Derivs - Interest Rate

Not all derivatives on all days are suited to electronic trading, according to interdealer brokers.

Short-term hedge fund clients of Société Générale bought about USD300 million in one-month U.S. dollar/Brazilian real reverse knock-out put options over the past week.

Tradition is exploring trading U.S. dollar interest rate swaps on its Trad-X electronic trading platform, perhaps as early as the autumn.

Credit Suisse has reorganized its Asia Pacific global market solutions group, promoting Carl Bautista, Mervyn Chow, and George Pavey to become the three co-heads of the group, according to a memo from the firm.

The outstanding notional of over-the-counter derivatives in South Korea grew 8.3% over the 12 months to KRW6,970 (USD6.57 trillion) through to the end of first quarter, according to Financial Supervisory Service figures.

Central clearing of over-the-counter credit default swaps is set to start in Japan tomorrow (July 19) with five inaugural members – Daiwa Securities Capital Markets, Nomura Securities, Mizuho Securities, Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities.

The consumer price index swaps market could take off in the U.K. if the government presses ahead with an idea to issued CPI-linked gilts.

The next wave of derivatives set for clearing will likely include interest rate swap-like non-linear products like swaptions and options, Garry O’Connor, ceo at the International Derivatives Clearing Group in New York, told Derivatives Intelligence in an interview. Cross-currency swaps and swaps with caps and floors will likely follow.

If we are to learn anything from the credit crisis that engulfed the global economy a few years back it is that individual solutions are temporary and often finite. Comprehensive solutions are permanent.

The German Federal Financial Supervisory Authority has ditched a requirement to translate sales documents for foreign Undertakings for Collective Investment in Transferable Securities into German.

Industry associations and U.K. firms have warned the Independent Banking Commission about the implications that ring fencing could have on a banking group’s derivatives use.

Derivatives regulations are expected to increase the size of the interest-rate swap and credit default swap market by more than 10% to an estimated USD435 trillion in two years, according to Citigroup.