-FX FLOWS
*Bid GBPUSD gamma has all gone better bid this morning, with spot weaker and market makers getting paid for front-end over the past few days. 1W GBPUSD has moved from 7.0 to around 7.75, and 1W EUPGBP horn 6.6 to 7.75. The EUGBP flow has some RKO and DNT close-outs which paid the market for sub-2w gamma, and in GBPUSD it has mainly been some fresh topside calls and call spreads.
*There was a remarkable move lower in US yields on Tuesday despite continued strong and accelerating economic data. As argued last week, the moment of maximum US optimism may have been priced for Me time being. With US yields consolidating and USD longs being dosed on the major currencies, it may be time for European sentiment to catch up. If EURUSD moves higher, that should also help EM currencies -- apart from the negative idiosyncratic stories in Turkey and Russia (with another military clash in amine apparently In the making).
*GBP moves have been driven by EURGBP demand in the last 24 hours seems to be more now than news-driven. I was of the view That the pair was oversold into month/quarter-end, with EU negativity around vaccines and the lockdown extensions in the mice, but I am surprised by the speed of this rebound. Growing concerns over the estle2eneca vaccine in the UK might weigh on GBP and threaten plans to reopen the economy 22.
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