Goldman Sachs: Coming To The End Of The Pregame Show

Goldman Sachs note that they "have argued that the move lower in EUR/GBP on the back of the European commodity-led supply shock has been justified - and can extend - as long as monetary policy shifts are sufficient to more than offset the negative impact on growth from the deterioration in terms of trade. With markets now pricing an aggressive policy response over the next few meetings, we now enter a new phase of this cycle where we will see whether markets have correctly interpreted the series of "signals" from the MPC on the speed and scope of tightening that will be delivered."

• "With relatively little data between here and the November BoE meeting, and data last week generally confirming that domestic demand is robust but supply constraints are significant, Sterling has become even more sensitive to wiggles in market pricing, and this will become an increasingly important driver over coming weeks. The degree of tightening we anticipate should be sufficient to preserve recent currency strength, but the running MPC commentary has set a high bar to deliver. Recent news reports also highlight that Brexit negotiations remain in a fragile state, at a particularly inopportune time, which is an additional source of vulnerability. However, we stress that there is still a long stretch - with lots of off-ramps - before more disruptive options would really come into play."