The Lloyds share price spiked on Tuesday as investors reacted to the latest UK jobs data. The LLOY stock jumped to a high of 47.45p, which was the highest level since June.
Data by the Office of National Statistics (ONS) showed that the UK labour market continued to tighten in August as the country reopened. The average hourly earnings with bonuses increased by 7.2% in August while without bonuses, they rose to 6.0%.
At the same time, the country’s unemployment rate dropped from 4.6% in July to 4.5%. This is the lowest it has been since the pandemic started.
Another data showed that the UK employment change rose from 183k to 235k, which is a sign that employers are snapping more workers. The number of claimant count in September declined to more than 51.1k.
These numbers, coupled with the rising inflation, has led many investors to start price in a situation where the Bank of England (BOE) will start hiking interest rates and winding down quantitative easing earlier than expected. Such a move will be better for companies like Lloyds Bank and NatWest, which make most of their money in interest.
The daily chart shows that the LLOY share price has been crawling back in the past few weeks. The stock has managed to rally from a low of 41.86p to today’s high of 47.50p. As it rose, it moved above the key resistance level at 46.90, which was the highest level in August.
Therefore, I suspect that the Lloyds share price will keep the bullish momentum going on as investors target the next key resistance at 50p. On the flip side, a drop below 45p will invalidate this view.