UK: Sterling's Surprising Strength - BBH
Research Team at BBH, suggests that a major development today is sterling's strength as the Sterling inexplicably shot up almost two cents in a matter of minutes in Asia (~$1.4475 to $1.4660).
“It quickly came off amid talk of a trading error. However, on the push back, it found support near $1.4500 and managed to trade back above $1.4600 in the European morning. One-month implied volatility is making new highs today above 22% (it was near 16.6% on May 27) and the put-call skew is at a new record extreme (~6.9%). U
K stocks are underperforming, but the FTSE is the best performing G7 equity market over the past week. UK gilts are also underperforming, with 10-year yields three bp higher near 1.30%, while most Eurozone benchmark yields are lower.”