USD/CAD risk reversals turn bearish for first since 2017
USD/CAD three-month risk reversals (CAD1MRR) have turned negative in favor of put options(bearish bets on USD/CAD) for the first time since October 2017.
The gauge is currently trading at -0.025 vs 0.30 on May 15. The sharp slide indicates a bullish-to-bearish trend change for USD/CAD (or bearish-to-bullish trend change for the CAD)
A negative number indicates the implied volatility premium for the USD/CAD put options is higher than for the USD/CAD call options.