Derivs - People and Markets

A vote by the United Kingdom to leave the European Union would entail a host of negative consequences for the derivatives market, according to Allen & Overy lawyers. The concerns include a deterioration of counterparty creditworthiness, changes in mark-to-market exposure and a decline in the value of UK linked collateral.

Hong Kong Exchanges and Clearing plans to add to its suite of renminbi currency futures this quarter.

Large flows coming into US credit have increased the attractiveness of CDX index options prices versus iTraxx, said market participants this week.

A reversal in trading patterns last week sent the yen as low as ¥109.70 against the dollar, but recent trading has been driven by aggressive hedge funds unwinding long yen positions ahead of a Bank of Japan (BoJ) meeting in late April.

The International Swaps and Derivatives Association's EMEA Determinations Committee has agreed to determine whether Norske Skog has triggered a restructuring credit event.

TriOptima, the over-the-counter post-trade service provider, has completed what it said was the first compression cycle for cleared Swedish Krona interest rate swaps.

The Commodity Futures Trading Commission's Office of the Chief Economist has been accused of blocking studies on politically inconvenient topics.

US investors have crowded into bets on higher volatility, just as stocks have begun to recover.

The US Senate Agriculture Committee was expected to review legislation reauthorising the Commodity Futures Trading Commission (CFTC) on Thursday amid debate over the benefits of additional funding for financial regulators.

Falling expectations for Japanese inflation and the dovish turn at the US Federal Reserve sent the yen higher last week. This left USD/JPY at the lowest level since October 2014 going into this week, with only a slight retracement on Thursday bringing solace to Japanese exporters.

The International Swaps and Derivatives Association (ISDA) used its 31st annual general meeting in Tokyo this week to publish the first in a series of documents to help market participants comply with margin requirements for non-cleared derivatives. It also joined other industry bodies in a clarion call for global regulators to drop dual-sided derivatives trade reporting in favour of an entity-based approach.

When it comes to Italian banks, pessimists are not in short supply. Indeed, to be bullish on this sector could be considered contrarian, or even foolhardy, given its parlous state. Asset quality is the overriding problem — Italy’s banks have €360bn of non-performing loans on their balance sheets, about a third of the eurozone’s total.