Derivs - FX

The kiwi gained on the Japanese yen this week, climbing up to JPY81.24 Thursday, from the previous day’s JPY80.06, as the market absorbed the New Zealand government’s tax cut plans.

The last few weeks has seen heavy flows of investors dumping rate falling trades as expectations are now the Bank of Japan will begin a series of rate hikes.

Interest in downside puts on the Australian dollar spiked in a quiet week of trading on the currency, as the market absorbed warnings from Reserve Bank of Australia Governor Glenn Stevens Thursday that the economy is slowing.

A former head of Asia Pacific interest-rate trading at BNP Paribas is taking a stab at launching his own hedge fund firm with what he believes is the first statistical arbitrage fund to focus on Asia ex-Japan.

Investors have been taking profit from short-dated euro puts bought to cover Thursday’s rates announcements from the Bank of England and the European Central Bank.

Lehman Brothers is planning to return to trading Chinese yuan non-deliverable forwards after pulling out two weeks ago.

ABN AMRO and The Royal Bank of Scotland are rethinking the creation of a new structured credit and alternatives business.

Retail investors have started to look at structured products referencing Hong Kong property.

Lehman Brothers is shorting the New Zealand dollar via the yen using options, fitting in the firm's long-term bearish forecasts for the kiwi dollar against a more bullish outlook for the yen.

Asia-Pacific sellsiders are shifting to look for senior derivatives players with broader-based skills rather than specific expertise.

Institutional demand for inflation-linked structured notes is prompting interest in long-dated inflation caps, which allow investors to play the pickup in volatility associated with note issuance.

Investors are looking for further downward movement of the euro, as it dipped to USD1.55 Thursday against the U.S. dollar, from flirtations with USD1.60 the previous week.