As he assumes the reins of the Global FX Committee, Reserve Bank of Australia deputy governor Guy Debelle talks to Colin Lambert about the impact of the FX Global Code and the importance of maintaining momentum as the GFXC seeks to broaden its reach.Read More
Monthly Archives: July 2019
China Opens Up Finance Sector to More Foreign Investment – Agence France-Presse
China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the United States.
Philip Hammond has told the BBC he intends to resign as chancellor if Boris Johnson becomes the UK’s next PM.
- Britain is About to be Humiliated — I Prefer to Resign: Gauke – The Times
- UK Business Chief Says New Premier Must Restore Confidence – Bloomberg
- UK Minister Duncan Quits Before Johnson Becomes No-Deal Brexit PM – Reuters
Italy’s fractious coalition partners are gearing up for a showdown this week that is likely to determine if the government will collapse, triggering autumn elections, or survive to the end of the year.
Chairman Jay Powell treads cautiously in supporting US economy.
- Boston Fed’s Rosengren Says Recent Economic Developments Have Been Positive – Wall Street Journal
- Powell Seeks a Cure for the Disease of Low Inflation – Financial Times
Central banks world-wide are poised to unleash some of the most aggressive monetary stimulus since the financial crisis a decade ago.
Prime Minister Shinzo Abe’s ruling Liberal Democratic Party and allied forces fell short of a critical two-thirds majority of the 245-seat Upper House in Sunday’s election, according to final media tallies — a significant setback in their bid to revise the nation’s postwar Constitution.
- US Reiterates Commitment to Alliance After Election, but Sticky Bilateral Trade Talks Await Abe – Japan Times
- Japan PM Abe: Won’t Hesitate to Take All Steps Flexibly vs. Downside Economy Risks – Reuters
Technology has been a huge enabler for the FX industry but it has brought challenges – one such being what can only be described as a false picture of liquidity in the market at any given time.
China’s second-quarter GDP slowdown has more to do with the government’s debt crackdown than the US president’s efforts. Given China’s huge contribution to global GDP growth, any decline will adversely affect all economies.
The adage in financial markets is ‘do not fight the central bank’. But can central banks fight the US president? The Swiss National Bank may be about to find out.
In this week’s podcast the Congressional hearings on Facebook’s cryptocurrency, FX turnover and unfair dismissals are firmly in focus.
Dealers, who strategically supply liquidity to traders, are subject to both liquidity and adverse selection costs. While liquidity costs can be mitigated through inter-dealer trading, individual dealers’ private motives to acquire information compromise inter-dealer market liquidity.
The Commodity Futures Trading Commission has announced that US District Court for the Southern District of Texas entered judgment against defendant Kelvin Ramirez in a CFTC enforcement action that found that he had fraudulently solicited and misappropriated funds from clients in a forex trading scheme.
Slow, inefficient and high-handed are all epithets flung at the UK financial watchdog.
The Securities and Exchange Commission is expected to extend an exemption that allows US brokers to sell research to European fund managers under the EU’s Mifid II regime that came into force last year.
St. Louis Fed Chief James Bullard reportedly views cryptocurrencies as part of a global currency competition that is ultimately unhealthy.
In an ongoing issue of cryptocurrency safety due to its lack of regulation, St. Louis Fed President James Bullard raised concerns Friday about the rise of cryptocurrencies, uniting with other key economic and political officials who have questioned the fledgling platforms as Facebook prepares to launch its “Libra” digital token.
Benoit Coeure, a board member of the European Central Bank, said that Facebook’s Libra coin will not launch until global regulators are satisfied.
Chair of the House of Commons’ Digital, Culture, Media and Sport Committee is worried about the launch of Libra.
Technology provider Caplin has announced the addition of cryptocurrencies to its range of technology components for multi-asset trading.
Bridgewater’s flagship fund suffered one of its worst first-half performances in two decades this year after being wrong-footed by rebounding markets.
South Korea’s Hyundai Motor Co on Monday posted its steepest quarterly net profit gain in over seven years, as a weaker local currency helped lift US income, while new models boosted domestic sales.
The bond trading platform’s April IPO lifted banks in Q2 — but its long-term success raises questions about their place in fixed income markets.
When Mario Draghi speaks on Thursday, the market will be hanging on his every word.
Trading in crude oil options and futures surged last week as market participants prepared for Mexico’s annual oil hedging program, in which the country buys as much as $1 billion in contracts to protect its oil revenues.
While the trade war, political uncertainties in the US and lower interest rates have hit sentiment surrounding the US dollar, risks in Europe and the prospect of higher oil prices could trigger a flight to the US currency.
The pound edged lower on Monday, with investors holding on to their hedges against further weakness ahead of the result of the Conservative party’s leadership election on Tuesday, which will decide Britain’s next prime minister.
Oil prices rose nearly 2% on Friday as tensions brewed again in the Middle East after a US Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude.
Nobody can know with any degree of certainty whether we are headed soon to a destructive world currency war in which countries compete with to weaken their exchange rates to gain an unfair competitive advantage.
The chance that Britain will leave the European Union without a deal is the highest since October 2017, economists polled by Reuters say, as arch-Brexiteer Boris Johnson looks set to take over as prime minister next week.
Italian Deputy Premier Matteo Salvini has asked President Sergio Mattarella for a meeting which may take place Friday, according to an official who spoke amid speculation that the League leader could pull the plug on the populist government.
German Chancellor Angela Merkel said on Friday that Europe’s largest economy was in a “somewhat more difficult phase” after a decade of growth, adding that gave grounds to try to stimulate the domestic economy.
Japanese Foreign Minister Taro Kono summoned South Korea’s ambassador on Friday in a deepening diplomatic dispute over compensation for Korean wartime forced labor that threatens global supply of memory chips and display screens.
Thailand’s new finance minister said he will not interfere in the central bank’s monetary policy decisions and will let it handle the strengthening baht currency.
The Commodity Futures Trading Commission has issued an Order filing and settling charges against Swapnil Rege, a former portfolio manager for Connecticut-based hedge fund Marinus Capital registered with the CFTC as a commodity pool operator, for fraudulently mismarking swap valuations to artificially inflate the profits of his employer’s trading book in order to obtain an increased performance bonus.
UK financial markets regulator says boards should be asking themselves: ‘what is the worst thing that can go wrong’.
The career of the next European Central Bank chief shows the institution is getting a diplomat and negotiator, not a technocrat or economist.
US Commodity Futures Trading Commission chairman Heath Tarbert has announced appointments to key executive leadership positions at the CFTC.
Regulatory fears over digital assets are narrow, focusing on consumer protection.
Bitcoin and cryptocurrencies have divided the traditional financial industry and economists, with some arguing bitcoin and crypto is incompatible with the current system and others more open to the new technology.
The most newsworthy Trump rants almost invariably felt improvised, emotional and reactive. However, the historic series of tweets that constituted the first-ever public comment on cryptocurrencies by a sitting US president didn’t seem to fit the same mould.
Bitcoin has retaken $10,000 today following a moderately volatile month.
As Deutsche Bank AG and BNP Paribas SA sort out a deal on servicing the German lender’s hedge-fund clients, one of the prizes at stake is the Asian business.
Societe Generale is now supporting Eurex FX futures, from clearing to trading.
The 2019 algorithmic trading survey finds that brokers are stepping up to the plate in the post-MIFID II landscape to provide consistent execution to hedge fund firms that are more knowledgeable and discerning than ever before.
JP Morgan is confident that high-frequency traders will be able to stay in business and find new foreign exchange prime brokers following Citi’s decision to give 90 days’ notice to the largest electronic market-makers in currencies.
The dollar extended its losses against the euro, yen and other major currencies as remarks from New York Federal Reserve President John Williams increased bets the central bank would lower interest rates at month-end.
US growth and bond yields have converged towards those of the rest of the world this year. But there has been no reversal of the US dollar’s 2018 strength, merely a slowing of its appreciation.
Sterling had gained 1% on vote to block no-deal Brexit and Barnier comments.
Investors are, belatedly, catching up with the real risk that US authorities will try to weaken the dollar.—>
Central banks are currently embroiled in a covert currency war which is causing stagnation in foreign exchange markets, according to Thanos Vamvakidis, the global head of G-10 FX strategy at Bank of America Merrill Lynch.
- Currency Intervention: How Would the US Do It, and Would It Work? – Financial Times
- Wall Street Firms See Increased Chance That Trump Takes Action to Weaken the Dollar – CNBC
Get ready for a humdinger of an economic shock. That in any case is what policymakers at the Bank of England and the Treasury are doing.
With the first U.S. interest rate reduction in a decade expected later this month, two Federal Reserve policymakers sketched out arguments on how deep the cut should be, even as a third said she needs more data before being ready to sign on at all.
- Powell Maintains Fed Pledge to Act to Sustain US Expansion – Bloomberg
- Betting Man Kyle Bass Wagers Fed Policy Will Turn Japanese – Financial Times
Germany’s Ursula von der Leyen secured European parliamentary approval on Tuesday to become the first female European Commission president on a platform of a greener, fairer and rule-based Europe.
China’s holdings of US Treasuries including notes, bills and bonds fell by US$2.8 billion in May to US$1.11 trillion. The dip in May was the third consecutive month of declines, leaving China’s holdings at the smallest since May 2017.
The United States and Japan are working on a trade deal involving agriculture and autos that could be agreed by President Donald Trump and Prime Minister Shinzo Abe when they meet in New York in September, three industry sources familiar with the discussions said.
France’s finance minister said the post-war international monetary order needed to be reinvented or become increasingly dominated by China.
Australia’s banking watchdog vowed to be tougher with the entities it oversees but needs more funds to carry out its work, its chairman said, after a government report recommended the regulator be more forceful and less discreet.
International Monetary Fund chief Christine Lagarde submitted her resignation from the global crisis lender on Tuesday, citing more clarity about her nomination to lead the European Central Bank as European legislators approved a new top bureaucrat.
Regulators have been pushing banks to ensure they have appropriate controls in place around the use of personal devices.
The euro risk-free-rates working group said participants should “avoid entering into new contracts referencing Eonia”.
The cryptocurrency market took a beating on Tuesday with bitcoin losing over 10% in value after US lawmakers grilled Facebook on its cryptocurrency plans, as political and regulatory scrutiny of digital coins intensifies.
- Key Takeaways from Day One of the Libra Hearings – Profit & Loss
- Why Facebook’s Libra Cryptocurrency has Banks and Regulators Scrambling to Respond– South China Morning Post
US President Donald Trump’s tweet attacking bitcoin highlights his increasing interest in controlling global currency markets — an interest that could create a “new world order” in foreign exchange.
Finance officials from the Group of Seven rich democracies will weigh risks from new digital currencies and debate how to tax tech companies like Google and Amazon when they meet at a chateau north of Paris.
Investors got a reminder that the market infrastructure for trading cryptocurrency is still under construction.
Hedge funds and other big traders are betting that bitcoin will fall, even as the digital currency has risen above $10,000 on a new wave of crypto-optimism.
Commodity Trading Advisors posted a 1.59% return in June, according to the Barclay CTA Index compiled by BarclayHedge.
Ongoing market volatility stemming from Brexit, trade wars, and other supply chain disruptions resulted in $23.39 billion in foreign exchange losses for publicly traded North American companies during the first quarter of 2019, according to the new Kyriba Currency Impact Report.
Global macro, the hedge-fund style that made George Soros and Alan Howard famous, is struggling to recover from a dire 2018 — with one investor lamenting that top funds are “just not there any more”.
Stefan Simon advised the bank on Libor scandal — now he is its head of regulation.
Concerns about the power of the major technology companies echoed across the nation’s capital on Tuesday, with politicians in both parties demanding more regulatory scrutiny of the tech giants’ reach and plans for expansion.
Who does the European Central Bank work for? It sounds like an absurd question, but the market finds itself in an absurd situation. The soft patch in Europe has investors clamouring for the ECB to act — yet not one of those same investors believes interest rate cuts or quantitative easing will have a beneficial impact.
Thailand’s real interest rates are low compared with those of its regional peers, so cutting the benchmark rate may not have much impact, the central bank said.
Two controversial departures of high-ranking technocrats in the space of three days, one in Ankara, the other in Mexico City, have served as reminders of the high-risk nature of investing in emerging markets.
A full-blown currency war where major central banks and governments, including the US, deliberately weaken their currencies can no longer be ruled out, Pacific Investment Management Co.’s global economic adviser Joachim Fels wrote in a report.
China’s economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.
The main US derivatives markets regulator has agreed to rein in its rules for regulating overseas clearing houses, in a move Washington hopes will ease a stand-off with counterparts in Europe. A proposal was passed unanimously at a meeting of the Commodity Futures Trading Commission in Washington late on Thursday. By a narrow vote, the five commissioners also agreed to let overseas clearing houses that are exempt from US standards accept business from US citizens.Read More
The Global Foreign Exchange Committee (GFXC) has released a new illustrative example on “cover and deal” trading activity to be included in the FX Global Code in a future update, which highlights so-called “under-filling” of client orders using the last look window. The negative example highlights that a participant accepting an order on the understanding that it is operating in “cover and deal” mode and therefore not assuming any market risk, cannot execute the full amount with its own liquidity provider and then under-fill the client because the market has moved.Read More
Interest rate swaps trading platform trueEX will close in less than a fortnight, reinventing itself as a cryptocurrency derivatives exchange. The platform’s exit leaves the swaps market in the hands of incumbents: broker-run platforms continue to dominate interdealer trading of interest rate swaps, while dealer-to-client trading will take place on Bloomberg and Tradeweb.Read More