BoE bets lower, what to do about GBP positions? - Nomura

Analysts at Nomura had a GBP/CHF long position that they have just cut due to the recent data disappointments in the UK economy.

Key Quotes:

"We expect GBP to remain under pressure until the April PMIs are released next week."

"It’s why we are booking a partial profit on long GBP/CHF reducing the size from $10mn to $5mn (locking in ~$60k of profit), and keeping our tight stop at our entry level of 1.3540 on the remaining $5mn."

"We expect the 10 May BoE meeting to remain a risk event and good news over the customs union or the April PMIs to keep the trade live."

"Despite our call changing to reflect a hike is unlikely at the next BoE meeting, the balance of risks are that the data start to pick up for Q2, and therefore the pricing for the BoE’s August meeting and GBP with it."