FX & Rates Trading Simulation and Sales Development

Learning Outcomes

•Understand the fundamental FX and Interest Rate products and explain the strategies underlying their use

•Analyse the fundamental links between rates (money and fixed income) and the foreign exchange markets

•Analyse the trading relationships that exist between the bank and other market participants (Central Bank, Other Banks, Clients)

•Understand the relationship and differences that exist between trading and pure treasury (ALM) functions •Aligning treasury activities with the bank’s risk appetite & business strategy

•Embedding the treasury –client relationship, including moving clients up the value chain

•Becoming a better trader with greater situational awareness

•Recognise that everyone has biases that must be acknowledged in order to avoid the “Ostrich Paradox”

•Show solid working knowledge in fundamental risk management applied to the hedging of trading positions

•Recognise the fundamental skills necessary for providing accurate and swift markets quotes in response to client RFQs

•Understand and appreciate that trading and maintaining risk positions is an exercise in the assessment of probabilities

Workshop Outline

•Understand how money & bond market traders can take a position

•Understand how FX swap traders can take a position •Analyse fundamental risk management as it is applied to the hedging of FX and rates positions

•Analyse the centrality of the “yield curve” and the information that it contains

•Trading FX and rates products in alternative yield curve environments •Understand and evaluate interest arbitrage opportunities

•Reconcile units of risk measurement and return between alternative products(Nominal position risk, Position DV01 Portfolio DV01, Value-at-Risk, Consumption of Economic Capital)

•Building situational Awareness of the political and financial world around me

•What motivates central bank action and trying to understand what the trigger points for Central Bank action in the markets are

•Avoiding the trap of the “Daily Me” –where do I obtain “unbiased good information that doesn’t just validate what I believe”?

•The Ostrich Paradox and why we consistently underestimate risk •Avoiding the temptation to follow the herd

•How is “risk” is identified, measured and managed

•Distinguishing between “market noise” and bona fide market drivers and trends

•Learning NOT to trade the news

•Recognising the drivers for alternative currency pairs, bond and money markets

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