Cable rallied by more than a quarter-cent to a 26-year high of 2.0133 after the 08:30GMT disclosure that UK annualized earnings rose by a much higher-than-expected 4.6% in the three months to February. The robust number increases the risk that the BoE MPC might hike the UK base rate by 50bp to 5.75% next month (May 10). A 25bp increase to 5.5% is already priced in.
Some option-related supply may emerge ahead of 2.0150, a level at which an exotic option barrier resides. Further exotic option exposure is located at 2.0175, 2.0200, 2.0250, 2.0300, 2.0450 and 2.0500+.
2.0104 (early Europe high) is now a support level. Prop points below include 2.0089 (today's Asian session top), 2.0074 (yesterday's peak), 2.0063 (today's Asian session base), 2.0035 and 2.0000. A cumulatively estimated GBP 300mn of 2.0000 option strikes roll off at today's 14:00GMT NY cut. The bulk of those strikes were bought at 10.0 pct and 10.5 pct prior to yesterday's UK CPI topside shock when GBP/USD was trading sub-1.9940. There are more 2.0000 option expiries tomorrow and next Monday (Apr 23).
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