Brandt's Biggest FX Bet Is Short EUR/JPY as Yen Strengthens
Peter Brandt's firm holds its largest futures and FX position in a short EUR/JPY trade as the yen gains on intervention and rate expectations.
Key FX option expiries for EUR/USD, USD/JPY, and EUR/GBP are set for 15 October, potentially influencing price action.
There are a couple of notable expiry levels to keep an eye on today, highlighted in bold below.
The first is a sizeable one for EUR/USD at 1.1250, with the strike sitting just under 40 pips from the spot price. As the dollar pulls back alongside Treasury yields while traders continue to digest the September US CPI report, this expiry could remain relevant, particularly if the pair keeps edging higher in the session ahead.
The near-term chart is also beginning to shift, as EUR/USD buyers have broken back above both the 100-hour and 200-hour moving averages during trading today, a move not seen in five weeks. This points to a more bullish near-term outlook, though the key question is whether Treasury yields will sustain their retreat or reverse higher as we approach the second half of the week.
Should price action allow EUR/USD to drift closer to 1.1250, the expiries might act like a magnet, drawing price movements and limiting trading activity around that level as the cut approaches.
Next, there's a USD/JPY expiry at 158.00, just 5 pips from spot. This could keep the pair anchored near the figure level heading into the cut, but as noted, dollar pairs are currently highly sensitive to Treasury yield moves. For USD/JPY, intervention headlines are also a factor to watch. All of these could easily outweigh the influence of option expiries.
Another expiry worth noting is for EUR/GBP at 0.8480, with the strike just 11 pips above the spot price. That might draw some attention if the cross trades higher, although the impact will largely depend on broader euro and sterling flows.
For more on how to use this data, you can check out this post and/or the Q&A below.
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Peter Brandt's firm holds its largest futures and FX position in a short EUR/JPY trade as the yen gains on intervention and rate expectations.
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