UK unemployment falls to new cycle low, stay bearish EURGBP – BNP

By FXStreet FXStreet (Bali) – UK unemployment, which fell to new cycle lows on Wednesday, reinforces BNP position to play EURGBP from the short-side.

Key Quotes

The UK unemployment rate declined to a new cycle low of 5.3% in September, in line with our economists’ expectations. Employment rose by more than expected, up to 177k from 140k.

Earnings great ex-bonus slowed to 2.5%, 0.1pp below expectations. However, our economists note that this is due to base effects, and continue to expect wage growth pressures to build as base effects dissipate.

GBP initially softened following the data, but in our view these numbers should be seen as GBP supportive.

We remain exposed to EURGBP downside via a 0.72/0.68/0.64 put fly recommendation expiring in January.
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Source:: FX Street