Europe’s stock markets have opened cautiously, as investors sit tight ahead of today’s UK unemployment report, and the Fed meeting tonight.
London’s FTSE 100 has dipped by 16 points, or 0.25%, and there are similar declines in France and Germany.
Dixons Carphone are the biggest faller, down 3% in volatile trading, despite posting a 14% jump in profits and telling the City it had its ‘biggest ever’ Black Friday.
Michael Hewson of CMC Markets agrees that today’s earnings figures are particularly important, following the rise in inflation from 0.9% to 1.2% yesterday.
Inflation certainly appears to be on the way back in the UK in numbers released yesterday, which showed that CPI hit its highest levels in two years driven primarily by clothing and fuel prices, while a rise in import prices to their highest levels since 2011 was an unwelcome portend of what could be around the corner in 2017.
Unemployment is expected to remain at 4.8%, while average earnings are expected to remain at 2.3%.
Today’s econ news – ONS employment data: unemployment rate and average earnings are forecast to remain steady at 4.8% and 2.3% respectively pic.twitter.com/VKhFhK4UXO
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
This morning’s main event is the latest UK unemployment report at 9.30am GMT, which will show whether Britain’s labour market is ending the year with a bang or a whimper.
The figures will be poured over for signs that the economy is weakening in the face of continued Brexit uncertainty.
Economists predict that the headline jobless rate will stay low, but the number of people signing on for unemployment benefit may rise.
Here’s what the City expects:
- the unemployment rate will remain at an 11-year low of 4.8% in the three months to October
- The employment total will rise by 50,000 during the quarter.
- Wage growth will remain at 2.3% (but may accelerate to 2.5% if bonuses are stripped out).
- The claimant count will jump by 6,500 in November, following last month’s 9,800 rise.
Yesterday we saw inflation jump to 1.2%, so if wages don’t rise too people will face a real earnings squeeze in 2017.
Analysts at RBC Capital Markets believe the jobless rate could rise a little, to 4.9%, but are cautious about jumping to many Brexit conclusions.
Also coming up today.
Fed chair Janet Yellen will then give a press conference, to discuss the state of the US economy – and probably field a few questions about politics too.
The most important question: Will Trump tweet about this week’s Fed decision. https://t.co/ty6k66ttFP via @chrisjcondon
We’ll keep an eye on Greece, where relations between Athens, the IMF and the EU are deteriorating in a familiar fashion:
On the corporate front, consumer electronics group Dixons Carphone are reporting results this morning. They look decent, at first glance, with first-half profits up 19%, but the firm is also talking about uncertain times ahead.
They’re holding a press with journalists right now, so we’ll have more shortly…