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Watching the ECB and GBP reaction to wage data
Seems like the ECB is still leaning hawkish, despite some mixed signals. The recent CPI print wasn't exactly screaming for aggressive cuts. This keeps the carry game interesting on the euro side, even with $EURGBP at 0.85664 today. I'm not seeing a strong enough reason for a sustained move below 0.85583 without a clear shift in central bank rhetoric.
On the other hand, the latest UK wage data didn't exactly blow anyone's socks off. If the BoE starts hinting at earlier cuts, which isn't out of the question given the broader economic picture, then we could see $GBP under more pressure. I'm keeping an eye on how these narratives play out in $EURGBP's movement; still a lot of push and pull there.
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That's an interesting take on the ECB. I've been wondering if they're stuck between a rock and a hard place with inflation and growth. Do you think the market is overestimating the 'hawkish' element, or is it more about them maintaining optionality?