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Free AccessCurrency hedging volumes sitting below......>
OPTIONS: Currency hedging volumes sitting below average again, with a relatively
busy Asia-Pac session countered by quieter European and early US options
markets. Decent volumes in USD/JPY, USD/KRW and EUR/JPY were offset by quieter
EUR/USD, USD/CNY and AUD/USD markets. Implied vols are generally mixed but the
very short-end of the DMFX vol term structure has bumped higher, with the
EUR/USD 1w implied contract adding close 1.5 points as the contract captures
next Thursday's ECB meeting.
-USD/KRW is one of the standouts, one of the more interesting trades crossing
included a $250mln 1,195/1,205 three-week call spread - a structure that breaks
even on a rise though approx. 1,196 (equal to the multiyear highs printed in
May). The trade was placed as USD/KRW rallied sharply overnight, closing at a
one-month high of 1178.75.
-GBP hedges have also been in demand, with GBP/USD volumes well ahead of recent
averages. GBP/USD put strikes have been popular, although some of the largest
trades have been looking to pick the bottom: an ITM Gbp207mln $1.15/1.21
six-month call spread crossed just ahead of this morning's retail sales.
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Why MNI
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.