UK Jobless Claims Change & Claimant Count Rate - Lower than Expected by a little bit

This morning of January 18th 2012 at 9:30 GMT (4:30 EST) the Claimant Count Change or Jobless Claims Change (not sure if they changed the name of this report) came out. Basically it is the employment data for the UK. We have seen this figure cause only a brief move and then reverse in November and December, and also in November there appeared to be some leak of the data, or at least a rumor that brought strong flow of buying of Pound Sterling before the official release by a UK clearer on the bid, moving the GBPUSD forex pair up 50-60 pips heading into the release. So we were on the look-out for any strong flows in cable today, but were looking for at least a deviation of +/- 15k above or below the expected number of 7k to take a trade. The Pound did appear to be weakening into the release, so we did widen out our sell trigger and tighten the buy trigger, but still the deviation was not enough. A lower number is better because it means lower number of unemployed and the GBPUSD (Pound Sterling versus US Dollar Forex Pair) will usually rally.

Here is the data:



UK Jobless Claims Change
Estimates- Median: +7.0k Average: +6.7k Range: +0.4k to +11.0k
Actual: +1.2k Prior: +3.0k Revision: +0.2k

UK Claimant Count Rate
Estimates- Median: 5.0% Average: 5.0% Range: 4.9% to 5.1%
Actual: 5.0% Prior: 5.0% No Revision

UK ILO Unemployment Rate 3mnts
Estimates- Median: 8.3% Average: 8.3% Range: 8.2% to 8.4%
Actual: 8.4% Prior: 8.3% No Revision

UK Avg Weekly Earnings 3mnths
Estimates- Median: +2.0% Average: +1.9% Range: +1.7% to +2.1%
Actual: +1.9% Prior: +2.0% Revision: +2.1%

UK Weekly Earnings exBonus 3mths
Estimates- Median: +1.9% Average: +1.9% Range: +1.7% to +2.0%
Actual: +1.9% Prior: +1.8% No Revision

Here is a 30 second chart of the GBPUSD forex pair which shows the half hour leading into the news and the pair retraced some of the gains achieved earlier in the session. This was while EURUSD and AUDUSD were still at their highs for the day. Also the EURGBP was making new highs for the day at 0.8330 and GBPCHF was at its lows.

Nothing particularily fundamental was driving the rally in EURUSD, GBPUSD, AUDUSD etc into the 8am GMT European Cash Equity Open, other than talk of Russian & Mid-Eastern on the Bid but the Bank of India on the offer at the highs into the open, and then things did soon sold off after the top of the hour, with talk of a 2 notch downgrade for Italy from Fitch...clever Indians. But then Russian and Asian names came back in buying indeed a crazy old day, and this continued after the UK news, helping the GBPUSD rally as well as the EURUSD...first Fitch came back and clarified despite their earlier comment of a 2-notch downgrade Italy would not default but then more importantly the IMF would be getting more Money, which of course means more to bail out debt burdened countries. Is this good? Well the EURUSD liked it and regained its earlier highs.

Included below is a 5 minute chart of the GBPUSD with some important levels on it. As we can see where the thin Red arrow is where the UK Jobless Claims Change and Claimant Count Rate were released. The GBPUSD forex pair was sitting right on the 38% fibonacci of last week's 1.5500 to 1.5233 range. So it did move up off this, but it was a crazy day with lots of ups and downs, in fact during the european session the EURUSD was making an expanding triangle pattern but eventually the gains started to stick, even with the USA open (they have been selling the EURUSD on queue as soon as their session starts until it ends for weeks now). Also very interesting is after maybe 2 weeks of GBPUSD being the laggard, today it actually lead the gains, reaching new highs before the AUDUSD or EURUSD and having shallower pullbacks.