Bank of Japan Signals Rate Flexibility Amid Yen Volatility 
Bank of Japan Holds Rates Steady Amid Inflation Concerns and Yen Weakness 
RBA Raises Cash Rate to 4.10% in Closest Vote Since Transparent Voting Began 
J.P. Morgan Now Expects Two ECB Rate Hikes Amid Inflation Pressures 
China Holds Benchmark Loan Prime Rate Steady for Tenth Consecutive Month 
Bank of Japan Governor Signals Gradual Progress Toward 2% Inflation Target 
Trump Tariffs Show Minimal Economic Impact but Boost Federal Revenue, Study Finds 
Time to buy local: war fuel price shocks reveal the folly of a long food supply chain 
US-Iran Ceasefire Talks Underway: What You Need to Know 
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.
