Derivs - People and Markets

TriOptima has eliminated $500bn in notional principal outstanding since the launch of its cross-currency compression swap service earlier this year, and client participation has nearly doubled from 12 to 20 institutions.

Hedge funds are targeting decompression between iTraxx Crossover and iTraxx Main, in the expectation that Main will tighten versus Crossover in the aftermath of rumours that the European Central Bank may extend its asset buying programme to include corporate bonds. Funds are specifically looking at going long risk iTraxx Main and short risk iTraxx Crossover.

UBS appoints new levfin heads - SG heads to the Wharf - Leeming picked for RBS hybrid job

UBS has seen its exchange traded note program assets more than double in just over a year. The program had approximately $2bn at the end of July 2013 and now has around $4.5bn.

The fate of the eurozone’s ailing economy, and the policies undertaken to tackle the malaise, should have the biggest influence on spread direction in the coming months. But in the near term, Europe’s banking sector will be under scrutiny with the announcement of the ECB’s Asset Quality Review and the EBA’s stress test results on October 26.

The Singapore Exchange (SGX) this week launched FX futures contracts for Chinese onshore and offshore renminbi (USD/CNH and CNY/USD). Transactions in the new RMB futures achieved a first day volume of 1,836 contracts on October 20, or approximately Rmb1.1bn in notional value ($180m), said SGX.

Futures commission merchants (FCMs) are expected to come under increasing pressure from the buyside to reduce the clearing fees that they charge as trading volumes increase. This comes following an increase in rates charged by some FCMs in a bid to cover the rising costs of business associated with the implementation of various regulatory changes.

The Singapore Exchange has reported a 4% increase in derivatives revenues year-on-year in its first quarter results for the 2015 fiscal year. Derivatives volumes at the exchange were up 9% to 28.8 mn contracts.

Overall credit default swap notional that was reported to swap data repositories last week decreased by 4% from the previous week, according to data from the International Swaps and Derivatives Association. This follows six weeks of a consistent uptick in CDS notional, with a combined increase of 160%.

Robert Pickel, ex-CEO of the International Swaps and Derivatives Association, has been appointed to the special advisory board of Droit Financial Technologies, a trading solutions firm based in New York.

Live order book trading of market agreed coupon swaps is now trading on UBS’ electronic trading platform Neo, making it the first platform to offer an aggregated order book for MAC swaps.

Dealers are facing increasing costs when providing clearing services to pension funds amid the regulatory push to move trades to clearing houses. The lack of netting provisions for pension funds means capital charges for dealers are high, with the result that leading banks are questioning the viability of the business without a rise in clearing prices.