Derivs - Interest Rate

The US Commodity Futures Trading Commission gave market participants adapting to working from home some relief late on Tuesday, with sweeping no-action relief on voice recording requirements. The UK’s Financial Conduct Authority hasn’t gone so far, but has offered firms some flexibility.

The volatility gripping markets shows no signs of abating, in spite of the best efforts of central banks. Syndicate desks are hard at work, planning how best to bring SSA deals to such a difficult market.

Financial market participants were left wondering this week if what felt to many like a very vivid stress test had become a complete meltdown, as searing volatility puts all players into crisis preparation mode, write Ross Lancaster, Jon Hay, Max Adams and David Rothnie. Strains are appearing in places where they were not expected, such as the US Treasury market. But markets are continuing to function and some traders have enjoyed exceptional volume.

Siemens Gamesa, the wind power provider, has tapped into the nascent market for ESG derivatives with a three year interest rate swap executed by HSBC.

Financial industry lobbyists have told the US Commodity Futures Trading Commission (CFTC) that its proposed revisions to swap dealers’ and major swap participants’ capital requirements will have “a significant negative impact on the US swaps market”.

Demand for exchange-listed derivatives soared during February, with Cboe Global Markets, CME Group and Intercontinental Exchange hitting record average daily volumes during the month.

One of the derivatives industry’s largest annual conferences was cancelled on Tuesday, after the spread of the Covid-19 coronavirus made the event unviable in the view of the organisers.

As clear daylight emerges between jurisdictions making their transitions away from Ibor benchmarks, the cross-currency basis swap market could become a headache.

Tradition’s rates trading platform, Trad-X, has signed up Commerzbank and DekaBank to its new dealer-to-client central limit order book (Clob) and has 12 more firms in the pipeline.

Eurex Clearing has hired Nick Barnes from MarketAxess to expand its buy-side presence.

MEP Markus Ferber has come out swinging at the European Securities and Markets Authority for appointing chief French regulator Robert Ophèle to temporarily chair its central counterparty (CCP) supervisory committee.

The European Central Bank’s private sector working group on euro risk-free rates has recommended market participants replace Eonia products with €STR-referencing derivatives “as soon as possible” and flagged a threat to swaptions in the transition.