Trading patterns suggest that the cut in US interest rates on 31 October was fully expected, as traders sought positions to minimise the effect.

The US Federal Reserve slashed interest rates to 4.5% from 4.75% did not come as too much of a Halloween fright as trading patterns on options indicated that traders had fully expected the move and had taken appropriate positions to hedge.

CME Group’s Eurodollar November options trading illustrated this with 228,060 put calls exercised against the 89,406 calls...