Derivs - Credit

This year began with a bang for the sovereign credit default market as spreads in the eurozone’s periphery posted a strong rally in the first week.

Derivatives desks are scoping growth areas across asset classes for this year, but they’re targeting specific slices within the major underlyings.

Structured product investors in Asia are fast turning to deals denominated in local currencies as reliance on the U.S. dollar declines in the region. Filippo Olivetti, managing director and co-head of markets structuring for Asia Pacific at the Royal Bank of Scotland in Tokyo and Stefan Masuhr, managing director and co-head markets structuring Asia Pacific in Singapore, said the flow will grow in 2013. “This is simply driven by the fact that local investors in countries like Malaysia, [South] Korea and Indonesia simply don’t care for USD as much,” Masuhr told DI in an interview.

An International Swaps and Derivatives Association service allowing buysiders and sellsiders to amend and share ISDA Master Agreements to be in compliance with Dodd-Frank business conduct rules is seeing a pick-up from buysiders, Robert Pickel, ceo, told DI in an extensive interview.

Nomura has made three senior additions to its structured credit business with the hire of Gavin O’Neill as a managing director, Alex Mahler as an executive director and Pradeep Kanwar as a v.p., all in structured credit trading.

The establishment of clearinghouses in Asia Pacific will increasingly place greater pressure on the resources of major dealers, as investment banks attempt to negotiate the differing approaches in different markets.

Jeff Ross, ex-principal in derivatives and fixed income sales and head of repo sales at Bank of America, has joined London-based debt capital markets trading and research brokerage Yorvik Partners as a partner in London.

Adjusted volumes of over-the-counter derivatives have dropped by 5.3% from USD440.1 trillion at year-end 2011 to USD416.9 trillion June 30, 2012, largely due to compression and clearing, according to an analysis by the International Swaps and Derivatives Association.

The European Securities and Markets Authorities has published guidelines stating that a national competent authority should assess and ensure that a central counterparty has put in place a framework to identify, monitor and manage potential risks arising from interoperability arrangements.

The imminent end of the world — at least according to the Mayan civilisation — is credit-negative for Europe’s financial institutions, said rating agency Spoody’s in a report on Friday. The expected meteorite impact alone is likely to kill most of the continent’s population, while the ensuing flood brought on by a 100ft wall of water will drown the remainder. But the deluge could also hurt sentiment on peripheral Europe’s nascent recovery, the rating agency said.

Structured product volume on the Scoach Switzerland exchange is declining, reflecting waning investor concern over counterparty credit and the lack of appetite for the fees associated with listing.

Citigroup has taken an equity stake in ICAP’s iSwap Limited, a platform for interest rate swaps, and separately will support the platform with streaming prices.