CME takes on upstart ICE; Clearing now open to banks and investors

It’s that time of year again, when buy siders – especially active ones – become the best mates of FX salespeople around the world; when bank clients can extract promises about service levels, be wined and dined – at a reasonable cost of course – and attend what I will politely call “conferences” in swanky locations.

I’ve met some animals in my time in FX, so it always makes sense to me that retail FX should be covered by the Farm Bill in the US, which was passed back in May 2008. Anyway, the bill’s sponsor, the US Commodity Futures Trading Commission (CFTC), has decided it needs to take things further.

There is widespread buzz that a broker has done its cods in a gold swap.

Exchange-traded powerhouse Newedge has appointed Laurent Cunin as its head of the Asia-Pacific region. He is replacing the jolly Pierre Gay, who has been named global head of fixed income, currency and commodities. Gay will remain based in Hong Kong at least during the first quarter of 2010 during the transition with Cunin.

Talk is that Steve Englander has left his role as chief FX strategist for Barclays Capital in the Americas. Buzz is he’s off to back to his roots at Citi.

Many have questioned the viability of Nomura’s stated aim to build an FX franchise. Having worked there in one of its previous build-ups, I too have yet to be convinced. Still, that has not stopped a raft of quality players flocking to the Japanese shop. Therefore, I was surprised to hear that Steve Ware and James Lamb left their roles in hedge fund sales this week, apparently to head off to Natixis. It seems a brave but risky move.

Possibly the defining feature of the financial crisis in relation to trade finance has been the increased importance of multilateral institutions such as the International Finance Corporation and national export credit agencies.

Their problems have highlighted the importance of trade finance in maintaining the flow of goods. Laurence Neville reports on what is being done to sustain a vital economic function

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Cycling sources in the FX market (There is such a thing? Ed.) say that Saxo Bank is poised to announce it will stop sponsoring its professional cycling team at the end of 2010. The bank's decision to take over the sponsorship of Team CSC, run by former Tour de France winner Bjarne Riis, was announced in the summer of 2008 and initially raised some eyebrows in the FX market. However, the decision paid dividends when Spain's Carlos Sastre won the 2008 Tour de France. In 2009, Saxo's Andy Schleck, widely considered as one of the most talented young riders in the sport, came second, while his older brother Fränk came fifth.

A great deal of 2009 was a bit gloomy for the FX market. As Derek Sammann, managing director, financial products and services at the CME, pointed out in a media briefing this week, the spike in volatility at the end of 2008 was followed by quite a significant drop-off in volumes as 2009 got under way. And of course there was the fact that FX was caught up in the desire of a bunch of ill-informed zealots – sorry, let me rephrase that – FX found itself under the same legislative spotlight as other assets.

While the old adage that you don’t change a winning team is not strictly true, it does suggest that Bank of America Merrill Lynch must have some serious fault lines in its FX business. As 2010 starts, the bank has had yet another change in its senior management (see People moves). Over the years, the once separate banks have employed some highly regarded players to try and crack into the upper echelons of FX.

Newedge, the global exchange-traded products clearer and broker, has become the first foreign company to be granted a full futures licence by the Korea Financial Services Commission. The company is now able to offer all products listed on the Korea Exchange (KRX), which includes currency products.

BNP Paribas’ push into prime brokerage took another step forward this week when it was announced it had signed up as an EBS FX prime bank. “Joining EBS as a prime bank is an important part of BNP Paribas’ strategy to build out our prime brokerage offering. Our ambition is to become a top five FX house globally and our prime brokerage business is a vital part of realizing that ambition. Our current strength and potential for future growth in FX prime brokerage stems from factors including our strong balance sheet and a credit rating that makes us a particularly desirable counterparty,” says Nathaniel Litwak, the bank’s head of marketing for FX prime brokerage.

The days when the market used to shut and go to lunch for December have well and truly gone. Volumes on EBS came in at a daily average of $112 billion, down a modest 11.25% from a year earlier, which is not bad given the volatility of the last quarter of 2008.

Icap has informed clients that it will add two new pairs – EUR/USD and USD/JPY – to its EBS Smalls pilot. They will go live on Monday, January 11.

I got sent a copy of a Reuters story this morning: "Jan 5 (Reuters) - Being a FX spot trader is the best job to have in 2010, while being a lumberjack, dairy farmer or taxi driver are the worst positions, according to a study released on Tuesday by CareerCast.com, a job search site that analyzed 200 jobs in North America."

BNP Paribas has hired Deane Nuttall from Harmonic Capital. Sources say he will work in hedge fund sales and develop the bank’s commodity trading advisor (CTA) franchise with a focus on high-frequency accounts. Nuttall will report to Miranda Royston, BNP Paribas’ head of hedge fund sales.

No Christmas joy for RBS, where the exodus of staff continued right up to December 25. The latest departure from its FX sales force is Juan Urdaneta, who was director global FX bank sales and is off to Santander. The bank has also lost Paolo Comerci, whom sources describe as a bit of a hitter and who was head of gap risk.

Jim Courtney has left HSBC London, where he traded spot cable. Sources say he is another trader whose value could not be agreed – was his profit due to his skill or the franchise? He is believed to be headed off to WestPac to trade spot AUD.

Standard Bank has hired Celal Çelikcan as managing director, Turkey. Çelikcan was previously a principal trader at Citi in London, although he was at one time the bank’s treasurer in Istanbul.

My old mate Keith Dack (Dacky) has joined UBS, where he will run the bank’s proprietary team in Singapore. Dacky, who reports to Dave Tait, has had a long and illustrious career in FX. Over the past 30 years he has worked at such fine institutions as Fical, Northern Trust, BCI, Bankers, Barclays, Salomons, DLJ, RBC, Nomura and, according to one of his old muckers, some crappy Arab bank which we can’t remember, as well as Commerz, which he joined when it took over Dresdner.

Barclays Capital has hired Lakh Patra as its head of FX IT. He reports to Sameer Jain, the bank's head of FX, fixed income, exotics and vanilla options and derivative counterparty risk management IT. Jain's biggest challenge so far has been to fit his title on a normal-sized business card. Patra joins Barclays from Bank of America Merrill Lynch, where he was global head of rates and FX technology.

As a new year starts, Bank of America Merrill Lynch has carried out its traditional change to the management of its foreign exchange business.

With so much positive sentiment reflecting the assumption of a “normal” recovery, there is reason for caution. Government borrowing needs will increase interest rates in the USA and UK.

More Currency pairs

I get sent some right old tosh. Here’s a great example. “StreamBase is excited to announce that another influential firm in the FX market – Cürex Group – has selected StreamBase’s complex event processing platform as the foundation for its ultra low-latency market data and transactional infrastructure.”

FX Bridge says that it has seen the 1-millionth FX option trade on its ProTrader Plus platform. The company caters mainly for a retail audience, which has not had the same access to FX options as it has to other products. FX Bridge believes it is playing a major role in changing this. “As a technology provider, FX Bridge helps dealers take full advantage of the tremendous opportunities worldwide for retail forex options,” says Joe Cunningham, the company’s chairman.

Few people are as expert at generating publicity as Richard Branson. This week, he launched Virgin Racing to compete in that supposed sport called Formula 1. Cyprus-based trading platform FxPro has decided to sponsor the team.