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Aug 05 - 03:55 AM

EUR/USD's Mega Option Shackles Are Loosening - Eyes On NFP

By Richard Pace  —  Aug 05 - 02:25 AM
  • This week saw multi billion EUR/USD option expiries in mid 1.18's

  • Last of those expire today - 1.2bln 1.1825-30, 3.6bln 1.1850-60

  • Related cash hedging flows will end, and can release EUR/USD from shackles

  • However, 1.9-bln 1.1850 Tues could still impact if EUR/USD remains contained

  • Eyes now on NFP Fri after big ADP miss Wed and with Feds focus on job market

  • Overnight/Fri expiry option implied volatility is higher to reflect risk

  • However, only added 1.5 to 8.5, suggesting expectations of tame reaction

For more click on FXBUZ


EUR/USD option expiries Click here

Overnight expiry EUR/USD FX option implied volatility Click here

Source:
Refinitiv IFR Research/Market Commentary

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