FX Desks Gear Up For Strategy Shift

Foreign exchange sales professionals are starting to push volatility trades, rather than directional plays, because they are predicting volatility will rise alongside interest rates and don't have a clear view on the dollar.

  • 02 May 2004
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Foreign exchange sales professionals are starting to push volatility trades, rather than directional plays, because they are predicting volatility will rise alongside interest rates and don't have a clear view on the dollar. Volatility is expected to increase over the next six- to nine-months because of the possible rate rise, said one strategist.

Volatility plays are also back in favor because the dollar's weakening seems to have slowed, at least for the moment, noted Marvin Barth, global foreign exchange economist at Citigroup in London. "Within the market, there is a dispersion of views that wasn't there before, for instance, last fall," he added. Structures such as straddles, which give exposure to volatility, are proving popular over longer dates, said one trader, who noted however that longer tenor trades are not common in this market.

In the short end, however, the activity remains concentrated on spot movements. Adrian Walkling, head of fx structuring at UBS in London, said range trades, which effectively sell volatility, are popular. For example, an investor pays USD1 today to receive USD5 in a month, providing the euro/dollar spot trades continuously in a USD1.16 to USD1.21 range.

  • 02 May 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 357,043.08 1340 9.06%
2 JPMorgan 319,078.96 1445 8.09%
3 Bank of America Merrill Lynch 316,666.04 1099 8.03%
4 Goldman Sachs 236,643.87 789 6.00%
5 Barclays 230,494.28 891 5.85%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 34,591.50 163 6.58%
2 Deutsche Bank 34,293.84 117 6.53%
3 Bank of America Merrill Lynch 31,293.04 95 5.96%
4 BNP Paribas 27,578.61 168 5.25%
5 SG Corporate & Investment Banking 23,982.83 136 4.56%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 19,745.92 80 8.86%
2 Morgan Stanley 16,323.54 83 7.32%
3 Citi 15,946.50 94 7.15%
4 UBS 15,487.17 60 6.95%
5 Goldman Sachs 14,053.61 76 6.30%