Derivs - Interest Rate

The US Commodity Futures Trading Commission’s Division of Clearing and Risk has issued a no action letter stating it will not take enforcement action against the Hong Kong Exchange’s over-the-counter derivatives clearinghouse OTC Clear for failing to register as a derivatives clearing organisation.

The swap execution facility aggregation model, which allows market participants to connect to multiple SEFs without being a direct member, is favorable for buysiders who do not have the resources to connect to all facilities, according to speakers at the TABB Forum Derivatives 2014: A Market in Transition conference in Chicago, on Tuesday.

The Depository Trust & Clearing Corp. and Euroclear are to create a system to make the processing of collateral easier.

Overall credit default swaps notional that was reported to the swap data repository between April 28 and May 2 increased by 66% from the previous week, according to data from the International Swaps and Derivatives Association. Overall interest rates derivatives trading that was reported, however, only increased by 10%.

Lloyds Banking Group has hired Josh Gonnella, the former global co-head of rates sales at UBS, as head of rates sales in London.

The US Commodity Futures Trading Commission has expanded the capabilities of its Portal service, allowing market participants to electronically submit event-specific reports.

Investors should look at selling euro high-strike payers as the high issuance of €-denominated structured notes that was seen in the first quarter of 2014 is expected to continue in Q2. Long-dated volatility may remain under pressure as a result, due to the greater supply of long-dated options from these notes, according to strategists.

ICE Benchmark Administration has been selected by the International Swaps and Derivatives Association as the new administrator of ISDAFIX, marking the end of a three-month selection process and kicking off a transition process to a new system for collecting the data used to fix the benchmark rate.

Trading in CNY swaps has not been very aggressive ahead of the long weekend in China. 1s/5s and 1s/10s swaps are flatter due to tighter liquidity and outperformance at the longer-end, but market participants expect a corrective steepening move to come after the holiday, writes Deirdre Yeung of Total Derivatives.

The potential for a rise in interest rates has sent end-users scrambling to revaluate their portfolios over the last 12 months. As macroeconomic uncertainty persists and implementation of new regulation continues, Goldman Sachs has stood apart from its peers in being able to help their clients prepare for a full array of likely fixed income market scenarios with leading analysis and access to liquidity.

Citigroup has made the new over-the-counter derivative clearing regime in the US a top priority over the last 12 months, embracing the new system with investments in technology and personnel. The firm’s investments have started paying dividends, with market participants from the sellside and buyside taking note, helping the firm secure this year’s GlobalCapital Derivatives Americas Clearing Bank of 2014 award.

Consistent outperformance in the use of cross-asset derivatives has set Citadel apart from other hedge funds over the last 12 months. The firm's performance in global markets was lauded by sellside officials and institutional investors this year, who noted Citadel outperformed other funds using derivatives in both vanilla and exotic strategies. This helped Citadel win the 2014 GlobalCapital Derivatives US Hedge Fund Of The Year award.