Derivs - FX

Institutional investors are showing interest in emerging market fx structured notes that have barriers significantly higher than spot. According to structurers, barriers in some emerging market currency pairs are higher than spot has ever traded.

Standard Chartered is finding corporate takers for structured products that use the premium from selling fx options to participate in equity options—a novel play for that type of investor.

South Korean corporations not already licensed by the Financial Services Commission are now allowed to issue certain types of non-principal protected structured products, following the implementation of a recent amendment to the country’s main financial regulation.

Structurers in Japan are seeing a return in interest among private bank investors for structured products referencing U.S. dollar 10-year swap rates, as U.S. quantitative easing tapering in the short-term could lead to rates moving even higher.

The Royal Bank of Scotland in Japan is marketing six-month yen-denominated Nikkei 225 contingent payer swaptions to hedge fund investors as a hedge against a selloff in Japanese government bonds and equity.

Trudy Lee, managing director and head of fixed income markets at Credit Agricole in Singapore, has left the firm.

Japanese structured products, such as so called double deckers and fixed rate notes issued between 2010-and-2011 referencing the Brazilian real and South African rand, will still be carry positive despite recent weakness in emerging market currencies.

Option premiums on the U.S. dollar against emerging market currencies are becoming more expensive as EM economies stay under the spotlight and geopolitical tensions related to Syria escalate. Liquidity in the options market has also deteriorated as a result.

Kevin Walker, the former partner and head of multi-asset sales to pension funds and insurance companies at Goldman Sachs in London, is set to join Citigroup in a new role.

Singaporean exporters are buying 12-month U.S. dollar, Singapore dollar participatory or target redemption forwards with a 1.30 strike to hedge against weakening of the SGD.

THEAM, the EUR44 billion (USD58.8 billion) asset management division of BNP Paribas, plans to buy a three-month call spread next month on the U.S. dollar against the Swiss franc to express a bullish dollar position.

Tullett Prebon has filed an application to the U.S. Commodity Futures Trading Commission to become a swap execution facility under Dodd-Frank, three weeks after the final SEF rules became effective.