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Trading volumes on the U.S. dollar/Argentina peso non-deliverable forward market started recovering last week. Foreign exchange options traders in New York reported NDF volume growing to about 10 trades a day from zero around year-end when market players were backing away in the wake of the country's political and economic chaos (DW, 12/24). The average notional size of last week's trades was USD1 million.

Barclays Capital plans to hire two interest-rate derivatives strategists for its relative value group in London. The strategists will translate the firm's macro view into trades and sell the ideas to the firm's traders and customers, according to John Maskell, director of European relative value strategy in London. He added typical strategies would include volatility plays and convergence trades.

Barclays Capital and Goldman Sachs are separately planning to set up onshore interest-rate derivatives desks in Korea in the coming months, according to officials at both firms.

BNP Paribas has pulled out of the weather derivatives market. "The long-term profitability of this business is not at a level that our shareholders necessarily expect," said Jonathan Mullen, head of corporate communications at BNP Paribas in London. He was unable to give details of the French bank's profitability projections. The move will not result in any redundancies, he added.

BNP Paribas has hired Jeremy Adam, foreign exchange options salesman at ABN AMRO in London, to work in a similar capacity, replacing Karim Wilkins who left last month. A BNP official said Wilkins is taking a break and traveling in New Zealand.

BNP Paribas is bulking up its credit derivatives desk in Tokyo, as it looks to hire two senior credit derivative traders as well as bring aboard junior staff. "We've got too much business with too few people," explained Stephane Delacote, head of credit derivatives in Tokyo, commenting on the seven-strong desk which reports to him. Delacote plans to bring the new recruits aboard within the next two months.

BroadStreet Financial Products is structuring a USD500 million collateralized fund obligation on Bucephale's fund of hedge funds. The CFO is referenced to a portfolio of 18 hedge funds, diversified across sectors and regions, according to Andrew Smith, partner at Bucephale in New York.

Caltex Australia, Australia's largest oil refining and fuel distribution company, with over AUD3.2 billion (USD1.6 billion) in assets, is planning to enter interest-rate swaps on the back of its AUD1 billion floating-rate liability portfolio which consists of bonds and bank debt. Currently, 40% of the portfolio is hedged via synthetic fixed positions and the firm is looking to increase the amount to 50% of the portfolio as it anticipates an interest-rate hike over the course of the year, according to Seong Lim, treasury manager in Sydney. "We think rates have bottomed out," said Lim.

Credit Suisse First Boston's barrier options trading group, a main staple of Donaldson, Lufkin & Jenrette's equity derivatives group before it was acquired by CSFB in 2000, has bolted to Lehman Brothers, according to a company official. Market professionals said the group was a "money-making machine" for DLJ, grossing more than USD200 million annually. It made up 90% of the profits brought in by DLJ's equity derivatives group, according to one former member. The market professionals added that picking up the DLJ group will move Lehman Brothers into the top five equity derivatives firms, from about eighth.

UBS Warburg hired Claudia Hamilton, a credit derivatives marketer at J.P. Morgan in New York, in a similar role last month, according to a UBS official. Her hire is part of the firm's ongoing effort to beef up its credit derivatives trading operation and intensify its push into structured credit products. Hamilton reports to Sal Naro, managing director and global co-head of credit derivatives trading in Stamford, Conn. While at J.P. Morgan, Hamilton reported to Andrew Palmer, head of credit derivatives marketing. Palmer and Naro did not return calls and Hamilton declined comment.

DaimlerChrysler is considering entering an interest-rate swap on the back of a USD2.83 billion bond offering it issued two weeks ago. In the swap DaimlerChrysler would receive the 7.3% coupon and pay a LIBOR-based rate on the USD1.5 billion dollar tranche. The swap would mirror the 10-year maturity of the bond, according to an official at the firm.

The Stock Exchange of Hong Kong recently announced changes to the listing rules relating to derivative warrants. The principal changes include the relaxation of certain restrictions in placing guidelines for derivative warrants, the introduction of a requirement for warrant issuers to provide liquidity for derivative warrants listed on the exchange and the simplification of certain disclosure requirements for listing documents.