Asia Financial Markets Editor
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Sep 8, 2011

Swiss central bank may be intervening via FX options

HONG KONG (Reuters) – Switzerland’s central bank may be using currency options to reinforce its target of capping the franc at 1.20 per euro in what would mark an unusually aggressive step that carries considerable risk.

The Swiss National Bank may be selling options — in essence selling implied volatility — to help reinforce the 1.20 line in the sand set this week in a shock move to stop further franc gains, according to about 10 option traders at major banks in Asia and Europe.

Sep 8, 2011

Exclusive: Swiss central bank may be intervening via FX options

HONG KONG (Reuters) – Switzerland’s central bank may be using currency options to reinforce its target of capping the franc at 1.20 per euro in what would mark an unusually aggressive step that carries considerable risk.

The Swiss National Bank may be selling options — in essence selling implied volatility — to help reinforce the 1.20 line in the sand set this week in a shock move to stop further franc gains, according to about 10 option traders at major banks in Asia and Europe.

Aug 21, 2011

Big risks everywhere

The market volatility of the past two weeks has been astounding. While the broad factors are obvious, markets are not beasts that lend themselves to easy analysis and the nuances really matter here. A few broad factors at play are feeding off each other. All have been discussed and debated, but here’s a rundown on the interplay I see taking shape.

1) Euro breakup not so far-fetched

How do you hedge against the potential collapse of a single currency used in a $13 trillion economic zone plus trillions more of securities and derivatives? Not easily. A splintering or breakup of the euro has gone from unimaginable to a risk that can’t be ignored altogether. ¬†Europe’s inability to get ahead of the crisis now means a sovereign debt crisis is fast becoming a banking one. The solutions — a super sized EFSF rescue fund, Eurobonds, a commitment to fiscal union — are there to be had. But the political will is lacking.

Aug 5, 2011

Dollar funding costs rise as European crisis rages

HONG KONG, Aug 5 (Reuters) – Dollar funding costs edged up
in Asia on Friday as banks hunkered down during one of the worst
stock market sell-offs since the financial crisis, with
investors dumping risky assets on fears the raging euro zone
crisis will compound a global economic slowdown.

Front month Eurodollar futures dipped on expectations that
three-month LIBOR would be set higher later in the day, but
traders said the dollar markets were holding up thanks to ample
liquidity from banks’ huge excess reserves held at the Federal
Reserve.

Aug 1, 2011

Bonds drop, but debt deal adds to economy worries

HONG KONG (Reuters) – U.S. Treasury futures fell from an eight-month high on Monday after Republicans and Democrats thrashed out a compromise on cutting the budget deficit and raising the debt ceiling, although the slash in spending is seen adding to the headwinds facing an already weak economy.

Market players were now waiting to see if both houses of Congress would pass the deal and send to President Obama for his signature before Tuesday’s deadline for when the Treasury would default, though comments from lawmakers suggested the deal would pass.

Jul 28, 2011

Aussie and NZ eye rate hikes, Europe strains surface

HONG KONG, July 28 (Reuters) – Australian and New Zealand
swap rates jumped on Thursday as both central banks were
expected to pull the trigger on higher interest rates in coming
months, even as market players kept an eye on a flare-up of
strains in European banking system.

Two-year New Zealand rates soared to a seven-month
high of 3.93 percent, nearly back to where they were before the
Christchurch earthquake in February, as investors see the
country’s central bank lifting policy rates back to 3 percent in
September and higher in 2012.

Jul 26, 2011

Asia shares jump, dollar slides on US debt woes

HONG KONG, July 26 (Reuters) – Asian shares rebounded on
Tuesday as upbeat earnings lured buyers, but the dollar slid to
a record low against the Swiss franc after a speech by U.S.
President Barack Obama gave no sign that a deadlock in
Washington over raising the debt limit was easing.

European and U.S. stocks were primed for gains, with futures
on the Dow Jones Eurostoxxe 50 STXEc1 flat in early trade and
S&P e-mini futures ESv1 rising 0.2 percent.

Jul 26, 2011

Asia shares up, no signs of panic over U.S. debt deadlock

HONG KONG, July 26 (Reuters) – Asian shares edged higher on
Tuesday, rebounding from Monday’s fall, but the dollar slid to a
record low against the Swiss franc after a speech by U.S.
President Barack Obama gave no sign a deadlock in Washington
over raising the debt limit was easing.

Short-term speculators took aim at the dollar after Obama
delivered a prime-time address to Americans, warning that a
default on U.S. bond obligations would be a “reckless and
irresponsible outcome”. But he gave no indication a compromise
was imminent.

Jul 26, 2011

Asia shares up, investors calm on U.S. debt

HONG KONG (Reuters) – Asian shares edged higher on Tuesday, bouncing back from a slide the previous day, after U.S. stocks posted only modest losses in reaction to the worsening deadlock in Washington over raising the debt limit and avoiding a technical bond default.

The dollar fell to a record low against the safe-haven Swiss franc in early trade as President Barack Obama delivered a prime-time address to Americans, warning that a default on U.S. bond obligations would be a “reckless and irresponsible outcome.

Jul 26, 2011

Asia shares up, investors calm on US debt deadlock

HONG KONG, July 26 (Reuters) – Asian shares edged higher on
Tuesday, bouncing back from a slide the previous day, after U.S.
stocks posted only modest losses in reaction to the worsening
deadlock in Washington over raising the debt limit and avoiding
a technical bond default.

The dollar fell to a record low against the safe-haven Swiss
franc in early trade as President Barack Obama delivered a
prime-time address to Americans, warning that a default on U.S.
bond obligations would be a “reckless and irresponsible
outcome.”

    • About Eric

      "Asia Financial Markets Editor based in Hong Kong overseeing markets coverage across Asia-Pacific. Hyper-contrarian, uber-geek on charts and semi-regular tweeter. Any inadvertent opinions expressed are mine alone."
      Joined Reuters:
      2000
      Awards:
      2009 Reuters Editor of the Year
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