###POV: FURTHER PRICING OUT 'NO DEAL': In the....>

UK: ###POV: FURTHER PRICING OUT 'NO DEAL': In the wake of headlines that Brexit

would likely be delayed by PM May`s government, we saw markets Tuesday further

pricing out 'no deal', and options traders eyeing downside in Short Sterling.

- This included a buyer of 20k L U9 (Sep19) 99.00/98.875/98.75 put fly for 2. 

- Market source commented: "Someone is clearly looking for some sort of a Brexit

resolution in the near future, that potentially opens the door for a rate hike

later this year.....spent Stg500,000 in premium for the pleasure".

- Delaying the EU departure date may merely be kicking the can down the road,

and BOE may well remain paralysed as it waits for Brexit clarity.

- But low implied option vols probably not hurting the case for protection vs

rate hikes. 

- Notably this comes as GBP hit best levels vs USD since Oct 2018 and EUR since

May 2017, suggesting that sideways UK markets are finally thawing.

- 'No Deal' probability at just 14% on Betfair, around contract low.

- MNI PINCH currently attributes 39.8% probability of a 25bps hike at the BOE

December meeting, down from 53.3% in November but up from 27.4% a week ago.