The desk has seen USD buying with both macro and real money further squaring USD shorts as Fed commentary continues to lean more hawkish. A drop in economic sentiment in Europe, with German ZEW falling for the third consecutive month continued to weigh on the EUR after it closed below its recent 1.1750 support - the team has seen net selling EUR through London across real money and macro names.
A strong GBP also saw EURGBP continue to grind lower, GBP buying from macro names was somewhat offset by retail supply and gamma trading sideways - the desk has seen some interest to trade lowside more vol neutral structures, but some unwinding of longer dated digital puts are also going through.
CHF has held onto gains and there is continued topside demand in USDCHF with outright buyers of calls 1-3m as realised vol picks up. EMFX is generally rangebound with the market somewhat reluctant to add risk ahead of the US CPI print this week.
Virus risks remain at the forefront in Asia and concerns around downgrades to Chinese growth forecasts have weighed on CNH - the desk continue to see sellers through London and have now bought USD on the day.
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