Cable managed to recover off its European.....>

CABLE: Cable managed to recover off its European morning low of $1.2222, though

trailed EUR/USD's stronger risk on move, which in turn allowed EUR/GBP to bounce

off a pullback low of Gbp0.8920 and extend its recent recovery to Gbp0.8978,

after breaking minor resistance at Gbp0.8960. Little reaction to the earlier

release of weaker than forecast UK inflation data, with sterling able to recover

despite market expectations that the appearance of BOE Bailey, Broadbent and

Cunliffe in front of the TSC would again refer to the possibility of negative

rates as a tool to counter the economic effects of the COVID-19 epidemic. Little

reaction to early talk but market eventually pressed lower as Bailey said the

BoE are not ruling out the use of negative rates and that he had changed his

mind "a bit". Sterling lost ground, cable squeezing back to $1.2226, though so

far has held off a challenge on support at $1.2220. A break to expose $1.2200,

$1.2185/80. Resistance remains at $1.2288/96. 

- Thursday brings flash PMI's for May. Market expecting some bounce back from

April's poor showing on hopes for the easing in lock-down restrictions. Retail

Sales due Friday.