Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Chief Macro Strategist
Market Specialist
Following weaker-than-expected U.S. jobs data on 3 May, the sterling has strengthened against the dollar as it signalled a cooling labour market. This fueled the expectations that the wage growth and inflation would slow to allow the Fed to cut rates later this year. The higher-than-expected US jobless claims data on 9 May further supported the signs of a slowing labour market. However, GBPUSD dipped to a 2-week low of 1.2445 after the Bank of England decided to keep its rates unchanged at 5.25% during its policy meeting last week. The sterling has since rebounded to 1.255 and remained steady as investors await the U.K labour market report due on Tuesday and the release of US CPI on Wednesday.
GBPUSD has withstood the clearest signal on rate cuts yet boldly, given it comes from the disinflation narrative catching fire rather than any growth concerns. UK's resilient Q1 GDP, political stability and equity gains have fueled fresh optimism, which is unlikely to be deterred by central bank's rate cuts.
Buy Put/Sell Call for 45 days
Buy Put/Sell Put/Sell Call for 45 days
Scenario Analysis comparing pay-offs of Sell Spot vs Collar vs Seagull for 45 days for a notional value of GBP 100k
Buy Put/Sell Call for 90 days
Buy Put/Sell Put/Sell Call for 90 days
Scenario Analysis comparing pay-offs of Sell Spot vs Collar vs Seagull for 90 days for a notional value of GBP 100k
Buy Call/Sell Put for 45 days
Buy Call/Sell Call/Sell Put for 45 days
Scenario Analysis comparing pay-offs of Buy Spot vs Collar vs Seagull for 45 days for a notional value of GBP 100k
Buy Call/Sell Put for 90 days
Buy Call/Sell Call/Sell Put for 90 days
Scenario Analysis comparing pay-offs of Buy Spot vs Collar vs Seagull for 90 days for a notional value of GBP 100k
Important disclaimer: The impact of swaps is not taken into consideration in the scenario above. The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and consider their unique financial situation, risk tolerance, and investment objectives before making any decisions.
Options are complex, high-risk products and require knowledge, investment experience and, in many applications, high risk acceptance. We recommend that before you invest in options, you inform yourself well about the operation and risks. In Saxo Bank's Terms of Use you will find more information on this in the Important Information Options, Futures, Margin and Deficit Procedure. You can also consult the Essential Information Document of the option you want to invest in on Saxo Bank's website.Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
China Outlook: The choice between retaliation or de-escalation
Commodity Outlook: A bumpy road ahead calls for diversification