Urban studies: Doing research when every city is different 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
China's Refining Industry Faces Major Shakeup Amid Challenges 
Fed Holds Rates Steady as Middle East Conflict Clouds Inflation Outlook 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
RBA Set to Hike Rates Again Amid Inflation Surge and Global Uncertainty 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
China Holds Benchmark Loan Prime Rate Steady for Tenth Consecutive Month 
Bank of Japan Officials Signal Continued Interest Rate Hikes Amid Inflation Concerns 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
US Gas Market Poised for Supercycle: Bernstein Analysts 
As stated in our recent technical write up, EURJPY bulls manage to break out above major resistances of 113.946, 116.250, & 121.526, Current upswings consistently well above DMAs and sustain above these levels would take us to the newer heights.
Today, all focus will also be on the long-awaited ECB meeting. We expect the ECB to announce a six-month extension of its QE program and maintain monthly purchases at EUR80bn. This is probably close to market expectations given a recent Bloomberg survey, where 64% of analysts expected a QE extension with the current pace kept unchanged.
The reason why ECB is widely expected to extend the purchases is that inflation is still not on a sustained path towards 2% despite the latest increase, which is due to energy price inflation (core inflation has remained constant since August).
The market focus has over the past couple of months been focused on the risk of 'tapering' or 'end of easing'. However, in our view, that is premature and we do not expect the ECB to announce any kind of tapering at this meeting.
Instead, focus is likely to be on potential changes to QE buying restrictions like the issuer limit, buying below the deposit floor at -0.40% or potential deviations to the capital key.
The positively skewed 2m ATM IVs would still keep us alerted on downside risks.
As a result of the short-term bullish trend and any bearish pressures caused by the European central bank, we devise below option strategy in order to monitor both puzzling swings.
The diagonal bear put spread strategy is recommended that involves buying long-term puts and simultaneously writing an equal number of near-month puts of a lower strike.
As shown in the diagram, the strategy is constructed at net debit but with a reduced cost by writing (1%) 1m OTM put option, simultaneously, buying (1.5%) 2m ITM +0.67 delta put options.
This strategy is typically employed when the options trader is bearish on EURJPY spot FX over the longer term but is neutral to mildly bullish in the near term that is stated above.
