FX Hedging Strategy Series

FxWirePro: Korean GDP may reduce easing hopes – add OTM call-writing strategy in conjunction with longs in 3m USD/KRW forwards

Jul 25, 2016 08:07 am UTC| Central Banks

Korea Q2 GDP (Tue) is expected to improve compared to a year earlier (SG 3.1%, consensus 3.0%, previous 2.8%). The move lower in USDKRW is running into intervention flows and downside technical support and further gains in...

FX Hedging Strategy Series

FxWirePro: Bidding USD/JPY 1m RR and IV skew makes PRBS more productive in hedging ahead of central banks’ monetary policy season

Jul 25, 2016 08:01 am UTC| Central Banks Research & Analysis Insights & Views

The FOMC meeting next week is also likely to stay on script. We do not expect the Fed to use the July FOMC statement to push up market expectations for a September hike. While recent data and the easing in financial...

FX Hedging Strategy Series

FxWirePro: JPY IVs blow out of proportion, disparity between ATM premiums and 1w IVs – Calls seem under-priced ahead of Fed and BoJ

Jul 25, 2016 07:11 am UTC| Central Banks Research & Analysis Insights & Views

Please be noted that the yen currency crosses flash the highest IVs among G20 space (seems quite exaggerated OTC moves), while USDJPY sizeable market pin risks at 105.50 for tomorrows expiries and higher skews for OTM put...

Canadian inflation remains stable in June; current monetary policy stance to remain warranted for some time

Jul 25, 2016 06:02 am UTC| Commentary Economy Central Banks

Inflation in Canada remained stable at 1.5 percent year-on-year in June. The Bank of Canadas core inflation measure also remained steady at 2.1 percent year-on-year. This did not come as a surprise as hot housing...

Fundamentals to watch out for this week

Jul 25, 2016 04:54 am UTC| Commentary Economy Central Banks

In terms of data and events, this week is extremely risk heavy, especially with looming Fed and BoJ. What to watch for over the coming days: US earnings season: Earnings season in the United States will keep...

BoE rate cut probability rises to 88 percent

Jul 22, 2016 12:04 pm UTC| Commentary Central Banks

The market is almost certain that a rate cut from the Bank of England (BoE) is coming in August, especially after the release of PMI reports today. In July, Flash manufacturing PMI dropped to 41-month low to 49.1. UK...

ECB stands pat, makes no change to rules governing quantitative easing

Jul 22, 2016 10:13 am UTC| Insights & Views Central Banks Economy

The European Central Bank (ECB) kept its interest rates and forward guidance unchanged as expected on Thursday. The ECB kept its deposit rate at -0.4 percent and the main refinancing rate at 0.00 percent, both record lows,...