Derivs - FX

A plan to increase risk weightings for banks’ exposures to central counterparties may cool down dealers who might have been keen to push clearing for clients.

Flow in the fx options market has been thin this week, particularly on the euro/U.S. dollar cross. Players have been sidelined waiting for spot to break out of the tight USD1.3550-1.3820 range, where it has been for about two and a half weeks. A break from the range, in the absence of a big political or economic event, would be a driver in bringing players back to the market, said one trader.

The European Securities and Markets Authority is expanding its derivatives, credit rating agency and asset management expertise, and has today begun hiring for its Markets and Intermediaries Division.

RP Capital, the alternative investment firm founded by Rafael Berber, the ex-global head of Merrill Lynch’s equity-linked product group, is to launch a UCITS emerging markets fund.

Suggestions by the European Commission to abolish a provision under the Markets in Financial Instruments Directive--that states that professional investors have the necessary level of knowledge and experience to invest in investment products--could make it more expensive for investors in structured products.

Standard Chartered strategists are recommending investors sell three-month non-deliverable forwards to short the yen and go long the Korean won on an anticipated rate hike by the Bank of Korea.

UBS plans to roll out both its Equity Investor Marketplace and FX Investor Marketplace products to private banks in the U.S., according to Axel Kilian, global head of equity derivatives distribution in London.

A French dealer sold EUR250 million of volatility on the euro/U.S. dollar on behalf of an unknown corporate on Thursday. The trade was a major factor in capping implied volatility on the pair, despite an appreciation in the greenback.

A gulf divides buysiders and sellsiders on how much in derivatives will be electronically traded this year and the level of price transparency in different asset classes seen last year, according to a survey by the Association for Financial Markets in Europe.

Standard Chartered fx strategists are recommending investors increase their short U.S. dollar, long yuan trades via one-year non-deliverable forwards as they anticipate increased dollar appreciation after the Lunar New Year.

Royal Bank of Canada in New York has lost a number of staffers from its New York emerging markets fx derivatives group since December. Eric Olson, managing director of emerging markets trading, Sergio Zanini, v.p. of emerging markets trading, and Caroline Bloomberg, director of emerging markets rates and sales, have left the firm.

Derivatives accountants have defended new proposals released by the International Accounting Standards Board and the Financial Accounting Standards Board, after the International Swaps and Derivatives Association yesterday opposed new rules for the reporting of derivatives in financial statements.