The weak report on labor market weakened GBP?
According to the latest report examining the condition of the British labor market, the number of claimants in April increased for the month in a row. In addition, labor inflation was clearly slowing down – it translated into GBP lows, although in the first moment it tried to gain.
Earnings are still more important than employment
The pound sterling reaction to the results published by ONS can be really puzzling. The claimant change rate increased by 7.3 thousand in April (an increase of 20.3 thousand, previously 22 thousand). On the one hand, this is a much smaller increase, but still noticeable. By analyzing the historical results it can be seen that the index in the vast majority of cases reaches negative values (the real decline of the claimants). Adding to this the deceleration in the income (average weekly earnings), we receive a rather negative picture of the British labor market.
As a result, we can see the interesting behavior of the GBP/USD. The two very strong movements in the window for only 30 minutes (candle growth and then decline), which strongly stood out against the previous low volatility.
Of course, there were voices in the market that both movements were caused by premature data leaks.