate cuts haven’t been large enough relative to competing economics. He even went as far as demanding negative interest rates, done so before by the ECB and Japan. “Give me some of that. Give me some of that money. I want some of that money. Our Federal Reserve doesn’t let us do it,” he said. An interesting and certainly provocative interpretation of the stimulating policies perhaps desperately adopted by Draghi to promote price pressure and create consumer and business spending.

GBPUSD – Trading above 1.28 at 1.2837

GBPEUR – Trading above 1.16 at 1.1669

EURUSD – Trading below 1.10 at 1.1009

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