Evercore Reaffirms Alphabet’s Search Dominance as AI Competition Intensifies 
Bank of Korea Downplays Liquidity’s Role in Weak Won and Housing Price Surge 
BOJ Faces Pressure for Clarity, but Neutral Rate Estimates Likely to Stay Vague 
RBA Unlikely to Cut Interest Rates in 2026 as Inflation Pressures Persist, Says Westpac 
BoE Set to Cut Rates as UK Inflation Slows, but Further Easing Likely Limited 
Fed Rate Cut Signals Balance Between Inflation and Jobs, Says Mary Daly 
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.
