GBPUSD FUNDAMENTAL BACKDROP The British pound found some support on Friday with UK services data PMI as well as renewed risk appetite after better than expected Chinese PMI figures. The China re-open story has started to gain traction again allowing risk assets like the GBP to flourish. The key theme for next week remains in line with data dependency and while the Bank of England (BoE) has been erring on the side of caution in terms of their forward guidance, the US seems to be sticking with the hawkish narrative. That being said, market reactions to central bank speak have been on the decline as there has not been much change in forward guidance from Fed officials. This has given economic data more significance however; Fed Chair Jerome Powell who is scheduled to speak next week should bring about more attention relative to the other Fed officials.
Non-Farm Payroll (NFP) data (see economic calendar below) will take center stage from a US perspective, after persistence robust labor data. This has been supplementing the aggressive approach from the Fed (which is largely priced in). With expectations baked into the upside, any miss on data should result in a positive move for the pound.