Italian banks and index options expiry hold focus into 2017

Financial credits and stocks were focal points for derivatives traders this week, with a big rally in banks aided by perceptions of a more hawkish stance on interest rate hikes by the US Federal Reserve. But although volatility has largely abated from credit and equity markets with the passing of the Fed meeting, traders warned that Banca Monte dei Paschi di Siena and the credit index options expiry next week could still bring upsets before the end of the year.