Weak U.K. Jobs/Wage Data Set the Table for a BoE Rate Cut

Global equities are in risk-off mode on the back of squishy-soft overseas data releases.

Key Takeaways

• Dollar Momentum Turns South: The DXY dollar index has weakened modestly further to 98.25, and the 200-day moving average is set to slip below the 50-day trendline in what is a technically bearish move. Should be fodder for the commodity and precious metals complex.

• Breadth Breakdown: So much for the market breadth narrative. At the December 11^th peak in the S&P 500, less than 17% of the index actually made a new high that day. That was the lowest share for any interim peak posted in the past 25 years — rivaling the 13% share at the prior Tech bubble peak back on March 24^th, 2000. Nearly 40% of the S&P 500 membership is not up this year. Only two sectors are at, or challenging, new highs… Industrials and Financials.

• U.K. Data to Force the BoE’s Hand: In the wake of a -0.1% dip in real GDP in October, the U.K. just printed the highest unemployment rate figure in almost five years for October, at 5.1%. U.K. payrolls contracted -38k in November after dropping -22k in October. Wage growth has eased. This should definitely cement the case for a BoE rate cut on Thursday.