Derivs - FX

Good news from the US Federal Reserve — in the form of a more dovish rate announcement than some market participants had expected — brought a sanguine close to a turbulent week for credit derivatives and boosted equity markets, but only added to the pressure on emerging market countries and their currencies.

Currency wars are back in the headlines. First it was Japan’s endeavours to weaken the yen. Then, in August, China’s surprise 3% devaluation of its pegged exchange rate against the dollar, with some analysts predicting an eventual depreciation of 15%-20%. Now the US is raising interest rates while Europe pursues further easing, risking a soaring dollar, wilting euro, and heightened danger of US accusations of currency manipulation.

In this round-up, RMB futures trading on international exchanges picked up in November, RMB clearing in Hong Kong picked up in the same month, ICBC is working on a Belt and Road financing venture, and Deutsche Bank helped a German corporate set up centralised RMB treasury functions in China. Plus, a recap of GlobalRMB’s top stories this week.

Fidessa, the UK based financial software and data company, has appointed a former LIFFE sales head to its Europe, Middle East and Africa derivatives business.

Credit options were the worst hit of volatility strategies on Thursday, said traders, after the European Central Bank unveiled provisions that many in the market found underwhelming.

The Dubai Gold and Commodities Exchange (DGCX) is set to launch trading of offshore RMB (CNH) futures contracts on December 18. The exchange is looking to leverage the RMB’s new-found status as an SDR currency, it told GlobalRMB.

The International Islamic Financial Market has teamed up with the International Swaps and Derivatives Association to publish launch an Islamic cross currency swap standard.

The US Commodity Futures Trading Commission has proposed rules to increase oversight and risk controls for high speed electronic trading — particularly the use of algorithms — in a bid to limit disruptions in the futures market.

CLS Group, the foreign exchange settlement firm, has teamed up with financial information services provider Markit to launch an FX settlement service for cross currency swaps.

US regulator the Commodity Futures Trading Commission has proposed rules to increase oversight and risk controls for high speed electronic trading – and particularly the use of algorithms – in a bid to limit disruptions in the futures market.

Argentina has been a pariah among international creditors for years, but its new, pro-business president may reopen the door to foreign investors — the question for derivatives players is how they can take part.

CLS Group added the Hungarian forint to the list of currencies eligible for settlement. The group, which settles trillions of dollars in foreign exchange transactions a month, now settles payment instructions in 18 currencies.