GBP: Fluctuating Rates Ahead of PMI Data Release

GBP: Volatile pricing ahead of PMIs

GBP: Volatile pricing ahead of PMIs

Bank of England rate expectations have been quite volatile since the upside surprise in wages and CPI last week. The miss in retail sales on Friday saw peak Bank rate expectations as measured in the Sonia rate drop more than 10bp. Markets are currently looking at 5.95-6.0%, but today’s PMI release in the UK may well move pricing again.

Consensus is expecting some slowdown in both manufacturing (already in contraction territory) and services (to 51.0). The Bank of England will also look at the details of the survey searching for evidence that price pressures are abating.

EUR/GBP can make another attempt at breaking 0.8500 today, although the sustainability of sub-0.8500 levels is questionable unless markets price in more rate hikes in the UK or price out tightening in the eurozone.

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forex inflation quantitative easing BREXIT cpi gdp currency gbp bank of england monetary policy interest rates consumer price index pmi central bank eur/gbp economic indicators inflation rate uk economy Wages pound sterling eurozone financial markets retail sales sterling unemployment rate consumer confidence trade Price pressures economic data economic growth economic outlook housing market manufacturing trade balance public debt Budget deficit fiscal policy employment volatility inflationary pressures market volatility political uncertainty economic recovery manufacturing sector tightening Bank Rate volatile consumer spending rate hikes contraction market pricing services political developments exchange rate wage growth monetary tightening rate expectations inflation target services sector business sentiment government financial stability interest rate decisions monetary policy committee fiscal stimulus housing prices investment climate Sonia rate PMI release trade deals Brexit negotiations trade agreements foreign exchange markets.

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