Euro volatility set for highest close since March as nonfarm payrolls approach

Deep News15:30

Traders are positioning ahead of Friday's US nonfarm payrolls report, driving up one-day hedging costs across major currencies.

Euro-dollar overnight volatility climbed as much as 526 basis points to 11.58%, the highest level since July 29; the gauge is on track for its strongest close since early March.

Sterling-dollar corresponding volatility rose 479 basis points to 11.52%, the second-highest level since late July, and may post its highest close since May.

Dollar-Swiss franc volatility stood at 12.12%, on pace for a seven-month closing high.

Traders are focused on the nonfarm payrolls data, which is the key basis for judging whether the market is pricing in a Federal Reserve rate hike this month; the current probability of a hike is 36%, down from around 56% after the US PCE inflation data came in below expectations.

One-day expiry options also cover the US ISM manufacturing index and euro area CPI data.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment