Deutsche Bank has set up a correlation-trading department in its global commodities group as part of its effort to become a leading commodities house. The firm plans to use its bulge bracket status in the foreign exchange and interest-rate derivatives market to sell commodity-linked products to investors who would not normally enter these markets, such as fixed-income hedge funds, pension funds and retail investors, according to Kerim Derhalli, global head of commodities in London.
Derhalli, who was promoted from head of eGlobal markets in January, moved Kevin Rogers, global head of fx options in London, to head the new department last week.
The department will structure products to take advantage of macro views in the most efficient way. For example, metal prices lag behind interest-rate moves, so it may be more efficient for a hedge fund betting on further interest-rate cuts to take exposure to metals rather than enter interest-rate swaps or futures. As well as the traditional commodity products, such as metals, oil, electricity and gas, new products, such as weather derivatives, will also fall under Rogers' remit.
As part of the move, Neehal Shah, London head of fx options, has been promoted to Rogers' former position. Derhalli reports to Michele Faissola, global head of over-the-counter derivatives in London. Derhalli's former position has been eliminated and now the eGlobal markets division reports directly to Mark Ferron, coo for global markets. Before Derhalli became global head of commodities the position was held by Charles Von-Arentschildt, who is also head of global markets for North America. Von-Arentschildt will now concentrate on running the North American operations full time.