Renminbi Posts Strongest Monthly Rally in Almost 40 Years

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Top Headlines

Renminbi Posts Strongest Monthly Rally in Almost 40 Years – Financial Times (subscription)

The yuan experienced its strongest monthly rally for almost forty years in January, and analysts are expecting further gains to come, even as its strength begins to hurt local businesses.

Dollar Bounce Only Brief Despite More Hawkish Fed – Reuters

The dollar briefly clawed back some of its recent falls after the Federal Reserve said inflation was likely to rise this year, but with expected monetary tightening priced in, traders are waiting to see if upcoming data will give the greenback more than a brief respite.

ECB’s Cœuré: We Would Push Back If US Starts Currency War – Financial Times (subscription)

The European Central Bank may be forced to fight back if US leaders continue to prod currency markets to dent the strength of the dollar, one of the central bank’s most senior policymakers has warned.

Sterling Climbs as Investors’ Political Jitters Ease – Reuters

Sterling strengthened, recovering from losses earlier in the week, as concerns over Prime Minister Theresa May’s leadership eased and expectations grew that the Bank of England to take a more hawkish tone in its meeting next week.

Exchanges Defend Self-Certification at CFTC Meeting – Risk (subscription)

US futures exchanges are pushing back against a proposal that would require them to disclose whether clearing members were consulted before listing new products.

EU Banking Authority to Test Banks for 8.3% Post-Brexit Slump – Financial Times (subscription)

Banks across the EU are to be tested to make sure they can withstand potential doomsday Brexit consequences, including a severe recession that would leave the bloc’s economy 8.3 per cent smaller than it otherwise would have been.

Morgan Stanley Boosts Dublin, Frankfurt, Paris Offices on Brexit – Bloomberg

Morgan Stanley President Colm Kelleher said the bank would boost its offices in three European Union cities as it seeks to relocate London-based roles after Brexit.

Hotspot, GTX Hit New Highs as Platforms Report Strong January – Profit & Loss

The first three platforms to report FX trading volumes indicate January was a strong start to the year all round, with Cboe’s HotspotFX and Gain’s GTX platforms both recording new record highs for average daily volume (ADV).

TCA Use Creeps Up But Benefits Still Evolving – Euromoney

The impact of transaction cost analysis (TCA) on the FX buy side remains hard to quantify, despite the relative maturity of the technology.

Is the Customer Always Right? – Profit & Loss (subscription)

I don’t see why FX market participants shouldn’t pay a small amount more brokerage given the level of investment by several platform providers over the last year or two.

Regulatory News

Yellen Hands Off Go-Slow Approach to Rate Rises as She Departs Fed – Wall Street Journal (subscription)

Federal Reserve Chairwoman Janet Yellen concluded her final policy meeting by holding interest rates steady and leaving it to her successor to decide whether to lift them more quickly to prevent the economy from overheating.

Mifid II Was a Compromise, But the UK Will Lead the Way with Mifid III Says Politician Kay Swinburne – City AM

The UK’s voice of the City in the European parliament, Conservative politician Kay Swinburne, has said that legislators are already planning to overhaul a massive new piece of regulation which came into force earlier this month.

Non-EU Banks Consider Updating Benchmark Fallbacks – Risk (subscription)

Some banks outside of the European Union are looking into updating their derivatives contracts to meet standards similar to those set out in the bloc’s new benchmark regime, after a prod from the International Organization of Securities Commissions (Iosco).

Signaling Crackdown, SEC Boss Emerges as Crypto Skeptic-in-Chief – Bloomberg

Jay Clayton says more cases coming if conduct doesn’t change. 

Bank of Tokyo-Mitsubishi Accused of Unlawful Regulator Swap – Bloomberg

New York isn’t going to let Bank of Tokyo-Mitsubishi slip out of its regulatory oversight without fighting back.

Ex-JPMorgan Trader Grout Loses London Whale Suit – Financial News

FCA wins identity legal battle with former colleague of trader Bruno Iksil.

Company News

Lucid Markets Shuts Down? – Profit & Loss

Multiple industry sources tell Profit & Loss that Lucid Markets has sent out a communication to all clients stating it is closing its business effective immediately.

MarketFactory Connects to Moex – Profit & Loss

MarketFactory has added Moscow Exchange (Moex) to its API connectivity solution.

BMO Partners with Trade Informatics for TCA – Profit & Loss

Trade Informatics (TI), a provider of quantitative analytics and systematic trading solutions to institutional asset managers has announced it will provide BMO Capital Markets (BMO) with transaction cost analysis (TCA) tools to help execute algorithmic trades with improved execution quality.

Bank of New York Mellon Plans to Move Its Corporate Headquarters in Lower Manhattan – Wall Street Journal (subscription)

Bank of New York Mellon is moving its global headquarters for the second time in less than four years.

Coincheck Falsely Explained Security to Customers – Industry Group Head – Reuters

Japanese Coincheck made false explanations to customers about its security system before suffering one of the world’s biggest cyber heists, the head of a major cryptocurrency industry group said.

Market Savvy

Bitcoin Has Its Worst Month in Three Years – Wall Street Journal (subscription)

Global regulatory clampdown hits cryptocurrencies.

Shift by Argentina’s Central Bank Rings Alarm Bells – Financial Times (subscription)

For investors, the question of central bank credibility and the consequences for the currency is a red-hot issue.