UK: Sterling outlook becoming much less exciting - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the recovery in UK real yields has resulted in the Sterling outlook becoming much less exciting.

Key Quotes

“That’s probably a good thing. We expect the economy to be soft in the next few years, growing by less than 1%per annum on average in 2017-2019, but policy rates can barely fall any further, and the near-term outlook is mostly driven by sentiment about where on some imaginary hard-to-soft scale, ’Brexit’ will eventually happen. A recipe for choppy markets but also, given the poor economic outlook, a recipe for occasional spikes lower. We will see GBP/USD trade below 1.20 again on occasion, and we will see EUR/GBP trade back above 0.90 again in due course.”