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MNI's FX Options Monitor finds: -Markets....>

OPTIONS
OPTIONS: MNI's FX Options Monitor finds:
-Markets scrambling for GBP upside exposure following Meaningful Vote
Both GBP/USD call and EUR/GBP put volumes rose by over 70% apiece this week,
with the bulk of trading activity coming following the UK government's
Meaningful Vote Tuesday. Options traders appeared to buy EUR/GBP put spreads in
size with 0.86 and 0.88 put strikes traded in size in the days following the
vote.
-JPY options continue to look cheap
Realised vols for JPY crosses are now outstripping implied at the largest clip
since early 2011. This sees USD/JPY 1m ATM implied vols edge below the 2018
average, skewing the USD/JPY 1m smile curve further in favour of OTM puts.
-Markets continue to hedge against USD weakness
Risk reversals across EUR/USD, GBP/USD, USD/CNY and USD/JPY have moved in favour
of USD puts in recent weeks, with the now record long US government shutdown and
a dovish turn from the FOMC largely responsible.
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