Szykuje się gorący październik.“The market is leaning toward a firm no deal and a hard Brexit fallout scenario,” said Neil Jones, the head of hedge fund sales at Mizuho Bank Ltd. in London, adding that a change of mood before the summit would benefit those going long on volatility. “The vol move could be quite violent on a soft Brexit.”
Three-month implied volatility, a measure of pound price swings based on options, has declined this year to about 7.85 percent, a far cry from the 18.56 percent reached on June 14 last year, days before the EU referendum. Given market positioning, if the talks lead to a shift toward a smoother split or closer trading ties, it could shoot through 10 percent and trade at 15, Jones said.
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And to cap it all, prominent members of her [pani May] own party have suggested her days are numbered, after she frittered away an overwhelming lead in the polls before the election and ended up losing seats. To stay in power, the premier must navigate her Conservative Party’s annual conference which runs Oct. 1-4 in Manchester, when simmering resentments may come to a head, just two weeks before the EU summit.
“It could prove a significant event for the pound,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “It would be reasonable for the market to price in the higher event risk.”
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