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sd-10-EFTA01459711Dept. of Justice

EFTA Document EFTA01459711

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12 January 2016 FX Blueprint: Forever Young Theme #14: Volte-face - buy 6m EUR/EM-USD/EM vol spreads, sell EUR vs TRY, MXN, INR • Options markets assume the dollar will drive price action but the euro is now the "risk off" currency • "Euroglut" outflows into the US and EMFX reverse as risk appetite sours and carry trades squeeze • EUR/EM crosses have been realizing well above USD/EM but implied volatilities are quite similar • We recommend buying 6m EUR/EM - USD/EM volatility sprea

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Dept. of Justice
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sd-10-EFTA01459711
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