Top Headlines

Banks Advance Tokenised Settlement Project with Fnality Launch – Profit & Loss

A group of banks have become the founding shareholders of Fnality International as they advance their efforts to create a Utility Settlement Coin (USC). As part of the founding, the firm has completed an associated ‘Series A’ equity round of £50m.

A Powder Keg in Forex: the Prime Broker Business – (subscription)

Brokerages look at high-speed algo trading paired with bloated credit limits – and shudder.

Ex-JP Morgan Forex Trader Stuck Facing Conspiracy Charges – Law360 (subscription)

A Manhattan federal judge on Monday denied a onetime JP Morgan trader’s attempt to dump charges of bid-rigging and price-fixing conspiracy in the foreign exchange markets, ruling that it was too soon to exclude certain trading behaviours from examination.  

Buy Side Said to Target Sell Side with Code Compliance – FX Week (subscription)

Fewer than 50 buy-side market participants have committed to the FX Global Code of Conduct since it was officially published two years ago, but the body in charge of setting the new standards says the buy side is increasingly leveraging the Code to scrutinise the sell side.

Fragmentation vs. Liquidity: Can Technology Resolve the Debate? – Tabb Forum

While algos have helped traders lower their transaction costs, breaking up large trades into smaller pieces and executing them over time leaves the trader open to both market impact of a poorly timed, executed, or selected algorithm, as well as the opportunity cost of not executing immediately and leaving the trade open to a potentially market-moving event. This cuts to the heart of the age-old debate: Can an order both limit market impact and opportunity cost?

How Does it Look from Space? Satellite Surge to Alter Investing – (subscription)

For funds forever looking for that elusive edge, even space is no longer the final frontier. In what sounds like science fiction, hundreds of new satellites will zoom into orbit in coming years and start beaming down round-the-clock visual updates on unsuspecting companies.

Regulatory News

Fed Warns That the End of Libor Really Is Coming, So Be Prepared – Bloomberg

The Federal Reserve says the London interbank offered rate is going to come to an end and markets need to take warnings about that “seriously.” That’s the message from Randal Quarles, the central bank’s vice chairman for banking supervision.

FIA Files Amicus Brief on Permissible venues to arbitrate futures disputes – FIA

FIA has submitted an amicus brief to the US District Court for the Northern District of Illinois in a case that will decide the permissible venues for the arbitration of futures trading disputes under CFTC rules.

FCA to Transition to “Enforcement Mode” Soon: Duff & Phelps – FOW (subscription)

Duff & Phelps regulatory expert says many firms may be unaware they are reporting incorrectly under Mifid II.

Industry Body Publishes Best Practices Paper for CCPs – Regulation Asia (subscription)

Global association CCP12 says in a new paper that a ‘one-size-fits all’ approach to CCPs is inappropriate, and it is critical to recognise jurisdictional differences.

Crypto News

Regulators Must Do More to Assess Risk of Crypto Assets, Says FSB – Central Banking (subscription)

Regulators need to do more to assess the risk that crypto assets pose due to the rapid pace of technological change and the patchiness of existing regulation, the Financial Stability Board has said.

Could Bitcoin Hit $50,000? In Wild World of Crypto Options, Some Say Yes – The Wall Street Journal (subscription)

As bitcoin has rebounded from wintertime lows, some traders in an obscure corner of the cryptocurrency markets are betting it could jump as high as $50,000—more than double its record during the bitcoin mania of 2017.

LMAX Digital Hits Volume Milestone – Profit & Loss

LMAX Digital, a regulated institutional crypto currency exchange and part of the LMAX Exchange Group, has announced it reached record trading volumes during the month of May. A record $5 billion was traded on LMAX Digital in the month, with a record high of over $400 million in daily spot volumes achieved on 12 May.

Crypto Currency Founder Revealed as Winner of Buffett Lunch – Financial Times (subscription)

Crypto currency entrepreneur Justin Sun has revealed himself as the winner of a charity auction for lunch with billionaire investor Warren Buffett. Mr Sun, founder of cryptocurrency Tron and chief executive of peer to peer file sharing service BitTorrent, placed the winning, and record breaking, bid of $4.6m, which will go to anti-poverty charity Glide.

Company News

Using AI to Spot Potential Rogue Traders – Financial Times Video (subscription)

Rogue traders can cost banks billions. Now some are using artificial intelligence programmes to flag suspicious behaviour, looking at everything from how traders phrase their emails to the times they use their computers.

StanChart to Set Up Forex e-Trading, Pricing Engine in Singapore – The Straits Times

Standard Chartered Bank plans to launch a foreign exchange e-trading and pricing engine in Singapore, with support from the Monetary Authority of Singapore, by the first quarter of 2020.

Stater Shutters Prime-of-Prime Business – Profit & Loss

Less than three years after opening for business, Stater Global Markets has said in a statement that it will no longer be offering FX prime-of-prime services.

Deutsche Bank FX Chief Joins Derivatives Broker – Financial News (subscription)

Amedeo Ferri-Ricchi, the former head of Deutsche Bank’s foreign exchange business in Europe, the Middle East and Africa, has joined JB Drax Honoré as global head of structured products.

Platform Volumes Increase After April Dip – Profit & Loss

The average daily volumes on Cboe FX, FXSpotStream and Euronext FX all increased in May, up 4.9%, 9.1% and 7.6%, respectively, compared to April.

INTL FCStone Partners with Eventus Systems – Profit & Loss

Eventus Systems, a global trade surveillance and market risk platform provider, will now provide its technology to INTL FCStone.

Refinitiv Blocks Reuters Stories on Tiananmen from its Eikon Platform – Reuters

Under pressure from China’s government, financial information provider Refinitiv has removed from its Eikon terminal Reuters news stories related to the 30th anniversary of the bloody suppression of pro-democracy demonstrations in Beijing’s Tiananmen Square.

Trading Technologies Expands Access to Chinese Derivatives Markets – The Trade

Trading Technologies has teamed up with a futures broker based in Hong Kong to expand access to major Chinese derivatives markets to investors based outside of China through its trading platform.

Market Savvy

Sterling Struggles as Trump Weighs in on Brexit – Reuters

The pound dropped to a 20-week low against the euro on Tuesday amid weak UK data and growing fears of a disruptive Brexit weighing on the currency.

Dollar Drops as Rate Cut Bets Mount, Weak Inflation Halts Euro’s Rally – Reuters

The US dollar weakened to its lowest since mid-April on Tuesday as investors bet the Federal Reserve could soon cut interest rates, while concerns about global growth encouraged investors to buy the safe-haven yen.

Wall Street Warns of Mounting Recession Risk From Trade War – Bloomberg

Wall Street’s biggest banks lined up to warn investors of growing recession risks from the escalating trade war between the US and China. A global recession could start within nine months if President Donald Trump imposes 25% tariffs on an additional $300 billion of Chinese exports and Beijing retaliates.

Trump Tariffs Raise Chances of Mexican Economy Falling Back into Recession – Investment Europe

Investors will have to price growing headwinds to Mexican trade. The peso is one of the most liquid and freely tradable currencies in emerging markets, so much of the immediate market impact will come via the exchange rate. Also, Mexican equities are currently vulnerable to a correction.