Derivs - FX

There is a growing likelihood that the Reserve Bank of Australia (RBA) will decide to cut interest rates at its July meeting, due to weak wage growth and a declining inflation outlook, said some analysts this week. But options markets are not yet priced for a change.

There is a growing likelihood that the Reserve Bank of Australia will decide to cut interest rates at its July meeting due to weak wage growth and a declining inflation outlook, but options markets are not yet priced for a change.

Concerns of rising central clearing costs are pushing derivative market participants to step up compression initiatives and shrink trade volumes to a post-2007 low, according to an industry report.

The fervour of expectation in the run up to this week’s US Federal Reserve and Bank of Japan meetings ended in widespread pain for foreign exchange, equity and derivative market participants.

Dollar-yen currency option prices have risen sharply this week in line with shifting expectations for the Bank of Japan meeting on Thursday, after details were leaked by anonymous officials of a possible negative loan rate to encourage banks to lend.

Moskovskaya Birzha (Moscow Exchange, or MOEX) has vowed to improve risk management and will expand the range of foreign exchange services it provides.

Saudi Arabia on Monday announced its plans to diversify away from oil production through a plan it called "Vision 2030". But the oil rich nation won't find it easy to execute in the plan, particularly when it comes to attracting skilled foreigners to fuel its goals.

LCH, the clearing house operator, has made two senior executive appointments.

The chance of the United Kingdom voting to leave the European Union has been driving sterling option premiums sharply higher, but so far has not affected the price of risk in the euro. That, say strategists, is likely to change.

Despite the difficult start to the year, global financial exchanges have continued to expand their coverage of world markets with new listed products.

A reversal in trading patterns last week sent the yen as low as ¥109.70 against the dollar, but recent trading has been driven by aggressive hedge funds unwinding long yen positions ahead of a Bank of Japan (BoJ) meeting in late April.

Hong Kong Exchanges and Clearing plans to add to its suite of renminbi currency futures this quarter.