Now that the U.K. general elections are over, is sterling set for a relief rally? Or are there other catalysts to look out for?
Markit flash PMIs (Dec. 16, 10:30 am GMT)
- Considered leading indicators of economic performance
- Dec manufacturing PMI to climb to 49.1 to reflect slower contraction
- Nov manufacturing PMI upgraded from 48.3 to 48.9
- Dec services PMI to improve to 49.6 to signal slower contraction
- Nov services PMI revised higher from 48.6 to 49.3
BOE bank stress test results & Financial Stability Report (Dec. 16, 5:00 pm GMT)
- Checks if banks’ stability and liquidity can withstand extreme conditions
- Identifies potential financial system risks, which can guide policy changes
- Impact of latest election results and Brexit developments to be assessed
U.K. jobs figures (Dec. 17, 10:30 am GMT)
- Claimant count change to slow from 33K in Oct to 21.2K in Nov
- Average earnings index to dip from 3.6% to 3.4% in period ending in Oct
- Unemployment rate to tick higher from 3.8% to 3.9%
U.K. CPI (Dec. 18, 10:30 am GMT)
- Headline CPI to stay unchanged at 1.5% in Nov
- Core CPI also to hold steady at 1.7% in Nov
- PPI input prices to post 0.1% uptick after earlier 1.3% slide
- PPI output prices to stay flat after earlier 0.1% dip
BOE monetary policy decision & MPC minutes (Dec. 19, 1:00 pm GMT)
- Interest rates likely to be kept unchanged at 0.75%
- No changes to asset purchases at 435B GBP expected
- Two MPC members expected to vote for a cut, the rest likely to stand pat
- Traders also eager to hear the BOE’s take on the U.K. election results
- Moving averages show that sterling is bullish against all of its major counterparts, particularly the Aussie and the yen.
- Stochastic, however, reveals that GBP/JPY and GBP/USD are already seeing overbought conditions and could be due for dips.
Missed last week’s price action? Check out the GBP Weekly Review for Dec. 9 – 13!