Pound drops back towards $1. 24 after uk jobs data - but dollar index hits 14-year high on inflation expectations

Tara Cunningham Business Reporter 16 November 2016 5:11pm GMT * CHINESE YUAN FALLS TO 8-YEAR LOW AS TRUMP PREPARES TO TAKE OFFICE * DOLLAR SURGES TO 14-YEAR HIGH * UK JOBLESS RATE FALLS TO

11-YEAR LOW, BENEFIT CLAIMS RISE * OIL PRICES EXTEND RALLY ON OPEC DEAL BETS * FTSE 100 FALTERS AS HOUSEBUILDERS WEIGH * POUND DROPS BACK TOWARDS $1.24 * BREXIT IS 'A LOSE-LOSE

SITUATION', SAYS DIJSSELBLOEM                                                                                                       5:10PM MARKET REPORT: VEDANTA RESOURCES JUMPS ON

RATING UPGRADE A bullish broker note propelled India’s biggest metals producer VEDANTA RESOURCES towards the top of the mid-cap index. Goldman Sachs hiked its rating to “buy”, upped its

12-month price target from just 450p to £13 and added the FTSE 250 stock to its “conviction list” as it believes Vedanta is “well placed to benefit from zinc exposure”. “We believe there is

potentially another leg up for the stock,” Eugene King, of Goldman Sachs said, pointing to the bank’s positive stance on zinc prices. Around 40pc of Vedanta’s earnings come from its zinc

business, so higher prices should be a significant positive for earnings. The US investment bank also flagged that the approval of its merger with Cairn India is moving ahead, would should

“help instill confidence” that Cairn’s $3bn balance sheet will be available to Vedanta, solving its debt repayment concerns. Shares jumped 41.5p to 801.5p. Vedanta share price 1 year

Utilities were also in demand after a slew rating revisions from Citigroup. The investment bank hiked PENNON, SEVERN TRENT and UNITED UTILITIES as it believes their valuations now look “less

stretched” compared to highs reached in the aftermath of the Brexit vote. Severn Trent climbed 47p to £21.86, United Utilities made gains of 6.5p to 882p, and Pennon added 12.5p to 788.5p.

United Utilities share price On the broader market, the FTSE 100 ended the day down 43.02 points, or 0.63pc, at 6,749.72 as a disappointing trading update from BARRATT DEVELOPMENT weighed on

the index. FTSE 100 1-day In another sign that the London housing market is cooling, Britain’s biggest housebuilder said it was cutting some of its most expensive homes in the capital by up

to 10pc. Following the cautious update, Robin Hardy, of Shore Capital, said: “We believe investors might consider some switching out of Barratt.” Shares dropped 13.4p to 469.5p. Property

developer BRITISH LAND also surrendered 14p to 592.5p after its net asset value fell by 3pc to 891p per share in the nine months to September 30. British Land On the other side, broadcaster

ITV eked out gains of 2p to 167p after it said it expects to complete the sale of UTV Ireland on November 30. Elsewhere, MORRISONS launched a new service offering Amazon Prime customer

same-day deliveries of goods from it stores in and around London causing shares in its online partner OCADO to slump 24p to x258.2p. Morrisons slipped 3.4p to 218p after broker Bernstein

warned the deal is part of a wholesale agreement, where Amazon are able to charge their own prices and so, it could undercut Morrison’s offer. Ocado shares Meanwhile, retail discounter

B&M jumped 11p to 256p on the back of a rating upgrade. Jefferies lifted its rating to “buy” as it believes its 33pc share price fall from its summer 2015 peak represents “a buying

opportunity”. Industrial equipment rental group SPEEDY HIRE rallied 5.5p, or 15pc, at 42.3p, after its cost-cutting measures and asset disposals boosted half-year profits. Non-executive

director David Shearer, who was appointed to the board at Tosca Fund’s behest in September, also snapped up 100,000 shares at 42.5p apiece. speedy hire shares On Aim, stamp collecting firm

STANLEY GIBBONS leapt 16pc to 10.9p as bid rumours circulated the City. Finally, shares in energy supplier FLOWGROUP dipped 1.4p, or 11.8pc, to 10.3p after it warned that it may be forced to

abandon its plans for a UK roll out of its microCHP boiler due to increased manufacturing costs, in the wake of the post-Brexit vote pound plunge, and the slashing of government subsidies.

_On that note, it's time to close up for this evening. We'll be back again tomorrow morning with more markets coverage. _ 4:39PM EUROPEAN BOURSES CLOSE DOWN AS DISAPPOINTING

TRADING UPDATES WEIGH European bourses ended the trading session in the red as disappointing trading updates and political risk weighed on stocks.  At the closing bell:  * FTSE 100: -0.63pc

* CAC 40: -0.78pc * DAX: -0.866pc * IBEX: -0.56pc FTSE 100 1-day > CHRIS BEAUCHAMP, OF IG, said: "The mood across most equity markets > remains subdued, with modest losses being 

posted. Investors are > evidently still cautious about the new administration, with the > steady drip of news relating to appointments and the like keeping > the market in check. 

About the only thing still surging is the US > dollar, which is now a hairs-breadth away from highs last seen in > December 2015."  3:54PM OIL PRICES CONTINUE TO EXTEND GAINS ON

HOPES OF OPEC DEAL  Oil prices continued to climb this afternoon after Russia's energy minister Alexander Novak said he sees big chances for Opect to agree an output deal.  However, he

cautions a decision has not yet been made around which date to take for the oil freeze, November or January 1.  Brent crude jumped 1pc to $47.38 a-barrel following his comments.  3:49PM

INTEREST RATES WILL GO UP, SAYS FORMER BANK OF ENGLAND DEPUTY  Interest rates will start to rise in coming years as the population ages and the middle-aged savers who dominate the economy

start to retire and become spenders, according to Sir Charlie Bean, a former deputy Governor of the Bank of England. Big demographic changes in recent decades have forced interest rates

down, central bankers argue, a position which was pushed to the current extremes by the financial crisis and the slow economic recovery which followed. As a result the UK and much of the

world ended up with a glut of savings,pushing down the so-called natural interest rate. But the rich world’s population is now past the peak ratio of middle aged workers to older pensioners,

as those savers in their 40s and 50s move into retirement, and start spending their savings. As a result, Sir Charlie believes, interest rates should start rising again. “It is the middle

aged who do most of the saving for retirement, and then you dis-save when you are retired,” he told the UBS European Conference. “We are now going into a period where the size of the old

cohort relative to the savers in middle age will be steadily increasing, and that will put downward pressure on savings at a global level. “That is one reason why the underlying real

interest rate will shift up over time – but this will move slowly, it is not something that will happen in a year or two, we are talking about slow-moving tectonic forces here.” REPORT BY

TIM WALLACE (READ MORE HERE) 3:24PM 94PC CHANCE OF DECEMBER FED RATE HIKE Investors’ increasing confidence that the Federal Reserve will raise rates in December has led to the familiar sight

of a fearful Dow falling in the face of the gaining greenback, CONNOR CAMPBELL, OF SPREADEX, said this afternoon. He flags that the probability of Janet Yellen and her cohorts increasing

interest rates in December now sits at around 94pc - enough to drag the US index 70 points lower. > Done deal: The chance of a Fed rate hike is approaching 100% in > anticipation of 

#Trumpenomics https://t.co/4uCkt9Pdkk > pic.twitter.com/hAsdTcTM9s > — Holger Zschaepitz (@Schuldensuehner) November 16, 2016 > Campbell added: "Given the current 

‘Trumpflation’ talk and the > subsequent re-tabling of a pre-Christmas hike, tomorrow’s US > inflation figures for October have only gained in importance. > Analysts are expecting 

the number to rise from 0.3pc to 0.4pc > month-on-month; if accurate that would be the highest reading in 6 > months, and may nudge the Fed even further towards its first hike in > 

a year." 3:12PM ANGLO AMERICAN CONDEMNS VIOLENCE AS CHILEAN PROTESTERS SEIZE PARTS OF COPPER MINE About 100 hooded protesters illegally entered Anglo American's Los Bronces copper

mine in central Chile, seizing installations and setting up flaming barricades. JON YEOMANS REPORTS:  Anglo American has denounced a “violent” protest in Chile that has resulted in 100

hooded protesters seizing parts of its Los Bronces copper mine. The company blamed a group of contractors and “unidentified people” for setting fire to barricades and seizing outbuildings

and trucks. > Esta situación genera un grave riesgo a la seguridad e integridad > física de más de 1.500 personas en Los Bronces. > https://t.co/bHoKHP6o0E 

pic.twitter.com/uo78jHqsdt > — Anglo American-Chile (@AngloAmericanCL) November 16, 2016 “This situation creates a serious risk to the safety and physical integrity of more than 1,500

people who are currently in Los Bronces and presents environmental risks in case the normal operation of our processes and operational controls is not restored,” the FTSE 100 miner said. The

protest comes as the union representing contractors at the mine negotiate with their employers, who provide services to Los Bronces. Anglo said it was a “facilitator” in the negotiations

and appealed for both sides to continue their dialogue and call off the violence. READ MORE HERE 2:47PM STERLING'S WEAKNESS MAKES RATE-SETTING HARDER, SAYS BOE'S CUNLIFFE The

pounds sharp depreciation following the referendum in June has made it harder to set monetary policy, Bank of England deputy governor Jon Cunliffe said.  _Reuters has more details: _

Cunliffe said he fully backed the central bank's neutral stance regarding its next move in interest rates, as announced earlier this month, and its latest quarterly set of forecasts

which see a modest slowdown next year. The British economy probably still needed interest rates to be negative in 'real' or inflation-adjusted terms, but the fall in sterling meant

the BoE would not necessarily be able to stick to this, Cunliffe said in the text of a speech to be delivered at the University of Manchester. > "The policy rate may need to depart 

from the natural rate if the > policymaker is faced with a shock that creates a trade off – for > example between bringing inflation to target and smoothing output > 

volatility," Cunliffe said. >  > "The exchange rate shock has made it more difficult for policy to > follow the natural rate," he added. 2:45PM POST-ELECTION RALLY

STALLS AS US STOCKS DROP AT OPENING BELL The euphoric reaction to Trump's victory stalled, snapping the Dow Jones' seven-day winning streak, as US stocks opened lower this

afternoon.  Investors braced themselves for higher interest rates, which spurred another leg up in the dollar index, to its highest level in 14 years.  At the opening bell:  * Dow Jones:

-0.26pc * S&P 500: -0.25pc * Nasdaq: -0.4pc 2:17PM BARCLAYS BOSS: LONDON'S 'GRAVITATIONAL PULL' ON FINANCE WILL NOT WANE AFTER BREXIT Brexit is unlikely to lead to a

sudden weakening of London’s “gravitational pull” as one of the leading centres for the global capital markets, according to the boss of Barclays. The vote in June to leave the European

Union has sparked fears that the UK will quit the single market and damage the City’s status as a hub for banking and investment. Jes Staley, the chief executive of Barclays, told a banking

conference today that while Brexit would lead to a great deal of uncertainty for the sector, it would not result in the City losing its influence in the  capital markets overnight. “The

users of capital find the providers of capital, not the other way around, and the providers of capital, by and large, are resident in London and New York,” Mr Staley told the FT Banking

Summit. “I don’t think London will lose its gravitational pull in terms of management of capital in any reasonable timeframe.” Mr Staley, a US citizen who spent much of his career at Wall

Street giant JPMorgan, said that the election of Donald Trump was likely to result in pressure on the US Federal Reserve to pursue tighter monetary policy. “You’ll see political pressure on

the Fed to be less accommodative,” the Barclays chief predicted, adding that “influence on the Fed is going to be another significant consequence of the presidential election”. REPORT BY BEN

MARTIN (READ MORE HERE) 1:46PM DOLLAR INDEX BRIEFLY WEAKENS ON US PRODUCER PRICE DATA  The dollar index briefly weakened this afternoon, retreating from a 14-year high touched earlier in

the trading session, after data from the government showed that US producer prices rose by less than expected last month.  It slipped back to 100.23 after hitting 100.53 earlier today.  >

 #UnitedStates Core PPI month-on-month at -0.2% > https://t.co/xvTkgl8wEa pic.twitter.com/rx6FXTuTwa > — Trading Economics (@tEconomics) November 16, 2016 1:42PM US STOCK INDEX FUTURES

SLOW AS POST-ELECTION RALLY STALLS US stock index futures edged lower as the post-election rally looks set to stall, following seven consecutive days of gains for the Dow Jones. 

Here's a look at the opening calls on Wall Street courtesy of IG:  > US Opening Calls:#DOW 18853 -0.25%#SPX 2173 -0.29%#NASDAQ 4746 > -0.36%#IGOpeningCall > — IGSquawk 

(@IGSquawk) November 16, 2016  Trump's plans to cut tax and increase spending is seen as boosting economic activity, but his protectionist policies are seen as driving

inflation higher.  The prospect of higher inflation has given rise to expectations that the Fed will hike rates more aggressively than previously expected.  Strategists at Amplify Trading

pointed out that markets are pricing in 94pc chance of a rate hike next month - but added Trump doesn't take office until January 2017.  > "This means we are in a bit of a state

 of limbo where news flow > regarding what Trump might or might not do as he takes his seat in > the Oval office will be the main driver of sentiment rather than any > economic 

measures." 1:11PM TRUMPFLATION PUSHES DOLLAR TO HIGHEST LEVEL SINCE APRIL 2003 Naeem Aslam, of Think Markets, weighs in on the move in the dollar index:  > "The Trumpflation 

trade has pushed the dollar index to its highest > level since 2003. This is becoming extremely crowded trade and there > are no signs that traders want to back off at all for the time

> being. > "The strength in the dollar index does represent a risk for the > emerging markets and it can also eat into corporate profit for the > US firms. The current move

 is also massively backed by bets that the > Fed is going to raise the interest rate and odds are standing at > 94%. It is important to keep in mind that come in December, it is > 

the tone of the Fed for the future trajectory of the interest rate > hike which is going to impact the dollar."  1:00PM CAN THE DOLLAR GO TO PARITY WITH THE EURO? Adnan Akant, head

of foreign exchange at Fischer Francis Trees and Watts, a New York based institutional currency manager owned by BNP Paribas, thinks it probably can.  > "Can the dollar go to parity 

with the euro? Well, we are only 7-8 > percent away so probably yes. >  > "Under Trump, we are looking at fiscal policy divergence (with > Europe and Japan) which should be 

very positive for the dollar. > Protectionism is a risk, but if that is focused on emerging markets, > it may perversely also be a dollar positive." _Quotes from Reuters_ 12:58PM

DOLLAR INDEX SURGES TO 14-YEAR HIGH The dollar hit its highest level in 14 years against a basket of currencies on expectations of inflation.  It also surged to its highest level against the

euro in almost a year, as investors debate the possibility of a move towards parity.  Spurred by expectations of an inflationary push from the administration of  President-elect Donald

Trump, that would trigger more rises in Federal Reserve interest rates, it advanced past $1.07 per euro  for the first time since the start of December 2015. It also rose half a percent

against the yen to its highest since June 1, pushing the dollar index  up another 0.3pc to 100.53 - its highest level since April 2003. It has gained almost 3pc since Trump's election

victory just over a week ago. 12:42PM PROTECTIONISM IS BIGGEST RISK TO FINANCIAL MARKET STABILITY SINCE 2009, BOAML SURVEY FINDS The survey of 177 investors managing $456bn in assets,

published by Bank of America Merrill Lynch also found that protectionism is the biggest risk to financial market stability since 2009.  An overwhelming 84pc of investors cited protectionism

as a risk, while 73pc say it is monetary risk of higher rates that poses a risk to financial market stability.  Meanwhile 69pc said geopolitical risks.  Meanwhile, a stagflationary bond

crash was deemed the biggest 'tail risk' (23pc), followed by EU disintegration/banks default  (22pc) and China devaluation/property bubble (16pc).  *It's worth noting that

this survey was conducted between November 9-14 (after Trump's victory). 12:36PM BOAML: INFLATION EXPECTATIONS SOAR TO 12-YEAR HIGHS Inflation expectations soared to 12-year highs, a

closely-followed monthly survey of investors around the world showed. 85pc of investors said they expect higher global inflation,  Bank of America Merrill Lynch found, after polling 177

investors managing $456bn in assets earlier this month.  That's up from 70pc in October - and its highest level since June 2004.  However, stagflation expectations now close to 4-year

highs as 22pc of investors expect below trend growth and above-trend inflation over the next 12 months. 65pc of investors think yield curves will steepen over the 12 months - that's the

highest level since August 2013.  Meanwhile, 44pc of investors think the rotation to cyclical styles and inflationary sectors will continue well into next year.  12:03PM HALF-TIME MARKETS

UPDATE: EUROPEAN BOURSES EXTEND LOSSES  The FTSE 100 extended its losses as disappointing results from Barratt Developments and Rolls-Royce weighed.  Meanwhile, European bourses also came

under pressure as political risk looms.  Just after midday:  * FTSE 100: -0.47pc * DAX: -0.44pc * CAC 40: -0.45pc * IBEX: -0.22pc FTSE 100 1-day >  MIKE VAN DULKEN, OF ACCENDO 

MARKETS, said: "Equities are > nursing small losses as excitement eases about US Trumpflationary > policies representing a turning point and looming political risk in > Europe 

attracts fresh attention. An Italian referendum on > constitutional reform could see PM Renzi ousted. >  > "Austrian elections (third attempt) could see the far-right Freedom

> Party take power. Both take place on 4 Dec and, after Brexit and > Trump, could add important populist precedents ahead of 2017 French > and German elections given rising 

popularity for Le Pen's National > Front and the Alternative for Germany party, respectively."  11:53AM EUROGROUP TO DISCUSS DEBT RELIEF FOR 'COMMITTED' GREECE, SAYS

DIJSSELBLOEM Relations between Greece and its creditors are more constructive than ever and the bloc's finance ministers will discuss wide-ranging debt relief for the country when they

meet next month, Eurogroup head Jeroen Dijsselbloem said on Wednesday. > "The current Greek government seems to be very committed, and > working much more constructively than 

previous governments. There is > a degree of optimism," Dijsselbloem said at the UBS > European conference in London. > Is now speaking at the annual European Conference @UBS 

in London > about the #BankingUnion pic.twitter.com/D8v7tI5pHH > — Jeroen Dijsselbloem (@J_Dijsselbloem) November 16, 2016 > "In December, we will have to talk about short-term

 debt measures, > there are some things we can do now and in the coming years a number > of measures can be set up for the end of the programme." Euro zone finance ministers,

known as the Eurogroup, are scheduled to discuss Greek debt relief measures on December 5. > Speech by @J_Dijsselbloem #Eurogroup President at the #ubseuroconf > in London: 

https://t.co/3Kwr39UXYB #BankingUnion #Brexit #populism > — EU Council Press (@EUCouncilPress) November 16, 2016 11:51AM BREXIT IS 'A LOSE-LOSE SITUATION', SAYS DIJSSELBLOEM

Eurogroup president  and Dutch finance minister Jeroen Dijsselbloem has said that Brexit is a "lose-lose situation" which can only be managed as well as possible.  Speaking at the

UBS European conference in London, Dijsselbloem said the doesn't see any enlargements of the EU in the coming years.  He also said that he would prefer to have as much free trade with

the UK as possible, adding that there needs to be an agreement to prevent losses to both economies.  > #Brexit is a lose-lose situation, which we must manage as well as > possible. 

#ubseuroconf > — Jeroen Dijsselbloem (@J_Dijsselbloem) November 16, 2016 While people make jokes about the UK not having a Brexit plan, Dijsselbloem said many European didn't have a

plan either.  11:45AM BREXIT TALKS WILL TAKE 'A LOT LONGER' THAN TWO YEARS, SAYS EUROGROUP HEAD Negotiations over Britain's departure from the European Union are very complex

and are going to take longer than the scheduled two years, Eurogroup president Jeroen Dijsselbloem said. Britain has said it will trigger Article 50 of the Lisbon Treaty by the end of March

next year, starting a 24-month countdown to its departure from the bloc. > "Negotiations are hugely complex... They are going to take a lot > longer that two years", Dutch 

Finance Minister Dijsselbloem said at > an event in London, adding that both sides were viewing each other > with "some suspicion". _Report from Reuters_ 11:26AM UK LABOUR

MARKET: CHUGGING AWAY FAIRLY NICELY – WAGE INFLATION TO BUILD? The labour market appears to be chugging away nicely, Chris Hare of Investec, said after official data showed the unemployment

rate dropped to 4.8pc in the three months to September.  However, growth in private sector wages, excluding bonuses, jumped up from +2.4pc to +2.7pc (3m yoy) – the highest rate in over a

year, Hare flags. > "There are signs that the labour market is still tightening and, bar > a material post-EU referendum slowdown, higher wage inflation could > on the 

way." > 31.80m people in work and 1.60m unemployed people for Jul-Sep 2016 > pic.twitter.com/C4AsJnNMjK > — Richard Clegg (@ONSRichardClegg) November 16, 2016 Mr Hare also

thinks it is possible that labour market "tightness" will give wages "another leg up".  > "Granted, headline average wage growth held steady at +2.3pc (3m > 

yoy). We were also struck by the ‘single month’ annual growth > rate in private sector underlying pay – it increased from +2.5pc > to +3.1pc. That is the highest rate of growth seen 

since July 2015. >  > "We admit that these ‘single month’ data are volatile, and that > a period of 3pc-plus pay growth seen last year proved to be a false > dawn. But with 

the unemployment rate now as low as 4.8pc, there > might not be much spare capacity left in the labour market to bear > down on wage inflation." > For Jul-Sep 2016 wages up 

2.3% on a year including bonuses and 2.4% > on a year excluding bonuses https://t.co/akklsvf2Wc > pic.twitter.com/b8Rj7WcLGZ > — ONS (@ONS) November 16, 2016 Investec's central

view remains that Brexit related economic uncertainty, particularly the prospect of the UK exiting the Single Market, will see economic growth slowing over the next couple of years. In

terms of GDP, its forecast is for growth to ease back from +2.1pc this year to +1.4pc next year. As a consequence, Investec sees the unemployment rate climbing gradually to just above 5.25pc

by the end of 2018. > "That in turn should keep domestic inflationary pressures in check," > Mr Hare said.  11:09AM POUND BOOST POST-UK LABOUR DATA SHORT-LIVED The boost the

pound enjoyed following the release of the labour report this morning has been short-lived.  The local currency turned negative, down 0.02pc on the day, to $1.2438 against the dollar as it

shrugged off the surprise fall in the unemployment rate and instead focused on the risks surrounding Brexit.  The UK jobs report also showed some signs that the labour market might be

cooling.  11:00AM UK JOBS REPORT CONFIRMS THERE IS 'NO SIGN YET' OF BREXIT VOTE LEADING TO JOBS LOSSES, SAYS PWC John Hawksworth, chief economist at PwC, says today's UK jobs

report confirms there is "no sign yet" of the Brexit vote leading to job losses.  However, he cautions unemployment tends to be a lagging indicator.  > “We could yet see a 

modest rise in the jobless total next year as > uncertainty around the Brexit negotiations dampens business > investment and slows overall economic growth. But we do not expect > 

the UK economy to go into recession, so would not expect any large > increases in unemployment." > UK #unemployment rate at 4.8%, down from 5.3% for a year earlier & > 

lowest since July to September 2005 https://t.co/LHIEvoPwq1 > — Linda Yueh (@lindayueh) November 16, 2016 Hawksworth also noted that earnings growth, which has been "quite

sticky" in recent years, "remained relatively subdued" at 2.3pc - unchanged from the previous months.  > “We would expect this to continue next year, with earnings growth

> remaining around current levels while consumer price inflation picks > up to well over 2pc, squeezing real wages again.” 10:49AM UNEMPLOYMENT DROPS TO FRESH 11-YEAR LOW BUT RISE IN

BENEFIT CLAIMS SIGNALS JOBS SLOWDOWN AHEAD Here's our full report by SZU PING CHAN on the UK labour report released earlier this morning: Britain's jobless rate fell to a fresh

11-year low in the quarter to September, though weaker employment growth and a rise in benefit claims suggested the job rich recovery could be slowing down. The unemployment rate stood at

4.8pc in the first full quarter following the Brexit vote, down from 4.9pc in the three months to June, according to the Office for National Statistics (ONS). This is the lowest rate since

the quarter to September 2005. Economists expected the rate to remain unchanged. The ONS said the number of people in work continued to rise over the quarter, keeping the working age

employment rate at a joint record high of 74.5pc. While this suggests Britain weathered the initial shock of the Brexit vote, the 49,000 rise in employment was half that forecast by

economists, and the slowest increase since the three months to March. Alan Clarke, an economist at Scotiabank, said the latest figures implied a 15,000 drop in employment in September, which

would represent the first monthly drop since February, while the fall in the headline unemployment rate was helped by a drop in the number of people actively looking for work. READ MORE

HERE 10:42AM SIGNS UK LABOUR MARKET 'MIGHT BE COOLING', SAYS ONS STATISTICIAN  Back to the labour report, ONS statistician David Freeman has cautioned that there are signs that the

labour market in the UK "might be cooling", with employment growth slowing.  Earlier this morning, data from the ONS showed that unemployment was at its lowest level for 11 years

and the employment rate remained at a record high.  > Claimant count and tax receipts are both good early warning signs > for UK outlook and neither looks good. > — Duncan Weldon 

(@DuncanWeldon) November 16, 2016 Freeman also highlighted that the Labour Force Survey also includes information on the nationality and country of birth of workers.  > "That limited

 evidence suggests the referendum outcome and > subsequent devaluation of sterling has had little impact so far on > the number of EU workers in the UK labour force," he added. 

10:34AM MAY'S COMMENTS ON DISTRIBUTIONAL EFFECTS OF QE WERE 'UNCONTROVERSIAL', SAYS BEAN Bean also said Theresa May's comments on the distributional effects of QE were

"uncontroversial".  The "furore" around May's "a change has got to come" comments was "I suspect an element of cock-up in the drafting", Bean

said, as  the HMT didn't get to look at it first. Bean said he read her speech as meaning "she will change what the government does'" rather than interfering with the

BoE. On Brexit, Bean said it might mean the government forgets all of the UK's other problems such as productivity growth. Although it is too early to tell, he said the idea of an

industrial strategy could be a "return to the bad old days". _Report from Tim Wallace at the UBS European Conference in London​_ 10:27AM QE HAS RUN ITS COURSE, SAYS FORMER BANK OF

ENGLAND GOVERNOR  Away from the UK labour data, former Bank of England Deputy Governor  Charlie Bean, has said that QE has run its course.  Speaking at the UBS conference in London today, he

reckons QE comes with risks to financial stability, makes the rich richer and is decreasingly effective at boosting growth.  > "If QE becomes permanent, we've effectively got 

'helicopter money' > already," he added.  Bean thinks that we should put effort into structural and other policies, rather than wasting time on ever-less useful monetary

policy. _Report from our economics correspondent Tim Wallace_ 10:15AM DECENT LABOUR REPORT, BUT SIGNS OF CRACKS APPEARING HOWARD ARCHER, OF IHS MARKIT, has described this morning's jobs

report as "decent" but cautioned that are some signs of cracks appearing.  > "Employers so far have seemingly been maintaining a “wait and > see” approach after June’s 

Brexit vote, helped by the > economy’s resilience in the third quarter when GDP expanded 0.5pc > quarter-on-quarter," he added.  >  > He suspects the economy and the labour 

market will be "increasingly > pressurised" by mounting uncertainties over the coming months - > "particularly once the government triggers Article 50 (the > 

government is still aiming for end-March) and likely very difficult > negotiations with the EU come increasingly to the forefront".  > UK Unemployment drops to 4.8%, while average

 earnings rise to 2.4%, > still outstripping inflation pressures for now. > Good news for UK > — Michael Hewson (@mhewson_CMC) November 16, 2016 Elsewhere, SAMUEL TOMBS, OF PANTHEON

MACROECONOMICS, said the drop in the unemployment rate provides "little consolation" in an otherwise weak labour market report.  > "The claimant count rose by 9.8K 

month-to-month in October and > September’s increase was revised larger to 5.6K, from 0.7K. The > moderate upward trend in the claimant count now is clear, suggesting > that the 

main ILO unemployment rate will begin to drift up soon," he > added.  >  DAVID CHEETHAM AT XTB.COM, said: "Whilst the news seems > positive on the face of it, it 

should be noted that this data is > lagging by 45 days and therefore only covers the labour market > strength until the start of October. >  > "Upon closer inspection the 

rise in the claimant count change - > which is a fairer representation of the current environment as this > data point covers the period until the end of last month - takes the > 

shine off the good news at the very least and possibly even usurps > it."  10:04AM STRONG JOBS DATA UNDERLINES 'RESILIENCE OF UK LABOUR MARKET', SAYS HINDS Weighing in on

the surprise fall in the jobless rate, EMPLOYMENT MINISTER, DAMIAN HINDS, SAID: > "Yet again we have a strong set of figures, with employment > continuing to run at a record high 

and unemployment falling to a > 11-year low. >  > "Growth is being fuelled by full-time professional jobs while wages > are continuing to perform strongly, which underlines 

the resilience > of the UK labour market. >  > "The measures we have taken have put our economy in a position of > strength, and we will work to ensure more people can 

benefit from > these opportunities as we build a country that works for everyone." > UK Unemployment rate drops to 11yr low of 4.8%, but far fewer jobs > created (49K vs 91Ke v

 106k prev); headline Wages growth firm, > Claims up > — Mike van Dulken (@Accendo_Mike) November 16, 2016 9:58AM UK LABOUR MARKET: STILL WAITING FOR THE BREXIT EFFECT Reacting to the

latest UK jobs report, BEN BRETTELL, SENIOR ECONOMIST, HARGREAVES LANSDOWN, said the UK's labour market continues to surprise with its resilience to the Brexit shock.  The unemployment

rate fell unexpectedly to 4.8pc in the three months to September.  > Brettell said: "This is yet more evidence that the labour market and > the wider economy have fared better 

than expected since June’s > referendum." > New independent stats show the employment rate is the highest since > records began in 1971 pic.twitter.com/H3AnLLk2oj > — DWP 

Press Office (@dwppressoffice) November 16, 2016 However, he cautioned there could be storm clouds gathering on the horizon. > "The claimant count – which in a quirk of the data is a

 more > recent figure than the unemployment rate – jumped by 9,800 in > October, with September’s figure revised upwards from 700 to > 5,600. All in all, it does seem likely that 

unemployment could tick > up somewhat during the coming months, though dire predictions made > in the immediate aftermath of the vote appear wide of the mark. >  > "Wage 

growth held steady at 2.3pc, but it’s probable pay will fall > in real terms over the coming year or so. An industry survey > released earlier in the week showed employers expect to 

make pay > settlements of 1.1pc at present - well below many predictions for > inflation, which the Bank of England forecasts will hit 2.7pc next > year." > New independent 

stats show the number of people in work has risen in > every region and nation of the UK since 2010 > pic.twitter.com/cFEheUfmt1 > — DWP Press Office (@dwppressoffice) November 16, 

2016 9:53AM POUND EDGES UP AFTER UK JOBS REPORT Having dropped in advance of the economic data release, the pound has edged up 0.2pc to $1.2469 following the release of the UK jobs report.

Data from the ONS showed that the unemployment rate fell to 4.8pc and benefits claimed jumped to its highest level since May.  > The British pound is bouncing from an initial dip 

following a higher > claimant count since the unemployment rate saw a surprise drop to > 4.8% > — Jasper Lawler (@jlawler_CMC) November 16, 2016  Here's a look at the

pound's performance so far today:  9:49AM UK JOBS REPORT: KEY CHARTS Here's a look at the key charts from the ONS release that revealed UK unemployment dropped to 4.8pc and benefit

claims jumped to its highest level since May:  * There were 31.80m people in work, 49,000 more than for April to June 2016 and 461,000 more than for a year earlier. * The employment rate

(the proportion of people aged from 16 to 64 who were in work) was 74.5pc, the joint highest since comparable records began in 1971.  * The proportion of jobs accounted for by the

manufacturing and mining and quarrying sectors fell from 26.3pc to 8.0pc, while the proportion of jobs accounted for by the services sector increased from 63.2pc to 83.2pc. * Between July to

September 2015 and July to September 2016, in nominal terms, regular pay increased by 2.4pc, slightly higher than the growth rate between June to August 2015 and June to August 2016

(2.3pc).  9:37AM BREAKING: UK UNEMPLOYMENT RATE FALLS TO 11-YEAR LOW, BUT BENEFIT CLAIMS JUMP  Britain's unemployment rate fell in the first three months after the Brexit vote

to its lowest level in 11 years but there were some signs that a slowdown in the labour market could be coming. Key points from ONS release:  * Unemployment rate edged down to 4.8pc  in

July-Setpember, from 4.9pc (compared to forecasts of an unchanged jobless rate of 4.9pc); * Number of people in work rose by 49,000 - slowest increase since the three months to March this

year; * Number of people claiming unemployment benefits in October rose by 9,800 - biggest rise since May; * September's claimant count increase was revised up to 5,600 from a previous

reading of 700; * Total earnings including bonuses rose by an annual 2.3 percent, unchanged from their pace in the three months to August. > #Unemployment rate (for people aged 16+) 4.8% 

for Jul-Sep 2016, down > from 5.3% a yr earlier https://t.co/akklsvf2Wc > pic.twitter.com/70eOASsr7s > — ONS (@ONS) November 16, 2016  _More to follow.... _ 9:31AM FED SHOULD HIKE

RATES ONCE MORE THIS YEAR, SAYS BULLARD  The Fed should hike rates once more this year, Fed policymaker James Bullard said this morning at a UBS conference in London this morning.  He is

also relatively upbeat on Trump's victory. He believes tax cuts and increased spending could be good if it targets infrastructure, which would boost productivity.  Cutting red tape

could also help productivity, he says. Immigration and trade policies will only get hit in the longer-term, he said, so are less of a worry for the Fed, for now. On the market reaction to

Trump's victory, he said it had not rattled markets as expected.  > "There were a lot of predictions that if the election went the way > of Republicans and President-elect 

Donald Trump then there would be > great deal of volatility, but that has not materialised so far."  _Report from our economics correspondent Tim Wallace, who is attending the

conference_ 9:24AM POUND INCHES HIGHER AS INVESTOR EYE UK JOBS REPORT Ahead of the UK jobs report due for release shortly, the pound has edged up 0.12pc to $1.2456 after falling yesterday,

when a leaked memo suggest that the government had no overall plan for Brexit.  9:21AM DOLLAR HITS HIGHEST LEVEL SINCE DECEMBER  Looking at currency markets, the dollar hit its highest level

against the euro since December this morning on expectations an inflationary push under Trump's administration would trigger aggressive rate rises by the Fed.  It rose by as much as

0.3pc to 0.9345.  9:16AM ANALYSTS PREVIEW UK JOBS REPORT Ahead of the release of UK unemployment and wages data at 9.30am, analysts in the City have previewed the report:  After

yesterday's inflation report suggested the pause in rising inflation is unlikely to be sustained in the longer term, MICHAEL HEWSON, OF CMC MARKETS, said wages data will be "even

more important" in the coming months to ensure the effects of any future income squeeze remain "as benign as possible".  > He added: "Average earnings for the three 

months to September is > expected to come in unchanged at 2.3pc, while the latest ILO > unemployment rate is expected to remain unchanged at 4.9pc, as the > UK economy continues to 

confound all those critics who expected a > post Brexit vote slump." Meanwhile, FIONA CINCOTTA,  OF CITY INDEX, said today's report is expected to show an increase in October of

2.3k people claiming unemployment benefits, whilst average wage growth in the three months to September is expected to have increased 2.3pc year on year. > "Anything short of these 

figures could again fuel expectation of > further easing by the Bank of England and therefore put renewed > downward pressure on sterling, with a decisive break through 1.2400 > 

possibly dragging cable back to 1.2350. "  LUKMAN OTUNUGA, OF FXTM, said investors may direct their attention towards the pending UK labor report which could provide some clarity on how

the UK economy is faring in the aftermath of the Brexit vote. > "The number of new claimants for unemployment has been predicted to > edge higher in October, and if such becomes 

a reality then concerns > could elevate over the Brexit woes contaminating the UK labor > markets. Another batch of soft domestic economic releases from the > UK could be the 

catalyst bears need to install another heavy round > of selling on the GBPUSD during Tuesday’s trading session." 9:01AM MORRISONS TIE-UP WITH AMAZON PRIME SENDS OCADO SHARES PLUNGING

Shares in Ocado slumped towards the bottom of the mid-cap index, down almost 5pc, after Morrisons announced that it has set up a new service that will offer Amazon Prime customers same-day

deliveries of groceries from its stores. HARRY YORKE REPORTS:  Selected customers of Amazon's Prime service will be able to order a full Morrisons shop via their smartphone from today,

as the retailers forge ever closer ties.  Orders will be picked at a local Morrisons store and delivered the same day by Amazon either within one hour for £6.99 or in a two-hour slot for

free. The service will launch in selected postcodes in London and Hertfordshire. Ocado shares The news sent Ocado shares tumbling more than 6pc in early trade, to £2.65, amid concerns that

Amazon is now making a serious attempt to seize a share of the UK's online grocery market. Morrisons' shares rose 0.6pc. Morrisons already has an online service in partnership with

Ocado, which it renegotiated August, extending its coverage nationwide and adding more products. The tie-up with Amazon Prime is an extension of a deal Morrisons struck in February that saw

it begin wholesale supply to the US giant. CONTINUE READING HERE 8:56AM UBS WON'T CHANGE LONDON PRESENCE ANY TIME SOON, SAYS WEBER The chairman of Swiss bank UBS Axel Weber said the

bank will not make any changes to its London operations any time soon in the wake of the EU referendum.  > Speaking at a conference hosted by the bank, Weber said: "We are > not 

planning to change anything any time soon and we will wait and > see where the dust settles."  > The exodus continues -- UBS won't change London presence any time > soon, 

chairman says > — Jasper Lawler (@jlawler_CMC) November 16, 2016  He also said that he expects the Brexit process to generate more volatility, before adding that all key

decisions will be made in the very final stages of negotiations.  8:53AM TRUMP TRANSITION TRADE LOOKS TO BE IN REVERSE. The Trump transition trade looks to be in reverse, REBECCA

O'KEEFFE, OF INTERACTIVE INVESTOR, said this morning, as equities dip into the red.  > "As the initial shock wears off, expectations have waned and the > huge sector moves 

seen over the past week are starting to unwind a > little. Industrial metal prices remain volatile, having potentially > overpriced the infrastructure impact and moved too far, too 

fast. > Technology companies, which had fallen sharply, are seeing investors > move back into the sector. Emerging markets are also paring losses > from last week, as investors 

start to rethink some of the early > reaction and reality returns to the market. > Good morning from Berlin. Asia enjoying solid bounce. 6% rally in > oil overnight is great help, 

as well as Dollar & bond yields > stabilizing. pic.twitter.com/2PE2nXHoBb > — Holger Zschaepitz (@Schuldensuehner) November 16, 2016 > "However, global bonds continue to 

sell off, with yields rising as > the repricing continues on expectations of a prolonged turnaround in > the sector.  With inflation expected to rise from multi-decade lows > as 

policy makers move from monetary to fiscal stimulus, interest > rates and bond yields are likely to creep higher over the coming > months and years and we are already starting to see 

some major bond > investors beginning to reverse their long held positions."  8:44AM FTSE 100 FALTERS AS HOUSEBUILDERS WEIGH The FTSE 100 dipped into negative territory in early

trade after Britain's biggest housebuilder Barratt said it was having to cut the price of some of its most expensive London homes by up to 10pc, suggesting the market is cooling after

the referendum.  Meanwhile, European bourses also came under pressure.  Here's the current state of play in Europe:  * FTSE 100: -0.06pc * DAX: -0.24pc * CAC 40: -0.04pc * IBEX: +0.08pc

FTSE 100 1-day  However, MIKE VAN DULKEN, OF ACCENDO MARKETS, flagged that sentiment remains positively biased towards a Trump presidency, potentially representing a welcome

turning point for markets after a decade of stagnation. > Looking back at the action overnight, he said: "Japan’s Nikkei is > leading Asian bourses higher thanks to continued Yen 

weakness > derived from USD strength and disposal of the currency as an > alternative safe haven to the Gold. There is also some fresh > excitement surrounding Mario, but from 

Nintendo not the > ECB. Australia’s ASX is flat with Miners held back by the > correction in metals offsetting gains in Energy from the Oil > rebound." 8:36AM YUAN FALLS TO

8-YEAR LOW AS CHINA-CRITIC TRUMP PREPARES TO TAKE OFFICE   China's yuan weakened to an eight-year low on Wednesday as expectations of higher U.S. interest rates buoyed the

dollar, putting Beijing's commitment to market-oriented reforms in the spotlight as fierce critic Donald Trump prepares to take office. The yuan has now depreciated 5.4pc against the

dollar so far this year, with its descent gathering speed since Trump's election in the presidential race on Nov. 8, which has boosted the greenback against most other global

currencies. Trump has threatened to label China a currency manipulator on his first day in office and has threatened to slap punitive tariffs on Chinese imports. > This recent drop in the

 Chinese currency (against the dollar) has > pushed it well below market estimates. Smell another round of > revisions? pic.twitter.com/uf3DQbxGM4 > — David Ingles (@DavidInglesTV) 

November 15, 2016 Prior to the market open, the People's Bank of China set a weaker midpoint for the ninth consecutive day as the dollar stood near an 11-month high against a basket of

currencies. The PBOC set the midpoint at 6.8592 per dollar, weaker than the previous fix of 6.8495. In the spot market, the yuan  opened at 6.8608 per dollar and was changing hands at 6.8700

at midday, 135 pips away from the previous late session close and 0.16 percent away from the midpoint. > "We are still waiting for clearer signs of whether the dollar index > can

 stand still above 100 and whether China's central bank will take > action to intervene in the market," said a trader at a Chinese bank > in Shanghai. > "Our strategy

 now is to keep our positions low to minimize risk," > the trader said. > JUST IN: Offshore yuan just fell past 6.88; weakening when the > dollar's actually consolidating 

(fix was weaker as well for a 9th > straight) pic.twitter.com/1BiUCXGeS4 > — David Ingles (@DavidInglesTV) November 16, 2016 _Report by Reuters_ 8:30AM AGENDA: UK UNEMPLOYMENT AND

EARNINGS DATA Good morning and welcome to our live markets coverage.  Last night, oil prices leapt by almost 6pc on hopes Opec will agree an output cut when they meet later this month.

Meanwhile, on Wall Street, the S&P 500 rose as tech stocks bounced backs, following a recent slide on concerns about Trump's administration.  > #Trumpflation shock fading. 

Volatility has dies down a week from > Trumps surprise victory. https://t.co/FjK1zXbyXs > pic.twitter.com/qsmrFQqX0m > — Holger Zschaepitz (@Schuldensuehner) November 16, 2016

Today, attention shifts to the UK unemployment and earnings data which will be released at 9.30am. > Previewing the economic data release, CONNOR CAMPBELL, OF > SPREADEX, said: 

"Both the unemployment rate and wage growth > readings are forecast to remain unchanged at 2.3pc (though it could > creep a bit higher to 2.4pc) and 4.9pc respectively; the 

jobless > claims figure, on the other hand, is set to see a bit more movement, > rising to 1.9k from the 0.7k seen the month previous."  Also on the agenda:  INTERIM RESULTS:

ICAP, British Land, HICL Infrastructure, Fenner, Speedy Hire TRADING UPDATE: Barratt Developments, Aggreko AGM: Celtic, AB Dynamics ECONOMICS: Claimant count change (UK), average earnings

index (UK), unemployment rate (UK), PPI m/m (US), industrial production m/m (US), capacity utilisation rate (US), NAHB housing market index (US), crude oil inventories (US), TIC long-term

purchases (US) > At 8.09am - FTSE +10 - PRU +1.5%, SPEEDY HIRE +10%!!, FENNER +5%!, > AGGREKO +1.6%, BRITISH LAND unch, BARRATT DEVLOPMENT unch > — David Buik (@truemagic68) 

November 16, 2016