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FTSE 100 Jumps On Lower Than Expected Unemployment Rate

FTSE 100 jumped over 1% at the opening after the unemployment rate came lower than expected. Positive sentiment around equities boosted stocks in Asia and continues into the European session, after President Trump announced some tax relief measures, and extended the unemployment benefits. 

U.K. Employment Data Mixed

June ILO unemployment rate came down to 3.9% better than analyst’s expectations of 4.2%. The unemployment reading for May was at 3.9%. The employment change for June came in at -220k below the estimates of -300k. The May reading was at -125k. 

 The Office of National Statistics (ONS) in UK said the figures show that employment is weakening and unemployment is unchanged because of increases in economic activity. The Claimant Count Rate dropped to -2.2% in July from the previous 7.3%. Claimant Count Change came in at 94.4K topping the expectations of 10K. The June average weekly earnings, excluding bonus, registered at -0.2% below the forecasts of -0.1%. 

More robust than expected employment data from the USA on Friday sparked a rally in U.S. equities with S&P 500 now approaching the record highs. The Nonfarm Payrolls in USA came in at 1763K in July, above the expectations of 1600K. The unemployment rate in the states fell to 10.20% from 11.1% the previous month. 

The data eased investor’s worries on the state of the global economic recovery, as the employment data shows clear signs of improvement. 

Traders await the GDP figure latter on the week for fresh clues on the state of the U.K. economy. 

On the FTSE index among the top performers are: NatWest is 2.19% higher 116.63. Lloyds is 2.01% higher at 28.99, HSBC Holdings is 1.56% higher at 336.20. Barclays is 2.16% higher at 108.98. Vodafone is 1.94% higher at 118.90, and B.P. is 3.25% higher at 305.02. 

FTSE 100 Technical Analysis

FTSE 100 is 1.70% higher at 6,155 marking the highest level since July 24, and showing signs that the index might break to the upside the recent narrow trading range. 

Bulls need a credible break above the 50-day moving average, which would give a strong bullish signal and might be the start of another leg higher. Next resistance level stands at 6,270 the top from July 23. More sellers would await at 6,320 the high from July 21. 

On the other side, immediate support for the FTSE 100 index stands at 6,050 today’s low. Next support would be met at 5,984 the 100-day moving average. More bids expected to emerge at 5,856 the low from August 3. 

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FTSE 100 Daily Chart

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