UK Jobs Data Sparks Surge in BoE Rate Cut Expectations

UPDATE: The latest UK labour market report has just been released, fueling a dramatic surge in expectations for a rate cut by the Bank of England (BoE). Following the disappointing data, the probability of a rate cut in December has soared from 61% to 81%, highlighting a significant shift in market sentiment.

The report showed widespread weakness in employment figures, which has intensified calls for action from the BoE. Market analysts are now closely watching for potential changes in monetary policy as officials grapple with the implications of this data.

In addition to the UK report, the German ZEW survey also missed expectations, although it had minimal impact on the markets due to the European Central Bank’s (ECB) neutral stance. ECB members reiterated their previous position, claiming that inflation risks remain balanced and interest rates are currently appropriate.

Despite the soft employment figures, BoE official Silvana Tenreyro maintained a hawkish tone, suggesting that the central bank might not be ready to adjust its policies just yet.

This news comes as the US observes a federal holiday for Veterans Day, with the stock market open while the bond market remains closed. Traders are also anticipating the release of ADP’s weekly jobs data, originally scheduled for 13:15 GMT / 08:15 ET, although it has yet to be confirmed. Some sources indicate it may be released tomorrow, but uncertainty remains about its timing.

With the focus on the US labour market data from the Federal Reserve, the upcoming ADP report could be a crucial market mover. Investors and economists alike are on high alert for any developments that could influence economic conditions further.

As the situation evolves, market participants are urged to stay informed and prepared for potential shifts in both UK and US monetary policies. This developing story will be updated as more information becomes available.