Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
Gold Shines on Oil Relief: Buy Dips at $4160, Targeting $4305 as Bullish EMAs Dominate 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
BOJ Minutes Signal More Rate Hikes as Inflation Risks Grow 
Gold Slips Below $4050 as Bond Yields Surge to 4.7% on Fed Inflation Concerns – Sell Rallies at $4060 Targeting $3940 
The economic recovery in the eurozone has strengthened and thanks to the prospect of an imminent exit from the ECB’s expansionary monetary policy, after the ECB had already removed the reference to further rate cuts from its statement, EUR has appreciated.
Well, for directional Euro bulls, it is worth considering additional expressions of Euro strength after a decent rally in EURUSD spot and vol this week, either by selling Euro-bloc correlates such as USDCHF, USD/Scandies, and USD/CEE, or buying EUR-crosses that have a reliable track record of co-moving with Euro.
Only a handful of crosses satisfy the latter requirement; EUR/Asia, in particular, are predictable candidates (refer above chart) since idiosyncratic forces in managed, lower beta Asian currencies are often swamped by more powerful global forces during a concerted European surge.
Call spreads are the likely instruments to participate in additional EUR upside after this week’s high-velocity move; using 3M at-expiry digitals as an analytically simpler stand-in, above chart screens for bullish EUR spread plays within a narrow universe of viable proxies and recommends EURJPY, USDNOK and EURSGD options as better priced than EURUSD to layer on additional leverage.
We have long liked NOK as a valuation play, and there could be RV room for the krone to catch-up to the Euro now that the Norges Bank has removed its long-held rate easing bias and oil has rebounded above $45/bbl.
