Sharp spike higher in cable Wednesday,........>

CABLE: Sharp spike higher in cable Wednesday, reaction to reported comments from

a German lawmaker that UK and Germany had abandoned key Brexit demands,

potentially easing the path for Britain to strike a deal with the EU, saw rate

trade up to $1.2983, move said to have taken out stops as it moved above

$1.2950. German Govt spokesman then said German Govt stance on Brexit hadn't

changed and fully supported EU negotiator Barnier. Rate dropped to $1.2873 but

was able to settle back above $1.2900 through to the close. Trade in Asia saw

rate consolidate within $1.2902-27. Early Europe sales have seen rate probe

under $1.2900, as market tries to hunt out weak stops though no added downside

momentum triggered before rate edged back to $1.2902. Looking at the GBP/USD

25-delta 3-month risk reversal, it has largely tracked spot and sits just off

the recent cycle low. It is worth noting that the metric now captures the touted

October & November deadlines for a Brexit deal between the UK & EU. This,

coupled with the large net short position in GBP futures could explain why

positive Brexit news is having a greater effect on prices than the more negative

headlines at present i.e. pessimism is priced into market.