Top Headlines

A Market Guide to a Brexit Deal, If and When It Finally Happens – Bloomberg

UK negotiators have secured a deal with the European Union to exit the bloc, and today Prime Minister Theresa May will try to win over her Cabinet and later, Parliament. For investors, a done deal would remove one of the biggest overhangs in European markets since the 2016 vote.

Sterling Catches Breath Before UK Cabinet Meeting – Reuters

Sterling steadied after posting its biggest jump in two weeks on Tuesday as investors await the outcome of a cabinet meeting where Prime Minister Theresa May will try to convince her ministers to accept a draft European Union divorce deal.

FX Futures – Welcome to the New Normal – Profit & Loss

Many FX participants are already reviewing their FX operating model, building support for FX clearing and futures in addition to their OTC FX.

Bogucki Asks Court to Bar Argument on Fiduciary Duty at Trial – FX Week (subscription)

Robert Bogucki, a former US head of currency trading at Barclays, is asking a federal court to bar the government from arguing to a jury that he owed a fiduciary duty to Hewlett-Packard during a multi-billion currency transaction at the centre of his criminal case.

Regulatory News

Imperfect Harmony: Industry Balks at EU Foreign Venue Rules – Risk.net (subscription)

Proposal could force non-EU platforms to choose between following Mifid II and ditching EU firms.

A Predictable Regulatory Framework – ISDA

Over the past 10 years, policy-makers embarked on a largely consistent agenda of regulatory reform to make derivatives markets more robust and resilient. That global reform initiative is now mostly in place, but there are a number of challenges on the horizon, including Brexit, which must be overcome before all the pieces fall into place.

More Than Half of Firms Are Not Producing MiFID II RTS 27 Best Execution Reports – The Trade

Research from Cappitech revealed that many firms are not producing RTS 27 reports, and 60% have no intentions to use the reports on execution quality internally.  

MAS Issues Guidance on Responsible Use of AI, Data Analytics – Regulation Asia

The document incorporates views and feedback from financial institutions, industry associations, FinTech firms, technology providers and academia. The principles provide guidance to firms offering financial products and services to strengthen internal governance around data management and the use of AI and data analytics.

Arizona Sandbox Gives Fintech Start-Ups a Regulatory Path to US – Financial Times (subscription)

Arizona became the first US state to set up a so-called regulatory sandbox for fintech start-ups – essentially a test environment in which early-stage companies that are innovating in the financial sector are given limited access to the market under regulatory supervision, without having to be fully licensed.

Swaps Data: Cleared vs Non-Cleared Margin – Risk.net (subscription)

A growing margin burden for non-cleared swaps means cleared margin is likely to grow further.

Crypto News

Central Banks Should Look at Issuing Digital Currency, Says IMF’s Christine Lagarde – The Telepgraph

Central banks across the world should consider issuing digital currencies, according to the head of the International Monetary Fund.

Coinbase Is Making Bitcoin More Available to Wall Street – The Wall Street Journal

Bitcoin exchange Coinbase has attracted around $100 million in investment flows from professional money managers as part of a new initiative to bring cryptocurrencies to more Wall Street clients, the company’s chief executive said.

New Crypto Hedge Fund Says Don’t Be Fooled by Digital Asset Rout – Bloomberg

The collapse in digital asset values this year is obscuring the growing use of cryptocurrencies among consumers and investors.

Ripple Is Aiming to Overtake Swift Banking Network, CEO Says – Bloomberg

Ripple Labs, the blockchain startup whose digital money is often used as a proxy for other cryptocurrency payments, is gaining new customers because financial firms are seeking faster, more up-to-date technology than the Swift banking network, Chief Executive Officer Brad Garlinghouse said.

OTCXN Launches Crypto Block Trading Venue – Profit & Loss

OTCXN has launched its OTC Block Trading venue for crypto trading – what it says will be the first of several trading venues that will be launched for institutional-only digital asset trading.  

The Seven Deadly Paradoxes of Cryptocurrency – Bank Underground (Bank of England Blog)

Existing private cryptocurrencies do not seriously threaten traditional monies because they are afflicted by multiple internal contradictions. They are hard to scale, are expensive to store, cumbersome to maintain, tricky for holders to liquidate, almost worthless in theory, and boxed in by their anonymity.

Company News

LCH Receives Licence to Clear FX NDFs in Japan – LCH

LCH has received approval for an extension to its clearing licence from the Japanese Financial Services Agency. The licence extension enables LCH’s ForexClear service to clear FX non-deliverable forwards on behalf of banks and clients based in Japan.

HSBC Joins $36 Million Funding Round in Blockchain Specialist Axoni – The Trade

Goldman Sachs, Citi, JP Morgan, Wells Fargo and Franklin Templeton Investments are also investors in blockchain technology vendor Axoni. 

How Ex-JP Morgan Silver Trader’s Guilty Plea Could Boost Manipulation Claim against Bank – CNBC

A previously secret guilty plea by a former commodity trader at J. P. Morgan Chase, who admitted that he rigged precious metals markets, has drawn the attention of a lawyer who has already accused traders at the nation’s largest bank of similar conduct.

Market Savvy

Euro Under Pressure as Italy Sticks to Deficit Target in Budget – Reuters

The euro hovered below $1.13 on Wednesday as Italy re-submitted its draft budget for next year to the European Commission and traders prepared for economic growth numbers due out later.

US Dollar’s Safe-Haven Status May Not Be So Safe, BofA Says – Bloomberg

Currency traders may not want to put all their trust in the dollar’s status as a haven, especially if the US trade conflict with China calms down.

Japan Risks Repeating Some Old Mistakes – Financial Times (subscription)

The central bank is muddying its commitment to easy monetary policy.

Trump’s Tariff Battle with China is Spurring Record Dollar-Yuan Trading – CNBC

Market uncertainty due to the ongoing trade dispute between the U.S. and China has spurred a jump in trading volumes for the dollar-yuan currency pair.