MNI BRIEF: Gilt Moves Orderly, 'So Far, So Good'- BOE Breedon

MNI: Fed’s Collins Calls For Gradual Approach To Rate Cuts

MNI BRIEF: Meloni Says To Lower Taxes On Medium Incomes

MNI BRIEF: Banxico Set To Consider Larger Rate Cuts - Minutes

MNI BRIEF: Mexico Inflation Up To 4.21%, More Rate Cuts Loom

MNI China Daily Summary: Thursday, January 9

EZ/UK Bond Supply Calendar: EU Synd; IT Auction, BoE APF Mon

MNI: EUROZONE NOV RETAIL SALES +0.1% M/M, +1.2% Y/Y

MNI: GERMANY NRW DEC CPI +0.5% M/M, +2.5% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

GBP: Recovery for Gilts Helps Cable Stabilise Around 1.2300

GBP
CEEMEABulletUKMarketsForeign Exchange Bullets
  • UK gilts had been edging further away from the lows through Thursday’s session, representing a steady correction from the hawkish session/cycle extremes seen at the open. The general market stabilisation has helped sterling consolidate a moderate recovery. As such, GBPUSD is trading 60/70 pips off the lows, just above the 2024 low of 1.2300, a level breach that saw this morning’s weakness accelerate.
  • As noted above, Citi’s real effective exchange rate index shows GBP as the second most elevated of major peers when looking over five- and ten-year ranges. Furthermore, the latest CFTC report indicated that while the net position for GBP was trimmed, it remained long at 44,111 contracts, and the following two reports will be important in assessing the indicated adjustment in GBP sentiment.
  • Goldman Sachs have said that while FX markets have been trading with a risk-off dynamic over the past two sessions, they think this can only explain around half the sell-off in GBPUSD in that timeframe, affirming the UK-specific nature of Sterling price action. They continue to highlight the differences in the current broader macro backdrop to the 2022 mini-budget episode that GS believe make sterling less vulnerable to a sharp sell-off on fiscal credibility concerns.
200 words

To read the full story

Close

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.
  • UK gilts had been edging further away from the lows through Thursday’s session, representing a steady correction from the hawkish session/cycle extremes seen at the open. The general market stabilisation has helped sterling consolidate a moderate recovery. As such, GBPUSD is trading 60/70 pips off the lows, just above the 2024 low of 1.2300, a level breach that saw this morning’s weakness accelerate.
  • As noted above, Citi’s real effective exchange rate index shows GBP as the second most elevated of major peers when looking over five- and ten-year ranges. Furthermore, the latest CFTC report indicated that while the net position for GBP was trimmed, it remained long at 44,111 contracts, and the following two reports will be important in assessing the indicated adjustment in GBP sentiment.
  • Goldman Sachs have said that while FX markets have been trading with a risk-off dynamic over the past two sessions, they think this can only explain around half the sell-off in GBPUSD in that timeframe, affirming the UK-specific nature of Sterling price action. They continue to highlight the differences in the current broader macro backdrop to the 2022 mini-budget episode that GS believe make sterling less vulnerable to a sharp sell-off on fiscal credibility concerns.