Top Headlines
ACI to File Amicus Brief for Mark Johnson Appeal – FX Week (subscription)
The ACI Financial Markets Association (ACIFMA) is planning to file an amicus brief, supporting the appeal of former HSBC executive Mark Johnson, who was convicted of wire fraud relating to a $3.5 billion foreign exchange order in October 2017.
CLS Seeking Legal Fix for Brexit Settlement Threat – Risk.net (subscription)
Critical foreign exchange service CLS hopes EU27 member states will tweak domestic rules to ensure European firms using its London entity still enjoy insolvency protection in the event that the UK leaves the European Union without a Brexit deal next March.
Deutsche Bank’s Clearing Move Revives City of London Fears – Financial Times (subscription)
Deutsche Bank’s move to concentrate some of its euro clearing activity in Frankfurt rather than London has revived concerns that the UK capital could lose its dominant role in this area after Brexit. The clearing of euro-denominated derivatives is a key facet in the City of London’s position as a leading global financial centre.
- Deutsche Bank/Eurex: Clear Monster – Financial Times (subscription)
- Deutsche Shifts Chunk of Euro Clearing to Frankfurt from London – Reuters
EU Banks Toughen Terms for OTC Trades: ECB – Risk.net (subscription)
European banks tightened credit conditions for over-the-counter derivatives and securities financing transactions in the second quarter, with conditions expected to worsen in the third quarter. A European Central Bank survey shows that the credit terms, including price and non-price factors, offered to counterparties tightened the most in a year over the last three months.
Why Libor Will Disappear – and What It Means for You – Brink News
Libor is sometimes called the “world’s most important number.” The London Interbank Offered Rate (Libor) is everywhere in the financial landscape.
- Investors Cheer Debut Fannie SOFR Note Launch – Risk.net (subscription)
- IHS Markit Provides Critical Infrastructure to Replace Libor in Derivatives Markets – IHS Markit
AmEx Plans External Review in Wake of FX Price Hike Allegations – Bloomberg
American Express said an external party will conduct a review of its foreign exchange business after a report said employees boosted rates for some business customers without notifying them.
Regulatory News
Want to Blow The Whistle? Try The US Regulators – Financial News (subscription)
This month, the US markets regulator announced that it was awarding $30m to an individual whistleblower who had provided key information which led to enforcement action and a $300m settlement. That is the highest ever payout to a whistleblower by the Commodity Futures Trading Commission, which has budgeted for more than $45m in awards in the current financial year alone.
Esma finds “deficiencies” in the national supervision of the sec lending and derivatives activities of Ucits funds.
Mark Carney Is Preparing for Brexit and the Next Crisis – Bloomberg
What it’s like to be the UK’s central bank chief as Britain negotiates its traumatic exit from the EU.
SEC’s New Crypto Czar Wants Coin Industry to Step Out of Shadows – Bloomberg
The US Securities and Exchange Commission is well known for bringing landmark cases against the biggest names in finance. But its powers to punish individuals and companies can also be intimidating, something that’s very much on the mind of Valerie Szczepanik, the SEC’s new top official overseeing the nascent cryptocurrency industry.
Crypto News
Thomson Reuters Partners with Cryptocurrency Aggregator – Profit & Loss
Thomson Reuters is partnering with CryptoCompare, a cryptocurrency market data aggregator, to integrate order book and trade data for 50 cryptocoins onto its Eikon platform.
Cryptalgo Partners with Blockchain Specialist for Institutional Crypto Trading – The Trade Crypto
Crypto trading and brokerage firm Cryptalgo has teamed up with blockchain investment and advisory firm NKB Group to address the growing demand for crypto services from institutional investors.
Novogratz’s Crypto Bank Makes Belated Debut After Plunge – Bloomberg
Mike Novogratz is past the point of no return. Two days from now, his cryptocurrency-focused merchant bank, Galaxy Digital, will start trading on Toronto’s TSX Venture Exchange. It should be a triumphant moment for the former Goldman Sachs partner and a milestone for the industry, yet Novogratz is having second thoughts.
Expect Further Declines in the Price of Cryptocurrencies, Says Goldman Sachs – MarketWatch
Coming off back-to-back winning weeks, bitcoin is looking to consolidate the recent momentum that has seen the number one digital currency rise by more than 40% since the start of July. However, the momentum has been dealt a blow with all major coins in the red in afternoon trading.
Company News
Bloomberg, NEX BrokerTec and Tradition Team Up on Fixed Income Data – The Trade
Bloomberg has launched a new data service with NEX Group that aims to establish the most liquid and transparent reference for US Treasuries and interest rate swaps. Known as Bloomberg Capital Markets Package, the service will combine NEX’s BrokerTec US Treasuries data with USD spread-over data from Tradition’s Trad-X platform.
Mesirow Expands with TCS Acquisition – Profit & Loss
Mesirow Financial has agreed to acquire assets of The Cambridge Strategy (Asset Management), a UK-based currency alpha investment firm.
Derivatives Revenues Drive Profit Growth at SGX – Profit & Loss
Singapore Exchange has reported a net profit of S$363.2 million for the year ending June 30, a 7% increase from the previous year.
Market Savvy
Yen Weakens as Japan Reaffirms Commitment to Policy Stimulus – Reuters
The Japanese yen weakened against the dollar on Tuesday after the central bank pledged to keep interest rates low and adopted a forward guidance model to strengthen its commitment for its massive policy stimulus.
Asian Currencies Mostly Steady after BOJ Policy Tweak – Reuters
Most Asian currencies were little changed on Tuesday after the Bank of Japan refrained from making drastic changes to its accommodative policy and as investors waited on policy reviews from other major central banks, including the Federal Reserve.
Sterling Inches Higher Before Expected BoE Hike This Week – Reuters
The British pound edged higher on Tuesday as investors prepared for the Bank of England’s monetary policy meeting later this week at which markets are now pricing in a near-90 percent chance of a 25 basis points rate rise.
FX Options Volatility Set To Rise As Currencies Wobble? – Seeking Alpha
FX options are trading near record lows; an extended period of easy monetary policy has depressed both realized and implied volatility; a slowing Chinese economy could also contribute to soaring FX options volatility in the future, especially on AUDUSD and CADUSD.
Are Trade Wars Spiralling Into A Currency War? – Forbes
President Trump recently tweeted that currency manipulation was rampant across the rest of the world. He blames the US Federal Reserve for raising interest rates and strengthening the dollar. He also accuses China and Europe of manipulating their currencies, making US exports less competitive.
- China’s Falling Yuan Stokes Currency Tensions – Deutsche Welle
- Yuan Weakens, Set for Fourth Straight Monthly Loss in July – Reuters
Dollar Drivers: What’s Boosting the Buck? – Reuters
This year’s dollar rally is three months old and, despite some clouds over the US growth outlook, the gains may have a bit further to go.