Focus will be on wages
Expectation is for the headline reading to come in at +3.0% 3m/y, rising to the strongest pace of wage growth since September 2015. Meanwhile, the ex-bonus reading is expected to remain steady at +3.1% 3m/y.
The pound has been on on a solid recovery path to start the day, with cable rising back above 1.2900. But you kind of get the feeling that some of that has to do with the data expectation to come.
However, regardless of how strong the data beat here will be, the real focus for pound trading will still center around Brexit. There's still no hints that a deal this week will come about and if things get pushed to December, I don't see how that could be anything other than negative for the pound in the near-term.
Solid wages will justify that the BOE is on the right rate hike path but I doubt it will extend to any major repricing of rate hike expectations given that there's still Brexit uncertainty to navigate through. With that acting as the backdrop, the data release here will help act as more of a temporary cushion in the fall than a springboard for a jump higher.
