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FX Hedging Activity Well Ahead of Average

OPTIONS

Options activity in FX is higher than average for this time of day at the NY crossover, with more active USD/JPY, GBP/USD and EUR/USD markets largely responsible, making up for quieter AUD//USD and USD/HKD trade.

In vol space, the front-end of most implied curves across G10 are lower as markets discount last night's Fed decision and as equities moderate (although some implied vol contracts that capture November's US election got a small boost on Trump's delay tweets).

Bias in USD/JPY trading today leans toward USD/JPY calls marginally, with 104.85, 107.00 and (in particular) 105.50 strikes proving the most popular. This has helped USD/JPY 3m risk reversals corrected the downtick posted at the tail-end of last week, with the 3m contract rising to 1.6 points in favour of puts today.

MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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