UK 10-year gilt yield slipped to record lows, dragging GBP lower along with itself. The message is clear - markets are pricing-in a rate cut by Bank of England (BOE) next week.
If Reuters poll is to be believed, the BOE is likely to cut rates but hold off QE for now. That makes sense, since we are yet to receive labor market data, wage growth data for post Brexit period.
A symbolic rate cut is what market wants and the Bank of England (BOE) may just hand it over.
GBP/USD
The inverse head and shoulder pattern is in the making for so long and now the completion appears possible only if BOE stands pat next week.
Upticks could be met with fresh offers till Aug 4. Selling is seen gathering pace once this week's low of 1.3056 is breached.