Ex-MPC member Posen's comments re: Brexit &...>

CABLE: Ex-MPC member Posen's comments re: Brexit & weaker than exp. UK

Construction PMI added to the pressure on cable early Tuesday, with the addition

of broader USD demand & reaction to strong US ISM data pushing the rate to a low

of $1.2811. USD sales through the London fix provided some respite, followed by

reported EU lawmaker comments on a softer stance re: the Irish border, which saw

cable move above $1.2870, before the Telegraph reported that the "EU has warned

that PM May's Chequers plan is "dead" & is urging her to adopt a Canada-style

deal," limiting the rate. GBP/USD last $1.2855. On the BoE front, the FT

reported that Carney is exp. to extend his stay as Gov. until '20, after UK PM

May backed a plan to maintain stability through the turbulence of Brexit.

- From a technical perspective cable based ahead of $1.2810 but has so far

failed to show any meaningful signs of a recovery. The short-term outlook

remains bearish with immediate focus on $1.2750, a break confirms the bearish

reversal and brings the YTd low ($1.2662) back into view. Bulls need a sustained

rally back above $1.2900 to allow them to target the 50-DMA ($1.3020).

- UK Services PMI headlines the UK docket today.