Intra-Day Market Moving New and Views
22 Jul 2014 03:23GMT
GBP/USD - ... A Reuters report yesterday which should give sterling bulls food for thought:
Currency investors started to buy options on Monday that allow them to hedge against the possibility of a Scottish vote for independence.
This trend is likely to pick up in coming weeks, analysts said.
Scottish independence has been at best a slight risk for most money managers, with opinion polls still showing more than 50% of Scots want to remain part of the UK - far more than the third who want independence. Two-month implied volatility, which captures the Sept. 18 vote n the results n shows how sharp swings in a currency is likely to be, rose to around 5.2% from below 5% on Fri n 4.6% just a week ago.
Uncertainties include which currency an independent Scotland would use, membership of the European Union, sharing of North Sea oil revenues and whether the Scottish fund industry would move south, they said.
A number of banks have published reports in the past few weeks which highlight a prolonged period of sterling weakness if the Scots voted for independence. BNP Paribas analysts said that whether or not Scotland voted for independence, the referendum was likely to deliver a shock to sterling. "Even a 'no' vote will herald a new era, one that could spell uncertainty for sterling," they said. "A 'no' vote on Sept 18 will not be a continuation of the status quo in our view, given the push for devolution by the Scottish National Party." The SNP is leading the campaign for independence.
Morgan Stanley analysts said that a "yes" vote could cause sterling to slip by up to 10% on a trade-weighted basis , retracing its gains over the past year.
22 Jul 2014 03:23GMT
GBP/USD - ... A Reuters report yesterday which should give sterling bulls food for thought:
Currency investors started to buy options on Monday that allow them to hedge against the possibility of a Scottish vote for independence.
This trend is likely to pick up in coming weeks, analysts said.
Scottish independence has been at best a slight risk for most money managers, with opinion polls still showing more than 50% of Scots want to remain part of the UK - far more than the third who want independence. Two-month implied volatility, which captures the Sept. 18 vote n the results n shows how sharp swings in a currency is likely to be, rose to around 5.2% from below 5% on Fri n 4.6% just a week ago.
Uncertainties include which currency an independent Scotland would use, membership of the European Union, sharing of North Sea oil revenues and whether the Scottish fund industry would move south, they said.
A number of banks have published reports in the past few weeks which highlight a prolonged period of sterling weakness if the Scots voted for independence. BNP Paribas analysts said that whether or not Scotland voted for independence, the referendum was likely to deliver a shock to sterling. "Even a 'no' vote will herald a new era, one that could spell uncertainty for sterling," they said. "A 'no' vote on Sept 18 will not be a continuation of the status quo in our view, given the push for devolution by the Scottish National Party." The SNP is leading the campaign for independence.
Morgan Stanley analysts said that a "yes" vote could cause sterling to slip by up to 10% on a trade-weighted basis , retracing its gains over the past year.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.