BOJ Holds Interest Rates at 0.75% as Policymakers Signal Growing Inflation Concerns 
RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
Goldman Sachs Delays Fed Rate Cut Forecast to 2026 Amid Rising Inflation Concerns 
Bank of Korea Signals Potential Interest Rate Hikes as Inflation Remains Elevated 
BOJ Governor Kazuo Ueda Hints at Rate Hike as Inflation Pressures Build 
Kevin Warsh Advances Toward Fed Chair Role Amid Political Tensions 
We stay short GBPUSD because interest rate based valuations are even more stretched than USDCAD (we expect BoE hawks to be caged by an economy that is finally starting to cool), but once again reduce the directionality to the USD by opening a complimentary long position in EURGBP through options given the depressed level of volatility (2m EURGBP vols are 0.9 pts below their 6m average despite the French premium).
We remain short EUR on a handful of European crosses, but only where we believe local currency factors are bullish and justify currency appreciation even in the absence of a French political shock, namely CHF, SEK and CZK.
In the bigger picture, we are inclined to position for macroeconomic normalization in the euro, and the portfolio remains implicitly positioned along these lines through long positions in European currencies versus the dollar bloc (USDCHF and NZDSEK).
The addition of EURGBP to the portfolio augments the overall beta to a euro recovery (we believe that EURGBP would re-price much more on a Macron victory than EURCHF would, for instance).
Finally, we unwind a short volatility position in EURCHF given the substantial cooling of tail risk in the last few weeks both in ATMs and risk reversals.
