Early Morning Call: UK unemployment rate unexpectedly falls in April; wages rise more than expected
UK unemployment rate unexpectedly fell to 3.8% in April. The number of people claiming for unemployment benefits fell by 13,600 in May.
APAC overview
APAC equity markets rose on Tuesday, following the lead of European and US indices. In Japan, Nikkei 225 rallied to a new 33-year high, helped by SoftBank on the news it may team up on an AI venture with OpenAI. Toyota also rose by nearly 5%.
In Australia, two surveys released overnight reflect the effects of the Reserve Bank of Australia (RBA) tightening policy. Australian consumers are increasingly worried about the consequence high interest rates could have on employment prospects.
Westpac-Melbourne consumer sentiment remained well below 100 in June, at 79.2, suggesting pessimists greatly outnumbered optimists. But what the survey also revealed is the difference in reading before and after the RBA decision last week. Before the 25-basis point hike, confidence survey came in at 89. After the decision it dropped to 72.6. The survey also showed that unemployment expectations rose 6.6%.
The other is National Australia Bank (NAB) business confidence, also showing worries around employment. Australia's business sentiment unexpectedly fell to -4 in May, when the market expected the index to remain at 0. A negative number means that there were more pessimistic opinions that optimistic ones. The survey's measure of sales declined eight points to +14 in May, the employment index fell seven points to +4.
In China, the People's Bank of China (PBoC) lowered a short-term lending rate overnight. The seven-day reverse repo rate was cut by 10 basis points to 1.90%. The cut to the lending rate signals possible easing for longer-term rates. One-year and five-year Loan Prime Rates, used respectively to set consumer loan and mortgage rates, could be lowered by the same margin next Tuesday. They currently point at 3.65% and 4.3%.
UK unemployment
The UK unemployment rate unexpectedly fell to 3.8% in April. The number of people claiming for unemployment benefits fell by 13,600 in May.
At 10am, Germany ZEW economic sentiment is expected to fall to -12.7 in June, from -10.7 in May.
Ahead of the Federal Reserve (Fed) decision, the market is getting ready for the latest US inflation data. The consumer price index (CPI) is expected to fall to 4.1% year-on-year (YoY), following a 4.9% rise the previous month. This would be the weakest CPI growth since March 2021.
But more than headline CPI, the focus will be on core CPI. It is forecast to fall too, but not as much, to 5.3% YoY, from 5.5% in April. Since March, the headline CPI figure points below the core CPI. Energy prices have substantially fallen, but broad-based inflation seems to be stickier than thought.
Equites overview
Oracle shares stormed to a record high last night after the company smashed earnings expectations. Adjusted earnings came in at $1.67 per share. Revenue rose by a whopping 17% to $13.84 billion. The company's top source of revenue, cloud services and license support, jumped 23% to $9.37Bln. Revenue from cloud infrastructure climbed an eye-watering 76% to $1.4Bln.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
