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JP Morgan and Dutch pension fund PGGM transacted derivatives margin trade
◆ Chinese bank treasury shift from USTs to dollar callables considered ◆ Some European SSAs face cross-currency limitations ◆ Previous market staple 'almost non-existent'
Bank intermediaries eye resurgence in profitable trades
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The surging rally in credit markets since the start of the month hit an impasse this week, as trader caution set in ahead of key policy decisions by the Bank of Japan on Friday and the Bank of England next week.
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An auction to settle credit default swaps referencing Portugal Telecom International Finance returned a low final price, but slightly higher than had been indicated by secondary bond and CDS levels despite greater physical settlement interest to sell.
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The International Swaps and Derivatives Association has published a ‘clearing classification letter’ that will enable derivative counterparties to notify each other of their status for clearing requirements under Hong Kong’s mandatory clearing regime.
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Improved liquidity conditions have offset the weak yuan to support the short-end of the CNY curve while currency-related export optimism supports paying in the longer tenors. Sources expect further steepening from current levels, writes Deirdre Yeung of Total Derivatives.
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Last week’s failed Turkish coup, and the resulting crackdown, has spooked holders of Turkey’s dollar denominated government bonds.
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The chief executive of ICAP’s EBS BrokerTec has stepped down from his post, and is set to leave “in due course,” according to the company.