###POV: OPTIONS MARKETS SEE A SHORT.....>

EURO-DOLLAR: ###POV: OPTIONS MARKETS SEE A SHORT LIFESPAN FOR THE STRONGER EUR

-EUR/USD 1m risk reversals touched multi-year highs in early January (has only

ever been higher when covering Trump's Election and the subprime crisis) but

subsequently crumbled alongside the US equity meltdown in Feb. Since capturing

the Apr26 ECB rate decision, 1m RRs have dropped in every session but one

(Mar30) to fall well below the YTD average.

-As a result, the EUR/USD SMILE curve capturing the ECB has become far more

symmetric after being heavily skewed toward OTM calls in March, both of which

are signals that options markets are becoming less bullish on the single

currency.

-Slowing EZ economic activity (March Advance CPI fell 0.1 ppts below exp. on

Wednesday and March composite PMI dropped to the lowest level since Jan'17) has

led to a flatter EZ yield curve (as measured by the Euro benchmarks curve). 

-Four of the top five most profitable trading strategies for EUR/USD over the

past 12 months are signalling a short EUR/USD position, all of which are

currently profitable.