Free Trial

Currency hedging volumes sitting a touch....>

OPTIONS: Currency hedging volumes sitting a touch below average so far Tuesday,
with better-than-expected USD/JPY volumes failing to counter lower levels of
activity in EUR/USD and USD/CNY. Short-end vols in USD/JPY have really picked up
over the past week, inverting the term structure as markets price in speeches
from Fed's Powell today and the G20 summit beginning at the tail-end of the
week. The fall in USD/JPY spot to cycle lows of Y106.78 has also helped and a
close at those levels would be the lowest since early 2018. Vols also sit higher
across much of the rest of DMFX, with the EUR/USD vol curve also sitting
slightly flatter.
-Markets have favoured USD/JPY puts so far Tuesday, with $3 in put options
trading for every $2 in calls. Put strikes layered from Y107.00 down to Y106.45
have been a point of focus, with volatility bets proving popular. The Asia-Pac
session saw over $1bln in Y106.75/107.75 strangles crossing, with $500mln
rolling off on Friday and $500mln rolling off in two week's time.
-Countering the strength in KRW over the past week or so, USD/KRW calls have
proved popular, with 1,158 and 1,170 call strikes in vogue.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.