1) Last October you noted that Sterling(£) was getting oversold and that the market was overly concerned with respect to the UK’s external balances.
2) Currently on a real effective exchange rate basis how cheap is Sterling(£)?
3) You also highlighted previously that within an overall negative view on sovereign bonds(ex EM high yielders), gilts might be particularly vulnerable?
4) So one of our key macro trades remains short gilts/long US Treasuries?
5) Last week before PM May’s speech you suggested that whatever its content sterling(£) was likely in a bottoming zone?
6) And our economists have been emphasizing for some time the risk that the Bank of England is getting behind the curve?
7) So opportunistically we would continue to look for long Sterling(£) & short gilts trade entry points?