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###POV: ARE GBP/USD OPTIONS TOO RELAXED.......>

CABLE
CABLE: ###POV: ARE GBP/USD OPTIONS TOO RELAXED ABOUT THE BOE?
-While the shorter-end of the implied vol curve has been rising for 6
consecutive sessions, options markets seem particularly sanguine about the risks
surrounding Thursday's BoE meeting and the raft of UK data. 1-week implied
volatility sits below 10 vol points and well below the 11.2 vol point average
seen in the lead-up to the QIR and data deluge in the first half of February.
-Meanwhile, risk reversal gauges continue to move in a supportive manner for
GBP, with 1w, 1m and 3m RR all touching the best levels since early February
today.
-This points to a market that is geared for a 9-0 vote at this Thursday's BoE
meeting, but there remains a risk that the minutes could (as they did in
February) signal a rate hike cycle occurring "somewhat earlier, to a somewhat
greater extent" than the market is pricing.
-This may result in the vol premium for 3m GBP/USD over 3m EUR/USD widening
beyond the YTD (and 12 month) highs of 2.1 vol points and a supportive
environment for the pound.

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