SocGen Touts Eurozone Disinflation Risk Hedge Via Fx

A further fall in inflation expectations could be worrying for the European Central Bank and have the potential to dramatically impact euro crosses. In order to hedge disinflation risk, Société Générale is suggesting buying three-month basket options, with EUR as the base currency while shorting the Australian dollar and Russian rubble, while going long the Singapore dollar and U.S. dollar.