• German and EZ PMI data is due on Friday, potentially market moving
• Overnight options expire 10-am New York/14GMT Fri and now include the data
• However, additional volatility risk premium limited - expected tame reaction
• Overnight expiry EUR/USD implied volatility opened 13.0 Thurs from 12.0 Mon
• Premium/break-even 52 USD pips to 56 USD pips - negligible and already lower
• EUR/JPY vol may offer better value as it also includes Friday's BoJ decision
• Big option expiries and related hedging may have more effect on EUR/USD
• 3.3 billion euros of 1.0400-05 strikes expire at 10am New York Thursday
• Friday has massive 7 billion euros between 1.0350-1.0400 to
underpin/contain
EUR/USD option strike expiries Jan. 23 and 24
Overnight expiry EUR/USD implied volatility
(Richard Pace is a Reuters market analyst. The views expressed are his own)