Bank of America Posts Strong Q4 2024 Results, Shares Rise 
China Holds Loan Prime Rates Steady for 14th Month as Economic Recovery Remains Uneven 
BOJ Rate Decision in Focus as Sticky Inflation, Weak Yen Shape USD/JPY and Nikkei Outlook 
RBI Holds Repo Rate at 5.25% as Inflation Risks and Global Uncertainty Persist 
Fed Holds Interest Rates Steady as Kevin Warsh Says Rising Treasury Yields Tighten Financial Conditions 
Wall Street Analysts Weigh in on Latest NFP Data 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
China's Refining Industry Faces Major Shakeup Amid Challenges 
BOJ Expected to Hold Rates Steady While Signaling More Hikes Ahead 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
Australia Inflation Cools as Core CPI Misses Forecasts, Easing RBA Rate Hike Pressure 
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After the ECB yesterday highlighted growing downside risks to the EU economy, today’s manufacturing and services PMIs will provide further evidence on whether underlying growth momentum continues to soften. Last month, the manufacturing and services PMIs fell to 51.8 and 53.4, respectively. Both these outturns were the weakest for more than two years. For December we look for further, albeit small, declines to 51.6 and 53.3, while the consensus forecasts are for no change.
Hedging skewness: Please be noted that the positively skewed IVs of 2m tenors are signifying the hedging interests for the bearish risks. The bids for OTM puts of these tenors signal that the underlying spot FX likely to break below 126 levels so that OTM instruments would expire in-the-money.
Risk reversals: Most importantly, to substantiate the above indications, negative risk reversal numbers of all euro crosses except EURGBP (especially EURJPY) across all tenors are also substantiating bearish risks in the long run amid minor abrupt upswings in the short-term. IVs for 2w tenors are on lower side which is interpreted as conducive for put option writers, and 2m IVs are on higher side which is good for the put holders.
Overall OTC barometer is noteworthy size in the forex options market that can stimulate on the underlying forex spot rate.
Options Trade Tips (EURJPY): Buy 2m EURJPY (1%) ITM -0.69 delta puts for aggressive bears on hedging grounds. If expiry is not near, delta movement wouldn’t be 1 point increase with 1 pip in the underlying spot FX. Which means if the spot FX moves 1 pip, depending on the strike price of the option, the option would also move less than 1. Thereby, in the money put option with a very strong delta will move in tandem with the underlying. Source: sentrix, saxobank
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at -79 levels (which is bearish), while hourly JPY spot index was at 24 (mildly bullish) while articulating at (10:36 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
