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UK key data events previews - Nomura

FXStreet (Guatemala) - Analysts at Nomura explained the key data events taking place in the UK this week to potential break the GBP/USD range while it is testing key resistance.

See here for recent GBP/USD price action (GBP/USD: bears line up but bulls stacked at 1.5230).

Key Quotes:

"Inflation (Tuesday): The rate of CPI inflation has been choppy for several months and we expect that to remain true for the next couple of months before an upward trend establishes itself. Base effects from sea fares last year are the main factor driving our forecast for CPI inflation to increase by a tenth to 0.1% y-o-y in September, unlike the consensus.

As there is still a large seasonal decline in this area and airfares, while the RPI has a newly increased weight assigned to this in 2015, our RPI inflation forecast is instead for a decline of 0.1pp to 1.0% y-o-y (index at 260.1).

Labour market report (Wednesday): The LFS unemployment rate resumed its declining trend in July but we believe it is too soon to expect another dip from 5.5% in this release, despite estimating employment growth surging to 195k. Such ongoing strength should continue to translate into average earnings. Even assuming a weaker underlying monthly performance for pay, we forecast average weekly earnings to rise by another tenth to 3.0% y-o-y 3mma in August.

The weak spot in the last labour market report was jobless claims. However, revisions trends suggest this may be revised for the better and anyway soon be replaced by further falls in jobless claims (see UK labour market beat best in details), so we forecast claims declining by 3k in September."

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