Top Headlines

A Trump Victory – Currency Markets Are Asking What If? – Financial Times (subscription)

Medical bulletins about the Democratic nominee are helping to shake investors from their seeming indifference about the US presidential election, forcing them to at least confront the possibility that her opponent, the maverick Donald Trump, might just win.

Goldman Sachs Files Patent for FX Trading on a Blockchain – Finance Magnates (subscription)

Goldman Sachs wants to use blockchain technology to replace the traditional foreign exchange market, according to a patent application released by the US Patent and Trademark Office.

SGX to Charge Negative Interest to Clearing Members; Excess Euro and Yen Cash Deposits Expected to Generate 20 – 40bp Charge – (subscription)

Singapore Exchange will begin passing negative interest rates on excess yen and euro cash collateral to its clearing members.

Rout in Emerging-Market Currencies Gets No Trader Respect – Bloomberg

The sell-off in emerging market currencies that has shocked investors out of a torpor in recent days is being taken as little more than a nuisance than the beginnings of a bear market.

Shining a Light on FX Rates – Financial News (subscription)

For corporate treasurers, identifying potential cost efficiencies is only possible when operational costs and processes are transparent.

Wells Fargo Blames Central Bank for Mexico Peso’s 2016 Swoon – Bloomberg

Mexico’s central bank actually may be to blame for the peso’s slide this year.

Is This the End of Fiat Currency? – Seeking Alpha

Central Banks are bloating their balance sheets by competing with private citizens for assets thus lowering yields and forcing up asset prices in the hope that this will stimulate economic activity and increase inflation.

Market Volatility Rises in all its Guises – Financial Times (subscription)

Financial market stress has spiked the most in a year, and volatility is boiling up in markets from currencies to equities to bonds.

How China Is Reshaping Market Correlations in Asia – Bloomberg

China’s increasing trade and financial heft has ramped up correlations in equity and currency markets in Asia in recent years, challenging diversification strategies for investors as new — and increasingly complex — feedback loops emerge.

The Swiss and Negative Rates: How is the Experiment Going? – Financial Times (subscription)

Swiss banks and consumers have adjusted to negative rates but concern about long-term pain is brewing.

Nigeria’s Tanking Currency Has Left its Airline Industry on the Brink of Collapse – Washington Post

Nigeria is between a rock and hard place, and every day it is getting more and more difficult to leave it — literally. 

Regulatory News 

EU Banks More Vulnerable Than Peers to Basel Revamp, Data Show – Bloomberg

Large European banks may be more vulnerable than their global peers to changes in the rules for measuring asset risk that are under discussion at the Basel Committee on Banking Supervision, regulatory data show.

House Financial Services Committee Passes Bill to Overhaul Dodd-Frank Law – Wall Street Journal

A House committee approved legislation Tuesday to revamp the federal government’s approach to regulating Wall Street banks, the first step in replacing the 2010 Dodd-Frank financial overhaul law. 

The Robin Hood Tax Is Dead. Just Say So – Bloomberg

A handful of European Union nations is trying to maintain the fantasy that a tax on financial transactions makes sense.  

Company News 

Goldman Says Dollar Surge Far From Over as Traders Misprice Fed – Bloomberg

Goldman Sachs Group is holding fast to its bullish-dollar call, undeterred by plunging expectations for a Federal Reserve interest-rate increase.

Standard Chartered: No Fed Rate Raise Expected Before Start of 2018 – South China Morning Post

Bank sees the Chinese yuan supported above 6.7 against the US dollar in the short term. 

Currency Volatility to Aid Invoice Finance Growth as Firms Look to Bolster FX Hedges – PoundSterling Live

Factoring is now seen as another tool at the disposal of firms looking to mitigate currency risks posed by the EU referendum and impending Brexit. 

Market Savvy 

FTSE 100 Rebounds and Pound Climbs Above $1.32 as UK Labour Market Withstands Brexit Shock – Telegraph

Britain’s labour market has shown its resilience in the wake of the shock Brexit vote, as official data revealed the unemployment rate held steady in the three months to July.  

Intervention Speculation as Offshore Renminbi Volatility Rises – Financial Times (subscription)

Renminbi volatility in Hong Kong increased on Wednesday as traders and analysts speculated that China’s central bank was intervening just ahead of a Chinese bank holiday. 

Dollar Gains as Falling Oil Damps Demand for Riskier Currencies – Bloomberg

A gauge of the dollar reversed a decline as weaker oil and iron ore prices dragged currencies of resource-exporting nations lower amid reduced investors appetite for riskier assets. 

Stocks Sell-Off Rumbles on, China Strains Hit Asia FX – Reuters

Emerging market stocks fell for a fourth day running on Wednesday as growing concerns about the ability of central banks to keep pump priming global growth left them on their worst run in three months.