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Hedging volumes slightly lower than.........>

OPTIONS
OPTIONS: Hedging volumes slightly lower than recent averages once again
Thursday, with markets appearing to be gearing down for the longer weekend.
Nonetheless, USD/JPY, USD/CNY and USD/TRY markets are busy, but lower volumes in
EUR/USD and USD/KRW in particular are dragging.
-Notional waged behind USD/JPY puts outweighs that of calls so far today, with
the larger trades of the session including what appears to be a series of large
put spreads: 2x $500mln Y104.00/108.75 put spreads expiring on 20th June and 2x
$500mln Y104.00/108.75 put spreads expiring 20th January 2020, making up a bulk
of the put option notional so far Thursday.
-Spot volatility in USD/TRY has clearly triggered a wave of TRY hedging, the
bulk of which are USD/TRY calls. 6.40 and 6.50 USD/TRY call strikes have been
particularly popular so far helping keep USD/TRY 1m risk reversals close to
recent cycle highs.
-Implied vols elsewhere are generally declining among DMFX, with the exception
of GBP/USD 1m vols, which have crept higher (albeit by only 5bps), snapping an
extended losing streak.

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