For now, Sterling is still trading as the second strongest major currency for the week despite yesterday’s post CPI dip. Employment data will be a main focus today. Markets expect claimant counts to dropped -3.1k in February. ILO unemployment rate is expected to stay unchanged at 4.4% in January. A key focus is on wage growth as average weekly earnings is expected to rise 2.6% 3moy in January. Still, with CPI at 2.7% yoy, wage is still playing catch up.
Reaction to the job data could be muted though as the major focus is on tomorrow’s BoE rate decision. BoE is widely expected to keep bank rate unchanged at 0.50% and asset purchase target at GBP 435b. No updated economic projections will be delivered as they were published back in February’s Inflation Report already. Instead, eyes will be on whether BoE would turn more upbeat in the statement, given that a Brexit transition deal is already done. In addition, known hawks Michael Saunders and Ian McCafferty could come back with a vote on rate hike. All in all, focus in on gauging the chance of a May hike.
