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Rate hits extended session lows at $1.2910,...>

CABLE: Rate hits extended session lows at $1.2910, the lowest rate since April
26 with a fall through $1.2876 opening multi-month lows at $1.2866 and
mid-February lows at $1.2773. The move in spots runs in parallel with 1m risk
reversals which, today, have slipped back below the zero level, moving back in
favour of GBP/USD puts after spending much of the past two weeks in positive
territory (in favour of GBP calls). Mirroring this, GBP/USD puts have been
favoured over calls so far Tuesday, with just under $2 in GBP/USD puts traded
for every $1 in calls.
-Moves follow further signs of disharmony among UK lawmakers toward UK PM May's
approach to Brexit compromise discussions with the opposition Labour party,
calling into question whether May can get any form of deal through the Commons
even with opposition support. Nonetheless, cabinet meetings today reaffirmed the
government's commitment to get a Brexit deal passed by the Summer recess.
-The GBP/USD implied vol curve continues to steepen, with contracts capturing
the new Brexit deadline at end-October gaining while short-term vols retrace (1w
vols have fallen over 1 points in the past week).
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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