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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
OPTIONS
- Wednesday marked another session of declining FX options volumes, with DTCC data showing just over $80bln in contract notional traded vs. the average 2024 daily turnover of ~$91bln.
- Asia-Pac and early European trade looks to extend the theme, with activity pretty light again overnight. Muted markets are led by China, with CNY hedging considerably below average as markets head into the Lunar New Year – however the pattern is consistent across much of G10.
- Coinciding with the fade in volumes for G10 FX options, implied vols are under further pressure, with AUD/USD, GBP/USD, EUR/GBP, EUR/NOK and EUR/SEK 3m implied at, or extremely close to, 12m lows.
- JPY hedging was marginally more active overnight following Uchida’s speech. USD/JPY downside protection was favoured, evident in the put/call ratio approaching 2.00. 1-Month USD/JPY put vols cleared to new YTD lows of 8.9 points overnight – cheapening downside to a near 3-month low.
Figure 1: Quieter FX volumes reflected in range-lows for G10 FX implied vols
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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