Scotiabank’s Global Head Of FICC On Staying Agile In A Volatile Market

Stephanie Larivière, managing director and world head of Fastened Revenue, Currencies, and Commodities (FICC) Gross sales at Scotiabank—which was named the Global 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 keep agility in fast-moving forex markets.

Global Finance: Final yr started with elevated G7 overseas trade volatility pushed by US election outcomes, adopted by a spike in volatility tied to the Trump administration’s tariff bulletins. Implied volatility finally subsided. In opposition to this backdrop, how has consumer demand advanced 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 high of thoughts for shoppers all through 2025. In the primary half of the yr, the US Greenback Index vaulted again towards the highs we noticed throughout the pandemic, and there have been fears that it will be pushed even greater as we grappled with the prospect of a worldwide 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 consumers frightened a few sustained surge within the index and the affect on their money flows. 

The outlook for exports to the US stays no much less murky shifting ahead. In consequence, consumer demand for structured FX options has solely elevated. Purchasers have targeted on value administration and have integrated flexibility into hedging applications by way of options-based options. By defending current revenue margins whereas retaining the power to take part in favorable strikes in FX markets, these methods have allowed shoppers to stay agile and adapt shortly 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 towards additional potential greenback weak spot. 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’ve got additionally seen a weak Canadian greenback towards different majors, pushed by uncertainty over Canada’s price range, the dimensions of the Carney authorities’s deficit, and questions on how the brand new US and Canadian administrations will work collectively. That stated, 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, practically 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 components at play right here. Higher volatility in charges has triggered volumes to surge. Central banks had been additionally extra in play over the second half of final yr, which additional contributed to this phenomenon. Each components are responses to overexposure to the greenback and a shift to hedge towards 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: Purchasers are in search of bespoke hedging options constructed on a full suite of derivatives merchandise throughout asset lessons. These personalized options are tailor-made to their distinctive firm necessities, permitting shoppers to specific market views whereas hedging underlying exposures. In addition to the elevated flexibility these merchandise present, shoppers anticipate proactive recommendation that leverages experience from gross sales, buying and selling, technique, and structuring groups.

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

GF: What developments do you anticipate will form FX and derivatives markets this yr, significantly concerning volatility, market construction, and regulation?

Larivière: The Fed has launched into a chopping cycle, although it stays unclear how deep the cuts can be. If yields proceed to say no, we anticipate elevated stress on the greenback, resulting in greater volatility. The FX market sometimes grows in periods 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 belongings. Regulatory modifications that favor these belongings will facilitate extra curiosity and funding within the merchandise.