Top Headlines

Bank of England’s Head of FX Division Leaves – Reuters
The Bank of England’s head of foreign exchange, Michael Cross, has left the Bank, two sources familiar with the situation told Reuters on Monday.

FX Behaviour is Changing, Greenwich Survey Finds – Wall Street Journal(subscription)
A two-year long probe into manipulation of the currency markets, which has resulted in billions of dollars in fines, is beginning to change the mechanics of foreign exchange trading, according to a study by Greenwich Associates.

Pragma Analysis Uncovers Predictable Trading Patterns around the New WM/Reuters Spot FX Rate Window – MarketWatch
Recent changes to the calculation of the WM/Reuters spot FX rate (or Fix), coupled with a shift in how banks handle client orders, have created unusually predictable patterns in the FX markets, according to research released today by Pragma Securities.

Bailout Deal Rests with Greek Parliament – Profit & Loss (free story)
While the Greek parliament is expected to back today’s deal for a new bailout package, the mood in the market is one of caution, with many strategists describing the agreement as merely ‘kicking the can’ down the road.

Why Bad News for Greece Has Been Good for the Euro – MarketWatch
Currency speculators reduced their short positions against the euro last week, even after Greeks voted in a 28 June referendum to reject a reform plan proposed by the country’s international creditors, according to the latest report on speculative positioning from the Commodity Futures Trading Commission.

East Africa Fights Currency Rout with Aggressive Rate Action – Bloomberg
East African central banks are having little success in stemming a rout in their currencies despite taking ever-more aggressive monetary policy action.

Black Thursday: Seven Lessons to Remember – Euromoney
Six months have passed since the Swiss National Bank (SNB) scrapped its EUR/CHF 1.20 floor on 15 January, unleashing a torrent of volatility and burning traders across the globe. What lessons should we remember from one of the craziest days in currency markets?

China Share Shock has Lasting Impact at Home and Abroad – Financial Times(subscription)
The spectacle of Chinese shares in free-fall last week gave rise to a sense of schadenfreude among many western observers who remember complacent Chinese statements about the superiority of their own financial system in the wake of the global financial crisis.

Regulatory News

US Regulators Identify No Single Cause for 15 October Treasury Volatility –Profit & Loss (free story)
A new report issued by US regulatory authorities says that there is no single cause of the volatility in the US Treasury and other closely related financial markets that occurred on 15 October 2014.

Fed, CFPB Heads to Testify; SEC, CFTC to Hold Meetings – Capital Thinking Blog
This week, Janet Yellen, Chair of the Board of Governors of the Federal Reserve, will appear before the House Financial Services and Senate Banking Committees to provide the Board’s semi-annual monetary policy report to Congress.

Wall Street’s Top Cop Takes Harder Line – Wall Street Journal (subscription)
The Securities and Exchange Commission has ratcheted up its punishment of individuals, more than doubling the typical fine over the past decade amid pressure to prove the agency is tough on Wall Street.

Company News

CTAs Hit by Third Month of Declines in June – FOW (subscription)
Newedge CTA Index declined 4.2% in June and 2.28% over the first half
Commodity Trading Advisors (CTAs) were hit by a third consecutive month of losses in June, reversing gains achieved in the first quarter of the year, according to French bank Societe Generale.

Taifex Selects 20 July to Launch FX Futures – FOW (subscription)
The ambitious Asian exchange earlier this month added new ETF futures
The Taiwan Futures Exchange (Taifex) has said it will launch two renminbi-denominated foreign exchange contracts on 20 July to tap the Taiwanese interbank spot FX market.

Market Savvy  

Euro Below $1.10 as Investors Refocus on Diverging Interest Rates
The euro inched towards a six-week low against the dollar on Tuesday, staying below $1.10 as investors switched their focus away from Greece and back towards diverging US and Eurozone monetary policy.

Chinese Trade Tantrum 
Olivier Desbarres
Chinese trade rebounded in June, but from a very low base, and overall Asian exports remain depressed. The temptation is to think that Chinese policy-makers will sacrifice a robust renminbi in order to spur economic growth but I expect the PBoC to favour a stable currency while the government focuses on pump-priming domestic demand.

Entering Short EURUSD
BNP Paribas
A major step towards a constructive solution in Greece and a dissipation of the markets concerns over a potential ‘Grexit’ has boosted risk sentiment. We believe it will also allow markets to return to the policy divergence theme that dominated in Q1 but got side-lined in Q2 by soft US data and Greek jitters. We think a short EURUSD offers an attractive risk- reward at this juncture.

Press Releases

Thomson Reuters Extends Low-Footprint, High-Performance Direct Feed Service to Derivatives Exchanges
Thomson Reuters has today announced that it has expanded its Elektron Direct Feed service to include the Options Price Reporting Authority (OPRA).  This provides customers with high-performance access to real-time options data with a low hardware footprint.

R5FX Selects smartTrade Technologies for Emerging Markets FX Platform
R5FX has chosen smartTrade Technologies to build and host the e-trading platform for R5FX, the new liquidity pool specialising in the trading of emerging market currencies.

Swift Institute Paper Examines Instability of Large Bitcoin Mining Pools
The Swift Institute has published a paper that investigates Bitcoin mining pools and considers whether an evolution towards smaller mining pools might stabilise the Bitcoin system. The report, entitled “Bitcoin – the Miner’s Dilemma” by Ittay Eyal from Cornell University, focuses on inherent dangers of mining pools, an essential part of the Bitcoin ecosystem.

Industry Events

SEC and FINRA: 2015 National Compliance Outreach Programme for Broker-Dealers, 14 July in Washington, DC
Forex Magnates’ Tokyo Summit, 29 July in Tokyo, Japan
Profit & Loss Scandinavia, 16 September in Copenhagen, Denmark
Profit & Loss Forex Network Chicago, 24-25 September in Chicago, IL
Forex Magnates’ London Summit, 2-3 November in London, UK
FIA Expo 2015, 3-5 November, in Chicago, IL
Profit & Loss Shanghai, 12 November in Shanghai, China
Profit & Loss Singapore, 17 November in Singapore
11th Annual FIA Asia Derivatives Conference, 8-10 December in Singapore