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CABLE: GBP/USD started the week on the back foot, pressured by comments from BoE
chief economist Andy Haldane (see earlier BOE bullets for some colour). As a
quick recap, Haldane admitted that the UK's central bank is studying
unconventional monetary policy measures, including negative interest rates.
- This occurs as sterling remains vulnerable owing to concerns over the Brexit
process. Over the weekend, the Telegraph cited a No. 10 source calling Michel
Barnier's current mandate "unnegotiable". The newspaper also reported that UK
chief negotiator Frost expressed a similar view as he briefed PM Johnson on the
matter. Meanwhile, the Times reported that the EU "is ready to back down from
its hard line on fishing rights."
- GBP/USD sits -26 pips at $1.2090. Bears target the 50% retracement of the Mar
20 - Apr 14 rally at $1.2030. Conversely, bulls look for a rebound above May 13
high of $1.2340. Worth noting that the 100-DMA has crossed below the 200-DMA.
- UK data releases this week include labour mkt report (Tuesday), inflation data
(Wednesday), flash Markit PMIs (Thursday) & retail sales (Friday). BoE's
Tenreyro speaks today, while Bailey, Broadbent & Cunliffe appear on Wednesday.
MNI London Bureau | +44 203-865-3806 |