Derivs - FX

Increasing volatility correlation across different asset classes could be an early warning sign of a financial crisis, some investors and strategists have warned, even though options prices have yet to convey any panic.

Foreign exchange settlement firm CLS has teamed up with LCH.Clearnet’s ForexClear platform to develop a service that will enable physical settlement of cleared FX products.

A strong compression in implied volatility globally across most asset classes has brought euro/dollar volatility to near dead calm, despite unanswered questions about what the results of Greece’s bail-out discussions will be.

The CME Group will phase out open outcry trading of almost all futures products on Monday.

The People’s Bank of China (PBoC) surprised the market by cutting benchmark interest rates and the RRR at the weekend. Short swaps have been well offered in response and the curve is steepening as the central bank move combines with expectations for an equity rebound, writes Deirdre Yeung of Total Derivatives.

Despite waning interest in liquid alternatives, US wealth management firms focused on ultra-high-net worth and family office investors remain loyal to volatility managers.

To make trading algorithms useful for derivatives execution, measurement of their effectiveness must be carefully tailored to each user, writes Yuriy Shterk, head of derivatives product management at Fidessa.

After a turbulent sell-off in bond markets, options volatility levels across the rates and FX spectrum suggest that investors are less fearful but remain vigilant for bumps in the road ahead.

Moscow may have only secured a Rmb150bn ($24bn) currency swap line with the People's Bank of China in October 2014, but local banks and exchanges have already built solid businesses around the RMB needs of commodities giants and other corporate and banking clients. GlobalRMB spoke to Igor Marich, managing director, money market business, at the Moscow Exchange (MOEX) about recent developments in its RMB product offering.

ADM Investor Services has hired around 10 futures and alternative asset management sales staff in New York. They have all been hired from Jefferies’ wound-down Bache division.

While banks have engaged in some genuinely appalling conduct and been punished for it, the quantum of fines has become seriously disconnected from — well, anything. It is not just bad for bank shareholders, it is bad for regulatory credibility.

The European Commission has launched a public consultation into how well the European Market Infrastructure Regulation has been implemented.