Aussie employment data to reflect slight recovery in AUD; Arbitrage options in EUR

Euro has been reasonably reflecting in Asia-pacific currency crosses to account Greece matters, given the intense volatility in Chinese equity markets of late, that Chinese equity markets were opening today as the ABS (Australian Bureau of Statistics) released the employment data.

Total employment: +7.3k from +40.0k (original +42.0k).

Unemployment rate: 6.0% from 5.9% (original 6.0%).

While Euro group President and European Stability Mechanism Chairman Jeroen Dijsselbloem sent a letter to the top euro zone economic officials asking them to assess Greece's request for a stability loan.

We saw the usual volatility around the number, though we went into data with AUD versus dollar trading around the 0.7425 level. The better than expected outcome plus a solid start to equity trading in China has helped AUD higher and we have seen 0.7475 high so far.

Having seen such a rapid fall in recent sessions, the risks of a further squeeze towards 0.7510/0.7530 is possible versus USD. However, beyond that we would deem AUD as expensive. But this hasn't been the same case with Euro, RSI has been neutral at 27.3482 while stochastic (9,6) indicates a sell call.

Hence, we advocate go long in EUR/AUD while short in AUD/USD simultaneously. Use either binary instruments or near month futures contracts to effect these positions.