Cable traded moderately higher in early European trade as interbank names and short term leverage accounts responded to the broad equity market rally. There was also good news on the data front, with Rightmove data indicating that house prices rose 0.6% in July from a -0.4% fall in June, which left the annualized rate at -3.1%. The swine flu and its impact on the U.K. economy was the main focus of attention in the weekend press, with various warnings on the impact on GDP. We suspect that Cable gains may be tempered as a result of this medium term risk and this could underpin EUR-GBP as risk appetite improves further. The cross is supported ahead of 0.8600 today, but offers at 0.8650 have capped upward momentum early on. Cable offers are noted from 1.6450-60 and more are seen ahead of 1.6500 amid reports of option defensive sellers.