Derivs - FX

Hong Kong Exchanges & Clearing has posted on its web site a report on consultation conclusions concerning clearinghouse risk management reform measures, which include improving its stress-testing systems and introducing a “dynamic guarantee fund” to protect against defaults.

LCH.Clearnet has received clearance from the U.K.’s Financial Services Authority to launch its over-the-counter clearing service, ForexClear, and expects to launch non-deliverable forwards in the near future.

VTB Capital has recently hired Barin Yucemen as global head of fx and rates in London.

Chile’s main stock exchange in Santiago is planning to launch fx derivatives in a move that it says will double its trading volume.

Dual digitals and plain vanilla calls positioning for a rise in spot and volatility on Latin American currencies against the U.S. dollar have gained favor this week, partially in response to expected central bank interventions and expected corrections in underpriced volatilities.

Standard Chartered strategists are advising investors to buy a six-month U.S. dollar, Chinese onshore yuan non-deliverable forward outright, with an entry at 6.2740 and an exit at 6.3165.

Broker Marex Spectron has expanded its fx team in London, Singapore and Geneva.

Hong Kong and Singapore-based institutional investors, such as pension funds and insurance firms, are taking advantage of low volatility and purchasing two-year at-the-money principal protected structured products referencing either a basket of Asian currencies or the ICE U.S. Dollar Index.

A hedge fund bought USD700 million in one-month butterfly options on the euro/U.S. dollar cross Wednesday, according to traders.

Some credit valuation adjustment desks may hold back on trading contingent credit default swap indices because of uncertainty over how much Tier 1 capital they will need to cover their exposure.

State Street said the U.S. attorney in Manhattan and the New York attorney general are investigating what the firm referred to its “indirect foreign exchange execution methods.”

Buyside and sellside firms who have been short volatility on the U.S. dollar against the yen have been buying overnight straddles with strikes around JPY80.50.