📝Hedge Funds and Real Money Accounts Sell EUR/USD: UBS Strategy

Hedge funds and real money accounts have been selling EURUSD, while wealth management clients have bought some USD versus GBP and CHF.

The EURUSD interest was mirrored in options, with buyers of downside, and accordingly gamma remained quite bid despite vols and skew getting marked lower this morning with spot rallying.

Hedge funds have also been looking to re-engage in USDJPY downside via knock-out structures, with clients becoming increasingly interested in a potential policy shift from the Bank of Japan at the meeting on Friday.

In emerging markets, USD flows have been relatively mixed, with real money clients selling some USD versus CZK and PLN. Wealth management and corporates have sold some USD versus EGP and RUB.

In options, clients continue to look at USDEM higher structures, but flows have been light. - UBS Strategy