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How do you price liquidity risk?

Debt trading poll: A year to separate the men from the boys

Click here to download pdf including photos of the event

The US dollar’s long-term weakness looks set to persist as the currency seems to fall to a fresh historical low against the euro on a weekly basis. The latest G7 meeting, held over the weekend of October 20-21, did nothing to provide any support. In the immediate aftermath of the meeting, the dollar fell to 1.4349 against the euro before bouncing. The reasons for the recovery, at this stage, are not clear.

In front of a US Senate committee, the agencies are indignant while investors claim they are focusing on the wrong signals.

Proposed US legislation shows that patience has snapped with the markets.

In October, Royal Bank of Canada (RBC) added to its set-up in the Caribbean. The number one Canadian bank announced a $2.2 billion acquisition of RBTT (Royal Bank of Trinidad and Tobago) Financial Group. RBTT had been in discussions with potential buyers since April and suitors included Canadian rivals Scotiabank and CIBC, through its FirstCaribbean unit. RBC is paying for the group with 60% cash in hand and a further 40% in RBC shares.

Sub-prime slime and the credit crunch have diverted attention from global imbalances. However, any dollar rout would be ugly. Neglect is no substitute for policy.

After the build-up of its sales and distribution teams under Keenan Altunis and Steve Turner, UniCredit has switched its attention to its trading force. The bank has appointed Ben Welsh, the former head of FX, global markets and US rates at HSBC New York, as its co-head of global FICC. Shortly after he started, it was announced that Welsh had persuaded the well-regarded Dan O’Sullivan, who was head of FX trading North America at HSBC, to join him. The pair, who also worked together at Goldman Sachs, will be based in London.

Spate of high-profile delistings by blue-chip European companies boosts Pink Sheets’ premium market segment.

RBC Capital Markets has made Mike MacBain co-head of its global debt markets business. MacBain, who will be based in New York, will focus on financial products and commodities, alongside Richard Pilosof. MacBain was most recently president of TD Securities and global head of DCM and cash equities.

Leading specialist emerging market fund manager Ashmore Investment Management believes that local-currency and high-yield corporate debt could be the prime way for investors to take advantage of US dollar weakness and sub-prime mortgage concerns in the coming year.