Currency hedging volumes looking pretty.....>

OPTIONS: Currency hedging volumes looking pretty firm ahead of the Nonfarm

Payrolls report, with Asia-Pac options activity leading. USD/SGD volumes are a

stand out, with turnover today over four times higher than the average for this

stage of the session.

- Options traders have been chasing SGD downside protection, with USD/SGD calls

proving popular. 1.3925 and 1.4380 call strikes have drawn focus. Vol bets also

stand out, with one of the larger trades crossing during Asia-Pac hours a

$170mln 1.3335/1.4380 6m strangle. The trader paid an approx $470,000 premium

for the position.

- Implied vols are generally higher across DMFX in the short-end, with AUD 1m

vols holding close to the multi-month highs printed at the beginning of

February. With the spot rate so close to multi-year lows, it's likely these vols

will stay supported in the coming sessions. Similar moves are seen in the

equivalent NZD contracts, with markets looking ahead to the RBNZ rate decision

on Wednesday for direction.