Margin Requirements for OTC Derivatives: Regulators Listen, but Do They Hear?

Introduction On 2 September 2013, the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) published their long-awaited final policy document dealing with “Margin requirements for non-centrally cleared derivatives”. Scope Subject to certain exemptions discussed below, the final rules apply to financial firms and systemically important non-financial entities (“Covered Entities”) […]

Default Semantics – Credit Default Swaps & Greece

The European Union’s linguistic gymnastics, redefining default as “restructuring” or “re-profiling” and the structure of any final deal on Greek debt has “real” implications for the arcane workings of the CDS market. In the film Casablanca, Rick (Humphrey Bogart) tells Captain Renault (Claude Rains) that he came to the city because of his health, to […]

Asian Market Snapshot: Stocks Gain on Speculation Japan and U.S. Governments Will Support Growth

Asian markets traded higher after the BoJ expanded its JPY 20 trillion bank loan facility to JPY 30 billion as a strengthening yen threatens the recovery. (See RGE critical issue: Is Yen Intervention in the Offing?). Markets, however, pared back some of their gains as the size of the increase disappointed. 

The MSCI Asia Pacific Index rose 0.2% to 117 led by material producers, while the MSCI ASIA APEX 50 rose 0.9% to 740.

In Japan, stocks advanced as the central bank increased the size of its liquidity facility. The Nikkei 225 gained 1.8% to 9,149. Technology (up 2.64%) and industrials (up 1.94%) led the gains. Canon rose 2.4% while Honda gained 1.6%.

Asian Market Snapshot: Stocks Gained on Optimism About Corporate Earnings and Better than Expected U.S. Job Data

Asian markets opened lower but quickly pared back their losses to close up for the last day of the week amid optimism about corporate earnings and better than expected U.S. initial jobless claims. Yesterday after Asian markets closed, the U.S. labor department reported that jobless claims dropped more than expected. Initial claims dropped in the week ending August 21st to 473K from an upward revised number of 504K. The median economists’ estimate from the Bloomberg survey was 490K. (See RGE critical issue: U.S. Labor Market: Initial Unemployment Decline, But Still Elevated). 

The MSCI Asia Pacific Index rose 0.6% to 117, closing the week down 1.5% while the MSCI ASIA APEX 50 rose 0.1% to 733 to end the week down 2.1%.

Asian Market Snapshot: Most Stocks Rise on Cheap Valuation, Weaker Yen and Speculation Fed Will Act

In a choppy trading day Asian markets opened higher and traded lower in the first hours before paring back losses to close higher for the day.  Cheap valuation sparked the gains as investors speculated that prices have fallen excessively relative to earnings.

The MSCI Asia Pacific Index fell 1.4% to116 while the MSCI ASIA APEX 50 lost 0.8% to 733.

In Japan, stocks rose on a weaker yen and speculation that stocks were undervalued. The Nikkei 225 rose 0.7% to 8,906 led by exporters as the yen weakens. Yahoo Japan climbed 5.7% while Suzuki Motor rose 2.9%.

Asian Market Snapshot: Most Stocks Fall Amid Speculation on U.S. Home Sales Report

Asian markets traded lower all throughout a choppy trading day as investors speculate on weaker U.S. home sales data due later today. Economists surveyed by Bloomberg expect home sales to fall to 4.65 million from 5.37 million in June. (See RGE Critical Issue: U.S. Housing Demand Languishes Following Tax Credit Expiration

The MSCI Asia Pacific Index fell 0.8% to 117 led by 225 the Nikkei.The MSCI ASIA APEX 50 lost 1.1% to 738.

Asian Market Snapshot: Stocks Fall over Concerns of Upcoming U.S. Data

Asian markets opened and traded lower all throughout the day as investors speculate on weaker U.S. data due later this week.

The MSCI Asia Pacific Index was unchanged at 118 as losses in auto and electronics shares offset gains in utilities. The MSCI ASIA APEX 50 lost 0.3% to 746.

In Japan, stocks declined as investors anticipate weak U.S. data this week and on comments made by Finance Minister Yoshihiko Nado who said that he hasn’t heard of any scheduled meeting between Prime Minister Naoto Kan and BoJ Governor Masaaki Shirakawa to discuss the rising yen. The Nikkei 225 lost 0.7 % to 9,117. Sharp declined 2.5% while Honda, with 84% overseas exposure, fell 0.5%.

Asian Market Snapshot: Stocks Rise on Speculation the BoJ Will Ease Monetary Policy

A report by the Sankei newspaper indicated the Bank of Japan is considering increasing the size of its emergency credit program to US$351 billion or 30 trillion yen and lengthening loans to 6-month terms from the current 3-month terms in order to lower longer term rates. This report sent Asian markets trading higher all throughout the day as investors speculate on an easier monetary stance. (See RGE Critical Issue: Will They Won’t They? Is it Time Japan Intervened to Weaken the Yen?Yen Trends: How Has the Yen Been Behaving?). Further supporting the markets’ rally was Applied Materials stronger than expected profit forecast. The semiconductors builder said its profit for the current period will exceed analysts’ estimate of 26 cents a share by 2 to 6 cents.

The MSCI Asia Pacific Index gained 0.6% to 119 while the MSCI ASIA APEX 50 advanced 0.9% to 753.

Asian Market Snapshot: Most Stocks Rise on U.S. Industrial Production and Strong Corporate Earnings

Asian markets traded higher all throughout the day on stronger than expected U.S. industrial production data. U.S. industrial production unexpectedly rose 1% in July led by auto manufacturing, beating expectations of a 0.5% increase. (See RGE Critical Issue: U.S. Industrial Production Rises; Regional Surveys Continue to Show Weakness). Japanese auto and technology companies also posted stronger than expected earnings. 

The MSCI Asia Pacific Index gained 0.2% to 118 led by Australian banks. The MSCI ASIA APEX 50 declined 0.3% to 746.

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