Wheatley’s Departure from FCA Marks Clear Change in Political Climate

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Top Headlines

Wheatley’s Departure from FCA Marks Clear Change in Political Climate – Financial Times (subscription)
What really doomed Martin Wheatley was a change in the political climate. Over the past year, the unspoken fear in London is that that financial re-regulation has gone too far.

Traders Rue Death of Currency Volatility with Returns Wiped Out – Bloomberg
Some of the most violent swings in currency markets during the past five years are showing signs of abating, and that’s bad news for traders seeking to recover from their worst month since 2011.

The Ex-Cable Trader vs The Academic – FX Forwards Are Not a Systemic Risk – Profit & Loss (subscription)
The esteemed Professor Darrell Duffie continues to argue that the deliverable forward FX market contains a huge element of counterparty risk. To some extent of course it does, as all OTC financial markets do, but the Professor conveniently ignores, or in this case plays down, the role of CLS.

Canada to Collateralise Cross-Currency Swaps – Risk Magazine (subscription)
Canada’s central bank will post collateral to its derivatives counterparties for the first time, under new agreements currently being put in place by the country’s finance ministry. The two-way contracts are “expected to provide modest savings to the government, while reducing counterparty exposure,” says a spokesperson for Department of Finance Canada.

Tech-Powered Non-Banks Taking Over US Treasury Trading – Banking Technology
Technology is equipping non-bank market-makers to move into the US Treasury Market, giving them analytics and speed to manage and hedge risk, while enhancing market liquidity.

 

Regulatory News

Dodd-Frank Creators on Wall Street Reform, Five Years Later – Wall Street Journal (subscription)
Bank regulation was transformed by the Dodd Frank law. In an interview, Christopher Dodd and Barney Frank look back at what they wrought.

Esma Moves to Be More Open with Politicians on Mifid II – Financial News (subscription)
Europe’s top markets watchdog has started to offer politicians increased insight into the reform of its trading rulebook after receiving an unusually public reprimand. The European Securities and Markets Authority has released some content to the Parliament in recent days and said that it had held numerous “bilateral” meetings with specific MEPs to provide them with updates on the Markets in Financial Instruments Directive.

Mifid II Increases Burden on Custodians – Financial News (subscription)
While Mifid I was primarily aimed at sellside firms including the likes of investment banks and interdealer brokers, it would be a mistake to be complacent. Mifid II, like many of the regulations introduced since the financial crisis, aims to enhance investor protection, and custodians, as safe keepers of client assets, cannot ignore it.

Barclays Welcome Mat Worn Out as UK Watchdog Visits 186 Times – Bloomberg
FCA visits are much more a part of everyday business for banks now. Requests for information or meetings that may have been met with panic and defence previously are now being viewed as routine.

 

Company News

ICE to Buy FastMatch? – Profit & Loss (free story)
Intercontinental Exchange (ICE) may be close to concluding a deal to buy FastMatch. Sources indicate that a deal is being prepared that would see ICE buy out all three owners of the ECN.

CME and Deutsche Börse Join Blockchain Gang – Financial News (subscription)
Derivatives giant CME Group, Deutsche Börse, Depository Trust & Clearing Corp., EuroCCP, and data provider Markit have joined the growing ranks of industry players looking at distributed ledger technology.

Barclays to Cut 30,000 Jobs in Two-Year Drive to Reduce Costs – The Times (subscription)
Job cuts are likely to affect staff at middle and back office operations, where largest savings are achieved.

Currenex to Launch London Matching Engine and Move to NY6 in US – Profit & Loss (free story)
Currenex plans to launch a matching engine in London and is moving its matching engine in New Jersey into the Equinix NY6 data centre in New York.

Thomson Reuters Launches Data Visualisation App for FX Traders – Profit & Loss (free story)
Thomson Reuters has launched a new application on its Eikon desktop that provides useful information for traders to more quickly isolate value opportunities in the currency markets.

FXCM Reports Volume Increase in June – Profit & Loss (free story)
FXCM has reported that its institutional and retail trading volumes for the month of June were up year-on-year by 0.4% and 43% respectively.

Symphony’s Wall Street Messaging System Aims to Widen Reach – Reuters
Symphony Communication Services, a Wall Street-backed messaging and information start up, is about to start offering its product more widely. The company, which has more than 30,000 users in a “beta” version of its product, will roll out a new interface and iPhone application for them on Monday.

 

Market Savvy  

Greece Relief Means Buying Dollars as Euro, Aussie, Loonie Fall
Bloomberg
The euro dropped to a two-month low against the dollar after German Chancellor Angela Merkel signalled Greece may get limited debt relief, allowing traders to shift focus back to diverging monetary policy.

Dollar Hits Three-Month High on Rate View, Pans Gold
Reuters
The dollar jumped to three-month highs on Monday, extending its recent run of gains as expectations of a US rate rise gathered pace, while gold prices plunged to their lowest in more than five years.

Australian Dollar Touches Six-Year Low
The Sydney Morning Herald
The Australian dollar touched a six-year low on Monday as traders searched for cues in a week dominated by domestic inflation data, central bank minutes and a speech by Reserve Bank of Australia governor Glenn Stevens.

NZD Vulnerable to a Squeeze Higher on Any RBNZ Disappointment
BNP Paribas
This morning’s rise in the NZD has been driven by PM Key commenting that the NZD has ‘fallen faster than expected’ and highlights the vulnerability of a squeeze higher on any disappointment around this week’s policy meeting, especially considering that the currency appears oversold and short positioning is large according to our quant analysis.

 

Press Releases

Taifex: Successful Launch of RMB FX Futures
The Taiwan Futures Exchange (Taifex) launched two RMB FX futures contracts, the USD/CNT FX Futures (RTF) and the USD/CNH FX Futures (RHF) today. Trading in both products together achieved a total volume of 5,290 contracts on the first day of trading.

DGCX to Waive Trade Fees for Mini INR Contracts
The Dubai Gold and Commodities Exchange (DGCX) is stepping up its efforts to spur trading in the Indian rupee. The exchange will remove the trade fees for Mini Indian Rupee futures from August.

 

Industry Events