Derivs - Interest Rate

Authorized institutions in Hong Kong acting as benchmark submitters in the city’s nascent offshore yuan HIBOR market will need to establish systems to manage conflicts of interests arising between parts of their business that submit benchmarks and those that use the rates.

To hedge against central bank dovishness from the Bank of England’s Monetary Policy Committee, JPMorgan suggests entering short sterling curve flatteners.

StormHarbour Securities has hired Magnus Orgard, the former European head of solutions and derivative sales at WestLB, to work in the firm’s client solutions team in London.

Credit Suisse recommends tapping constant maturity swap curve floors on the 30s/7s U.S. rates curve for investors who wish to hedge for significantly higher rates and a flatter long-end curve.

Patrick Law, managing director and head of north Asia rates and fx trading at Barclays in Hong Kong, is joining Bank of America Merrill Lynch.

The Hong Kong Exchange is planning a round of simulations in the third quarter of this year, to test its newly constructed central counterparty for clearing over-the-counter derivatives, according to a statement in its financial results.

Short term interest rates in sterling could become more stable as a result of the Bank of England’s Monetary Policy Committee adopting a policy of forward rate guidance.

The Hong Kong Securities and Futures Commission will require clearinghouses seeking recognition to submit a self-assessment detailing how they comply with the standards for financial market infrastructure set out by the Committee on Payment and Settlement Systems of the Bank for International Settlements and the International Organization of Securities Commissions.

Credit Suisse recommends buying 6m3y receiver spreads on U.S. rates based on attractive volatility-adjusted rolldown.

South Korea’s plan to introduce a derivatives transaction tax in 2014 could hurt volumes and liquidity in the KOSPI 200 futures and options market, and will face stiff opposition from the market.

Société Générale sees value in entering conditional Japanese yen five-to-30-year, or five-to-20-year, bull-steepeners on the JPY yield curve to take advantage of declining short-term rates.

To take advantage of the wide spread in 30y rates in the U.S. dollar against sterling, strategists at the Royal Bank of Scotland are recommending a zero-cost payer structure.