ECB May Stop Rate Hikes After December, Capital Economics Says 
BlackRock’s Rick Rieder Favors Bonds Over Stocks as Treasury Yields Surge 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
NEAR Price Surges 11% as Trading Volume Doubles 
BNB Price Faces Pressure as DOJ Investigates Binance 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Yen in Focus as BOJ, Fed Rate Hikes Reshape Currency Markets 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
BOJ Signals Faster Rate Hikes as Inflation Risks Grow 
US Gas Market Poised for Supercycle: Bernstein Analysts 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Fed's Hammack Urges Faster Rate Hikes to Fight Inflation 
Most Americans Oppose Election Betting on Prediction Markets, Poll Finds 
Fed’s Hammack Says More Data Needed Before Next Rate Move 
Hyperliquid (HYPE) Price Analysis: Can Bulls Push Above $88? 
Add as a preferred source on Google
In terms of sterling’s currency markets, GBP crosses fell by around 1.14% yesterday versus the USD and euro but regained today slightly about 0.17%. Moves lower in the currency may be partly due to some caution/uncertainty on markets ahead of tomorrow’s BoE meeting which is likely to stand pat in its monetary policy (official bank rates likely to remain at 0.25%).
On the data front, yesterday’s modestly softer than expected UK CPI inflation data for August (+0.6% vs forecast +0.7%) also coincided with some sterling weakness. In level terms, cable (GBP/USD) fell from its opening above $1.33 to near $1.32. The softer tone to sterling saw EUR/GBP trade up around the 85p mark.
In the day ahead, the focus will remain on sterling with a raft of key UK labour market figures due (incl. employment, unemployment, and earnings). The figures will be assessed for any signs of negative impact on the jobs front following the Brexit referendum.
Option-trade recommendation:
The rationale: Upside potential is limited in short run as you can see neutral risk reversals in 1 expiry with negative sentiments in OTC over long-term tenors and this should be cushioned & used for shorts during reducing volatility times,
Thereafter, to favour major downtrend, dips should optimally be utilized so as to participate in that major trend.
Thereby, the profitability can be maximized for every shift towards downside and this is not the same on upside.
The current ATM implied volatility is creeping up at 9.65% for 1W.
Execution: Keeping risk reversal, IV and trend factors in mind, it is advisable to go long in 2W ATM -0.49 delta put while writing 1W (1%) ITM put with positive theta and delta closer to zero (both sides use European style options).
This credit put spread option trading strategy is recommended when the spot FX is anticipated to inch higher moderately in the near term and not prolonged in the long term but continue with long term downtrend.
