Archived IMT (2008.10.20)

GBP's negatiive bias remains intact on a combination of limited gains in risk appetite and widespread expectations of at least 50-bps in rate by the Bank of England this week. The positive correlation between equities and GBPUSD as well as yen crosses remains solid on an intraday basis , with the swap spread and LIBOR having secondary influence. UK Sept retail sales and Q3 GDP on Wednesday and Thursday will provide a key element to sterlings fundamental direction. $1.71 is seen as medium term target weeks end.