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Fed Digs Into Clearinghouse Risks After JP Morgan Raises Alarms – Bloomberg

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Fed Digs Into Clearinghouse Risks After JP Morgan Raises Alarms – Bloomberg
Federal Reserve Governor Daniel Tarullo is quizzing Wall Street after big lenders and asset managers said clearinghouses pose their own threats, said three people with knowledge of the discussions. Among the concerns raised by financial firms: Relying on clearinghouses shifts risk to just a handful of entities, and the collapse of one could lead to uncapped losses for banks.
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Robot Trades Inflamed Then Soothed Markets After Franc Shock

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Robot Trades Inflamed Then Soothed Markets After Franc Shock – Bloomberg

High-frequency traders may have at first exacerbated currency swings after the Swiss National Bank’s surprise decision to drop its euro cap, before helping to calm the market faster than would otherwise have been the case according to central bankers attending the Global Meeting of Foreign Exchange Committees in Tokyo.

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Has Someone Found a Clever Edge in Trading Major Releases? – Profit & Loss (subscription)

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Has Someone Found a Clever Edge in Trading Major Releases? – Profit & Loss (subscription)
On Tuesday – for the third time in a row – there was suspicious price action ahead of the Reserve Bank of Australia’s monetary policy announcement. I am confident there is no leak from the RBA; indeed several sources familiar with the matter say they believe a similar move happened ahead of last Friday’s employment report, which would suggest that someone is ahead of the game somehow. It would not be the first time that a firm with what it believes is an edge in FX markets starts in local markets before angling for bigger fish.
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Fast FX Moves Raise Liquidity Worries – Financial Times

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Fast FX Moves Raise Liquidity Worries – Financial Times (subscription)
In recent months a series of dramatic and unforeseen intraday fluctuations – even in popular and widely traded currencies – has led FX investors, bank traders and analysts to question the mechanics of the market. At its heart is a question of whether the vast over-the-counter market is in a cyclical decline or just the latest to be affected by new technology and tough regulation enforcing change. The broader concern is that declining liquidity will fuel more sudden FX moves and destabilise the market.
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