Short-term yields turn up on record UK wages, but GBPUSD still to follow



The UK's average earnings index 3m/y (including bonuses) printed at 8.2%. This is higher than the previous 7.2% and higher than the forecast of 7.3%. In fact, regular pay grew by 7.8%, which is the highest rate since records began in 2001. This suggests another rate hike by the BoE in September is a distinct possibility.

In this regard, the 2-year gilt has bumped up nearly 9 basis points (red arrow) today. Moreover, the short-term yield has charted a higher trough followed by a higher peak and is in uptrend.

Nevertheless, GBPUSD is still defined by the green downtrend line and is yet to turn up with the 2-year. However, there is underlying support near the 1.2620 level, which may act as a platform for a higher cable pair.

Trade the News: View our Economic Calendar

For timing purposes, a golden cross of GBPUSD's EMAs will be constructive in signalling that the pair is starting to move in line with the 2-year yield.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.