Derivs - Interest Rate

There is a growing likelihood that the Reserve Bank of Australia (RBA) will decide to cut interest rates at its July meeting, due to weak wage growth and a declining inflation outlook, said some analysts this week. But options markets are not yet priced for a change.

HSBC has begun offering a clearing collateral service for over-the-counter (OTC) derivatives to help clients comply with G20 swap reforms.

OpenDoor Trading, a trading platform that aims to improve liquidity in off-the-run US treasuries and treasury inflation protected securities (TIPS), has hired an experienced capital markets strategist to a senior position.

Short-end CNY swaps have been offered and the curve has been steepening as the stronger yuan and improved liquidity conditions have supported receiving interest in the 1-2 year maturities, writes Deirdre Yeung of Total Derivatives.

Post-crisis regulation, funding pressures and liquidity demands are leading investors to favour derivative products over underlying assets in novel ways, said analysts.

The short-end of the CNY swap curve has been bid on the back of today's weak yuan fix while disappointing economic data has triggered offers in the belly. Separately, the People’s Bank of China (PBoC) is considering direct trading of CNY/ZAR FX, writes Deirdre Yeung of Total Derivatives.

Broadridge Financial Solutions, an operations and tech solutions firm, has added derivatives clearing to its post trade services by buying Dojima, another tech firm.

Global stress testing is required for derivatives clearing houses to ensure that they do not become ‘too big to fail’, the Bank of England has said.

Derivatives post-trade initiatives are on the rise in Asia, said post-trade services operator TriOptima, arguing that the region is trying to improve its fragmented regulatory framework and adhere to global financial standards.

Concerns of rising central clearing costs are pushing derivative market participants to step up compression initiatives and shrink trade volumes to a post-2007 low, according to an industry report.

TriOptima, the over-the-counter post trade service provider, has completed its first compression cycle with Eurex Clearing members for euro-denominated interest rate swaps.

The US state of Delaware is embarking on a blockchain and smart contract technology programme in the hope that this will lower transaction costs, speed up and automate manual processes, and reduce fraud.