The Federal Reserve held off hiking interest rates 
Governments have been able to overrule the Reserve Bank for 80 years. Why stop now? 
If central banks don't start cutting them soon, it could actually increase inflation 
FxWirePro- Gold Daily Outlook 
The biblical character who goes ‘down the rabbit hole’ into an alternate reality − just like Alice in Wonderland 
Uganda’s tax system isn’t bringing in enough revenue but is targeting small business the answer? 
Why the Bank of England is now more upbeat than the IMF 
FxWirePro- Gold Daily Outlook 
As treasurer, Bill Hayden set Labor on the path to economic rationalism 
Will the RBA raise rates again? Unless prices surge over summer, it's looking less likely 
Why central banks should stop raising interest rates 
This week would be eventful week for both UK and Japan as central banks in both regions (BoE and BoJ) are scheduled for their monetary policy announcements.
BoJ to maintain policy stance with focus growing on 10-year yield range.The Japanese central bank will maintain its policy settings at its meeting this week, according to economists surveyed by Bloomberg, amid a growing stance that the BoJ will eventually use greater flexibility in yield movements as a tightening measure and most likely to keep the status quo on policy this week.
On the flipside, the market has always ignored the fact that all the current BoE interest rate moves are due to a favourable result of the Brexit process.
OTC outlook and Hedging Strategy: Please be noted that IVs of this pair that display the highest number among entire G10 FX universe.
While the positively skewed IVs of 2m tenors signify the hedgers’ interests to bid OTM put strikes upto 139 levels (refer above nutshells evidencing IV skews).
Accordingly, put ratio back spreads (PRBS)are advocated on the hedging grounds. Both the speculators and hedgers who are interested in bearish risks are advised to capitalize on current abrupt and momentary price rallies and bidding theta shorts in short run, on the flip side, 2m skews to optimally utilize delta longs.
The execution: Since the underlying spot has showed minor gains to the current 143.70 levels while articulating. Short 2m (1%) OTM put option (position seems good even if the underlying spot goes either sideways or spikes mildly), simultaneously, go long in 2 lots of delta long in 2m ATM -0.49 delta put options.
The rationale for PRBS: Well, the traders tend to perceive these trades as a bear strategy, because it deploys more puts. But actually, it is a volatility strategy.
Hence, entering the position when implied volatility is high and anticipating for the inevitable adjustment is a wise thing, regardless of the direction of price movement. Based on volatility and time decay, the strategy is a “price neutral” approach to options, and one that makes a lot of sense.
The position is a spread with limited loss potential, but varying profit potential. The degree of profit relies on the strength and rapidity of price movement. The position uses long and short puts in a ratio, such as 2:1 or 3:2, to maximize returns. In most long/short spreads, you make money if the stock moves, but you lose if it remains in the middle “loss zone.” A ratio put back spread is different because it creates a net credit, so even if the underlying spot FX price does not move very much, you keep the credit if all of the puts expire worthless.
Every underlying move towards the ITM territory increases the Vega, Gamma and Delta which boosts premium. As you could observe spot GBPJPY keeps dipping, these delta longs would become in the money, while these derivatives instruments target further bearishness of this pair.
Currency Strength Index: FxWirePro's hourly GBP spot index is flashing -84 (which is bearish), while hourly JPY spot index was at 127 (bullish) while articulating (at 07:32 GMT). For more details on the index, please refer below weblink:
