💷Sterling Bullish Skewness Extends: Cable FX Macro

• GBP/USD 1y risk reversals have jumped by almost 50bps over the last month, reflecting a broad dollar deterioration in sentiment. The tenor now ticks at 60bps in favour of puts over calls, this however, is the most bullish 1y risk reversals have recorded since 2014

• Short-term implied vols have retraced the recent move higher, the 1m tenor is now below 9.0% after reaching levels shy of 11.0%

• As of time of writing, sterling is now up for an 8th consecutive session, the best winning streak since 2020