Derivs - FX

Euro/Swiss franc option flows are spiking as hedge funds and other institutional investors play upside and downside scenarios.

U.K.-based F&C Thames River has hired Torquil Wheatley, an ex-director in global finance and foreign exchange global markets structuring at Deutsche Bank, to drive new business at the asset manager in alternative products.

Da Cheng International Asset Management is to launch its first Hong Kong-listed retail fund. The China Core-Satellite Equity Fund plans to give investors exposure to Chinese private and state-owned enterprises and will use over-the-counter derivatives, such as interest rate swaps and FX derivatives, for hedging proposes, according to an official at Da Cheng.

Société Générale and Credit Agricole Corporate Investment Bank are not doing business with GFI because the interdealer broker is in the process of hiring around 40 officials from the derivative and securities brokerage Newedge.

BNP Paribas has hired Deron Goodwin in a new role as managing director in corporate fx sales in New York.

Strong performance in Barclays Capital’s fx business helped mitigate losses in its fixed income, currency and commodities division.

Observers are raising questions about a little discussed part of Hong Kong’s over-the-counter derivatives reform plan: small automated trading systems will be allowed to act as designated central clearing counterparties.

Central clearing houses in Asia will scramble against each other to secure cash from near defaulting counterparites if fragmentation and extra-territoriality issues are not settled among the region's regulators, according to Stephen O'Connor, chairman at the International Swaps and Derivatives Association.

Strategists at Morgan Stanley in Hong Kong are recommending going long the MS AXJ Index while shorting three-month U.S. dollar/Philippine peso non-deliverable forwards to take advantage of the continuing appreciation of emerging Asian currencies.

Kotak Mahindra Asset Management, an asset manager based in Mumbai, is planning to launch a series of mutual funds that can use fixed income derivatives, such as interest rate and credit default swaps, to hedge interest rate and credit risk.

At-the-money U.S. dollar/Japanese yen implied volatility is near the bottom of its three-year range, and investors should buy one-month over one-month forward volatility agreements on the expectation vol will break out of its recent lull, according to Olivier Korber, fx options strategist at Société Générale in Paris.

Hedge funds across the U.S. and Europe have been buying euro/U.S. dollar vanilla puts with one to three months with various strikes, while one popular strike was noted at USD1.34.