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David Charles, head of risk management at Gen Re Securities in Tokyo, has joined Deutsche Bank's group market risk management team in London. A Deutsche Bank official in London said there is ongoing movement in and out of the group, declining to specify whether this is a new position. The group is responsible for managing all market risk across the bank's activities, of which the largest component is trading, the official added. Charles could not be reached for comment. The group is headed by Richard Evans, chief risk officer. Evans was traveling last week and could not be reached.

Andrea Minetti has returned from a 12-month sabbatical from Deutsche Bank in London as a managing director and head of southern European equity derivatives sales. Minetti, previously head of fixed-income derivatives sales in Italy, replaces Maria Binaghi, who is herself taking a sabbatical for personal reasons, according to Yassine Bouhara, head of global equity derivatives. Deutsche Bank plans to add a total of 12 equity derivatives professionals and expects to announce further hires in the coming weeks, Bouhara said. He declined to divulge further details while the firm is finalizing employment contracts. Binaghi was traveling and could not be reached.

Foamex International, a manufacturer of polyurethane foam with USD1.25 billion in revenue last year, is considering entering its first interest-rate swap to even its ratio of fixed-to-floating debt, according to George Karpinski, treasurer in Linwood, Pa. The company has about USD500 million in fixed-rate debt and some USD300 million in floating-rate debt. "It's definitely something we've been thinking about. Right now we're pretty heavy on the fixed debt side," he added.

Crédit Agricole Indosuez has hired Medes Ma, trader in the Asian credit trading group for treasury and capital markets at HSBC in Hong Kong, in a new role as credit trading manager for Indosuez's recently established credit derivatives desk in Hong Kong. "This hire further increases our capacities to grow a liquid market in Asia," said Loïc Fery, head of credit derivatives-Asia at Indosuez in Hong Kong. Ma, who starts at the end of the month and will handle trading for both Japanese and non-Japan Asian credits, will report to Fery. Ma was on gardening leave and could not be reached.

Valuing options on a fixed exchange rate, or on any asset price set by official decree, is problematic. To the casual observer, such options may seem illogical, since the cash rate does not move. Yet active markets have existed on such options despite explicitly pegged exchange rate regimes. Exchange rate crises in which currency pegs were abandoned, such as Mexico (1994), Russia (1998), Brazil (1999), and Argentina (2002) have also shown that options with strikes outside the band are not worthless. Such options can offer valuable information about the probability of a peg holding over a given period. Following is a basis for pricing and evaluating such options using practical methods, and some simple estimation techniques for relative valuation.

Merrill Lynch has hired Takuya Iwasaki, v.p. in foreign exchange at Morgan Stanley, as a director of foreign exchange, handling options trading in Tokyo. He reports to Masayoshi Takegawa, head of foreign exchange trading in Tokyo.

A growing number of sovereigns issuing inflation-linked bonds is expected to kick-start the nascent market for over-the-counter inflation-linked derivatives, according to bankers at the 17th Annual General Meeting of the International Swaps and Derivatives Association in Berlin last week. France last year joined the club of sovereign inflation-linked bond issuers and Italy and Germany are reportedly planning their first issue.

Grand Cathay Securities Corp., a securities house in Taipei, is looking to enter its first convertible asset swap in the coming weeks. "We're in the final stages--they're just reviewing the ISDA's," said Tony Ko, assistant v.p. of fixed income, referring to the International Swaps and Derivatives Association master documents. The firm received a license to enter asset swaps last year (DW, 6/17).

Toshihiro Hirose, general manager of the international business department at Sumitomo Life Insurance Co., has joined ING Financial Markets in Tokyo in a new role as managing director and head of institutional sales. In this position, Hirose covers foreign exchange, fixed income derivatives, repo and debt markets sales, as well as structured fixed income and credit derivatives products.

One-month euro/dollar implied volatility rebounded to 8.2% from 7.4% on Wednesday following comments from Federal Reserve Chairman Alan Greenspan suggesting rates are on hold. Traders said implied vol had been falling steadily lower because euro/dollar had been trading in a narrow range in the spot market, but Greenspan's comments caused the dollar to weaken and drove vol higher. Common trades saw both investors and hedgers buying euro calls/dollar puts struck at USD0.89-0.90 with spot trading at USD0.882 when the options went through.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market during the week ending April 20. It also tracks facility amounts, ratings, pricing and maturities.