GBP: The strongest story in G10? – ING
|This will be a busy week in the UK data calendar, ING's commodity experts Ewa Manthey and Warren Patterson note.
EU-UK summit on 19 May may keep EUR/GBP under pressure
"On Tuesday, we'll get the latest jobs figures. The job market is cooling but not significantly weakening after recent tax hikes. Last month's payroll drop might be revised up, and while unemployment is expected to rise, the figures have known reliability issues. Crucially, wage growth should slow, easing pay pressures."
"On Thursday, the first-quarter GDP report will be released. February's GDP surged by 0.5%, and despite a potential pullback in March, the first quarter should show solid growth. This is partly due to volatile manufacturing numbers. The second quarter will likely be more subdued, but overall growth should be supported by government spending."
"The pound has received support from an improved trade picture for the UK (i.e., deals with the US and India and upcoming negotiations with the EU) as well as from a hawkish-leaning Bank of England. Positioning imbalances, improved risk sentiment, and the upcoming EU-UK summit on 19 May may well keep EUR/GBP pressure, with a break below 0.840 now appearing increasingly likely."
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