UKX FTSE 100 Index

By Sara Sjolin, MarketWatch

Vodafone slumps after news of CEO's planned departure

U.K. stocks struggled for direction in the early going on Tuesday, with traders wary of making any big bets ahead British labor-market data that could weaken or strengthen the case for a Bank of England rate rise.

What are markets doing?

The FTSE 100 index was up 0.1% at 7,716.11, slightly rebounding from a 0.2% loss on Monday.

The pound traded at $1.3538 compared with $1.3556 late Monday in New York.

What is driving the market?

All eyes were on the U.K. jobs data, due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time. BOE Gov. Mark Carney last week said interest rates will rise over the next three years if the economy evolves as the bank forecasts, seen as adding weight to the macroeconomic data coming out of the U.K.

Analysts expect the unemployment rate in March to remain at a 42-year low of 4.2%, while earnings without bonuses are seen as rising 2.9%, according to a FactSet consensus estimate. Wage growth including bonuses are forecast to have slipped to 2.7% from 2.8%. Particularly the wage data are seen as a major factor in determining monetary policy as it's an indication of underlying inflation pressures.

What are strategists saying?

"Following a string of disappointing economic data, the BOE decided to hold off from hiking when it met last week, while Governor Carney noted that policy makers believe momentum will be reestablished, but they prefer to see evidence before moving," said Charalambos Pissouros, senior market analyst at JFD Brokers, in a note.

"Accelerating earnings excluding bonuses could make investors more confident on the prospect of a BOE rate hike this year, and could even revive some speculation of such an action happening as early as in August. On the other hand, a downside surprise could prompt market participants to take off the table more of their 2018-hike bets," he added.

Stock movers

Shares of Vodafone Group PLC (VOD.LN) (VOD.LN) dropped 3.5% after the telecom giant said its chief executive Vittorio Colao will step down (http://www.marketwatch.com/story/vodafone-cfo-to-succeed-ceo-colao-in-october-2018-05-15) and be succeeded by Chief Financial Officer Nick Read, effective Oct. 1.

EasyJet PLC (EZJ.LN) rose 3.1% after the budget airline said its pretax loss for the first half of fiscal 2018 narrowed (http://www.marketwatch.com/story/easyjet-first-half-loss-narrows-on-higher-revenue-2018-05-15), driven by record revenue a reduction in capacity by other airlines.

(END) Dow Jones Newswires

May 15, 2018 04:02 ET (08:02 GMT)

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