Currency hedging markets taking a modest....>

OPTIONS: Currency hedging markets taking a modest breather Thursday, with

overall volumes slipping slightly below the recent average. Higher volumes are

still noted in key Asia-Pac FX markets, with CNY, TWD and IDR all seeing high

levels of activity however volumes are lower among the majors, with JPY, EUR and

AUD lower.

-Short-end vols are seeing some relief, with most 1m measures modestly lower

across both EM and DM. Notable movers include AUD 1m vols, which have fallen

close to half a point after AUD spot recovered from the post-jobs data drop.

-GBP/USD vols are the exception, with implieds higher across the curve today as

spot fell below $1.28 for the first time since mid-February as May's Brexit deal

looks perilously close to being taken off life support. The confirmation that

Boris Johnson is to run as Conservative party leader (and therefore Prime

Minister) will have done little to soothe.

-USD/TRY vol markets have moved further in favour of TRY, with 1m risk reversals

retreating closer toward multi-month lows. Reflecting this, the entire vol term

structure trades lower on the week.