With oil prices hovering around $50 a barrel, oil companies are adapting to a "lower for longer" oil price environment. This has meant cutting back on investment and jobs. Shell plans to shut down its office in the Thames Valley Park by the end of 2016.
Tuesday, 31 May 2016
Wednesday, 4 May 2016
AWS Lifts Amazon Q1 Earnings - Cloud Computing Proves Viable Second Stream To Ecommerce
For the last 12 months, Amazon Web Services (AWS) has been a $9bn business. Bezos expects it to be a $10bn annual business.
Within the AWS offering, Amazon offers EC2 (Elastic Compute Cloud), a web service that provides resizable compute capacity in the cloud. Customers include Netflix, Autodesk and Nasa/JPL. EC2 works in conjunction with VPC (Virtual Private Cloud) - which allows users to create their own virtual networking environment within AWS, including IP address ranges, subnets and so forth.
Within the AWS offering, Amazon offers EC2 (Elastic Compute Cloud), a web service that provides resizable compute capacity in the cloud. Customers include Netflix, Autodesk and Nasa/JPL. EC2 works in conjunction with VPC (Virtual Private Cloud) - which allows users to create their own virtual networking environment within AWS, including IP address ranges, subnets and so forth.
Thursday, 10 March 2016
Metro Bank lists on LSE
Metro Bank, the first new high street bank in the UK for 100 years, has listed on the LSE with a market capitalisation of £1.6bn similar to that of CYBG which listed in the previous month.
Craig Donaldson, CEO, who studied at the University of Bradford, remarked that the first branch opened less than six years ago in London's Holborn.
Vernon Hill is the American business behind Metro Bank and author of "Fans not Customers".
He is often quoted in his views on regarding banks as being in the retail business, rather than the banking business, and is a critic of "shadow banking systems" (in other words, banks or financial intermediaries that operate outside of banking regulation).
Craig Donaldson, CEO, who studied at the University of Bradford, remarked that the first branch opened less than six years ago in London's Holborn.
Vernon Hill is the American business behind Metro Bank and author of "Fans not Customers".
He is often quoted in his views on regarding banks as being in the retail business, rather than the banking business, and is a critic of "shadow banking systems" (in other words, banks or financial intermediaries that operate outside of banking regulation).
Monday, 29 February 2016
What Kinds of Volumes are Being Done on Cleared Interest Rate Swaps?
Volumes Compared by Currency
The CME Group's clearing solution for interest rate swaps is doing considerable volume.
For trade date February 26, 2016, $21.6 billion of swaps were traded, with $12.5 trillion open interest. Dollar and Euro are trading around parity (with the Euro being slightly more valuable), so that's a 20 bn EUR equivalent trading volume.
Euro swaps traded only 5.2 billion euros worth in comparison. So the volume of USD swaps is approximately four times as large.
Swaps on GBP actually exceed USD swaps in trading volume terms, for the same day, 24 billion pounds traded, which is around $34 bn (which is about 1.5x larger).
Cleared Swaps on Different "Flavours of LIBOR"
The CME clear swaps on USD Libor, Euribor and plain old "LIBOR" (which is GBP LIBOR of course) as well as host of other currencies.
Where Are Rates At - USD Libor
Friday's level for USD Libor Overnight was 37 basis points. 1 month is 43 basis points and 3 month USD Libor is 63 bps. A daily update on USD Libor levels can be found here. 1year USD Libor is 116 basis points.
"Regular" LIBOR
Overnight is 48bps, 1 month is 50 bps, and 3 months is 59 bps. 1 year LIBOR is close to 100 bps.
Who sets the LIBOR Rates
The former BBA Libor is now known as ICE Libor following the reform of the benchmark and management by ICE Benchmark Administration. The Wheatley Review of LIBOR in 2012 made specific recommendations for the reform of LIBOR including a change of administration. Under a tender process led by Baroness Hogg, the NYSE Euronext came up trumps (later renamed to ICE Benchmark Administration). Both administering and making submissions to LIBOR became regulated activities from 1 April 2013 - LIBOR being the first benchmark to be regulated.
As part of their activities, ICE has a dedicated surveillance team identifying breaches of submission standards and tolerances through "a combination of alerts and pattern matching".
Other Benchmark Rates administered by ICE
The ICE Swap Rate is the new replacement for ISDAFIX effective August 2014. ICE also now administer the LBMA Gold Price.
The Greatest Volume of Swaps
Interest Rate Swaps, followed by Overnight Indexed Swaps followed by basis swaps.
The CME Group's clearing solution for interest rate swaps is doing considerable volume.
For trade date February 26, 2016, $21.6 billion of swaps were traded, with $12.5 trillion open interest. Dollar and Euro are trading around parity (with the Euro being slightly more valuable), so that's a 20 bn EUR equivalent trading volume.
Euro swaps traded only 5.2 billion euros worth in comparison. So the volume of USD swaps is approximately four times as large.
Swaps on GBP actually exceed USD swaps in trading volume terms, for the same day, 24 billion pounds traded, which is around $34 bn (which is about 1.5x larger).
Cleared Swaps on Different "Flavours of LIBOR"
The CME clear swaps on USD Libor, Euribor and plain old "LIBOR" (which is GBP LIBOR of course) as well as host of other currencies.
Where Are Rates At - USD Libor
Friday's level for USD Libor Overnight was 37 basis points. 1 month is 43 basis points and 3 month USD Libor is 63 bps. A daily update on USD Libor levels can be found here. 1year USD Libor is 116 basis points.
"Regular" LIBOR
Overnight is 48bps, 1 month is 50 bps, and 3 months is 59 bps. 1 year LIBOR is close to 100 bps.
Who sets the LIBOR Rates
The former BBA Libor is now known as ICE Libor following the reform of the benchmark and management by ICE Benchmark Administration. The Wheatley Review of LIBOR in 2012 made specific recommendations for the reform of LIBOR including a change of administration. Under a tender process led by Baroness Hogg, the NYSE Euronext came up trumps (later renamed to ICE Benchmark Administration). Both administering and making submissions to LIBOR became regulated activities from 1 April 2013 - LIBOR being the first benchmark to be regulated.
As part of their activities, ICE has a dedicated surveillance team identifying breaches of submission standards and tolerances through "a combination of alerts and pattern matching".
Other Benchmark Rates administered by ICE
The ICE Swap Rate is the new replacement for ISDAFIX effective August 2014. ICE also now administer the LBMA Gold Price.
The Greatest Volume of Swaps
Interest Rate Swaps, followed by Overnight Indexed Swaps followed by basis swaps.
Sunday, 21 February 2016
Shell's "AA" Credit Rating Cut to "AA-" by Fitch due to Takeover of BG Group
Moody's has also said it is reviewing credit ratings of oil, gas and mining stocks. These companies are selling assets and slashing headcount due to the rout in commodity prices. On the flip side, the deal makes Shell the UK's largest publically owned company, with HSBC in second place. Shell rival BP is around number 6 in market cap.
Saturday, 20 February 2016
Barclays pays $50m to Axiom Investment Advisors over Last Look Algorithm in FX
Barclays is paying $50m over its lawsuit from November 2015 with Axiom Investment Advisors, an asset manager specialising in foreign exchange. The "last look" is the opportunity taken by market makers to reject a trade after the client commits to a trade at a certain price, giving them the flexibility to reject unprofitable trades, a practice which is illegal in many jurisdiction and asset classes, and frowned upon in others. However, the specific complaint by Axiom relates to delaying execution of trades, resulting in a worse consummated final price than what was initially agreed. The investigation was led by the New York Department of Financial Services (DFS). Barclays has denied wrongdoing.
Sunday, 14 February 2016
Trading GOI and KTB Bond Futures
INDIA - Government Bond Futures and Bills and Who can Trade Them
The National Stock Exchange (NSE) of India offers futures trading on government bonds (10-year) and (91-day) bills a.k.a. 91TDB. Trading members must be registered with SEBI to trade in the Currency Derivatives segment.
Price Quote Convention
Prices are quoted "clean" i.e. without considering accrued interest.
Settlement and Delivery of GOI Bond Futures
Bond futures settle on VWAP during the last thirty minutes of trading, or theoretical value. Note that the 10 year bond futures actually allows delivery of bonds with 8-11 years of residual maturity.
Clearing of Trades
Trades are cleared by NSCCL (National Securities Clearing Corporation Limited), a wholly owned subsidiary of the NSE incorporated in 1995, and the first clearing house to be incorporated in India, starting operations in 1996. Counterparty risk is avoided by cash settlement of the daily mark to market of open positions.
KOREA
Korean Bonds
AsianBondsOnline has good coverage of Korean Won bonds, and presentation of 2, 5 and 10 year yields. In Korea, all fixed income instruments are available to foreign investors.
Bond futures trade on KRX. They are known as KTB futures (Korean Treasury Bond futures), available in 3, 5 and 10 year varieties.
The wholesale market for KTBs is known as KTS (this is also the venue to trade Monetary Stabilisation Bonds, or MSBs and Deposit Insurance Fund Bonds (DIFBs)), and is limited to government bond dealers licensed by the Financial Services Commission (founded in 2008).
The National Stock Exchange (NSE) of India offers futures trading on government bonds (10-year) and (91-day) bills a.k.a. 91TDB. Trading members must be registered with SEBI to trade in the Currency Derivatives segment.
Price Quote Convention
Prices are quoted "clean" i.e. without considering accrued interest.
Settlement and Delivery of GOI Bond Futures
Bond futures settle on VWAP during the last thirty minutes of trading, or theoretical value. Note that the 10 year bond futures actually allows delivery of bonds with 8-11 years of residual maturity.
Clearing of Trades
Trades are cleared by NSCCL (National Securities Clearing Corporation Limited), a wholly owned subsidiary of the NSE incorporated in 1995, and the first clearing house to be incorporated in India, starting operations in 1996. Counterparty risk is avoided by cash settlement of the daily mark to market of open positions.
KOREA
Korean Bonds
AsianBondsOnline has good coverage of Korean Won bonds, and presentation of 2, 5 and 10 year yields. In Korea, all fixed income instruments are available to foreign investors.
Bond futures trade on KRX. They are known as KTB futures (Korean Treasury Bond futures), available in 3, 5 and 10 year varieties.
The wholesale market for KTBs is known as KTS (this is also the venue to trade Monetary Stabilisation Bonds, or MSBs and Deposit Insurance Fund Bonds (DIFBs)), and is limited to government bond dealers licensed by the Financial Services Commission (founded in 2008).
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