Implied vols across DM currencies are.......>

OPTIONS: Implied vols across DM currencies are higher in early NY hours,

particularly in the short-end. The uptick is reflecting the modest increase in

risk aversion across the Asia-Pacific session after equities softened and the

JPY gained on fears surrounding the spread of Coronavirus beyond China's Wuhan

province.

- 1m USDJPY implied vols are ticking back above the 4.5 point mark, but are

still short of the highest levels of the year. This pattern is echoed across

Asia-Pac options markets, with KRW and CNH vols also on the front foot as

markets pick up (historically) cheap protection via options after the phase one

trade deal.

- Mimicking the uptick in vols, options volumes are also sitting higher than

recent averages for this time of day, with USD/INR, EUR/JPY and USD/KRW markets

particularly active. Downside protection in Asia FX against the greenback has

been in demand, reflected in the highest print in 1m 25d risk reversals since

early September last year this morning. 1,191.10 and 1,192.10 call strikes saw

some decent interest in early European hours.