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Feb 18
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$129.80
$129.80
+0.0%
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SHORT
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Adam Vincent
Bloomberg
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Vincent states the Bank of England is "increasingly dovish" and the data is "set for a march cut." He believes the market may see a second cut later in 2026. He also notes "political risk" and that these factors could "keep down pressure" on the currency. Interest rate cuts generally weaken a currency by lowering the yield available to foreign investors. With the BoE moving faster/more dovishly than previously expected (validating the disinflation narrative), the Pound Sterling (GBP) faces downside pressure against peers. SHORT FXB (British Pound proxy). If inflation data surprises to the upside, the BoE may be forced to hold rates, causing a sharp rally in the Pound. |
Bloomberg Markets
AI Displacement to Remain a Headwind for US S...
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Feb 17
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$130.41
$129.80
-0.5%
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SHORT
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Shonali Pinon
UK Economist, Bank of America
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UK unemployment ticked up to 5.2% (vs 5.1% exp) and wage growth cooled to 4.2% (vs 4.6% exp). The "sticky inflation" narrative in the UK is breaking due to labor market weakness. This forces the Bank of England's hand. Markets moved to price an ~80% chance of a March cut. Lower yields = Higher Bond Prices (Gilts) and a weaker currency (Pound). LONG UK Government Bonds (Gilts) to capture the yield compression; SHORT Sterling as the yield differential narrows against the USD. Inflation data (CPI) tomorrow surprises to the upside, forcing the BoE to hold. |
Bloomberg Markets
Anthropic’s Pentagon Talks Snag, Pound Falls ...
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