Derivs - Credit

Some of the recent economic data in the US has shown rising wages which should feed into GDP growth figures to come. That is driving a correction in the price of volatility.

Low interest rates have helped fuel M&A activity, so it is no surprise that several large transactions have been announced in recent months. But it’s not always the market that determines deals.

Risks of corporate downgrades and lower CDS volumes have pushed investors into carry strategies favouring single name entities and non-directionality.

The overall credit default swap and interest rate derivative trade counts reported to swap data repositories last week increased 24% and 46%, respectively, compared to the same week last year, according to data from the International Swaps and Derivatives Association.

RBC Capital Markets has added to its credit sales effort in Frankfurt with a senior hire.

At the International Swaps and Derivatives Association's AGM in Montreal on Thursday, the Commodities Futures Trading Commission appeared receptive to evolving discussions of post-trade name give-up on swap execution facilities in light of growing buyside demand for anonymity.

Westpac has hired an experienced salesperson to its fixed income business in London.

Earnings season has started strongly with most firms beating expectations, but Greece’s uncertain status within the eurozone continues to dampen positive momentum says Markit director Gavan Nolan.

While the spectre of a Greek default maintains its grip on CDS, having wreaked havoc last week, cash bonds and equities are made of sterner stuff, say traders.

The overall credit default notionals and trade counts reported to swap data repositories last week increased 33% and 37%, respectively, compared to the same week last year, according to data from the International Swaps and Derivatives Association.

Spreads on US corporate credit default swaps are tightening as credit conditions have generally improved or plateaued, motivating investors to seek higher yield.

Investors typically associate volatility with large price swings, adverse risks and expensive option premiums. Lately, we have seen some notable price movement, but not to the downside, and some expensive option prices, but not as a result of any particular fear.