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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessMNI: PBOC Net Drains CNY216 Bln via OMO Monday
###POV: ARE GBP/USD OPTIONS TOO RELAXED.......>
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.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.