Derivs - Credit

Clients of bank index platforms are adapting to a new investment climate, increasingly opting for more defensive strategies and specifically positioning for volatility spikes similar to the ones markets experienced in early February.

UK financial services advocacy group TheCityUK on Wednesday called for the continuity of cross-border derivatives contracts to be guaranteed after the UK leaves the EU.

In the political sphere, Europe and North America appear to be travelling in separate directions since the election of Donald Trump as US president in November 2016, as was evident at the recent G7 talks.

European member states and the EU Parliament will soon begin difficult talks to decide the length of an additional clearing exemption for pension funds.

Interest rate derivative volumes in swap execution facilities (SEFs) were up 22.3% in May compared to the same month last year, according to new data from the Futures Industry Association.

Top officials from global supervisory bodies furiously debated the implications of new European rules that change the oversight of foreign clearing houses, covering the role of central banks, national regulators and arrangements in crisis situations.

The Depository Trust and Clearing Corporation has appointed two new directors to its board after a vote at its annual shareholders meeting.

The Commodity Futures Trading Commission on Monday discussed a new proposal that would not change the notional threshold at which financial institutions have to register as swap dealers.

The spread volatility seen in recent days brings back memories of the 2010-2012 eurozone debt crisis. Whether they are fond recollections or not — many investors are no doubt scarred by the experience — in such febrile times observers from all asset classes reach for the CDS toolbox to try to gauge sovereign credit risk.

The US Federal Reserve Board has put forward a sweeping set of proposals to soften restrictions on proprietary trading under the Volcker rule, in a move that could free up banks to pursue more transactions related to underwriting and market making.

Investment house Hermes launched a new liquid credit fund this week, catering to clients seeking shelter from market volatility while foraging among new markets about which they know less.

Bond market havoc following the Italian president’s decision to appoint a technocratic government has shut the euro market for most public sector borrowers. Volatile swap spreads are making issuance near impossible, while an “enormous” flattening in Italy’s curve is of particular concern for that sovereign, said one head of SSA syndicate.