FxWirePro: Favor EUR/USD top end range with “European knock in options”
Jun 14, 2017 08:27 am UTC| Research & Analysis Insights & Views
EURUSD has traded between about 1.05 and 1.16 since 2015. While these bounds are pretty wide, this has been the longest period deprived of trends since the introduction of the single currency (refer above graph). EURUSD...
FxWirePro: What matters for choppy euro appreciation? RVs, IVs and skews to bid for OTM call strikes
Jun 14, 2017 08:10 am UTC| Research & Analysis Insights & Views
As the FX markets focus returns to monetary policy, its relationship with interest rates will become more prominent. The last time that FX vol was durably in a low regime coincided with a period when central bank policies...
FxWirePro: Bullish and bearish scenarios, OTC indications and hedging solutions of USD/JPY
Jun 14, 2017 07:26 am UTC| Research & Analysis Insights & Views
Bearish: USD/JPY to 125 if 1) The strong US growth leads aggressive Fed hikes and a spike in UST yields, resulting in broad USD strength, 2) The Japanese governments fiscal policy becomes more expansionary and the...
FxWirePro: Why do Loonie seem vulnerable? Cover USD/CAD exposure risks with covered call strategy
Jun 13, 2017 13:10 pm UTC| Research & Analysis Insights & Views
Last Friday, the front end of the Canadian rates market priced a 30% chance that rates would go up this year. One speech from BOC Senior Deputy-Governor Carolyn Wilkins later, and pricing is over 50%. She cited broadening...
FxWirePro: Strategic derivatives trades in global equities and FX space in H2’2017
Jun 13, 2017 12:54 pm UTC| Research & Analysis Insights & Views
In the US, despite the good economic backdrop, equity volatility has moved into oversold territory, and we illustrate this with a number of examples including an analysis of the business cycle. We advise caution in the...
FxWirePro: Cost-effective optionality structure to arrest RUB correction
Jun 13, 2017 10:52 am UTC| Research & Analysis Insights & Views
We turn bearish in RUB on the concern of commodity headwind and seasonally weaker current account outlook over the summer. We are more cautious of the commodity exporter, as terms of trade are unlikely to be favorable for...
FxWirePro: Beware of RUB correction and fetch benefits of high skew
Jun 13, 2017 09:55 am UTC| Research & Analysis Insights & Views
Please be noted that the IVs of RUB are the highest among G20 currency space. The volatility parameters favor structures that sell topside skew to cheapen up bullish USDRUB exposure. Being long USDRUB is a good hedge for a...
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