Investors who sought fresh insight into the outlook for UK interest rates were left empty-handed on Tuesday, after Bank of England’s Deputy Governor Ben Broadbent maintained a safe distance from monetary policy discussions in the speech he gave in Aberdeen. Sellers were swift to exploit this disappointment and to attack the GBPUSD with prices sliding towards 1.2820 as of writing. Price action suggests that the British Pound may be living on borrowed time, with bulls becoming increasingly exhausted as rate hike speculations become overshadowed by political uncertainty and Brexit woes. Although the hawkish remarks made a couple of weeks ago by BoE’s Mark Carney and Andrew Haldane may continue to support rate hike expectations in the background, questions should be asked whether the central bank will actually raise interest rates during such fragile economic conditions.

While the argument for higher rates is that they may be able to tame inflation, this could end up doing more damage than good to the UK economy, which is currently tackling deteriorating fundamentals at home and uncertainty abroad. Higher rates may end up impacting business confidence and pressure consumers even further.

The main risk event for Sterling on Wednesday will be the UK employment report which will be closely scrutinized for any signs of Brexit having an impact on unemployment and wage growth. BoE Hawks could be in store for a rude awakening if wage growth remains subdued and fails to meet market expectations.

From a technical standpoint, the GBPUSD is under pressure on the daily charts. The breakdown below 1.2850 may encourage a further depreciation towards 1.2775.

WTI Crude lurches higher

WTI Crude sprinted higher during Tuesday’s trading session with prices clipping $45.80 after reports that the Energy Information Administration (EIA) was lowering its forecast for 2018 production, encouraging investors to profit take. The upside was complimented by a decline in U.S Crude inventories which plunged almost three times more than forecast in the latest week, ultimately exciting oil bulls and easing some oversupply concerns.

Although Saudi Arabia exceeded its oil production cap for June as it pumped 10.07 million barrels, this was eventually overlooked by markets. While further upside could be expected in the short term amid the speculations of a cut in U.S production, gains may be limited by the firm oversupply dynamics of the markets. From a technical standpoint, WTI Crude is experiencing a technical bounce on the daily charts. Sellers still have some control below $47.

Commodity spotlight – Gold

Gold bulls received inspiration on Tuesday as investors sought safety, following reports of emails that show President Donald Trump’s son meeting with a Kremlin-linked Russian lawyer prior to the general elections last November. A weakening Dollar supported the metal further as prices found their comfort zone, around $1218. Although the zero-yielding metal has been noticeably pressured by the rising prospects of tighter global monetary policies, the return of uncertainty could support prices in the short term. From a technical standpoint, although Gold has popped higher it still remains under pressure on the daily charts. Sellers may exploit the current technical bounce to send prices lower with $1200 acting as a level of interest.