Second day of poor Sterling performance.......>

FOREX: Second day of poor Sterling performance

-After being the poorest performer in G10 yesterday on political concerns, today

GBP was the poorest performer on economic concerns as inflation fell broadly

below forecast, prompting a $1.3010 print in GBP/USD, the 2018 low. This comes

in contrast with rates markets which were relatively unchanged after inflation,

with MNI's PINCH model still seeing the probability of an August rate hike at

just under 80%. Large GBP/USD calls were in vogue with expiries just after the

BoE's Aug2 rate decision, with strikes layered from $1.3150-1.3500.

-Antipodean FX performed well again, with AUD and NZD rising against all others

and any break above the respective NZD/USD and AUD/USD 50-dmas may confirm that

the pairs have near-term bottomed.

-For once, the session saw little USD price action, with the greenback flat

following Powell's largely unchanged testimony.

-Attention turns to UK retail sales, Japanese trade balance and US weekly

jobless claims numbers. The Fed's blackout period starts this weekend so

speeches from Quarles (Thurs) and Bullard (Fri) may take focus.