VIEW: Tuesday saw Bank of America..........>

STERLING: VIEW: Tuesday saw Bank of America Research note "the breakdown in GBP

liquidity conditions since the Brexit referendum is an important anchor. Using

turnover statistics from the BIS Triennial Survey alone one would conclude that

the depth of the GBP market should have provided some cover against vol. This

has not been the case and, in our view, Brexit is likely to permanently alter

the way in which investors view GBP. The analysis of GBP cannot, therefore, be

undertaken within a traditional G10 FX framework. A more bespoke view of the

pound is required and one that would take an EM-esque view, particularly as the

UK's internal and external debt dynamics morph into comparisons with some of the

more developed EM nations. For us, the headwinds to GBP are gathering and this

is why we continue to believe traditional valuation metrics vastly over

exaggerate the degree of GBP undervaluation...In summary, we believe GBP is in

the process of evolving into a currency that resembles the underlying reality of

the British economy: small & shrinking with a growing dual deficit problem

similar to more liquid EMFX. We remain defensive on GBP but to avoid USD

exposure we believe investors should focus on a lower GBP vs. EUR, JPY & CHF."