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EUR/USD Downside Demand Noted Despite Post-CPI Rally

OPTIONS
  • Currency hedging activity is just ahead of average for this time of day, with EUR/USD options in particular seeing decent interest. Following the US CPI print yesterday, options volumes surged, with DTCC showing over $85bln notional traded yesterday. This was the busiest session for options since August 2nd and House Speaker Pelosi's trip to Taiwan.
  • Downside EUR/USD demand has been prevalent across the European morning, with 1.01 and 1.03 put strikes seeing particular interest. Close to $3 in EUR/USD puts have traded for every $2 in calls so far Thursday.
  • Activity coincides with the continued pullback in hedging costs, as front-end implied vols continue to drift. The 1m contract is now below 8.5 points for the first time since early June, although may see some support into the tail-end of next week as the contract captures the Sep 21st Fed meeting.
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  • Currency hedging activity is just ahead of average for this time of day, with EUR/USD options in particular seeing decent interest. Following the US CPI print yesterday, options volumes surged, with DTCC showing over $85bln notional traded yesterday. This was the busiest session for options since August 2nd and House Speaker Pelosi's trip to Taiwan.
  • Downside EUR/USD demand has been prevalent across the European morning, with 1.01 and 1.03 put strikes seeing particular interest. Close to $3 in EUR/USD puts have traded for every $2 in calls so far Thursday.
  • Activity coincides with the continued pullback in hedging costs, as front-end implied vols continue to drift. The 1m contract is now below 8.5 points for the first time since early June, although may see some support into the tail-end of next week as the contract captures the Sep 21st Fed meeting.