US DATA: OCC Q1 Derivs report says banks had trading revenues of $7.0b,
178% higher than in Q4:11, but -5% YOY — these revenues were seasonally
strong. “Client demand for risk management products was healthy,
supported by a generally positive macro environment at the beginning of
the year. Trading revenues were strong for all sectors except credit.
Int rate and fx revenues are the drivers of bank trading revenues, over
time representing 90% of total. “Credit trading revenues are much
smaller, and more volatile” OCC net current credit exposure (NCCE) was
-$53b, or -12% to $377b and OCC said “the more favorable risk and
economic environment outlook in Q1 pushed interest rates higher and
credit spreads lower. Each of these results in lower fair values of
derivatives contracts and therefore lower credit exposures.”