FxWirePro: Long-term risk reversals softened for sterling on better odds on EU-UK trade pact – Rosy time for option writers to use interim rallies and short vols

Apr 21, 2017 10:44 am UTC| Research & Analysis Insights & Views

Do you think GBPUSD is the worst behind us? Are Brexit negotiations better prospects? Prime Minister May surprised the market by calling for a snap general election on 8 June. The possibility of a hard Brexit has...

FxWirePro: Trivial elevation to GBP forecast on better macro and Brexit developments but bearish still linger - Shorting downside and volatility via seagull

Apr 21, 2017 10:09 am UTC| Research & Analysis Insights & Views

GBP has performed better over the past month than we had expected. The trade-weighted index looked to be breaking down in March on evidence of a broader economic slowdown but has since rallied 2% on a combination of better...

FxWirePro: Faltering reflation trade slips up dollar

Apr 21, 2017 07:11 am UTC| Central Banks Insights & Views Economy

Faltering US inflation expectations have emboldened the market to mark down its expectations of the Fed rate path. This has robbed the dollar of yield support. Absent a shock result in the French election, the euro should...

FxWirePro: EUR/JPY mounting hedging sentiments in major downtrend – Add vega longs in put back spreads as RR and IVs highest among G7 space

Apr 21, 2017 06:59 am UTC| Research & Analysis Insights & Views

As the delta risk reversals of euro crosses (especially in EURJPY) have shown a mounting bearish interest as the progressive increase in negative numbers signify the traction for hedging sentiments for further downside...

FxWirePro: Low yielding vols lure long vega in USD/CHF and delta hedges

Apr 20, 2017 13:09 pm UTC| Research & Analysis Insights & Views

One sticking point is that 5Y USDCHF forwards is realizing 1.5-1.8 pts. below 5Y ATMs. This is not a direct impediment to vol buying since gamma contribution to long-expiry option P/Ls is minuscule, but the implied ...

FxWirePro: Glimpse over vigilant of crude inventories and use credit call spreads to arrest WTI short term bearish and mid-term bullish risks

Apr 20, 2017 12:36 pm UTC| Research & Analysis Insights & Views

Crude stocks drew for a second straight week, falling by 1.0 Mb (vs. -1.4 Mb expected). Cushing stocks fell, too, by 0.8 Mb (vs. +0.2 Mb expected). Refinery runs continued to ramp up quickly, and 4w av. runs are 395 kb/d...

FxWirePro: Append optionality for bullish in Swedish krona - Covered put for EUR/SEK and naked put for NZD/SEK

Apr 20, 2017 10:58 am UTC| Research & Analysis Insights & Views

SEK has been one of the underperformers in G10 this week, weakening in sympathy with EUR. There isnt an immediately identifiable catalyst for the underperformance, although wage negotiations yielded an outcome that was...