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Ending QE Early Would Be Hawkish... Right?

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OPTIONS: Currency hedging volumes sit slightly below average Tuesday, with
higher trading activity in AUD/USD, USD/CAD countered by quieter trade in
-In short-end vols, AUD/USD 1m implied contract is advancing sharply, looking to
trade north of 7.5 vol points for the first time since late March in
anticipation of the CPI figures due across the Wednesday Asia-Pac session this
week. The contract now also captures election risk, with the May 18th general
election now captured by the 1m tenor. NZD/USD implied vols are rising in
sympathy, with vols rising for the entirety of the 2w - 2y sector of the curve.
-Elsewhere, 1m vols are generally rising, with today's return of realised vol
helping prop, but longer-dated contracts are little changed, with the EUR/USD 3m
implied vol (for example) actually lower on the day.
-In EMFX, USD/BRL vols are higher also, rising back above 14 points but still
well shy of 16.2 point cycle high printed in late March as markets focus on
reports that the Brazilian pension bill may progress as soon as today with the
lower house committee due to hold a vote Tuesday.
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