It was a mixed run for sterling last week even as the EU granted another Brexit extension. Here’s what’s coming up next.
U.K. jobs data (Apr. 16, 8:30 am GMT)
The spotlight could return to economic data this week as a bunch of top-tier reports are lined up. The first of these will be employment reports, namely the claimant count change, average earnings index, and unemployment rate.
For the month of March, the claimant count is expected to have increased by 17.3K, a slower pace of unemployment growth compared to the earlier 27.0K gain. However, a quick review of previous releases reveals that the actual figure tends to come in weaker than expected.
Meanwhile, the average earnings index for the three-month period ending in February is projected to have ticked higher from 3.4% to 3.5%. This would be in line with a steady pace of wage growth for around a year already, hinting at stronger inflationary pressures and consumer spending down the line.
Lastly, the unemployment rate is expected to have held steady at 3.9%. Stronger than expected results could highlight the resilience of the U.K. jobs sector and businesses amid Brexit uncertainties while weak data could reflect growing unease.
U.K. inflation reports (Apr. 17, 8:30 am GMT)
Next up, we’ve got the U.K. CPI and its fellow inflation reports for March. A slight pickup in price pressures is eyed for the month.
In particular, the headline CPI is estimated to have advanced from 1.9% to 2.0% while the core reading probably ticked higher from 1.8% to 1.9%. The retail price index or RPI is also projected to have increased from 2.5% to 2.6%.
If the actual results do come in line with expectations or even beat those, BOE tightening hopes could draw more support, especially since Brexit uncertainties are expected to ease after the latest extension.
BOE Governor Carney’s speech (Apr. 17, 1:00 pm GMT)
BOE Guv’nah Carney is expected to share more insight into the central bank’s monetary policy plans during his speech later in the day at the Network for Growing the Financial System Conference in Paris.
Although the conference doesn’t exactly focus on policy or Brexit, he might still touch upon those topics during his testimony or be asked questions by the press on his take. After all, market watchers are keen to find out if policymakers’ hands are no longer tied, freeing them up to make policy adjustments without worrying about a “no deal” situation.
U.K. retail sales (Apr. 18, 8:30 am GMT)
Last but certainly not least is the U.K. retail sales report due before the market holidays at the end of the week. While this release doesn’t normally trigger a huge reaction from pound pairs, it’s still worth keeping tabs on to gauge how the consumer sector is coping with the recent turn of events.
For the month of March, retail sales is expected to have slid by 0.3%, erasing most of the earlier 0.4% gain. Two out of the last three releases have come in stronger than expected, though, so there might be a chance for an upside surprise.
Missed last week’s price action? Read GBP’s price recap for April 8-12!