Top Headlines

ACI Commits Members to FX Global Code – Profit & Loss

ACI – The Financial Markets Association has announced it is mandating its 9,000 members to explicitly commit to the FX Global Code of Conduct, the complete version of which will be released on May 25.

Why ACI’s Global Code Stance Is Important – Profit & Loss (subscription)

ACI has among its members two groups that may not be fully aware the Code applies to them. 

Dollar Falls for Fourth Day After G20 Trade Message – Reuters

The dollar fell for the fourth day running against the basket of currencies used to measure its broader strength, as reaction to a G20 summit dominated by the Trump administration’s protectionist bent extended last week’s sales. 

Rising US Rates Could Mean Hard Fall for Some Currencies – Wall Street Journal (subscription)

Change could trigger a reversal of capital flows, potentially destabilizing currencies in places with higher rates.

Sterling Rises Past $1.24 On Post-G20 Dollar Selling – Reuters

Sterling rose to a three-week high against the dollar, sales of the dollar after the G20 gave in to US pressure and omitted a reference to protectionism pushing the greenback lower for a fourth day running.

Citi Abandons Call for Euro Fall Through Parity With Dollar – Reuters

Citi is the latest major bank to abandon its headline forecast for a fall in the euro to below parity with the dollar, upping its prediction for the single currency over the next six to 12 months to $1.04 from $0.98 previously.

Mexico Peso’s on Fastest Rise Since 2009 Thank to Kind Words from US – Bloomberg

The Mexican peso is in the midst of its sharpest sustained rally since it recovered from the global financial crisis, thanks to a few nice words from US officials.

Charts Show Rand Bears Are Running for Cover, With One Proviso – Bloomberg

The outlook has rarely been better for South Africa’s rand.

Denmark Rids Itself of Foreign Debt for First Time in 183 Years – Financial Times (subscription)

The country will pay off its last foreign currency loan worth $1.5bn today – ridding itself of any FX debt obligations for the first time in at least 183 years.

Egyptian Budget to Assume Exchange rate of 16 Pounds/Dollar – Reuters

Egyptian Finance Minister Amr El Garhy said that the 2017-18 government budget would assume an exchange rate of 16 Egyptian pounds per dollar.

Classic Models Are Failing FX Hedge Funds Desperate for Return – Bloomberg

Most of the strategies traders use to generate profit – momentum, carry and fair value -have either lost money or nearly erased their gains this year, according to Deutsche Bank models.

Regulatory News

Carney Warns of Balkanization Risk in Global Financial Markets – Bloomberg

Mark Carney, head of the Financial Stability Board, warned against giving in to “reform fatigue” a decade after the financial crisis, and called on the Group of 20 nations to strengthen regulatory cooperation.

Brexit Preparations Block MiFID Third-Country Guidance – Risk (subscription)

EU authorities see keeping rules vague as a way to maximise leverage in negotiations with UK.

EC Draft Rejects Single Source Data Model for TCA – FX Week (subscription)

Under the proposed RTS for the EU’s Priips, financial firms will not be able to use a single source of data to compile transaction cost analysis.

What to Expect When Senators Question SEC Chairman Nominee Clayton – Market Watch

When President Donald Trump’s pick for chairman of the Securities and Exchange Commission shows up for his confirmation hearing Thursday, Jay Clayton will likely enjoy lavish praise from Republicans for being a “job creator” but harsh criticism from Democrats about his conflicts.

Republican Senator Slams Bank Capital Rules – Risk (subscription)

A Republican senator has assailed the Federal Reserve’s implementation of the Basel III capital rules as “extremely dangerous” and an impediment to economic growth in the US.

Bank of England Trials Artificial Intelligence and Blockchain In Bid to Stay Ahead of the Pack – Telegraph

The Bank of England has paired up with artificial intelligence and blockchain specialists in a bid to keep up to date with the fast-growing financial technology sector.

Company News

Former Fed Chief Dealer Launches Macro Firm – Profit & Loss

Profit & Loss understands that Niall Coffey has formed Avoca Global Advisors, a new global macro firm out of Westport CT.

Investment Banks Ditch the Diet and Look to Expand: Study – Reuters

Fixed income, currencies and commodities revenues, which faced the brunt of regulation, are forecast to grow 2 percent over the next five years to $119 billion after shrinking to $109 billion from $140 billion over the previous five.

Bitcoin Price Plunges on Fears of a Currency Split – Wall Street Journal (subscription)

Bitcoin shed about a fifth of its value over the weekend as an increasingly bitter split in the developer community behind the virtual currency threatened to literally break it in two.


Market Savvy

The Pound to Australian Dollar Rate Hovers Over Key Support Level, Could Bounce – Pound Sterling Live

The GBP/AUD exchange rate is puttering along a range centred on the 1.60s, but the lack of downside momentum as well as the location of the S1 monthly pivot at the 1.5931 lows seems to indicate the possibility of a rebound higher evolving.

Emerging Stocks Sail to Two-Year High on Weak Dollar – Reuters

Emerging stocks hit a two-year high and most currencies strengthened, still basking in the afterglow of the US Federal Reserve meeting and shrugging off the prospect of more trade protectionism.

CEE Assets Retreat Ahead of Romanian Bond Auction – Reuters

Central European currencies and stocks gave up ground after Friday’s warning from the International Monetary Fund about a rise in Romania’s budget deficit and ahead of a government bond auction in Bucharest.