The FOMC statement in the recent monetary policy meeting explains for no urgency for rate hikes, while the jobs data give Fed some breathing room.

The February 1st FOMC statement reiterated the Committee’s outlook for “gradual increases in the federal funds rate,” and its key details were little changed from the December statement.

We think the latest statement shows that the Committee intends to keep raising rates over time, but that it does not feel much urgency to implement the next hike.

As stated in pre-polls agenda, the US President Donald Trump seems to be imposing a legislation, his order momentarily barring refugees and nationals from seven countries and demanding an end to Australia‘s offshore detention of asylum seekers, on the contrary to this, the US supreme court ruled out this decision.

In the aftermath of United States President Donald Trump's crackdown on the H1-B visa, according to a few sources, three bills have been introduced to Congress which reportedly seek to restructure the H1-B visa programme, including one that would raise the salary threshold, making it more expensive for outside firms to send employees to America.

The dollar weakness, pared back Fed expectations and a better tone to activity data globally continue to dampen long vol returns, but the threat of disruptive trade protectionism makes us wary of chasing the vol move lower. Stay the course with a mix of vega longs and hedged carry trades.

USDJPY vol is the most sensitive in G10 to erratic shifts in US policy focus between fiscal impulse and trade protectionism, could spike on Trump/Abe summit headlines and incurs minimal carrying costs in the 9M –1Y bucket. Buy 1Y straddles.

French election risks have resurfaced after the recent political developments. EURUSD spot carries little-to-no risk premium, and Euro vols have retraced a large part of their post-November rally, allowing good entry points into fresh Euro hedges via options.