Better volumes across equity indices and....>

OPTIONS: Better volumes across equity indices and bond markets are reflected in

currency hedging activity Monday, with options turnover higher than average for

this time of day across a wide range of currency pairs. Haven currencies are

seeing decent demand for upside protection: USD/JPY 108.50 and 105.00 put

strikes have traded in size, helping contribute to the high put/call ratio

today: $3 in puts have traded for every $2 in calls so far Monday.

- Alongside the deterioration in risk appetite today, implied vols are gaining

across the board including EUR/USD, which saw short-end tenors hit euro-area

record lows after the ECB decision last week.

- There's been a marked move in short-end risk reversals, with USD/CNH 1m

contract edging to the best levels of the year as concern mounts that the

Coronavirus impact could impinge heavily on the domestic economy. This has

mirrored the uptick in the front-end implied vol curve, but there's still a way

to go before the levels equal those seen during the US-China trade spat. PMI

data at the end of this week is unlikely to capture much of the virus' impact,

but the numbers will be carefully watched all the same.