The lingering theme for FX options is a lack of volatility - actual and implied, with the market lacking any real impetus and directional bias.
Front-end expiry G10 FX implied volatility remains at, or close to pandemic lows.
Wednesday's U.S. Federal Reserve policy announcement isn't expected to reignite markets - a hawkish lean would be a surprise, but overnight options have increased premium - warning against complacency nL1N2ML0QQ.
President Biden's speech is covered, too.
EUR/USD flows are light, but there's slightly more interest for sub 1-month expiry downside, than upside, and a falling EUR call premium on 1-month risk reversals (early April lows 0.05) may worry EUR bulls nL1N2ML16Q.
Rising U.S. yields lifted USD/JPY to 109.08, fuelling demand for topside strikes and broader implied volatility.
Benchmark 1-month reached 5.8 from 5.4, and there was a notable drop from 0.6 to 0.2 JPY calls over puts on 1-month risk reversals - reinforcing a renewed bullish lean nL1N2ML0N1.
Huge 108.50-109.00 expiry/hedging Thursday may cap rally nL1N2ML0S9.
AUD/USD view little changed since Tuesday nL1N2MK0UD and cable since Monday nL1N2MK0GU.
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