With no indication when the US government shut down will end, this week’s US economic data will be limited to the private sector NFIB small business report. This means attention will turn elsewhere, particularly to the UK, with the autumn Budget due in two weeks’ time. It will be important to monitor developments in the UK labour market (Tuesday) and economic growth, with Thursday’s preliminary Q3 GDP reading one to watch.
US earnings reports are also slowing to a trickle, with companies such as Cisco Systems and Walt Disney releasing results, while newer AI players like CoreWeave are also likely to attract investors’ attention.
UK October labour report
Tuesday 11 November
Unemployment data in the UK accelerated in June and July, but slowed sharply in August. As a result, the employment picture in September becomes particularly important, as the Bank of England now appears poised to cut rates at its next meeting in December, following the close call in November. Weaker data could seal the case for a rate cut, which would be a negative sign for the British pound, and could see it retrace all the way back to $1.271.
Recently, the pound fell below support at $1.31 and has since been consolidating sideways, which is to be expected given its oversold condition with the relative strength index (RSI) dropping below 30, and the currency trading beneath its lower Bollinger Band. However, weaker data may lead to further declines and additional weakness against the dollar. Conversely, stronger data could allow the pound to rebound and retest resistance around $1.3160, although a breakout above resistance appears unlikely.
