Scotiabank’s World Head Of FICC On Staying Agile In A Unstable Market – Market Evaluation & Knowledge

Stephanie Larivière, managing director and world head of Fastened Revenue, Currencies, and Commodities (FICC) Gross sales at Scotiabank—which was named the World winner of Finest FX Derivatives Supplier—explains how a client-first philosophy and superior structured options allow companies to proactively handle uncertainty, successfully diversify danger, and preserve agility in fast-moving forex markets.

World Finance: Final 12 months started with elevated G7 international trade volatility pushed by US election outcomes, adopted by a spike in volatility tied to the Trump administration’s tariff bulletins. Implied volatility ultimately subsided. Towards this backdrop, how has shopper demand developed for structured FX options and derivatives that mix FX with rate of interest and different exposures?

Stephanie Larivière: Tariffs and the ensuing uncertainty round worldwide commerce had been prime of thoughts for shoppers all through 2025. Within the first half of the 12 months, the US Greenback Index vaulted again towards the highs we noticed throughout the pandemic, and there have been fears that it might be pushed even greater as we grappled with the prospect of a world recession, given the US administration’s push for elevated world tariffs. We noticed elevated curiosity in hedging and the necessity for structured options from shoppers in these early months as US greenback patrons nervous a few sustained surge within the index and the influence on their money flows. 

The outlook for exports to the US stays no much less murky shifting ahead. In consequence, shopper demand for structured FX options has solely elevated. Shoppers have targeted on value administration and have integrated flexibility into hedging applications by way of options-based options. By defending present revenue margins whereas retaining the flexibility to take part in favorable strikes in FX markets, these methods have allowed shoppers to stay agile and adapt rapidly to altering market situations. 

GF: Have you ever noticed forex diversification methods or elevated exercise in non-dollar crosses out of your buyer base?

Larivière: The unsure outlook for worldwide commerce and dissenting views on the Federal Reserve Open Market Committee have led to elevated demand from shoppers to guard in opposition to additional potential greenback weak point. As we settle right into a lower-volatility regime, we’ve seen curiosity in expressing views in non-dollar crosses and a few rotation into worldwide and emerging-market fairness publicity. 

One instance was a strengthening Mexican peso as shoppers returned to expressing views by way of carry trades. We have now additionally seen a weak Canadian greenback in opposition to different majors, pushed by uncertainty over Canada’s funds, the scale of the Carney authorities’s deficit, and questions on how the brand new US and Canadian administrations will work collectively. That mentioned, the US greenback stays the dominant base forex in most commodities and forex buying and selling.

GF: OTC rate of interest by-product volumes have surged, almost doubling for euro-denominated contracts and rising considerably for yen- and sterling-denominated contracts. How are shoppers adapting their methods in response to this elevated exercise?

Larivière: There are a few elements at play right here. Higher volatility in charges has brought on volumes to surge. Central banks had been additionally extra in play over the second half of final 12 months, which additional contributed to this phenomenon. Each elements are responses to overexposure to the greenback and a shift to hedge in opposition to a few of that publicity. We might see this proceed to extend as bigger institutional names right-size their publicity to the US.

GF: Are shoppers’ expectations altering round reporting transparency, multi-currency liquidity, and entry to personalized derivatives merchandise?

Larivière: Shoppers are searching for bespoke hedging options constructed on a full suite of derivatives merchandise throughout asset lessons. These custom-made options are tailor-made to their distinctive firm necessities, permitting shoppers to specific market views whereas hedging underlying exposures. Along with the elevated flexibility these merchandise present, shoppers count on proactive recommendation that leverages experience from gross sales, buying and selling, technique, and structuring groups.

At Scotiabank, we try to supply considerate, well-coordinated concepts that assist shoppers navigate the uncertainty of working world companies throughout borders in an unsure worldwide commerce atmosphere.

GF: What traits do you count on will form FX and derivatives markets this 12 months, significantly relating to volatility, market construction, and regulation?

Larivière: The Fed has launched into a chopping cycle, although it stays unclear how deep the cuts shall be. If yields proceed to say no, we count on elevated strain on the greenback, resulting in greater volatility. The FX market usually grows during times of volatility; the shift away from yield-enhancement methods towards a pickup in volatility ought to drive a rise in FX in 2026.

One other theme we’re watching is the shifting regulatory panorama for digital property. Regulatory adjustments that favor these property will facilitate extra curiosity and funding within the merchandise.