Top Headlines

Asset Managers Strive to Cut Out Banks from Forex Dealing – Financial Times

Big investors are growing increasingly concerned that banks are able to decipher their trading patterns, and profit from the information, prompting a hunt for new ways to get deals done.

Brexit Inertia Means London’s Finance Workers Face Summer Slump – Reuters

The weeks before Easter are usually some of the busiest of the year for bankers, lawyers and consultants in the City of London, as clients rush to get deals done before a run of public holidays. But this year comparatively little has been happening.

Singapore’s Edge in Race Between Asia’s FX Hubs – FX Week (subscription)

Singapore, Tokyo and Hong Kong are vying to become the unchallenged foreign exchange hub in Asia, as interest in trading in the region sharpens. Each is strong in a particular aspect of the market. But if the factors behind Asia’s surge in FX trading shift, that could lift one city above its rivals.

Digital Forex Settlement Volume Tipped to Rise Tenfold – Risk.net (subscription)

An under-the-radar effort to digitise the settlement of fiat currencies may be about to attract some real volume. Nex Group and Baton Systems have built a real-time settlement system for foreign exchange trades, using distributed ledger technology to cut the traditional two-day post-trade cycle down to as little as three minutes.

Stoplight System Could Spot Meltdowns Ahead – Study – Risk.net (subscription)

A traffic-light system of risk indicators for financial market infrastructure could use transaction data to detect threats to financial stability in almost in real time, according to research due to be published later this year.

Regulatory News

FCA Outlines the Future of Regulation – FT Adviser

The Financial Conduct Authority will consult the industry on the future of regulation, as it intends to make sure the regulatory landscape is fit for purpose after Brexit.

• FCA Must Adapt to Changing Technology to Regulate City, Says Chief – The Guardian

Mifid II: Asset Managers Focusing on Digitization Projects – IR Magazine

Mifid II has brought about a number of new developments and trends since its introduction, but a new one is that asset managers are increasingly looking to data analytics and digitization projects.

Dutch Regulator to Make ESMA’s CFD Rules Permanent – Finance Magnates

Following in the footsteps of several other European regulators, the Dutch Financial Markets Authority says that it plans to make European regulations governing contracts for difference and binary options permanent.

Crypto News

Crypto Faithful Say Blockchain Can Remake Market Machinery – The Wall Street Journal (subscription)

The brutal bitcoin selloff continues. But cryptocurrency supporters are plugging away with plans to use its underlying blockchain technology to reshape Wall Street’s machinery.

Institutional Crypto Three Years Away – MarketsMedia

Wall Street broad acceptance of token-based assets as collateral is approximately three years away, according to Don Wilson, founder and CEO of DRW Trading.

ICE’s Bakkt Has Issues. A N.Y. Crypto License Might Fix Them – Bloomberg

Intercontinental Exchange has been facing resistance from federal regulators over a key part of its ambitious plan to bring Bitcoin to the masses. Now, the owner of the New York Stock Exchange is turning to state watchdogs to get the project over the goal line.

The World’s Largest Crypto Exchange Has Launched Its Own Blockchain – Bloomberg

Binance, the world’s largest cryptocurrency exchange, launched its own digital ledger as the fast-growing company seeks to leverage its clout to get developers to switch projects from rival platforms such as Ethereum to its own native blockchain.

Japan to Require Crypto Exchanges to Bolster Internal Oversight – Reuters

Japan’s financial regulator will require cryptocurrency exchanges to strengthen internal oversight of the so-called “cold wallets” used to store digital money.

NYDFS: Why We Rejected Bittrex’s Application for a BitLicense – CoinDesk

Bittrex purportedly aims to get the facts straight about the denial of its license applications by the New York State Department of Financial Services in recent statements to the media.

JP Morgan to Widen Use of Blockchain System – Financial Times

JP Morgan Chase is to widen the use of the industry’s leading blockchain technology to help smooth the banking industry’s payment system while also inviting fintechs to experiment on how to develop the platform.

Company News

Wall Street Banks Under Pressure to Make Deeper Cost Cuts – Reuters

Top US banks must make deeper cost cuts to drive earnings growth, with revenue expected to remain under pressure for the foreseeable future, analysts said.

Eurex Faces More Delays to Cross-Currency Swap Clearing – FX Week (subscription)

Eurex Clearing is said to be planning to debut its cross-currency swap clearing service by the end of June, after repeated delays caused the launch to slip from the original end-2018 date. However, dealers have reservations over the liquidity of the cleared product and the increases in posted margin versus non-cleared trades.

HSBC Brings in Fintechs to Strengthen its FX Muscle – FX Week (subscription)

HSBC is quietly building up a portfolio of financial technology firms to work within its operations, which the bank believes will help strengthen its foreign exchange capabilities and products.

Merger Talks of Deutsche Bank and Commerzbank Roil Emotions – The New York Times

The powerful labor unions are against it. Regulators are wary, and could impose onerous conditions. Shareholders are skeptical. There is some formidable political momentum behind it, but the government is split over the wisdom of morphing Germany’s two largest banks into one.

• Commerzbank Suitors Line Up as Deutsche Bank Discussions Drag On – Bloomberg
• Deutsche Bank and Commerzbank at Odds Over Client Losses – Financial Times
• Deutsche Bank Said to Prepare Plan B If Takeover Talks Fail – Bloomberg

Brokers Leading the Next Generation of Algorithmic Trading – The Trade

As end users become more comfortable and knowledgeable about the algorithms they are using, and in some cases placing them at the centre of their trading strategies, brokers and banks must stay ahead of the pace of change and provide consistent results to their clients.

Market Savvy

Dollar Firm in Thin Post-Holiday Trade, Loonie Up as Oil Prices Jump – Reuters

The dollar edged up against key peers such as the euro and the yen on Monday, boosted by the relative strength of the US economy, while losing ground against the Canadian dollar following a rise in crude oil prices.

Morgan Stanley Picks Hedges to Deal With Potential Trade Turmoil – Bloomberg

Investors should use hedges to mitigate the effect of several trade-event risks, according to Morgan Stanley.

Goldman Says Fed Losing Forecasting Edge Changes Game in Markets – Bloomberg

Risky assets are reacting more strongly to hawkish monetary shocks from the Federal Reserve in recent years, according to Goldman Sachs Group Inc. The reason, ironically, is that the Fed is losing its forecasting edge.