CDS sell-off brings profit-taking opportunity for basis trade players
Profit-taking on basis trades between CDS and cash bonds has begun, with the strong run for credit markets since the start of the year having hit a bump yesterday

Isda seeks fallback spread vendor for derivatives
The International Swaps & Derivatives Association is seeking an independent service provider to calculate and publish adjustments to fallbacks it will use in interest rate benchmarks for its Isda definitions

Central counterparties need to improve after Nasdaq Clearing member default, says Isda
Derivative central counterparties (CCPs) must look to make a number of improvements to risk practices, the International Swaps and Derivatives Association has said in a paper that follows a clearing member default at Nasdaq Clearing in September

Dealers gear up to settle Sears CDS and rule on Ziggo successor
The long wait to settle the final price of Sears Roebuck Acceptance Corp credit default swaps will end today with a credit event auction, while investors could also learn whether there is successor to contracts referencing deregistered Ziggo Bond Finance

Credit spread improvement is calm before the storm, warn strategists
European and US credit markets have begun 2019 with a more buoyant tone than they ended 2018, but strategists warn that bearish factors still outweigh and suggest the overall direction of spreads this year is likely to be wider

Europe/US relative value play opens up in battle of the bears
All indications point to 2019 being a tough slog for credit on both sides of the Atlantic, but a consensus is forming that US high yield has the most to worry about. That, say strategists, could present opportunities for those looking to trade one region against the other  

Creditex obtains CFTC swap execution facility exemption
Creditex, the electronic brokerage for corporate bonds and credit default swaps, has been granted an exemption from a requirement to register with the US Commodity Futures Trading Commission as a swap execution facility

Crossover converges on CDX HY as Fed, earnings and heavy technicals take hold
Big moves of single name credits continue to hold sway over the iTraxx Europe Crossover credit default swap index, whose underperformance of US counterpart CDX HY has extended during the past week amid a big technical repositioning of flows

Market favours retrospective over forward-looking approach to Ibor benchmark fallbacks, says Isda
New benchmark fallbacks for derivatives contracts that reference interbank offered rates are likely to be based on the “compounded setting in arrears rate” and the “historical mean/median approach to the spread adjustment”, the International Swaps and Derivatives Association has said

Credit sell-off has room to run and pricing is out of whack, says BNP Paribas
The credit market sell-off could have further to go despite recent widening and is “in the process of a late-stage business cycle unwind”, according to a strategist note seen by Creditflux

European CDS index tightens inside US even as bonds languish
Credit derivatives markets have hit a key point of trend reversal this week, with the iTraxx Europe five-year CDS index trading inside its US counterpart CDX IG for the first time since May

Isda transfers credit determinations secretary role to subsidiary
The International Swaps and Derivatives Association has relinquished its role as secretary to the credit derivatives determinations committees (DCs) with the appointment of a new unit, DC Administration Services (DCAS), to manage this function

Isda extends deadline for derivatives benchmark consultation
The International Swaps and Derivatives Association has extended the fast-approaching deadline for its consultation on derivatives benchmark fallbacks, to allow more time for responses

Market rout drives US/Europe credit convergence, as Brazil leads Latin widening
Credit spreads have sharply widened globally as financial markets are being rocked by concerns for a trade war and rising US rates. An equity-led rout in the US yesterday afternoon

Isda and Linklaters roll out test version of initial margin docs service
Five and a half months of partnership between the International Swaps and Derivatives Association and Linklaters has borne fruit, with the launch of a test version of an online tool that will allow firms to electronically negotiate and execute initial margin (IM) documentation

Tesla CDS hits big bump on largely self-driven woes
Tesla Motors’ five-year credit default swap is at a widest-ever print of 21.3/23.3 points up front going into the week

IHS Markit launches derivatives initial margin calculator
IHS Markit has launched an Initial Market Calculation Service to help market participants prepare to meet regulatory requirements for non-cleared derivatives trades across credit, commodities, equities, FX and interest rates

Central clearer resource concentration puts systemic risk in spotlight
A joint study by regulators has revealed that default resources are increasingly concentrated in just two central counterparties

Steep climb: dealers and investors cross-examine merits of five-year CSOs
The market for bespoke tranches of credit synthetic obligations (CSOs) looks set for further year-on-year growth, but this could depend on expanding activity to longer tenors

Alarm sounds on margin rules as small funds look to make early inroads
A fast-approaching 1 September regulatory deadline for phase three market participants to apply initial margin (IM) to derivatives trades looks set to pass without serious mishap, according to lawyers and the International Swaps and Derivatives Association

Trimming hedge costs with a mark-to-market approach

LCH expands into US with CDSClear as JP Morgan goes live
CDSClear, the Paris-based credit default swap clearing house of LCH, has expanded its reach into the US with JP Morgan becoming the first US bank to offer client clearing

Strengthen CDS definitions to stop engineered defaults, say lawyers
The likelihood of stamping out manipulation in the credit default swaps market – namely the practice of staging credit events – is remote, say market sources

Creditflux guide: index tranches
Bespokes are back, single name CDS remain popular and credit indices can be very liquid. So why, years after the crisis, are index tranches still in the doldrums? By Tom Davidson