Got any pound trades this week or still planning to take one? Make sure you watch out for these major catalysts lined up tomorrow, as GBP forex pairs could be in for a lot of big moves!
U.K. Claimant Count Change (9:30 am GMT)
First up, we’ve got the U.K. October jobs data up for release a few hours into the London trading session. This report comprises the claimant count change, the unemployment rate, and the average hourly earnings figure.
Hiring is expected to have picked up by 24.9K in the previous month, stronger than September’s meager 18.6K increase. If the actual claimant count change reading meets or beats expectations, it might be enough to bring the unemployment rate down from 6.0% to 5.9%. Meanwhile, average hourly earnings could show a 0.9% increase, higher than the previous month’s 0.7% uptick.
Stronger than expected jobs figures could lead to a pound rally, as these might be enough to reassure traders that the positive employment trend could be sustained and that the BOE might need to tighten monetary policy sooner than anticipated.
BOE Inflation Report (10:30 am GMT)
The BOE Inflation Report should shed more light on what policymakers have in mind when it comes to potential interest rate changes. Apart from improvements in the labor market, the U.K. central bank is also keeping close tabs on price pressures and whether or not the economy can maintain its 2% inflation target.
Upgraded economic forecasts could be bullish for the pound since this might lead forex market participants to price in a BOE rate hike for early 2015. On the other hand, a downbeat outlook could lead to more pound losses, as traders might push back rate hike expectations for the latter half of next year.
BOE Governor Carney’s Speech (10:30 am GMT)
Governor Carney is scheduled to grant a press conference after the Inflation Report is released, and this event might provide clearer clues on when BOE policy tightening could start. Bear in mind that Carney has flip-flopped in his rate hike forecasts but this indecision doesn’t seem to have clouded his credibility, as pound pairs still have a strong reaction to his remarks.
In his previous testimonies, Carney has emphasized how the timing of a potential rate hike hinges on employment and inflation data. In particular, he is keeping close tabs on whether on not wage growth can keep up with inflation. The negative impact of a looming euro zone recession on the U.K. might also be discussed, although the pound could still stay afloat if Carney assures that the economy could stay resilient.
While these events could set the stage for exciting profit opportunities, make sure you’re extra mindful of a likely spike in volatility among the pound pairs around these times. If that ain’t your thing, there ain’t no shame in sitting on the sidelines and watching forex price action play out.
What’s your game plan for these GBP catalysts on Wednesday? Share your thoughts in our comment box or cast your votes in our poll below!