Derivs - FX

The market for over-the-counter derivatives is transforming from a market of mostly bilateral contracts to a market where many contracts are executed through a central counterparty.

The Chinese authorities will wait until the development of the nation’s central clearing counterparty before rolling out an electronic confirmation matching system across the onshore yuan interest rate swap market.

Buysiders have taken profit on at-the-money straddles on the euro against the U.S. dollar and the euro against the Australian dollar, following an interest rate cut of 25 basis points by the European Central Bank to 0.75%.

FX Alliance, an institutional fx trading platform provider, has started letting investors execute European fx options on its trading platform, FXall.

JPMorgan is advising investors to buy three-month double-no-touches on the euro against the Norwegian krone based on the view the euro could settle into a better defined range following the European summit and Greek elections.

The Brazilian real traded 3% higher against the U.S. dollar after the nation’s central bank sold all its 60,000 fx swaps offered at auction.

The U.K.’s Financial Services Authority has reached an agreement with Barclays, HSBC, Lloyds Banking Group and the Royal Bank of Scotland that calls on the banks to compensate customers for loan-insurance products mis-sold to them, including interest-rate derivatives.

Société Générale is advising investors to buy notional USD10 million six-month U.S. dollar/Canadian dollar calls and sell 143 lots of six-month WTI crude oil puts on the basis that correlation between oil and USD/CAD has peaked.

Swap dealers will be able to determine whether a counterparty has the appropriate knowledge and soundness to enter into a swap agreement, according to a draft of business conduct protocols circulated by the International Swaps and Derivatives Association.

Daiwa Capital Markets is shifting its business to target its home market of Japan.

Institutional investors have been buying one-week puts on the euro/U.S. dollar ahead of the two-day European summit in Brussels on today and tomorrow.

David Wright, the recently appointed secretary general of the International Organization of Securities Commissions, plans to develop a research foundation.