GBP has been a world beater for much of this year. The world's worst performing currency up until a few weeks ago when the High Court ruled against the government over the means of triggering Article 50 and the world's strongest currency since then, including in the immediate aftermath to the US elections.

Our sense is that the impressive rebound in GBP, the best two-week performance since 2008, owes more to the weight of preexisting short positions than a fundamental re-think of the consequences of Brexit for GBP.

Nevertheless, the pain on short positions is palpable and this was evidenced by the accelerated deleveraging as global bonds collapsed and investors de-risked their portfolios.

Over the past few days everyone has been writing mainly about the election victory of Donald Trump and the possible consequences of his sometimes curious election promises, should he be able to implement them. However, there are amusing things going on in other parts of the world too, even if the subject matter itself is very serious.

The debate about the Brexit between representatives of Great Britain and the EU has descended to new lows: the British Foreign Secretary Boris Johnson continues to demand full access to the single market, but no free movement of labour. Otherwise, he threatened the Italian Minister of Economic Development Carlo Calenda Italy would sell less Prosecco in the UK. Calenda retorted that Britain would be able to export less fish & chips, and that to 27 countries.

Positive British retail sales as were published yesterday should not disguise the risks for the economy: even if the uncertainty amongst households eased very quickly following the Brexit vote the boomerang of Sterling depreciation will hit consumption. In 2017-18 at the latest when rising prices will dampen the desire to spend money amongst householders. Everything all told not a good prospect for Sterling.

Stay short GBPUSD via a bearish seagull; close 2m dual at-expiry digital in USDCAD < 1.30, GBPUSD <1.2090.

Short GBPCAD v ia 2-mo AED dual digital USDCAD < 1.30, GBPUSD <1.2090. Buy 1m GBPJPY option strips.