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Back to flat after the SONIA open; now look to the gilt open

GBPUSD
  • GBPUSD is now back to flat on the day, reversing its rally after the SONIA open as the market removes around 15-20bp of hikes across the curve.
  • The near-term direction for the pound is now likely to depend on the strength of the gilt market open.
  • We expect a strong gilt open and this could point to some further GBP strength over the next half hour.

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