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EUR/USD Downside Demand Makes Up for Quieter JPY Markets

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  • FX hedging markets are more muted early Thursday with overall volumes modestly below average for this time of day. Busier USD/JPY trading has unsurprisingly caught market focus in recent sessions, but are quieter today reflecting the more restricted spot ranges.
  • EUR/USD, USD/CNY options are busier, however, with EUR/USD’s show below the 1.08 handle helping trigger some downside interest. Sizeable trades consistent with a 1.0775/1.0750 calendar put spread crossed during early NY hours – with trades appearing to target the potential inflection point for the ECB policy cycle in June.
  • These trades, compounded by separate demand for 1.0500 and 1.0750 put strikes, has pushed the put/call ratio to just below 2/1 at the midway point.
  • Most notable strikes crossing at the final Mar’24 NY cut include $1.0750-52(E803mln) and $1.0815-30(E2.4bln) in EUR/USD, Y151.00($732mln) in USD/JPY, $1.2600(Gbp1.1bln) in GBP/USD and C$1.3585-00($1.6bln) in USD/CAD.
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  • FX hedging markets are more muted early Thursday with overall volumes modestly below average for this time of day. Busier USD/JPY trading has unsurprisingly caught market focus in recent sessions, but are quieter today reflecting the more restricted spot ranges.
  • EUR/USD, USD/CNY options are busier, however, with EUR/USD’s show below the 1.08 handle helping trigger some downside interest. Sizeable trades consistent with a 1.0775/1.0750 calendar put spread crossed during early NY hours – with trades appearing to target the potential inflection point for the ECB policy cycle in June.
  • These trades, compounded by separate demand for 1.0500 and 1.0750 put strikes, has pushed the put/call ratio to just below 2/1 at the midway point.
  • Most notable strikes crossing at the final Mar’24 NY cut include $1.0750-52(E803mln) and $1.0815-30(E2.4bln) in EUR/USD, Y151.00($732mln) in USD/JPY, $1.2600(Gbp1.1bln) in GBP/USD and C$1.3585-00($1.6bln) in USD/CAD.