Top Headlines

Bank of Japan Forecasts Trump-Driven Surge in Economic Growth – Financial Times (subscription)

Central bank keeps policy on hold and raises growth projections after yen slide.

BoJ’s Tailwind from Weaker Yen to Be Short-Lived: Capital Economics – Financial Times (subscription)

The Bank of Japan may have delivered some good news in the form of upgraded economic growth forecasts, but it is much too soon to talk about the prospect of tightening monetary policy, economists warn.

Rethink on Trump Hits Dollar and World Stocks – Reuters

The US dollar headed for its worst start to a year since 2008 while world stock losses, already the biggest in six weeks, grew after widespread protests against President Donald Trump’s stringent curbs on travel to the United States.

When Your Words Say One Thing But Your Policies Another – Financial Times (subscription)

Somehow moot to suggest that this is a break from convention but… it’s Trump the currency manipulator, courtesy of HSBC’s David Bloom.

Data Sparks Sterling Slide After Best January in Five Years – Reuters

Sterling fell by almost a full cent after weaker than expected data on consumer credit added to a handful of tentative signs that the UK economy may finally be slowing on the back of last year’s Brexit vote.

Euro and Government Bond Yields Climb After Early Inflation Surprise – Financial Times (subscription)

The euro and fixed income yields have crept up this morning after early inflation data from two of the bloc’s major economies revealed a healthy jump in annual inflation.

Iran to Ditch the Dollar in Wake of Trump’s ‘Muslim Ban’ – Forbes

The Iranian government is to stop using the US dollar in its official statements, according to a report in the local English-language daily, the Financial Tribune.

One Reason Why Putin Might Not Rush to Shed Sanctions Yet – Bloomberg

While a drag on the economy since 2014, the penalties have kept some pressure off the ruble even as it rallied in the past year on the back of stabilizing oil prices.

The Saudi Riyal/Dollar Peg: Time for a Change? – Financial Times (subscription)

The Gulf Cooperation Council countries’ currencies have been pegged to the US dollar (Kuwait’s is pegged to a dollar-dominated basket of currencies) for nearly three decades and the dollar peg has served these countries well.

Turkish Stocks and Mexican Peso: Unlikely Market Winners – Financial Times (subscription)

Turkey and Mexico might not seem like the most obvious countries to invest in at the moment, given recent upheaval in both countries, but for investors with a strong stomach, Turkish stocks and the Mexican peso have emerged from recent jitters as some of the best-performing assets in the world in recent weeks.

FX Volatility: Creating a New Playbook – Profit & Loss (subscription)

In recent years, the FX market has had to cope with some major spikes in volatility, forcing firms to adjust how they trade this market.

Regulatory News

Trump Casts a Shadow Over US Swap Stays Legislation – Risk (subscription)

Changes to agency heads could delay or derail a vital part of bank resolution rules. 

There’s a Huge Gap Between American Economic Hopes and Reality – Bloomberg

Fed officials waiting on the details of new Trump plans.

Esma Seeks ‘Urgent’ New Emir Enforcement Powers – The Trade

Steven Maijoor urges Commission to grant further sanctioning powers to Esma and looks to increase fines by five times.

European Commission Eyes Transaction Limits on Digital Currencies – Coin Desk

The European Commission, the executive branch of the EU, is weighing a limit on cash transactions in a move that may also affect digital currency payments.

Turkish Central Bank Signals Unorthodox Policy to Go On, Ups Inflation Outlook – Reuters

Turkey’s central bank governor signalled that its unorthodox steps to manage sharp falls in the lira currency were working and would continue until the inflation outlook shows a significant improvement.

Company News

Fourth Largest Interbank FX Dealer’s One Billion Euro Loss – Finance Feeds

Corporate fecklessness compounds liquidity crunch.

Nomura Gets Wholesale Boost from Rates and FX – Financial News

Japanese bank’s profits from markets and investment banking soared during final quarter of 2016.

Former Fed Employee Fined for Installing Bitcoin Software on Fed Server – Wall Street Journal (subscription)

A former Federal Reserve employee was sentenced to 12 months’ probation and issued a $5,000 fine for installing unauthorized bitcoin software on a Fed server, a government watchdog said.

Market Savvy

Asian Currencies Firmer as Trump Policy Worries Dent Dollar – Reuters

Most Asian currencies rose against a wobbly dollar as US President Donald Trump’s tough stance on immigration stirred worries about his policy priorities and risks to the US economic outlook.

Rand Bashed by Uncertainty – IOL

The rand plunged alongside the Russian rouble, pummelled by weaker commodity prices and political uncertainties and leading a wider fall in emerging currencies.

C$ Gains as Trump Travel Curb Pressures Greenback – Reuters

The Canadian dollar strengthened against its US counterpart, recovering from an earlier nearly one-week low, as uncertainty triggered by a travel curb ordered by US President Donald Trump pressured the greenback.