Think data leaks, in which the FOMC sends minutes to its banker supervisors a day in advance, where HFT algos pay millions to get key data to their collocated servers 10 milliseconds early, where journalists freely breach embargos and/or "secure" government lock-rooms are bypassed with a simple text message, are purely a US phenomenon? Think again. As Citi explains, today we saw just this taking place in the City.
- Sterling provided the main focus when, somewhat suspiciously, it went very bid ahead of the release of UK employment data at 09:30.
- Inevitably, this sparked a lot of talk that the data had been leaked. CitiFX Wire reported at 09:10: “This is extremely spurious – while it is not unknown for official UK data to leak, it is extremely rare. The data are released to journalists in a locked-room environment.”
- However, the data duly came out much better than expected – so it lookslike we’ll be eating humble pie for lunch - again.
- CitiFX Wire doesn’t subscribe to conspiracy theories, but the move strongly suggests that either someone got very lucky, or that they’d been given a bit of a nod & a wink.
- The September claimant count came in at -41.7k (forecast -25k), while the LFS unemployment rate was 7.7% as forecasted.
- Cable spiked briefly as high at 1.6064 on Reuters, but then eased immediately to 1.6020. It had been around 1.6035 just before the release.EURGBP eased around 10-pips to 0.8440.
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So is this merely a pervasive phenomenon in which the leakage rules are only made to be broken, or following the crackdown on US early data releases, are traders forced to find other, more "permissive" venues like the UK? We expect to never find out.
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