I believe Draghi is going to starting reining in QE as he kind of hinted in his last press conference.
However, because of the Brexit, French elections, Greece and Italy, I can’t help thinking that he might end up also being alittle dovish.
So in truth, I believe he can go either way, but the volatility on the upside seem to be higher than the down side.
I decided to execute a double down call and put option spread with the following details: –
Spot; 1.0905
Call option; BE; 1.0948 with 43bps premium
Put Option; BE; 1.0879 with 26 bps premium
Total premiums; 69bps.
Let’s see what happens. I believe whatever happens tonight will translate into market action over the next few days.
It doesn’t help that it’s a long weekend upcoming up.
The Panthenon Investment Group 