Derivs - People and Markets

The U.S. Department of Justice investigation into credit default swap pricing is being seen by some as a logical move, but also many CDS traders told Derivatives Week they believe the investigation will fizzle out.

The Basel Committee on Banking Supervision has enhanced its trading book rules, forcing firms to apply higher capital requirements to offset the risks of complex instruments, such as derivatives.

Five-year credit default swaps on British Airways pulled in by more than 40 basis points this morning on reports the airline’s pilots have agreed to take a 2.6% pay cut in a bid to help the company weather the aviation downturn.

Emerging market credit default swaps recently went from monthly maturities to quarterly.

Nomura has hired David Steck, who until recently was Deutsche Bank’s head of fx sales for hedge funds in North America, to head a new fx cash and derivatives desk in New York.

Morgan Stanley has hired five executives in New York covering fx derivatives and cash sales. “We see the market pulling back around us and we want to be on our front foot and opportunistic, adding where others are scaling back,” Tom Haskins, managing director and head of fx and emerging markets sales in the Americas, said.

Morgan Stanley is advising institutional investors who missed out on the technology sector’s strong performance this year to buy July 2010 tech stock calls and sell shorter-dated ones as a low-cost way to take advantage of an expected rebound in IT investment next year.

Paul Blake, the former head of institutional bond sales for Europe and Asia at CIBC World Markets in London, has joined boutique derivatives and securities dealer Conduit Capital Markets as head of fixed income sales.

London-based Meteor Asset Management has launched an offshore structure with capital returns based on the performance of the FTSE 100 and the Standard & Poor’s 500.

Retail and institutional investment flows in structured products in Switzerland are trending up, rising to CHF227 billion in April from CHF225 billion in March, according to the Swiss Structured Products Association’s latest market update our today.

Jefferies & Co. has hired Robert Leone as managing director and senior high-yield trader as part of the continued expansion of its high-yield business.

Saba Capital Management, the newly-formed hedge fund firm founded by Boaz Weinstein, ex-head of Deutsche Bank’s proprietary credit trading group, has hired Carl Casler of Viking Global as chief financial officer.