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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

Technical Snapshot

  • Moving averages show that sterling is bullish against all of its major counterparts, particularly the Aussie and the yen.
GBP Pairs Moving Averages from MarketMilk
GBP Pairs Moving Averages from MarketMilk
  • Stochastic, however, reveals that GBP/JPY and GBP/USD are already seeing overbought conditions and could be due for dips.
GBP Pairs Stochastic from MarketMilk
GBP Pairs Stochastic from MarketMilk

Missed last week’s price action? Check out the GBP Weekly Review for Dec. 9 – 13!