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10/06/24
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GBP Flat Before UK Employment Data
On Monday the British pound started the week quietly and GBP/USD traded at about 1.2718, down 0.03% for the day in the North American session.
The May UK employment report will be released on Tuesday. UK job growth has been dropping for a while and the trend will likely continue in May. Job growth is anticipated to drop by 100K in the 3 months to April, after a fall of 178K in the prior release.
The softer labor market will make it easier for the BoE to begin cutting rates, but wage growth is still high and that is supporting inflation. It is expected wage growth will creep up from 6% in the 3 months to March to 6.1% in the 3 months to April.
Although the general trend for wages has been lower, it is still too high for the Bank of England. The markets have not fully priced in an initial rate cut until Nov., although a rate cut in either June or August is possible.
The US nonfarm payroll report on Friday showed that the US labor market is strong despite interest rates weighing heavily. May’s nonfarm payrolls rose to 272K, much higher than the market estimate of 185K and much stronger than April’s revised gain of 165K.
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