– U.K. Jobless Claims to Increase for Fifth Consecutive Month.
-Â Average Weekly Earnings to Climb Annualized 2.3%- Highest Since October.
Trading the News:Â U.K. Jobless Claims Change
Even though U.K. Jobless Claims are projected to increase another 9.0K in July, signs of stronger wage growth may keep the British Pound afloat, with GBP/USD at risk of staging a larger recovery should the data tame market expectation for additional monetary support.
What’s Expected:
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Why Is This Event Important:
The Bank of England (BoE) is widely anticipated to further embark on its easing cycle this year as ‘a majority of members expect to support a further cut in Bank Rate to its effective lower bound,’ but the central bank may move to the sidelines after delivering the comprehensive easing packing earlier this month especially as Governor Mark Carney rules out a zero-interest rate policy (ZIRP) for the U.K.
Expectations: Bullish Argument/Scenario
|
Release |
Expected |
Actual |
|
BRC Like-for-Like (YoY) (JUL) |
-0.7% |
1.1% |
|
Net Consumer Credit (JUN) |
1.4B |
1.8B |
|
Gross Domestic Product (YoY) (2Q A) |
2.1% |
2.2% |
Even though ‘Brexit’ clouds the fundamental outlook for the region, signs of resilience in the U.K. economy accompanied by strong wage growth may spark a bullish reaction in GBP/USD and encourage the BoE to retain the current policy at the September 15 meeting especially as the central bank sees a risk of overshooting the 2% inflation-target over the policy horizon.
Risk: Bearish Argument/Scenario
|
Release |
Expected |
Actual |
|
Trade Balance (JUN) |
-2.550B |
-5.084B |
|
Manufacturing Production (MoM) (JUN) |
-0.2% |
-0.3% |
|
CBI Business Optimism (JUL) |
-15 |
-47 |
