FX options traders rethink vol drivers amid macro uncertainty
Market-makers believe more and more events will influence options pricing as political risk bubbles up during 2024
Options dealers are reviewing how macroeconomic events such as national elections or jobs data affect currency option pricing, as political risk rises and interest rates remain on a knife edge.
A senior options trader at a French-based international bank says: “I think events now have a much bigger weight. The exogenous impacts on the market are huge compared to three years ago.”
Options desks typically apply weights to a small number of events including non-farm payrolls releases, wage data and
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