FX & Money Markets

3 days 19-21 Jun 2017, London UK £3,645.00 + VAT* Download brochure Add to basket
3 days 11-13 Dec 2017, London UK £3,645.00 + VAT* Download brochure Add to basket

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Overview

Foreign Exchange (FX) and Money Markets course provides a firm grounding in the instruments and activities of the international money and FX markets, sweeping away the confusion that can be created by the scale, speed and apparent diversity of the markets.

The foreign exchange and money markets are worth trillions of dollars and are the pivot of the financial markets, providing funding, investment opportunities and the conduit between all other financial markets. In recent years, the importance of the money markets has become even greater as financial institutions focus more closely on the management and diversification of their sources of liquidity, apply greater discipline to their funding and examine the attractions of short term investment and trading strategies.

This course focuses on the current profile of the markets and offers up-to-date insights. The course also emphasises the integrated nature of the market - in particular, how different instruments perform the same or similar functions and the opportunities this provides for arbitrage and hedging. It also analyses the liquidity characteristics and risks of different instruments and funding strategies.

Summary of course content

  • The FX and money markets and its participants
  • The impact of Central Banks
  • Money market products
  • FX products
  • Risk management issues

Methodology

This course is an intermediate programme taught with highly interactive and intensive group exercises and case studies.

Who should attend

  • The FX and money markets and its participants

  • The impact of Central Banks
  • Money market products
  • FX products
  • Risk management issues

Instructors

We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

London
Paul Kitching

 The Course Director was the Strategic Development Manager at the London International Financial Futures Exchange (LIFFE), where he was responsible for the research and definition of new specialist swap and risk transfer contracts. Prior to this, he was Head of Interest Rate Product Development with responsibility for the maintenance of the existing product range and the development of new products.

He began his career with Ernst & Young and Grant Thornton as a tax specialist, before moving into corporate treasury management at Royal Mail where he was project leader for a treasury and risk management group. In this role he developed risk management protocols and procedures for the use of derivative products. He was responsible for recommending the optimal combination of product types and features for a wide range of situations.

Following the completion of a quantitative finance masters degree, he became senior lecturer in Corporate Finance and Taxation at the University of Greenwich. He is a visiting lecturer to Cass Business School on their Executive MBA programme.

He is a panel member for the Securities Institute, a member of the Association of Corporate Treasurers and an associate of the Institute of Taxation.

Venue

London

Central London Hotel Venue

All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.

Related Courses

Inhouse


 

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:





Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.



We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:


Read more about our offering or complete a call back request to speak to a learning specialist.

 

Agenda

Day 1: The Cash Money Market

Session One: Overview
  • What the money market does: liquidity and risk management
  • Distinguishing the money and capital markets
  • Primary & secondary characteristics
  • What drives rates of return
  • The role of the Central Bank and monetary policy
  • The depo market and the role of LIBOR & Euribor
    - How Libor is calculated
    - The shortcomings in Libor exposed by the 2008 Financial Crisis
    - Market conventions and calculations
    - How is the overnight market different?
          Overnight rates & indices (e.g. EONIA®; Fed funds rate)


Exercise: Libor computations

Session Two: Traditional Cash Instruments
  • Types of instruments:
    - Discount v interest bearing
    - Secured v unsecured borrowing and lending
    - The quoted discount rate v the true effective rate
    - Credit, liquidity and other drivers
  • The concept of “marketable” securities
  • The Treasury Bill Market
    - T-Bills as a source of government funding and monetary policy
    - Quotation of US & UK T-Bills
  • The Certificate of Deposit (CD) market
    - Who issues and why?
    - Understanding the cash flows
    - Calculating a holding period return
    - Market regulation following the Financial Crisis
  • The Commercial Paper (CP) market
    - US & Euro Commercial Paper
    - Quotation methodologies
    - Calculations
    - Why use CP issuance programmes


Exercise: Calculating holding period returns

Day 2: Securitised Funding

Session One: Repo
  • The fundamentals of repo markets
  • Importance of the market following the financial crisis
  • What collateral is eligible?
    - General (GC) and specific (SC) collateral; rights of substitution
  • The mechanics of repo agreements
    - Cash v security driven transactions
    - Repo v reverse repo
  • Comparison of alternative repo mechanisms
    - Classic repo v buy/sell-back
    - Securities lending
    - Basic repo mathematics: Price and interest calculations
  • Identifying and managing the risks in repo transactions:
    - Credit & liquidity exposure on repo
    - Collateral management
         Margin ‘haircut ’ agreements
         Custody of collateral: Bilateral, hold in custody (HIC), tri-party repo structures

Case study: Calculating the cash flows on a standard repo transaction

Session Two: Uses & Applications of Repo
  • Funding trading positions with repo; advantages and constraints
  • Short selling
  • Matched book trading
  • Yield enhancement trades:
    - Riding the yield curve
    - “Figuring the tail”
    - Understanding the “bet”


Case study: “Figuring the tail” in a yield curve trade

Day 3 : Money Market Derivatives

Session One: Money Market Derivatives: FRAs & STIRS
  • Deriving a forward interest rate using depos
  • The forward yield curve
  • What has changed since the financial crisis
  • Forward Rate Agreements
    - Defining the terms and cash flow dates
    - Using the settlement formula to lock-in a forward borrow/lend rate
    - Marking-to-market a FRA
  • Hedging with FRAs, hedged rates, imperfections
  • Creating synthetic loans & deposits with FRA’s
  • Exchange traded forward rates: Short-term interest rate futures contracts
    - Understanding the contract specification
    - Creating longer-term rates: Packs & bundles
  • Market structure: Changes since the financial crisis


Case study: Hedging cash exposures with FRAs and calculating hedged costs of borrowing or lending

Session Two: Money Market Swaps
  • Definition & mechanics of swaps
  • Overnight Index Swaps (OIS):
    - Mechanics
    - Creating synthetic interbank borrowing/lending exposures
    - Importance following the financial crisis
  • The function of interest rate swaps
  • Types of swap including basis swaps
  • Currency swaps v FX swaps
  • Relationship between STIR futures and IRS
  • Next generation swaps: The “futurization” of swaps

Case study: Calculating the cash flows of a OIS

Day 4: The FX Market

Session One: The Spot FX Market
  • Market organization
  • Quoting spot FX rates
  • Indirect v direct quotes
  • Market conventions
  • Reciprocal rates
  • Calculating the cross rate
  • Managing and monitoring the FX spot book: Position keeping


Case study: 
Calculating cross rates
Managing a spot book

Session Two: The Forward FX Market
  • Calculating the outright forward rate and forward points
    - Value dates
    - Understanding where the forward rate comes from
    - Premium v discount
  • The FX swap market and how swap rates are calculated
    - Why banks use forward swaps rather than outright forwards: hedging outright forward transactions
    - Understanding the sensitivity of FX swaps to changes in rates
    - “Historic rate” rollovers explained
  • Using FX swaps for funding purposes
  • Short dates
    - Introducing the terms
    - Calculating an FX swap over today and tom
    - Calculations
  • Marking-to-market outright forwards and FX swaps
  • Forward-forward transactions
  • Time options explained with calculations
  • Non-deliverable forwards (NDF’s)

Case study: Calculating forward points; marking-to-market an outright forward; using time options

Session Three:  Risks in Foreign Exchange
  • Credit risk and “market replacement”
  • Delivery (Herstatt) risk
  • Credit mitigation techniques:
    - Netting
    - Continuous linked settlement (CLS)
End of Course
Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product