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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.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Debbie Cervantes, portfolio manager at Patterson & Associates, says she will reduce the firm's 40% cash allocation by adding Treasuries and agencies. The move, which will total $400 million, will be split equally between Treasuries and agencies and may be completed over a few months. She says the purchase of those securities will begin as soon as the geopolitical environment improves and the uncertainty over war is lifted.

Groupama Asset Management will look to shift up to $30 million in assets from double-A rated corporate bonds to single-A rated credits in a bid to add yield. Dan Portanova, portfolio manager overseeing $150 million in taxable fixed-income at the New York firm, says he wants to see improved business spending, which he believes will come when there is more clarity regarding crises in Iraq and North Korea. Once business spending picks up, Groupama will likely commit $15 million to lower-rated credits, Portanova says. If geopolitical tensions were to show even greater signs of resolution and the economy responded accordingly, Groupama would invest another $15 million, he says.

HSBC Investment Management intends to trade U.S. Treasuries opportunistically as a mixture of U.S. economic data creates opportunities in the market. Tim Sullivan, London-based senior director of global fixed income, and responsible for £2.2 billion in assets, says the U.S. "keeps coming out with some curious data, creating chances to put on trades."