FX hedging volumes slightly higher than.....>

OPTIONS: FX hedging volumes slightly higher than average so far Wednesday, with

USD/CNY once again leading the way (as has been the case since the beginning of

last week) and making up for lower activity in EUR/USD, AUD/USD and GBP/USD

(although, USD/THB options have also been particularly busy Wednesday).

-Yesterday, sentiment among options traded was relatively neutral toward

USD/CNY, but that's not held through into the Wednesday session as the put/call

ratio leans further in favour of USD/CNY calls at a ratio of almost 2:1. USD/CNY

call strikes at 7.00 have been particularly popular Wednesday, with near $2bln

in contracts trading Wednesday rolling off at that strike, but some of the

larger trades crossing today eye gains north of that level. Just ahead of the NY

crossover a $500mln 6.95/7.30 3m call spread crossed, a position that would

break even just above the 7.00 mark.

-After retreating Tuesday, 1m implied vols are generally rising across DMFX,

although falling for some EM currencies. GBP/USD vols are ticking higher on the

announcement of another meaningful vote in the week beginning June 3rd, while

TRY vols pull back as spot is somewhat contained.