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Despite an active day for FX spot...........>

OPTIONS
OPTIONS: Despite an active day for FX spot markets, currency hedging markets are
slightly calmer, with lower than average volumes crossing in USD/CNY and
USD/JPY, although EUR/USD, GBP/USD and (particularly) USD/NOK options are much
busier. Implied vols are marching higher also, with notable recoveries in
AUD/USD, USD/BRL and USD/JPY 1m measures. USD implied vols are generally bid
ahead of the Fed decision due tomorrow, with EUR/USD 1w vols sitting around 1
point ahead of the YTD average - expected overnight vols to follow suit tomorrow
when the contract captures the decision.
-Draghi and Trump's war of words today has helped stimulate options activity
this morning, with EUR/USD options volumes around 30% ahead of average for this
time of day. Trading has been biased toward EUR/USD puts so far today, with over
$3 in puts trading for every $2 in calls. One of the more interesting trades
crossing includes a large E453mln 1.1135/1.0985 1m put spread struck shortly
following Draghi's opening remarks.
-Elsewhere, USD/NOK puts have been favoured ahead of the Norges Bank's expected
rate hike Thursday, with 8.64 strikes proving most popular.

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