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Pound May Rise if Wage Inflation Pickup Boosts BOE Rate Hike Bets

Pound May Rise if Wage Inflation Pickup Boosts BOE Rate Hike Bets

Talking Points:

  • Pound May Rise if Wage Inflation Pickup Bolsters BOE Rate Hike Outlook
  • More BOE, ECB Commentary in Focus as Traders Ponder Policy Trends
  • See Economic News Directly on Your Charts with the DailyFX News App

UK Jobless Claims figures headline the economic data docket in European trading hours. An increase of 1.4k is expected, marking a narrow improvement from the 4.6k rise in the prior month. The headline figure carries relatively limited implications for BOE policy bets however and traders will likely Average Earnings numbers far more interesting.

The pace of wage inflation is expected to rise to 3.2 percent, marking the third consecutive acceleration. A higher-than-expected outcome may hint that building domestic price pressures will be able to overcome external disinflationary forces from soft oil prices and a stronger currency. That could bolster rate hike expectations, sending the British Pound higher. A soft result could be seen as delaying tightening and weigh on the UK unit.

Meanwhile, another busy round central bank commentary will see investors combing through the rhetoric for near-term policy clues. Remarks from BOE Governor Mark Carney along with Deputy Governors Bailey, Shafik and Cunliffe may help shape tightening timeline expectations. Meanwhile, comments from ECB President Mario Draghi as well as policymakers Constancio and Hansson may help inform bets on possible routes for stimulus expansion at next month’s meeting.

Losing Money Trading Forex? This Might Be Why.

Asia Session

23:30AUDWestpac Consumer Conf Index (NOV)101.7-97.8
23:30AUDWestpac Consumer Conf SA (MoM) (NOV)3.9%-4.2%
23:50JPYMoney Stock M2 (YoY) (OCT)3.6%3.8%3.8%
23:50JPYMoney Stock M3 (YoY) (OCT)2.9%3.1%3.1%
05:30CNYRetail Sales (YoY) (OCT)11.0%10.9%10.9%
05:30CNYRetail Sales YTD (YoY) (OCT)10.6%10.6%10.5%
05:30CNYIndustrial Production (YoY) (OCT)5.6%5.8%5.7%
05:30CNYIndustrial Production YTD (YoY) (OCT)6.1%6.2%6.2%
05:30CNYFixed Assets Ex Rural YTD (YoY) (OCT)10.2%10.2%10.3%
06:00JPYMachine Tool Orders (YoY) (OCT P) -23.1%--19.1%
06:00CNYBloomberg Monthly GDP Estimate (YoY) (OCT)6.57%-6.55%

European Session

09:30GBPClaimant Count Rate (OCT)2.3%2.3%Medium
09:30GBPJobless Claims Change (OCT)1.4k4.6kHigh
09:30GBPAverage Weekly Earnings (3M/YoY) (SEP)3.2%3.0%Medium
09:30GBPWeekly Earnings ex Bonus (3M/YoY) (SEP)2.6%2.8%Medium
09:30GBPILO Unemployment Rate 3Mths (SEP)5.4%5.4%Medium
09:30GBPEmployment Change (3M/3M) (SEP)120k140kLow

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.