(Bloomberg) -- Treasury options traders are protecting against everything from multiple interest-rate cuts this year to a hike ahead of the US Federal...
-- Treasury options traders are protecting against everything from multiple interest-rate cuts this year to a hike ahead of the US Federal Reserve meeting this week.Plunging Home Prices, Fleeing Companies: Austin’s Glow Is Fading
“It makes sense that the options market should reflect some probability that the next Fed move will be a hike given cuts have been pushed out, but the bar is high for that outcome,” Tanvir Sandhu, Bloomberg Intelligence’s Chief Global Derivatives Strategist, said in an email. “The markets really needs the data to do the talking on disinflation being back on track.
The yen dropped as much as 1.8% on Friday to 158.44 per dollar, a fresh 34-year low, after US data showed inflation pressures remain, supporting recent messaging from Fed Chair Jerome Powell on keeping rates higher for longer. “The options skew in G10 FX can reprice further in favour of USD if inflation proves to remain sticky and the timing of cuts gets pushed out even further,” said Sandhu.Zero-Day Options Popularity Drives Record Notional S&P VolumeJane Street’s $1 Billion Trade Puts Spotlight on Indian OptionsSpot VIX moved back into a discount versus nearby futures, with the front part of the curve weakening as the S&P 500 had its best week this year, buoyed by strong earnings from Microsoft Corp.
Nasdaq 100 implied volatility jumped relative to the broader index with technology shares swinging during a busy earnings week. Dollar-yen 1-week implied volatility jumped as traders eye potential Bank of Japan intervention in the yen.
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