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Singapore-based Crédit Agricole Asset Management, with over USD2.5 billion in assets in Asia, is looking to trade credit default-swaps (CDS) for the first time within 12 months. "This [process] takes time," said an insider. The fund has shied away from the CDS market until now because its investor base is fairly conservative but these investors are coming around because of improving liquidity.

Japanese banks and credit derivatives end users are starting to put collateral agreements in place, a move which market players expect will boost volumes. "In Japan, asking for collateral has been a pride issue," said Junichi Kamei, policy director and head of the Tokyo office at the International Swaps and Derivatives Association in Tokyo. Requiring collateral for derivatives had been seen as a lack of creditworthiness and therefore was regarded as evidence of a loss of face by many local players. However, as Japanese banks look to reduce their capital adequacy ratios they are now quietly pushing for collateral agreements. Such arrangements are also beneficial to end-users by allowing them to reduce their exposure to the banking sector, a lot of which is teetering on the brink of bankruptcy because of the number of non-performing loans.

Jack DiMaio, head of fixed income for North America at Credit Suisse First Boston, is moving to sister outfit Credit Suisse Asset Management (CSAM) to take a senior global position. The asset manager expects to appoint a new ceo and DiMaio will likely take this role or a fixed income role reporting into the ceo, according to an official familiar with the plans. Either way he will likely boost the alternative investments arm of the asset manager, developing products such as convertible arbitrage funds, said the official. If DiMaio gets the ceo role he will report to Jeffrey Peek, vice chairman of CSFB. The asset manager has over USD280 billion in assets under management, of which USD3.5 billion are in alternative assets. DiMaio declined comment and Peek did not return calls.

Deutsche Bank executed USD2 billion (notional) in U.S. dollar/yen straddles Wednesday, causing one-month implied volatility to rise to 9.9% from 9.4%. In the trade, Deutsche Bank bought one-month at-the-money straddles, in which it purchased dollar calls/yen puts and sold dollar puts/yen calls, according to a trader at Deutsche Bank. Traders said spot was trading at JPY121 when the trade went through the market.

Credit Suisse First Boston International would be able to present a robust case if it chooses to appeal last week's ruling at the High Court in London, in which it lost a GBP1.2 million (USD1.9 million) credit derivatives case it brought against Nomura International, according to derivatives lawyers. Immediately after handing down judgment in Nomura's favor on Thursday, the Honourable Mr. Justice Langley rejected a request by CSFB's lawyer to refer the case to the appeals court. CSFB can, however, apply directly but would have to shoulder the GBP25,000 cost.

The price of euro/dollar options edged higher last week as the euro's spot market rally eased, with one-month implied volatility standing at 10.25% last Wednesday, up from 10.1% the previous week, said a New York-based trader. The currency pair traded at USD1.07 Wednesday, down from USD1.09 the previous week.

JPMorgan and Deutsche Bank have recently seen demand rise for trades based on bearish views on the U.S. dollar relative to high-yielding currencies and have structured a series of basket trades as a result. David Kitson, head of currency and commodity structuring at JPMorgan, said the firm has been offering basket trades to reduce the price of the options. Investors have been asking for exposure to currencies including the Polish zloty, Canadian dollar, Swedish krona, Norwegian krone, Indonesian rupiah and Mexican peso.

Hugh Evans, former co-head of global credit derivatives at UBS Warburg in London, has joined an old school friend to set up a credit derivatives arm of a London-based credit broker. The brokerage, named Brains, was originally intended to broker strategies but has been running a cash credit brokering arm since its inception in 1998, according to founder Jon Hunter in London. Evan's role will be to develop structured product ideas as well as a flow business.

Capital Management Advisors (CMA) plans to launch capital guaranteed products linked to its EUR65 million (USD69.39 million) Pantheon Fund, a fund of 28 diversified hedge funds. BNP Paribas will structure the notes, having recently executed CMA's first leveraged note linked to the Pantheon Fund.

Goldman Sachs is readying a slew of managed single tranche transactions for the U.S., many of which will include limited substitution of credit rights. Eric Bothwell, v.p. in credit derivatives and portfolio credit in New York, explained the deals are being prepared to satiate demand from credit players, including insurers and hedge funds, to sell investment grade credit protection. Single tranche deals are attractive due to their ability to be customized for individual clients. Particularly, by offering credit substitution rights, sellers of protection will be able to replace credits they consider to be at a high risk of defaulting, which has become an increasing concern due to the number of recent defaults, noted Bothwell.

Most big-hearted bank? Those romantics at Credit Suisse First Boston put in an early push for this category, and also displayed their community spirit last week by brightening Valentine's Day for senior citizens. Staffers were encouraged to buy or make special valentine cards as well as donate small gifts as part of the CSFB corporate cupids program.