Derivs - FX

A U.S. investment bank was buying at-the-money straddles on the euro against the U.S. dollar today, ahead of the Federal Reserve’s highly anticipated meeting this afternoon.

Risk-reversals in the U.S. dollar against the yen are now trading at levels not witnessed since 2011; so, strategists see value in buying.

International corporates operating in mainland China are still shorting the U.S. dollar and going long the China offshore yuan via forwards, despite warnings that the USD/CNH carry trade could become less profitable.

The first South Korean synthetic exchange-traded funds will likely reference U.S. and Korean high yield bonds and real estate investment trusts when the market starts trading sometime this summer.

Barclays made the most senior hire of the week, appointing ex-Goldman Sachs trader Michael Winkelgrund as head of exchange-traded fund trading. Deutsche Bank, meanwhile, hired Monty Lee as a senior index options trader from Barclays. In Asia Pacific, Nicholas Smith has replaced PJ Andersson as global head of pan-Asian equity derivative and convertible sales at Citigroup, after the latter left the firm last week.

A hedge fund has been picking up put spreads on the Australian dollar against the U.S. dollar, following the recent rally in the Australian unit.

Tradition has launched a voice and electronic platform that allows the negotiation and trading of realized volatility futures that have a variance payoff.

Private banks in Asia Pacific are showing less appetite for hybrid structured products that mix fixed income underlyings with equity, commodity or fx assets, with other specialized investors, such as hedge funds, instead driving the trend.

The International Swaps and Derivatives Association has published a new 2013 standard credit support annex to standardize market practices in collateral management for over-the-counter derivatives.

Hedge funds are buying structures that allow them to position for increased U.S. interest rates and currency appreciation simultaneously.

Stephen O’Connor has left his position as managing director at Morgan Stanley to take up the position of full-time chairman at the International Swaps and Derivatives Association.

Investors have been picking up hybrid range structures to maintain better yield levels in the low volatility environment.