### POV: CABLE UNJUSTLY TARRED WITH ITALIAN...>

CABLE: ### POV: CABLE UNJUSTLY TARRED WITH ITALIAN BRUSH?

-Given the recent market volatility was prompted by an increase in EZ break-up

risk you'd expect EUR to underperform most other FX, but that hasn't been the

case, with EUR/GBP higher since FX volatility picked up in mid-April.

-The move in spot prices comes at odds with options markets, which continue to

see trades that provide protection against EUR downside in high demand: both 1m

and 3m EUR/GBP risk reversals have touched the lowest levels since 2017's French

election in recent days, despite the spot price trading marginally higher over

the past month.

-The possibility of a more Eurosceptic Italian government raised concerns that

Brussels would take a harder line in Brexit talks (to show Rome the 'cost' of

leaving the EU), but recent reports suggesting a more conciliatory Italian

cabinet would make such a stance unnecessary.

-The most profitable trading strategy for GBP/USD over the past 12 months has

been the MACD indicator, which is on the cusp of switching from its winning

short position initiated on Apr20 to initiating a long recommendation.