Derivs - FX

Corporates are buying cheaper U.S. dollar, onshore China yuan non-deliverable forwards in order to hedge their offshore CNH exposure, instead of buying CNH forwards. The play allows corporates to save on hedging costs while benefiting from the positive carry.

Institutional investors are entering option strategies to profit from the decorrelation between the S&P500 and euro/U.S. dollar.

The increase in volatility in the euro/Swiss franc has caused increased transaction costs in options in the pair, resulting in a lack of liquidity.

Nomura has hired Tom Haskins as managing director and head of fx sales for the Americas, and Eric Miller as managing director and head of interest rates sales for the Americas.

Private banks globally have been tapping structures that allow them to benefit from the strengthening of the U.S. dollar against the yen, by investing in so-called Bull Disappearing DOCU’s on USD/JPY.

The international reach of Dodd-Frank may result in Brazilian businesses choosing to hedge with a non-U.S. firm to avoid any regulatory burdens involved in complying with U.S. regulation.

An amendment that would have reviewed a rule in the U.S. that requires investments firms to request a quote to buy or sell derivatives from three dealers—an automatic increase from two dealers—has been rejected by the U.S. Commodity Futures Trading Commission.

Institutional investors have been buying at-the-money straddles on the euro against the U.S. dollar, with approximately a EUR1.5 billion notional going through on the trades during London afternoon trading today.

The planned financial transaction tax could lead to direct costs as high as EUR40 million if those corporates are defined as financial institutions under the terms of the tax, according the European Association of Corporate Treasurers.

Dapeng ‘Ray’ Zhao, director in U.S. dollar swaps trading at UBS in New York, has left the firm.

Mark Valentine, Europe, Middle East and Africa head of the packaging group within Citigroup’s multi-asset structuring business in London, has left the firm after less than a year.

The European Commission has instructed the European Securities and Markets Authority to produce draft regulatory standards on the cross-border application of the European Market Infrastructure Regulation by Sept. 25, 2013.