UK payroll at a record high in September

We start Tuesday with a very healthy UK jobs report. The ending of the furlough period and the reopening of the food and entertainment sector combine to create 207,000 jobs in the month of September. That bought the unemployment rate down to 4.5% in the three months to August. This was generally expected and forecast which may explain why the pound has failed to rally on the very positive news. The other reason will be the poor retail sales data which highlighted the concerns shoppers have over the availability of goods and rising domestic bills.

Timing of rate hikes is still the main event

The GBPUSD rate is down three-quarters of a cent from yesterday’s highs. That pair starts Tuesday at $1.3590. T=Meanwhile, the GBPEUR rate is back in a very familiar pattern between €1.1750 and €1.1800. Traders are like the horses before the start of the Grand National; all jockeying for position to be ready for rate hikes from The US and UK, a later hike from the EU (probably), and much much later from Japan. The timing of these events will have an impact in the 6 months or so ahead.

For now, though, the Pound is up and down like a conductor’s elbow during the closing bars of O Fortuna and the Yen is falling away. Hence the USDJPY rate is up in the JPY 113 range and GBPJPY is around JPY 154. However, those levels have plateaued a little overnight.

Australian business confidence highest since June

A healthy rise in the NAB business confidence index to 13 gave the Australian dollar a boost overnight. At 13, that index is back up to June levels after a couple of very negative months. Undoubtedly the reopening of Sydney will have assisted there on the overall impact is that the GBPAUD exchange rate is back below AUD 1.85 this morning.

Business end economic sentiment will drive the Euro this morning. Germany’s ZEW institute will deliver a number of survey results for Germany and the Eurozone as a whole. We will also have a number of speeches by ECB members throughout the day. So that plays into the nervousness of traders.

This afternoon’s JOLTS data from the US will give clues as to the capacity for greater employment in the US and a few Federal Reserve speakers will be airing their views. That’s probably not enough to sway traders’ group-think views on bond purchase tapering and interest rate expectations.

And today is one we should remember as having blighted many childhoods. The poem/song, ‘Three blind Mice’ was first published on this day in 1609. Why were they blind? What’s that back story. What made them aggressive enough to chase the poor woman and how was she accurate enough to cut off all of their tails? We will never know. Traumatic though, wasn’t it.

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