Top Headlines

Banks Accused of Overcharging Small Customers for Forex Services – Financial Times (subscription)

Banks across Europe earn hundreds of millions of euros a year from overcharging small corporate customers for foreign exchange services, according to a new paper from the European Central Bank.

Regional Players Must Take a Different Approach to Algo Execution (opinion) – Profit & Loss

Two or three years ago we had a rush to market that saw a surge in the number of firms offering algo execution, and I suspect we are on the cusp of a second wave among regional and lower tier players as they seek to retain key clients. If this is the case, the newcomers will have to take a different approach, for we exist in a different world to that of 2016-17.

Singapore Jostles with Hong Kong for Financial Crown – Financial Times (subscription)

Singapore’s rapid rise as the region’s largest centre for both commodity and foreign exchange trading – as well as its growth as a wealth management hub – has created a new competitive dynamic in Asia, which bankers in western financial capitals are watching closely.

Currency Markets Expose a Crucial Flaw in Trump’s China Tariffs – Bloomberg (subscription)

When Donald Trump bemoaned that a weakening yuan had nullified some of the punitive effect of his tariffs on China, he was highlighting, unwittingly perhaps, a crucial flaw in his foreign policy tool of choice: In an era of free-floating exchange rates, currencies adjust so quickly they can offset the intended impact of higher levies before they even take hold.

In the FICC of It (podcast) – Profit & Loss

This week’s episode takes a look at a recent report into the future of the FX options market that may have gone down well with exchanges, but is received less rapturously by the podcasters who still think there are obstacles to be overcome. They also discuss the headline results in the latest Euromoney FX Poll.

Regulatory News

Asset Managers Urged to Commit to FX Global Code – FX Week (subscription)

Firms risk a hit to their reputation by not signing standards on market practice, investment manager says.

High-Speed Traders Back Exchanges in Fight with SEC Over Rebates Plan – The Wall Street Journal (subscription)

Citadel Securities, GTS Securities and the US arm of Amsterdam-based IMC said in a joint court filing that the SEC’s plan, called the Transaction Fee Pilot, was an “ill-conceived” program that would harm investors.

EU Tries to Revive Plan for Financial Transaction Tax – Reuters

European Union finance ministers have discussed a plan for a 0.2% tax on shares, which Germany sees close to being agreed, although further work remains to be done.

Esma Warns EC of Unintended Emir Refit Consequences – FOW (subscription)

The EU markets watchdog wrote to the European Commission seeking Emir Refit clarification.

Crypto News

TP ICAP Enters the Crypto Business to Trade Bitcoin Derivatives – Bloomberg (subscription)

Facing a slowdown in its core brokerage business, TP ICAP has joined the handful of traditional finance firms opening the door to Bitcoin. The ICAP unit of the world’s biggest interdealer broker is now acting as an intermediary between customers wanting to buy or sell Bitcoin futures.

FIS Sees “Great Potential” in Clearing Crypto Derivatives – FOW (subscription)

FIS looks to expand its cryptocurrency derivatives offering to include products that deliver into the underlying cryptocurrency.

JP Morgan Says Importance of Bitcoin Futures Has Been Understated – Bloomberg (subscription)

Bitcoin futures may be more important than many in the market appreciate, according to JP Morgan.

Crypto Exchanges Rally Against New Rules in G20 Showdown – Financial News

Some of the world’s biggest cryptocurrency exchanges are set for a crunch meeting with finance leaders and global policymakers in Japan later this month – with the crypto crowd aiming to head off a new regulation they say could stymie their businesses.

Company News

Refinitv Adds to China Service – Profit & Loss

Refinitiv has added data from the China Foreign Exchange Trade System, the main FX and fixed income venue for China, to its data platforms Elektron and Eikon. It has also added more than 300,000 new economic data series on China, sourced from both in-country and international sources, to its financial and economic research database Datastream.

IBM: Interbank Currency Blockchains Should Address Emerging Markets – FX Week (subscription)

Targeting major reserve currencies with technology to introduce blockchain-based cross-border transfer systems misses the needs of emerging markets that would benefit more from new infrastructure, according to IT giant IBM, which is rivalling fintechs in the space.

Eurex to Launch First Inter-Product Spreads – FOW (subscription)

The German exchange will launch inter-product spreads on fixed income futures in September.

Fokianos Joins ICBC Standard Securities – FX Week (subscription)     

Stamos Fokianos has joined ICBC Standard Securities to work in global markets electronic strategy. Until March, Fokianos was global head of e-business at Credit Agricole, a role he held for more than two years.

Market Savvy

Markets Send Mixed Signals on Trade Battle – The Wall Street Journal (subscription)

Markets are sending conflicting signals about how big a threat the global trade rift presents, underscoring the difficulty investors face in sizing up the fallout from the US and China’s spat.

Pound Extends Six-Week Losing Streak as Johnson’s Lead Grows – Reuters

The pound extended a six-week losing streak against the euro on Monday, as concern grew that Britain was heading for a no-deal Brexit after Boris Johnson got a boost in his bid to replace Prime Minister Theresa May.

Dollar Hits Two-Week High as Traders Pause Before Fed Meeting – Reuters

The US dollar rose to a two-week high on Monday as recent strong economic data led investors to think again about how dovish the Federal Reserve is likely to sound at this week’s monetary policy meeting.

Are Markets Somehow ‘Broken’? – Financial Times (subscription)

Are markets somehow “broken”? That may sound shrill, but some analysts and investors fret that there are some weird sounds coming out from under the hood of the financial system, clanks and whirrs that should worry us all.