GBP: Just looks odd now – SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the FX and rates markets have de-coupled somewhat, and gilts look more vulnerable here to him, than the pound.

Key Quotes

“The Government’s weekend public relations effort has seen talk of paying money to maintain access to some bits of the single market, while also supporting BOE Governor Carney. And yet, so far in early Asian trading, sterling is lower yet again, That doesn’t often tell me much about what happens in the days ahead but beyond repeating firstly, that the risk of short-covering isn’t negligible, secondly that we still think medium terms shorts against both Euro and Dollar will pay off and finally, that a fall in GBP/USD below 1.20 is dangerous in terms of what it does for broader confidence in sterling assets.”