Euro Options Turn Most Bearish Since 2022 on Fear of Long War

Traders are the most pessimistic on the euro since Russia's 2022 invasion of Ukraine (four years ago) as the war in the Middle East continues, pushing energy prices sharply higher and threatening Europe's economic outlook. The resulting risk-off positioning is weighing on EUR and could amplify inflationary pressure via elevated energy costs, increasing downside risk for European growth and markets.

Analysis

Traders are the most pessimistic on the euro since Russia's 2022 invasion of Ukraine (four years ago) as the war in the Middle East continues, pushing energy prices sharply higher and threatening Europe's economic outlook. The resulting risk-off positioning is weighing on EUR and could amplify inflationary pressure via elevated energy costs, increasing downside risk for European growth and markets.