EUR/USD hedging volumes going very well.....>

OPTIONS: EUR/USD hedging volumes going very well so far Tuesday, with total

notional traded around 50% higher than the recent (relatively low) average, as

the looming ECB meeting provides a decent incentive to hedge.

- Downside EUR/USD exposure has been in demand, with puts outnumbered calls by

around a fifth. Volatility bets proving popular, with one of the larger trades

crossing including a E200mln 1.1125/1.1400 strangle rolling off at end-August (a

trade that actually crossed twice in quick succession, although the second was

half the size).

- Unsurprisingly then, EUR/USD vols are inching higher, with 1m up over 0.1

points as the vol term structure flattens further headed into the ECB.

- Elsewhere, currency hedging markets are quieter, with volumes generally lower

than average. CNY, KRW and HKD markets in particular are very muted.