### POV, Thursday trade saw a....>

US EURODLR OPTIONS: ### POV, Thursday trade saw a large pick-up in Eurodollar

option trading (midday volume appr 650K) after weeks of apparently aimless,

two-way trade, w/accts showing little conviction on the positions they put on.

Whether the summer soft patch of inflation is transitory or not is the

underlying debate with some one-off bear positioning trades on the day, while

larger flow faded the increased chances of Dec rate hike. FOMC postmortem, mkt

is pricing in a 68.8% chance of hike at the Dec 13 FOMC, providing incentive for

accts looking for inflation to lag expectations heading into year end. Larger

accts have been fading the increased rate hike chances today by selling at- and

out-of-the-money puts and/or buying upside calls on the day. The window of

opportunity is still open for accts looking to take some risk have while implied

volatility holds stable.