Amid the June Bank of England MPC vote split in which three members voted for an immediate rate hike and the recent flurry of speeches from officials, we have yet to hear from Deputy Governor Ben Broadbent. He is scheduled to speak in Aberdeen at midday. He voted with the majority to leave rates unchanged, but his views on the trade-off between elevated inflation and softer economic growth will be closely examined. Dr. Broadbent is seen as a centrist or moderate dove. BoE Chief Economist Andy Haldane also speaks today, but the topic is on numeracy rather than policy.
Please be noted that the implied volatilities of GBPUSD ATM contracts from the nutshell evidencing ATM IVs of all expiries have been shrinking below 7.5%, in addition to that the underlying spot FX has been in range bounded trend and it has been foreseen to persist further in near future. If you have the short leg in your options strategy, it is quite good to expect vols shrinkage. An option writer wants IV to fall so the premium falls. You should also note short-dated options are less sensitive to IV, while long-dated is more sensitive.
We retain our bearish bias, with short-term price action relatively conducive – we spent most of the yesterday’s session testing and consolidating below 1.2890. A clear break of the 1.30-1.31 resistance is required to negate our bias and opens the 1.3375-1.3450 resistance region. BoE speakers pose a risk today. Otherwise, we bet for southward targets of 1.2829 levels again.
Contemplating major downtrend of GBPUSD, we advocate staying short hedged via diagonal debit put spreads by adding long in 2m (1%) in the money -0.66 delta put, while simultaneously, shorting 1m (1%) out of the money put option at net debit.


Europe Confronts Rising Competitive Pressure as China Accelerates Export-Led Growth
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data
BOJ Governor Ueda and PM Takaichi Set for Key Meeting Amid Yen Slide and Rate-Hike Debate
2025 Market Outlook: Key January Events to Watch
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile
Asia’s IPO Market Set for Strong Growth as China and India Drive Investor Diversification
European Stocks Rally on Chinese Growth and Mining Merger Speculation
Citi Sets Bullish 2026 Target for STOXX 600 as Fiscal Support and Monetary Easing Boost Outlook
BOJ Seen Moving Toward December Rate Hike as Yen Slides
U.S. Productivity Growth Widens Lead Over Other Advanced Economies, Says Goldman Sachs
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 



