Derivs - People and Markets

As investors sought gold and silver as a hedge against inflation and uncertainty, investment banks with the capabilities to act in these markets benefitted. Some made more than $100m in precious metals in the third quarter, according to Coalition Greenwich.

Société Générale said on Monday that planned "adjustments and optimisations" should lead to a net reduction of around 640 posts in France, as it changes its structured products business and mulls altering securities services too.

The US Commodity Futures Trading Commission and the Bank of England signed a memorandum of understanding on Tuesday regarding the oversight of derivatives clearing.

The transition from Ibor benchmarks passed a major milestone this week, when LCH joined CME in switching its discounting rate for dollar referencing derivatives from the Fed Funds Rate to Sofr.

Citi has appointed Christopher Perkins and Sabrina Wilson as global co-heads of its futures, OTC clearing and FX prime brokerage business, following Jerome Kemp’s retirement from the industry.

The International Swaps and Derivatives Association broke ground earlier this month in Libor transition when it the US Department of Justice approved its derivatives fallbacks. Market participants now face a busy few weeks working out if the protocol fits their differing needs.

Amid heavy options trading activity ahead of a US election that most market participants expect to be bitterly contested and drawn out, opportunities are opening up to play the short volatility position that had proven so popular before the pandemic.

Interdealer broking giant TP ICAP has advanced further into buy-side revenue streams, with specific plans to target fixed income markets, as it clinched its acquisition of trading platform provider Liquidnet for an initial $575m last Friday.

TP ICAP is pushing for a slice of buy-side business as it revealed on Tuesday night that it is in advanced discussions to buy Liquidnet, the trading platform provider.

Fannie Mae’s and Freddie Mac’s drive to buy floating rate loans that reference the secured overnight financing rate is charging up a nascent market in interest rate caps that reference the Libor replacement.

The European Commission on Tuesday gave the derivatives clearing industry a lifeline by granting an 18 month equivalence decision that will allow European firms to keep using UK central counterparties.

As political tensions rise over the UK-EU trade negotiations, concerns in the derivatives market are growing as the lack of equivalence between trading venues causes jitters once again.