Derivs - Credit

The Depository Trust & Clearing Corp. plans to report on non-standard credit default swap transactions by expanding the capabilities of its Trade Information Warehouse.

Proprietary trading desks are expected to be off the radar for banks for at least a year, market watchers say.

Markit is looking to launch credit derivative indices in new markets in the New Year. Regions of interest include Latin America, Russia, Eastern Europe and the Middle East, said Stephan Flagel, managing director and head of indices in London.

Hong Kong Legislative Council will begin debate on regulatory reform today, including the possible merger of the Hong Kong Monetary Authority and Hong Kong Securities and Futures Commission.

The Federal Reserve’s commitment of USD800 billion to help loosen the credit markets reeled in the CDX North American Investment Grade index series 11 to 246.5 basis points at press time.

Barclays Capital is suggesting buying five-year credit default swaps on building product and manufacturing names such as Black & Decker and Whirlpool, despite a general tightening of credit spreads this week.

Europe’s iTraxx main credit index is expected to tighten to around 120-130 basis points by the end of next year, factoring in an 8% global default rate, according to Société Générale’s annual credit strategy report.

Richard Gee, global head of program trading, index arbitrage and exchange-traded funds at JPMorgan in New York, has left the bank amid a raft of layoffs.

The secondary market for collateralized synthetic obligations could crawl toward recovery in 2010, and will be driven by market players far more familiar with its risks, market watchers say.

Fortis Investments has started offering institutional investors a fixed pay-offs strategy which uses derivatives across multiple asset classes.

Market participants are working on the creation of Shariah-compliant credit default swaps.

Hedge funds with out-of-the-money trades with Lehman Brothers in the U.S. are scoping whether they can offset paying up by buying discounted in-the-money derivative claims from other counterparties.