Currency hedging volumes looking to end.....>

OPTIONS: Currency hedging volumes looking to end the week on a positive, with

options volumes well ahead of recent averages. With Tokyo still closed, USD/JPY

volumes remain behind, but bumper activity in EUR/USD, USD/INR and USD/TRY are

more than making up for it. In line with the high option trading activity,

short-end implied vols are ticking higher, with EUR/USD and AUD/USD in focus

(both higher by around 0.25 points), while quieter USD/JPY markets lead vols

lower there.

-Larger EUR/USD trades so far today have tended to opt for downside protection,

with put strikes as low as $1.10 in firm demand. These trades appear to have

knocked some wind out of the risk reversals curve, with both the 1m and 3m

measure in the red so far Friday.

-The fourth consecutive session of strength for the INR has led options volumes

so far this week. However, it appears markets are opting to take the opportunity

to reload on USD/INR call strikes at lower spot levels, with calls outnumbering

puts by over 5:2 so far Friday. Elsewhere, NOK implieds are running higher

across the curve following this week's plummet in oil prices.