Derivs - FX

Proposed changes to the Basel leverage ratio could constrain market activity and restrict economic growth. That’s the view of the Global Financial Markets Association, the Institute of International Finance and the International Swaps and Derivatives Association which have written to the Basel Committee on Banking Supervision on the issue.

Investors should look at buying two or three-month Australian dollar, U.S. dollar downside puts with a knockout level between .84-and-.85 in expectation of AUD weakness, according to traders.

Scotiabank is building out its fx flow and structured product coverage in Asia, in a bid to offer its largely corporate clients greater access to regional currencies, such as China renminbi.

Chris Wait, global head of fixed income sales at Standard Chartered in Singapore, is leaving the firm.

The Chinese renminbi is increasingly being used for investment purposes via structured notes as opposed to just for hedging and trading, Vincent Craignou, global head of fx and precious metals derivatives at HSBC, told DW in an exclusive interview. “We had RMB for trade. We had RMB for hedging and now an interesting development this year is that we now see RMB for investment too,” Craignou said. “We’ve always seen hedge funds or other institutional investors play the appreciation of the RMB but this year we’re also seeing private clients buying notes to benefit from the appreciation of the RMB.”

Regulators must create a harmonized, robust derivatives system across domestic borders to avoid a race to the bottom on issues such as margin requirements, according to Martin Wheatley, chief executive of the Financial Conduct Authority in London.

A U.S. investment bank was seen picking up a significant amount of one-year U.S. dollar/yen puts during Asia trading on Thursday, after the U.S. Federal Reserve refrained from beginning to taper its monthly asset purchases.

Louis Curran, managing director and head of institutional sales, Asia, at UBS in Singapore, has resigned from the firm.

Wells Fargo has requested that the European Securities and Markets Authority enables third country branches to choose which regulation transactions should be subject to when entering derivative contracts between local branches of third country entities.

Only a few financial firms that have signed up to the Hong Kong Trade Repository are submitting trade data, with the rest of the counterparties waiting until December when mandatory interim reporting is enforced.

Investors should look at buying three-month U.S. dollar, Japanese yen condor options with strikes at 100-104-106-110 in order to benefit from the next round of yen weakness, according to strategists at Société Générale.

Nomura is reportedly set to hire Todd Sandoz, the ex-head of global fx and short-term interest rate trading at Credit Suisse in London, as global head of equities.