Sterling was generally weaker in the past week as political uncertainty and Brexit-related drama lingered. A handful of top-tier events this time might change that.
New U.K. Prime Minister
In case you’ve been living under a rock, you’d probably know that Jon Snow killed Daenerys and that Prime Minister May has officially stepped down from her post.
This week, all eyes and ears are on the race to secure the top spot. The candidates will be whittled down to the top two in a series of secret votes. The winner still needs the backing of both Conservative MPs and ordinary party members.
A general election isn’t really necessary, but it might prove to be positive for morale if public backing for the new Prime Minister and his (or her!) Brexit plan is confirmed.
Among the contenders, former London mayor Boris Johnson is said to be the frontrunner, followed by Foreign Minister Jeremy Hunt and Agriculture Minister Michael Gove.
Johnson has reportedly stated that the U.K. will be leaving the EU on October 31 “deal or no deal.” Meanwhile Gove has been quoted saying that he is open to another extension in negotiations with the EU. Hunt hasn’t really committed to an exit date either but stated that it has to be done with a transition deal.
U.K. jobs data (Jun. 11, 8:30 am GMT)
In terms of economic releases, the U.K. employment figures might be the ones to watch this week. After all, these serve as leading indicators for consumer spending and inflation.
The claimant count for May is expected to have increased by 12.3K, slower than the earlier 24.7K gain in joblessness. The unemployment rate for April likely held steady at 3.8%.
Market watchers might have a stronger reaction to the average earnings index or the three-month rolling average of wage growth as the reading is slated to slip from 3.2% to 2.9% for the period ending in April.
Weaker than expected results could add to the downside pressure on sterling, especially with Brexit uncertainty likely to weigh on future employment conditions, but upside surprises could spur intraday gains.
Missed last week’s price action? Read GBP’s price recap for June 3-7!