More Pain for Mrs Watanabe

Top Headlines

 More Pain for Mrs Watanabe – Profit & Loss

The legions of Japanese retail investors holding onto the carry trade, dubbed the Japanese housewives or Mrs Watanabes, are facing more pain today – a Japanese holiday – as USDJPY slumps to a new low for the year, indeed its lowest level since October 2014.


Japan’s Abenomics ‘Dead in the Water’ after US Currency Warnings – Daily Telegraph

The Bank of Japan has been forced to retreat from further emergency stimulus after a blizzard of criticism at home and abroad, and warnings that extreme measures may now be doing more harm than good.

Currency Trading’s 20% Drop Raises Specter of Flash-Crash Future – Bloomberg

The world’s biggest financial market has shrunk by 20% during the past year and a half.

Swiss National Bank’s Jordan Says Still Room for Policy Manoeuvres – Reuters

The Swiss National Bank has further room to manoeuvre in its monetary policy and will not shy away from using unconventional measures if that is in the country’s interests, its chairman said on Friday.

Exclusive: EU would divorce UK before any new relationship – Reuters

The European Union would insist on completing a swift divorce with Britain before starting to forge any new relationship if UK voters decide in June to leave the 28-member bloc.

Trump Attacks Clinton on Gender, Risking Backlash From Women – Reuters

Republican presidential front-runner Donald Trump waded into politically risky territory this week when he accused Democrat Hillary Clinton of exploiting her gender to win votes and said she would have little support if she were not a woman.

China’s Central Bank Raises Yuan Fixing by Most Since July 2005 – Bloomberg

China’s central bank responded to an overnight tumble in the dollar by strengthening its currency fixing the most since a peg was dismantled in July 2005.

BNP Hires Goldman Face – Profit & Loss

Regulatory News

BoE Cautions on Deposits with Small Banks – FT (subscription)

Local authorities and other uninsured depositors should be more careful about keeping their money at small financial institutions, the Bank of England has warned, as it prepares to introduce new bank windup rules.

Company News

Look Out Corporate America: After Apple Sale, Carl Icahn Is Armed And Dangerous – Forbes

Carl Icahn’s announcement on Thursday that he had sold out of his Apple position should strike a little bit of fear in the hearts of executives and directors across America.

Robert Linton, Steadfast ’80s Wall Street Banker, Dies at 90 – New York Times

Robert E Linton, a prominent Wall Street executive who led the swashbuckling investment bank Drexel Burnham Lambert in the years before it imploded in scandal but who was largely untainted himself, died on Tuesday in Manhattan.

RBS losses double to nearly £1bn – fastFT (subscription)

Royal Bank of Scotland has reported doubling of losses to nearly £1bn following a large payment to the government to restart dividends, a day after warning of a delay to offloading Williams & Glyn.

Head of Deutsche Bank Integrity Committee to Resign – FT (subscription)

Georg Thoma is to resign from Deutsche Bank’s supervisory board after coming under fire from other board members in a battle over how to deal with the German bank’s past scandals.


Danske Beats Estimates as Bank Weathers Negative Rates – Bloomberg

Danske Bank A/S reported profit that beat analyst estimates last quarter as Denmark’s biggest bank was able to navigate through negative interest rates and volatile markets.

Market Savvy

Dollar Sinks as Oil Near $46; Asian Stocks, Europe Futures Fall – Bloomberg

The dollar dropped against all of its G-10 peers after weaker-than-expected U.S. economic growth dimmed prospects for a Federal Reserve interest-rate hike. Asian stocks fell with European equity index futures and oil traded near $46 a barrel.

Why the Bank of Japan Held Fire for Another Day – WSJ (subscription)

The BOJ’s lack of action caught markets by surprise, but doesn’t mean it is done easing

Saudis to Push Oil Output Higher but Won’t Flood Market – Reuters

Saudi Arabia’s oil output will edge up close to record highs in coming weeks to meet summer demand for power but is unlikely to be pushed to the limit and flood global markets, Saudi-based industry sources said.

Silver Prices Near One-Year High; Fundamentals Take Over – News.Markets

Rather than simply adjusting to the gold price, it seems the supply dynamics for this year are now helping the metal too.

ECB’s Praet: Rate Cut Not Expected in Near Future – Reuters

The European Central Bank would need the inflation outlook to worsen significantly for another rate cut, but pushing rates deeper into negative territory remains an option, Peter Praet, the bank’s chief economist told a Spanish newspaper.


France Picks Up as Investment Boosts Growth to Fastest in a Year – Bloomberg

The French economy expanded faster than economists forecast in the first quarter, powered by increasing corporate investment and a rebound in consumer spending.

Press Releases

SEC Seeks Public Comment on Plan to Create A Consolidated Audit Trail


Bank of Japan Stuns Market by Holding Off on More Stimulus

Top Headlines

 Bank of Japan Stuns Market by Holding Off on More Stimulus – Bloomberg

The Bank of Japan held off on expanding monetary stimulus, as Governor Haruhiko Kuroda and his colleagues opted to take more time to assess the impact of negative interest rates.


Forget Unfair Dismissal…Whistle Blowing is the New Black – Profit & Loss

If losing a series of cases to former FX traders wasn’t enough, the banking industry faces increased pressure from a growing number of traders seeking whistle blower status as part of a claim for unfair dismissal.

Forget June. The Fed isn’t likely to hike interest rates until December – CNBC

The Federal Reserve left interest rates unchanged — no surprise there — moving the focus to the next Federal Open Market Committee meeting on June 14-15.


Kiwi rises after RBNZ stands pat – fastFT (subscription)8 hours ago

The Kiwi dollar jumped on Thursday after the Reserve Bank of New Zealand kept interest rates unchanged – although the central bank made it clear that further easing could yet be on the cards.

UK Becomes Second-Largest Offshore Renminbi Clearing Centre – FT (subscription)

The UK unseated Southeast Asian financial hub Singapore as the largest clearing centre for the renminbi outside of greater China in March, according to Swift’s RMB tracker.

The European Union always was a CIA project, as Brexiteers discover – Daily Telegraph

Brexiteers should have been prepared for the shattering intervention of the US. The European Union always was an American project.

EU referendum: Economists launch new pro-Brexit report attacking EU as an “evil” customs union – City AM

A group of economists has struck back against what they see as the one-sided tone of the EU referendum debate today, with a new report that outlines the potential benefits of leaving the EU.

Brexit shock would cost Britons a month’s salary by 2020, OECD warns – Daily Telegraph

A British exit from the EU would trigger a “major negative shock” that would act as a “tax” on growth and could even spark the disintegration of the whole bloc, a top think-tank has warned.

Tusk rejects Tsipras’s summit request but Dijsselbloem says Eurogroup may be held soon – Kathimerini

Prime Minister Alexis Tsipras is due to speak to European Council President Donald Tusk again on Thursday after the latter rejected his call on Wednesday for a leaders’ summit to discuss Greece’s bailout talks…

CLS Volumes Down 3.5% in March – Profit & Loss

Average daily input value of trades submitted to CLS was $4.69 trillion in March, down 3.5% compared to February.

Regulatory News

Industry to Work Together Over New MiFID Product Rules – FT Adviser

Fund groups, platforms and intermediaries are collaborating to reduce the burden of new Mifid II product rules announced earlier this month.

Company News

Schroders Assets Rise to Record Level Despite New Business Halving – Daily Telegraph

Schroders’ assets under management grew to a record level of £324.9bn, despite its net incoming business halving to £2.7bn in the first quarter as volatile markets weighed on client demand.

Lloyds First-Quarter Profit Almost Halves After Bond Buyback – FT (subscription)

Lloyds Banking Group has almost halved profit after the lender bought back more than £3bn of expensive bonds from investors in the first quarter.

The bank, which is 9 per cent owned by the government, posted a pre-tax profit of £654m in the first three months, down from £1.2bn a year ago.

Deutsche Bank Profit Beats Expectations – WSJ

Deutsche Bank AG said Thursday that first-quarter net income beat analysts’ expectations despite being pressured by difficult market conditions and the impact of the bank’s decision to exit certain areas.

IPO Market Torpid Worldwide: Ernst & Young – News.Markets

Fewer companies have listed globally during the first three months of 2016 than during any first quarter since 2009, according to a report compiled by Ernst & Young.

Sorrell Defends £60m Bonus as WPP Remains on Track – The Times (subscription)WPP appears on track to meet its full-year target of 3 per cent sales growth across its international marketing operation with an increase in like-for-like net sales of 3.2%.

Zuckerberg Seeks to Tighten Grip as Facebook Results Surge – FT

Facebook has proposed an arrangement that will allow Mark Zuckerberg to maintain long-term control while pursuing his charitable giveaway, by creating a new class of stock with no voting rights.

Market Savvy

Special Report: Is FX The Next Industry to be Disrupted by FinTechs? – Profit & Loss

The next edition of Profit & Loss magazine will be featuring a fintech special report looking at how these firms are changing the landscape of financial services and why they are increasingly targeting the FX market.

Crude Oil Prices Take a Breather After Hitting 2016 Highs – Reuters

Crude futures pulled back from 2016 highs on Thursday as traders locked in profits after April’s sharp rally, but analysts said falling U.S. production, strong investor appetite and a weakening dollar could push prices higher soon.

China Trades Enough Cotton in One Day to Make Jeans for Everyone – Bloomberg

The equivalent of 41 million bales of cotton traded in a single day on the Zhengzhou Commodity Exchange last week, the most in more than five years and enough to make almost 9 billion pairs of jeans, or at least one for every person on the planet.

South Korea’s President Says Needs to Look at Possible ‘Selective’ QE – Reuters

South Korean President Park Geun-hye said on Thursday there is a need to consider “selective” quantitative easing to provide liquidity where it is needed in light of ongoing structural reforms, media reported.

Elections Get Dirty as Adult Filmmakers Set up Political Action Committee – Reuters

California politics got a bit more racy on Wednesday, as producers and actors in the adult film business said they had formed a political action committee, or PAC, to fight a ballot initiative to require the use of condoms when shooting explicit sex scenes.

Press Releases

Mario Draghi: Interview with Bild

Deutsche Börse AG Posts Further Revenue and Profit Growth in Q1/2016

Monex Group Reports Monthly Consolidated Financial Results (IFRS)

Analysts Confounded (Again) by Economic Data

Top Headlines

Analysts Confounded (Again) by Economic Data – Profit & Loss

Today’s Australian inflation data surprised to the downside, rousing a sleepy Asia FX market from its pre-FOMC slumber.

US Election 2016: Trump Sweeps all Five US States – BBC

Donald Trump has won presidential primaries in all five US states that voted on Tuesday, while Hillary Clinton triumphed in four out of five.

Malaysia Names Zeti’s Deputy as New Central Bank Governor – Bloomberg

Malaysia named central bank deputy governor Muhammad Ibrahim as successor to Governor Zeti Akhtar Aziz when she steps down at the end of the month after 16 years at the helm. The ringgit gained and stocks pared losses.

Plans for Thursday Eurogroup Dropped, Tsipras Set to Ask for Special EU Summit – Kathimerini

Greece and its lenders were unable on Tuesday to reach an agreement on how to line up 3.6 billion euros in contingent austerity measures, leading to plans for an extra meeting of eurozone finance ministers on Thursday being dropped.

New Spain Elections Loom as Coalition Talks Fail – BBC

Spain is set for fresh elections after King Felipe VI announced the failure of the latest round of coalition talks.

Fed Set to Keep Rates Unchanged, May Nod to Ebbing Risks – Reuters

The US Federal Reserve is expected to keep interest rates unchanged on Wednesday as it continues to monitor the impact from weakening global growth but may seek to signal to markets it is determined to resume policy tightening this year.

Regulatory News

Buy Side Voices Concerns Over Impact of Regulation on FX – Profit & Loss

US regulations have failed to improve the FX market in the short-term, according to the buy side representative at a discussion hosted by the Commodity Futures Trading Commission (CFTC) today.

Japan’s FSA Establishes “Panel of Experts on FinTech Start-ups”

Company News

Barclays Misses Forecasts, Speeds up French Business Sales – fastFT (subscription)

Barclays is speeding up the sale of some of its French businesses after missing earnings forecasts for the first quarter of the year.

Apple Suffers First Quarterly Revenue Fall in 13 years – FT (subscription)

A growing preference among consumers for lower-priced iPhones contributed to a significant shortfall for Apple in its latest quarterly earnings compared with Wall Street expectations, according to figures released on Tuesday.

Warning Shot Fired at Citigroup – Bloomberg

Citigroup shareholders had their say on Tuesday, and not surprisingly the attempts by a few insurrectionists to shake things up failed.

Nomura Reports Surprise Quarterly Loss on Slump in Trading – Bloomberg

Nomura Holdings Inc. unexpectedly posted a loss for the first time in more than four years last quarter, as trading income and brokerage commissions dropped and it lost money abroad.

Santander Profit Hit by Slump at Home, Currency Weakness Abroad – Bloomberg

Banco Santander SA, Spain’s biggest bank, reported lower first-quarter profit as revenue slumped in its home market and operations aboard were hit by currency effects.

Market Savvy

Shocker as Pound Rallies – Profit & Loss

For much of this year, the market commentary about Sterling (GBP) has been a good reflection of the debate about whether or not the UK would vote to leave the European Union. In other words, it has been very ‘shouty’ and not particularly that well informed.

Oil prices jump on weak dollar, strong investor appetite – Reuters

Crude oil futures rose around half a dollar on Wednesday and remained near 2016 highs on the back of strong investor sentiment and a weak dollar, although analysts warned this month’s bull-run could soon run out of steam.


Alarm Over Corporate Debt and Stalled Earnings – FT (subscription)

Corporate America is swimming in cash. There is no great news about this, and no great mystery about where it came from. Seven years of historically low interest rates will prompt companies to borrow.

Yen Too Strong at 110 to Dollar, Former Economy Minister Says – Bloomberg

Japan’s former deputy economy minister said the yen was too strong at current levels of around 110 to the dollar, indicating dissatisfaction with the currency’s 8% rise this year amid global economic anxiety.

GPIF to Hedge Yen Exposures

Top Headlines

 GPIF to Hedge Yen Exposures – Profit & Loss

The president of Japan’s Government Pension Investment Fund (GPIF) has said that the fund will use currency hedges to “smooth out” the fund’s exposure to a rising yen.

Pound Shows How Brexit Concerns Are Starting to Look Overdone – Bloomberg

Implied pound volatility falls most since 2015 U.K. election; Speculators’ bets on sterling weakness are highest in 3 years


LCH Appoints FX Heads – Profit & Loss

Clearing house LCH.Clearnet has unveiled two senior executive appointments to its FX business.

On Election Eve for Five States, Trump Rips Cruz and Kasich – Reuters

Republican Donald Trump, on the eve of primary elections in five states that he is expected to sweep, launched blistering attacks on Monday on rivals Ted Cruz and John Kasich for their 11th-hour joint effort aimed at denying him the party’s presidential nomination.

German Parliament to Invite Draghi to Testify on ECB Policy: Sources – Reuters

The German parliament wants to invite European Central Bank President Mario Draghi to explain the bank’s ultra-low interest rates and expansionary monetary policy, sources in the coalition government told Reuters on Tuesday.

El-Erian Says this Week’s Fed Meeting to Set Stage for June Hike – Reuters

Mohamed El-Erian, the chief economic adviser at Allianz SE, said on Monday he expects this week’s Federal Reserve policy-setting meeting to set the stage for a June interest rate hike.

Greece’s State Cash is Rapidly Drying Up Again – Kathimerini

The state’s cash reserves are running low once again. “The more the days go by, the more the pressure grows,” according to one Finance Ministry official, as the absence of funding from the bailout mechanism is starting to have an impact.

Regulatory News

CFTC’s Market Risk Advisory Committee to Meet on April 26, 2016

The MRAC will describe and discuss how well the derivatives markets are currently functioning, including the impact and implications of the evolving structure of these markets on the movement of risk across market participants.

Company News

BP Reports Surprise Profit on Strength in Refining, Trading – Bloomberg

BP Plc reported a surprise first-quarter profit as a stronger-than-expected refining and trading performance helped mitigate the impact of sliding crude prices.

Leicester City: Dirty Dozen or Harvard Case Study? – Bloomberg

This column should begin with a financial disclosure — of the writer’s own ineptitude. For around 20 years, every August I have bet 20 pounds on Leicester City to win England’s Premier League.

StanChart Reports Steep Drop in Q1 Profits – fastFT (subscription)

Standard Chartered has reported a 58 per cent fall in first-quarter profits, leaving investors wondering how long it will take to turn round the emerging markets bank.

Goldman Sachs Drops the Velvet Rope for Savers – WSJ

Goldman Sachs Group Inc., adviser to billionaires and the world’s largest companies, will now accept your couch-cushion money.

Profits at China’s State Firms Fell 13.8% in Q1 – fastFT (subscription)

Investor sentiment toward China may have eased following recent releases of more positive economic data, but returns at state-owned firms aren’t among them.

UK banks’ Recovery From Crisis Lags behind European Peers – FT (subscription)

UK banks are lagging behind their European rivals in their recovery since the financial crisis, and are not expected to close the gap for years — if at all — despite their efforts to cut costs and restructure.

Mitsubishi Shares Slump on Chronic Shoddy Testing – fastFT (subscription)

Shares in Mitsubishi Motors tanked on Tuesday afternoon in Japan following reports the automaker may have used shoddy fuel economy tests since the 1990s.

Market Savvy

China Clamps Down on Commodities Frenzy – FT (subscription)

China moved to clamp down on excessive speculation in commodities on Monday after weeks of frenzied trading boosted prices and ignited fears of another bubble in its domestic markets.

Global Stocks Steady Ahead of Central Bank Meetings – WSJ (subscription)

Global stocks were little changed Tuesday as investors looked ahead to key company earnings reports and central bank meetings later in the week.

Draghi’s Growth Streak Seen Tarnished in Friday Data Splurge – Bloomberg

A suite of euro-area data on Friday will provide Mario Draghi with his first simultaneous dispatches from both fronts in his struggle to boost inflation — showing how he still has a fight on his hands.

Goldman Says China’s Iron Speculation ‘Concerns Us the Most’ – Bloomberg

Goldman Sachs Group Inc. has expressed its concern about the surge in speculative trading in iron ore futures in China, saying that daily volumes are now so large that they sometimes exceed annual imports.

Press Releases

Swissquote Releases Updated Version of Advanced Trader Mobile App

Misys Launches Misys FinCloud

Risk Sharing and Macroprudential Policy in an Ambitious Capital Markets Union – ECB (speech)

Distributed ledger technology – panacea or flash in the pan? – ECB (speech)

Traders 2 Banks 0

Top Headlines


Traders 2 Banks 0 – Profit & Loss

The past 10 days has seen two FX traders successfully win their cases for unfair dismissal against their former employers. As reported exclusively by Profit & Loss…

The Tokyo Whale Is Quietly Buying Up Huge Stakes in Japan Inc – Bloomberg

They may not realize it yet, but Japan Inc’s executives are increasingly working for a shareholder unlike any other: the nation’s money-printing central bank.

Cartel Members Still Under Threat – Profit & Loss

Although the UK’s Serious Fraud Office has declined to lay formal charges against members of the “Cartel” Bloomberg chat room, reports suggest the US Department of Justice has raised the stakes.

China Debt Load Reaches Record High as Risk to Economy Mounts – FT (subscription)

China’s total debt rose to a record 237% of gross domestic product in the first quarter, far above emerging-market counterparts, raising the risk of a financial crisis or a prolonged slowdown in growth, economists warn.

Yellen’s Scope for Summer Rate Hike Widens as ECB Signals a Hold – Bloomberg

Mario Draghi has opened a door. Janet Yellen has to decide whether she wants to walk through.

Speculators have net dollar short positions for first time since May – Reuters

Speculators turned negative on the US dollar this week, with more investors in the global currency market taking short positions against the dollar than long positions, for the first time in nearly a year.

Far-Right Wins First Round of Austrian Presidential Election – The Daily Telegraph

The far-Right moved a step closer to seizing the Austrian presidency on Sunday night, in an election result that will send shockwaves through Europe.

Regulatory News

FCA Issues Warnings on Four Clone Firms – FT Adviser

The Financial Conduct Authority has issued a number of warnings about firms it believes are providing financial services without authorisation. RBS Bourse, Capital Trust Ventures, Andersen Consulting (UK) and Beckett & Cromwell are all firms named by the FCA

 Company News

Reval and Swift Team Up – Profit & Loss

Technology provider Reval has reached an agreement with payments system provider Swift to allow corporate treasury teams using the Reval Cloud Platform for automated cash and liquidity management, to join the Swift messaging network.

Citi Poaches Davison to Head EMEA Financial Institutions Group – fastFT (subscription)4 hours ago

Citigroup has hired Piers Davison, an experienced financial institutions banker based in London, from JPMorgan Chase as part of push to capture more business in the UK and across Europe.

UK’s BHS Expects to Enter Administration, Risking 11,000 Jobs – Bloomberg

BHS Group Ltd. expects to enter administration Monday, a company representative said, putting 11,000 jobs at risk in what would be the biggest U.K. retail collapse since Woolworths Group Plc in 2008.

Market Savvy

Fed Seen Holding Rates this Week with Hike Still on Horizon – Reuters

US Federal Reserve policymakers are expected to hold interest rates steady when they meet this week, but may tweak their description of the economic outlook to reflect more benign conditions, leaving the path open for future rate rises.

The Yen’s Big Week – fastFT (subscription)

Ahead of what could be an interesting few days for the yen, it might be worth reflecting on just how big a week the Japanese currency has just had.


Sterling Hovers Near 6-week high after Obama Intervention – fastFT (subscription)

Sterling has been hovering near a six-week high today after an intervention by US president Barack Obama in the Brexit debate on the weekend caused betting markets to swing towards the UK voting to remain within the European Union.

The Things Economists Know. . . and Don’t Know about Brexit – The Daily Telegraph

Last week we were treated to a fine exhibition of the economist’s art.

Press Releases

Almax Analytics Closes Seed Round

FIA Announces New Members Of Asia Advisory Board