EUR/USD, GBP/USD flows - UK labour data softer; schizophrenic mood slightly catches up with risk o/n

The schizophrenic, compartmentalised mood noted in the outlook catching up with the market somewhat overnight as the reality of the ongoing and intensifying US-Iran standoff does final drag a little. Trump lashing out at Oman, Iran threatening to shift to ‘fully offensive’ and the US ruling out extending the temporary ceasefire has oil continue to creep, Brent +$1 and extending above $90 back towards the late Jul levels. Refining moreover still increasingly the bottleneck and the concern further downstream. Risk therefore somewhat checked, S&P off 0.5%, Nasdaq almost -1%, and dollar slightly supported (NZD pulling back especially after the initial false break and pullback from 0.59/10). 

UK labor market data meanwhile shows further cooling with private sector ex-bonus pay easing to 2.8%, lowest since Oct20, while unemployment held 4.9% (mkt 4.8%). HMRC payrolls data also showed a 13k drop in July, the second straight small slip.. Rightmove meanwhile showed a drop in house asking price, down 1% on the year. Soft data not particularly leaving a lasting FX impression on GBP this morning, but should again help the BoE stick to its current wait and see stance through the summer with the majority still viewing downside growth risks as outweighing upside inflation risks while second round effects are not apparent.