No magic bullets: Macro-hedgers look for eurozone protection

Europe’s debt crisis could get worse, and some firms are looking for tail risk hedges in the foreign exchange market – but even magic bullets can backfire. Mark Pengelly reports


An effective hedge for eurozone tail risk has to tick two boxes: it should be liquid enough so that large positions can be put on and taken off easily; and it should pay out when required. The foreign exchange market meets the first of those criteria. The difficulty – as many market participants are finding – is identifying a trade that meets the second.

“Whether we’re talking to corporates, pension funds, hedge funds or asset managers, this is a big focus. But the best hedge is not always the

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Stemming the tide of rising FX settlement risk

As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market

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