Solid US Jobs Report Sends Sterling Lower

Friday, November 3: the FTSE 100 edged higher(+0.07%) for a second consecutive day, as sterling continued to adjust lower versus both the US dollar and the euro, following a Bank of England 0.25% rate rise only yesterday.

TP ICAP(-6.54%) slipped lower despite reporting higher Q3 revenue, after warning on a challenging outlook for the last quarter of 2017, as it also announced the stepping down of CFO Andrew Badderly with immediate effect. The FTSE 250 inter-dealer broker noted revenue in the quarter ended September 30 stood at £420m, 3.00% higher than the prior period. A challenging Q4 forecast reflected current trading conditions, along with the strong performance recorded in the comparable period of 2016.However, the company is well placed to benefit from any interest-rate rises in the US and Europe.

The latest US employment data indicated that employers were continuing to hire at a strong clip in October, and revisions showed the labour market weathered hurricane damage better than previously estimated. Non-farm payrolls rose a seasonally adjusted 261,000 in October, a pickup from the prior month, as the unemployment rate ticket lower to 4.1%,its lowest level since December 2000. Economists surveyed by The Wall Street Journal expected a jobs add of 315,000 and a 4.2% rate for last month. The data provides yet more data for the Fed to analyse before their final meeting of the year on December 12-13,  where policymakers have noted that a further rate rise is likely should economic data continue to be robust.

Business activity in the UK service sector grew at the fastest pace in six months, and significantly faster than expected PMI data showed for the month of October. October’s PMI came in at 55.6, up from a 53.6 read in September and above analyst expectations of 53.4. This growth in activity was supported by improved order books and resilient client demand, however, the pace of job creation slowed to a seven-months low, and

Across Europe, indices were higher at the close with the FTSE 100 +0.07%, the DAX 30 +0.28% and the CAC 40 +0.14%.

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