Market Update – 13th November 2024.

13th November 2024

After weeks filled with key economic indicators, markets are enjoying a relatively quiet spell.

However, fresh unemployment data out of the UK provided some food for thought.

The UK’s unemployment rate rose slightly to 4.3% in the three months leading up to September. The latest report from the Office for National Statistics (ONS) revealed that the number of people claiming jobless benefits also rose significantly, with a 26,700 increase in October—up from a revised gain of 10,100 in September.

This uptick nudges the unemployment rate above the 4% seen in the three months to June and remains a key area of focus for the Bank of England, who look to the data to in part assess the impact of their monetary policy decisions. And yet, the increase – while notable – is moderate, and the ONS have cautioned against over-interpreting these figures owing to their particular methodology. Still, the data may hint that in the lead-up to the Autumn Budget, businesses operated with cautious hiring practices while they awaited the announcement of Rachel Reeves’ new fiscal rules.

Data also released on Tuesday highlighted that average regular earnings, excluding bonuses, increased by 4.8% year-on-year in the three months to September, slowing from a 4.9% raise in August even while continuing to outpace inflation. The UK’s wages data came in a little stronger than perhaps the Bank of England would have ideally wanted. But it’s a reminder that the UK economy – for all the gloom that has crept into the discourse since the election – is still in a reasonably healthy underlying condition.

Meanwhile, in China, encouraging signs of domestic demand emerged during Singles’ Day, the country’s largest online shopping event that is often compared to Black Friday. Sales data co-released by Xiaomi Corp. revealed that purchases over the four-week promotional period reached a record 31.9 billion yuan, potentially illustrating a cautious return of consumer spending following the multitude of stimulus measures proposed by policymakers this year to boost the economy.

Investors are eagerly awaiting the release of the latest U.S. CPI data, expected later today. Last Thursday, the Federal Reserve cut interest rates by another 25 basis points, aiming to protect the labour market, which, though showing signs of cooling, remains robust by historical standards. On a month-by-month comparison, the market is currently pricing in no change. Also still to come this week, we  have US PPI, Chinese retail sales and UK GDP.

Nicola Tune, Portfolio Specialist