Reflecting the more muted volume across.....>

OPTIONS: Reflecting the more muted volume across currency futures today, options

are following suit with currency hedging activity well below recent averages for

this time of day. This is mirrored in implied vol markets, with the most notable

declines in 1m AUD/USD, 1m USD/CAD and 1m USD/RUB.

- USD/JPY options are less than half what you'd expect to see at this time of

day, with EUR/USD, USD/CNY and GBP/USD activity leading the declines.

- One of the few currencies seeing decent interest in options is USD/HKD, with

considerable interest today in 1y 7.85 calls - a trade that tests the upper end

of the USD/HKD trading band. These positions traded in size throughout Asia-Pac

and European morning hours. As has been the case previously (with both 7.85

calls and 7.75 puts), these positions may not be eyeing a clear break in spot

through these levels, but aiming to profit from a future uptick in implied vols.

- Elsewhere, options have favoured upside exposure in NZD/USD, with $0.65 and

$0.6450 call strikes trading in size. This helped drive front-end NZD/USD risk

reversals higher to end the week, with the 1m measure bouncing after the steady

decline last week.