UK unemployment unexpectedly fell to 5.0% in April, which is the lowest level seen since November 2005. The median forecast had been for an unchanged reading of 5.1%. The employment rate was 74.2%, which is the joint highest since records began in 1971. Wage data were also perkier than expected, with the including-bonus average household income figure rising to 2.0% y/y in the three months to April, unchanged from March and contrary to expectations for a dip to 1.7%, while the ex-bonus figure rose to 2.3% y/y from 2.2%, contrary to the median forecast for a dip to 2.1%. The more timely claimant count change dipped by 0.4k in May, while the claimant count rate was 2.2%, unchanged from an upwardly revised figure for April. The data catalysed a 30 pip rally in sterling, thought follow-through has been limited given Brexit preoccupations.
With nine days to go until the UK’s referendum the FT poll tracker is showing 47% support for leaving the EU and 44% for remaining, with the Vote Remain campaign losing one percentage point since the last update. Conversely, bookmaker Ladbrokes is showing the betting market is discounting a 62% probability for the UK remaining in the single market, which is up from 57% yesterday, likely reflecting a betting response to the threat by pro-EU chancellor Osbourne today of higher taxes and cuts in public services in the event of a Brexit vote. Given the disrepute of pollsters following their abject failure to predict the comfortable Conservative Party victory at last year’s general election, many are looking to the betting market for a more accurate gauge on the vote outcome.
The H4 time frame has near term resistance at 1.4210-1.4220 and support at 1.4100, with the FOMC announcement and press conference awaited later today too.
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