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Jun 26 - 10:55 AM

GBP: Sterling Vulnerable To An L-Shaped Recovery; Sell The Pound - SocGen

By eFXdata  —  Jun 26 - 09:15 AM
Societie Generale maintains a structural bearish bias on GBP and likes short exposure vs JPY and SEK. 
 
"We highlighted sterling's vulnerability to an L-shaped recovery, which always looked more of a risk than a V. The odds are even worse, now.

With several US states seeing sharp increases in hospitalisations, timely data (like restaurant bookings, though there's a wealth of such sources out there) show the US ‘V' in reverse. Whether this leads to local lockdowns depends on the politicians, but it is already affecting activity. We already thought an L-shaped outcome was twice as likely (30%) as a V-shaped on (15%) in our risk scenarios (the in-between central case is the other 55%)," SocGen notes. 
"The UK is relaxing social distancing from 2-metres to 1-metre with precautions...We like shorts in GBP/SEK, and here, in GBP/JPY too," SocGen adds. 
Source:
Société Générale Research/Market Commentary

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