Currency hedging markets off to another.....>

OPTIONS: Currency hedging markets off to another decent start Wednesday, with

overall activity a little higher than the recent average. JPY, AUD, CAD and SGD

are all seeing above average volumes so far today, although CNY and KRW markets

are a little quieter.

- Implied volatility across short-end DMFX currencies are a touch higher today,

but are still well away from the best levels printed on Monday. Risk reversals

markets, however, hold close to recent extremes as USD/JPY 1m RR again hits the

lowest levels since the Global Financial Crisis.

- No surprise then, that today's USD/JPY put/call ratio has tilted in favour of

downside protection. The bias has been thanks to a slew of longer-term OTM put

strikes in the pair. Mid-European morning, over $800mln notional was waged on

the Y82.50 strikes, paying a premium of $4.5mln for the position that rolls off

on December 10th this year.

- CAD hedging sits well ahead of average for this time of day, with USD/CAD

calls preferred. C$1.40 and C$1.4555 call strikes have proved popular, with 9m

expiries favoured.