Changes in the UK economy affect GBPCHF
The British pound rallied on stellar jobs data (see economic calendar below. All metrics showed improvement which is not a good sign for Bank of England (BoE) doves. Concerns around sticky core inflation from the BoE’s Mann and aggressive monetary policy comments from Haskel yesterday will surely be heightened with today’s data and the fact that several other BoE speakers are scheduled for today (Greene, Governor Bailey and Dhingra) could augment the hawkish bias.
The average earnings metric is of particular concern as it reached fresh yearly highs (6.5%) and should contribute to elevated inflation pressures. Money markets now expect roughly 105bps of rate hikes by December 2023 (refer to table below) with an 82% probability of a 25bps (down from 93% a few days ago) increment for the June meeting. Should impending UK economic data release in the same fashion, projections may shift further in favor of a 50bps hike.
GBPCHF SELL 1.1410 - 1.1420
✅TP1: 1.1360
✅TP2: 1.1310
🛑SL: 1.1450
The average earnings metric is of particular concern as it reached fresh yearly highs (6.5%) and should contribute to elevated inflation pressures. Money markets now expect roughly 105bps of rate hikes by December 2023 (refer to table below) with an 82% probability of a 25bps (down from 93% a few days ago) increment for the June meeting. Should impending UK economic data release in the same fashion, projections may shift further in favor of a 50bps hike.
GBPCHF SELL 1.1410 - 1.1420
✅TP1: 1.1360
✅TP2: 1.1310
🛑SL: 1.1450
