UK labour data had mixed signals for markets, showing a new cycle in the unemployment rate, of 4.2%, but a sub-forecast reading in wages data. Average weekly earnings came in at 2.8% y/y (including bonuses) in the three months to February, unchanged from the previous month but below the median forecast for 3.0% y/y. Sterling has declined on the wages miss, as this has been a key metric for the BoE in justifying is guidance for tighter policy. The expectation remains that the BOE are likely to press ahead with a 0.25 bps rise in UK interest rates at their meeting next month. The stellar gains seen for Sterling in the last few sessions have been trimmed on the mixed data; Cable trades down to 1.4330 from 1.4375 and GBPJPY down to 153.25 from 1.5375.
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