FX forwards (or STIR) desks

those of you who work in FX, can you pls chime in? thx

which banks have FX forwards / STIR desks (both G10 and EM) that...
1. focus mainly on prop/directional bets instead of market-making
2. are very profitable and well-respected on the street, who know their shit and are most likely/able to jump to a directional risk taking position on the buyside

is it also safe to assume that the better the bank is at flow (JP Deutsche Barclays), the fewer directional bets they will look at, because most of their time is spent servicing the clients and making prices?

thx!!

 
whalesquid123:
Isn't fx forwards just non-usd denominated STIR?
A Foreign Exchange Forward ("FX Forward") is a contract to set today an exchange rate that will apply to a certain notional principal at a specified future period of time. An FX Forward is generally settled in cash at contract maturity.

STIR is Short-Term Interest Rate futures.

 
jesus of nazareth:
whalesquid123:
Isn't fx forwards just non-usd denominated STIR?
A Foreign Exchange Forward ("FX Forward") is a contract to set today an exchange rate that will apply to a certain notional principal at a specified future period of time. An FX Forward is generally settled in cash at contract maturity.

STIR is Short-Term Interest Rate futures.

On our floor, FX Forward is every outright FX transaction that's not T+2 (spot), and is handled by our STIR desk.

 
ugglan:
jesus of nazareth:
whalesquid123:
Isn't fx forwards just non-usd denominated STIR?
A Foreign Exchange Forward ("FX Forward") is a contract to set today an exchange rate that will apply to a certain notional principal at a specified future period of time. An FX Forward is generally settled in cash at contract maturity.

STIR is Short-Term Interest Rate futures.

On our floor, FX Forward is every outright FX transaction that's not T+2 (spot), and is handled by our STIR desk.

Banks put STIR and FX forwards together because both are short term products. But these two are not the same thing.
 
Best Response
jesus of nazareth:
ugglan:
jesus of nazareth:
whalesquid123:
Isn't fx forwards just non-usd denominated STIR?
A Foreign Exchange Forward ("FX Forward") is a contract to set today an exchange rate that will apply to a certain notional principal at a specified future period of time. An FX Forward is generally settled in cash at contract maturity.

STIR is Short-Term Interest Rate futures.

On our floor, FX Forward is every outright FX transaction that's not T+2 (spot), and is handled by our STIR desk.

Banks put STIR and FX forwards together because both are short term products. But these two are not the same thing.

Obviously we don't have the strict definition that STIR = STIR Future contract here. It's merely the name of our short end rates trading group.

 

To answer your question there's this thing called the Volcker Rule which makes giving you a straight answer difficult. Prop activity in these products is probably concentrated in bank treasuries nowadays, and even those groups are at risk after what happened in JP Morgan's CIO.

Your flow vs. directional question is misguided. 'Flowmonsters' in these products are naturally exposed to some directional risk in the course of their market making activities. If anything, the biggest banks are the ones likely to have more room to spare for prop activities. Just because your franchise is weak doesn't mean you should open a prop book.

 

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