Top Headlines

Bank of England Fired FX Chief for Series of Misjudgements: Carney – Reuters
The Bank of England dismissed its former chief foreign exchange dealer last year because of a series of inappropriate actions including the sharing of a confidential Bank document, BoE Governor Mark Carney said this morning.


Barclays Says Wants to Resolve FX Probes as Quickly as Possible – Reuters
Barclays wants to settle investigations into the alleged manipulation of foreign exchange trading with as many authorities as possible, as quickly as possible, its finance director said.

Bank of England FX Investigation Too Narrow, Says MP – The Guardian
The Bank of England has come under attack for failing to properly investigate its role in the rigging of foreign exchange markets. In a report commissioned by Jesse Norman, the Conservative MP and a member of the Treasury select committee, a leading UK barrister said the Bank set “very low tests” for its inquiry into the scandal.

EU Court to Rule on UK Challenge to ECB’s Clearing Policy – Risk Magazine (subscription)
A three-year legal dispute between the UK government and the European Central Bank over clearing house oversight is set to conclude on Wednesday, when the General Court of the European Union delivers its ruling. If the ruling goes against the UK, it would leave intact an ECB policy that calls for clearers of euro-denominated products to be incorporated in the euro zone.

Bill Gross Says Currency War Risks Slowing Global Growth – Bloomberg
Bill Gross said a global race to devalue currencies in an “undeclared” war risks slowing growth instead of stimulating it. Low to negative interest rates hamper the functioning of capital markets and prompt investors to take on higher risk to boost returns, making the financial system more vulnerable.

Parker FX Index Up 2.71% in January – Profit & Loss
Currency hedge funds in the Parker FX Index reported an aggregate gain for the seventh straight month in January amid a wave of volatility during the month that the Swiss National Bank removed its cap on the franc’s value against the euro.

Grexit Risk Rising Despite Cash Lifeline -Investor Survey – Reuters
The chances of Greece leaving the euro zone in the next 12 months are the highest since late 2012 even though Athens’s financial lifeline has been extended, a survey of investors based mainly in Germany showed on Tuesday.

Dollar Hit by Japan Govt Adviser’s Yen Comment, Drags Index Lower – Reuters
The dollar eased from an 11-year peak against a basket of currencies today, hit by losses against the yen after an economic adviser to Japanese Prime Minister Shinzo Abe said the greenback could not sustain more gains.

Australian Dollar Strengthened Ahead of RBA Rate Decision – Wall Street Journal (subscription)
The Australian dollar strengthened sharply against the US dollar on Tuesday, just seconds before Australia’s central bank surprised some investors by holding rates steady.

China’s Forex Chief Says Yuan to Stay Stable in Long Term – Reuters
The yuan’s exchange rate will remain stable in the long run, and two-way trade will be maintained in the currency market, the head of FX strategy at China’s central bank said today, sounding a reassuring note in the face of a recent slide in the yuan’s value due to increasing outflows from the world’s second-largest economy.

Bank of England Looks at Digital Currencies for Central Banks – Profit & Loss
The Bank of England has released a paper examining the potential for central banks to utilise digital currencies. The paper suggests that central banks could make use of cryptocurrency by using it for interbank settlement or making it available to a wider range of banks and non-bank financial institutions.

Join FXPA at FIA Boca
Attending FIA Boca next week? Please join the membership of the Foreign Exchange Professionals Association (FXPA) for a Meet & Greet session at the FIA Boca conference. Representatives from the FXPA will be in the Lounge Area adjacent to Bar Luna from 5:30-6:30 on Tuesday, 10 March. Please rsvp to jros@profit-loss.com

 

 

Regulatory News

Hong Kong’s Tax Reforms Target Corporate FX Hubs – Profit & Loss
Hong Kong is tabling amendments to its tax laws in order to become a more attractive financial centre for multinational companies to trade FX, following up on plans announced last year.

Keynote Address by CFTC Chairman Timothy Massad before the Institute of International Bankers
Key agenda items that the CFTC will be focusing on in the months ahead include margin rules for uncleared swaps, cross-border issues, clearinghouse strength and stability, cybersecurity, and benchmarks.

Hill Calls For Greater EU/US Cooperation to Reach Clearing Agreement – Profit & Loss
The EU’s financial services commissioner, Jonathan Hill, has called for increased efforts to resolve extraterritorial regulatory disputes with the US, proposing a treaty-based system as the solution.

ISDA Calls For Cross-Border Cooperation in Trade Reporting – Profit & Loss
The International Swaps and Derivatives Association (ISDA) has warned that major challenges remain in the realm of trade reporting, mostly due to a lack of standardisation within and across jurisdictions in reporting requirements.

Best Execution Enforcement ‘Falls Short’: ESMA – Profit & Loss
ESMA has raised concerns about how national regulators are monitoring and enforcing best execution requirements under the Markets in Financial Instruments Directive (MiFID), which obliges investment firms to provide best execution, or obtain the best possible result, for their clients when executing their orders.

 

 

Company News

Nasdaq Receives Authorisation to Clear FX in Europe – Profit & Loss
Nasdaq OMX Clearing has been re-authorised by the European Securities and Markets Authority to clear exchange-traded and OTC FX derivatives.

Saxo Says It Kept Taking Franc Orders to Avoid Being Sued – Bloomberg
In a letter to the Danish regulator, Saxo Bank said it was trying to avoid being sued when it continued accepting Swiss franc orders after the market froze on 15 January.

FastMatch Offers Free Trading for Non-Last Look Liquidity Providers – Profit & Loss
FastMatch has announced that it will be offering free brokerage to liquidity providers that offer firm quotes rather than using last look.

Hotspot Sees FX Volume Drop in February – Profit & Loss
Hotspot FX, KCG’s ECN soon to be handed over to BATS Global Markets, reports a 23% decrease in average daily volume last month compared with January, a trend expected to be replicated across other FX trading platforms.

FXPro Releases Slippage Statistics in Transparency Boost – Profit & Loss
FXPro has released its slippage statistics for February, claiming that such a move will help encourage greater transparency within the retail FX industry.

MGT Capital Investments, Tera Group to Create First Publicly Traded US Bitcoin Derivatives Exchange – Bitcoin Magazine
MGT Capital Investments announced a planned merger with Tera Group, which operates the first regulated US Bitcoin derivatives exchange. The merger will create the first publicly traded US Bitcoin derivatives exchange.

 

 

Market Savvy  

Do Cryptocurrencies Such as Bitcoin Have a Future?
Wall Street Journal
Time will tell which alternative currencies, if any, will grow in acceptance and value. Are we at the start of an era in which new monetary systems will be adopted? Or should we keep our hands on our wallets? Arguing that there is indeed a future for cryptocurrencies, or at least the technologies that some of them are based on, is Campbell Harvey, a professor of finance at Duke University in Durham, N.C. Taking the other side, that the lack of guarantees and controls cannot be overlooked, is Eric Tymoigne, an assistant professor of economics at Lewis & Clark College in Portland, Ore.

 

 

Press Releases

EBS Electronic Broking: February 2015 Volumes
Average daily volume on Icap’s EBS platform was $94.1 billion in February, 13% higher than the year previously, but 27% lower than January’s $129.6 billion.

CME Group FX Volume – $78 billion in February 2015
CME Group foreign exchange volume averaged 755,000 contracts per day, down 2% from February 2014.  The average daily notional value of FX contracts traded in February was $78 billion.

Moscow Exchange Launches USD/CAD and USD/TRL Futures
Moscow Exchange has today started trading in futures contracts on US dollar-Canadian dollar and US dollar-Turkish lira currency pairs.

 

 

Industry Events