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2 months ago | 
centralbanking.com | Cole Lipsky |Jiefei Liu |Christopher Jeffery |Daniel Hinge
Corporate treasurers are turning to FX options and longer-dated derivatives to hedge the impact of US President Donald Trump’s planned tariffs on global trade. In the run-up to Trump’s inauguration, threats of heavy tariffs on imports from China, Canada, Europe and Mexico led to a sharp rally in the US dollar and a significant pick-up in FX volatility. The moves set off a rush among firms with internal accounting approval to use FX options to buy protection against a stronger dollar. “Corporates
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2 months ago | 
fx-markets.com | Cole Lipsky |Jiefei Liu
Uncertainty surrounding President Donald Trump’s planned tariffs on global trade and their potential impact on foreign exchange costs is encouraging global corporate treasurers in the US and Asia to consider using options and longer-term hedges. In the run-up to Trump’s inauguration, threats of heavy tariffs on imports from China, Canada, Europe and Mexico led to a sharp rally in the US dollar and a significant pick-up in FX volatility. “Our day is spent following political headlines – it could
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Jan 21, 2025 | 
centralbanking.com | Jiefei Liu |Christopher Jeffery |Daniel Hinge |Daniel Blackburn
Tweet Facebook LinkedIn Save this article Send to Print this page The Hong Kong Monetary Authority’s (HKMA) recently outlined plans to allow Bond Connect investors to repo their Chinese bond holdings in the offshore market signals progress towards opening the country’s larger onshore repo market to international investors, say market participants.
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Dec 9, 2024 | 
risk.net | Jiefei Liu
China's once-popular "snowball" products face a further setback as moves by the country's regulators to restrict structured note issuance have effectively removed one of the two wrappers for the product. On October 25, new guidelines issued by the Securities Association of China (SAC) banned securities houses from issuing non-principal-protected notes, including snowball structures.
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Nov 29, 2024 | 
centralbanking.com | Jiefei Liu |Christopher Jeffery |Daniel Hinge |Daniel Blackburn
Tweet Facebook LinkedIn Save this article Send to Print this page Dealers in Asia are seeing increasing interest in cross-currency letters of credit (LCs), with users looking to take advantage of preferable interest rates to finance dollar-denominated trade with foreign currencies. Letters of credit are a common trade finance product issued by banks and serve as a buyer’s guarantee of payment to the seller until the final invoice is settled.
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Nov 28, 2024 | 
risk.net | Jiefei Liu
Dealers in Asia are seeing increasing interest in cross-currency letters of credit (LCs), with users looking to take advantage of preferable interest rates to finance dollar-denominated trade with foreign currencies. Letters of credit are a common trade finance product issued by banks and serve as a buyer's guarantee of payment to the seller until the final invoice is settled.
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Nov 7, 2024 | 
fx-markets.com | Jiefei Liu
Shanghai Clearing House is facing calls to accept bonds as margin for foreign exchange trades, as dealers reel from high clearing costs exacerbated by paltry interest payments on cash collateral. The Chinese clearing house already accepts bonds for some interest rate products, but for FX spot, swaps and forwards it only accepts US dollar and onshore renminbi (CNY) cash for initial and variation margin. The interest rates on the cash margin, paid by the clearing house to posting firms, are lower
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Nov 6, 2024 | 
risk.net | Jiefei Liu
Shanghai Clearing House is facing calls to accept bonds as margin for foreign exchange trades, as dealers reel from high clearing costs exacerbated by paltry interest payments on cash collateral. The Chinese clearing house already accepts bonds for some interest rate products, but for FX spot, swaps and forwards it only accepts US dollar and onshore renminbi (CNY) cash for initial and variation margin. The interest rates on the cash margin, paid by the clearing house to posting firms, are lower
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Oct 31, 2024 | 
risk.net | Jiefei Liu
Tweet Facebook LinkedIn Save this article Send to Print this page While US traders have been unwinding their interest rate steepener positions due to stronger-than-expected economic data in early October, dealers have seen the Chinese versions of the trade continue to thrive.
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Oct 21, 2024 | 
fx-markets.com | Jiefei Liu
Foreign investors into a popular onshore Chinese government bond carry trade have started to unwind their positions, after foreign exchange moves and US rate cuts made the positions less attractive. Foreign investors have been piling money into China’s short-term debt market since the last quarter of 2023, using cross-currency swaps to swap the cashflows into US dollars and netting a yield pick-up of 100 basis points or more over US secured overnight financing rate (SOFR) swaps. However
