Top Headlines

Banks Brace for Closure of EU Currency Manipulation Probe – Financial Times (subscription)

After six years of scrutiny, billions of dollars in fines and a flurry of criminal lawsuits, the world’s biggest currency-dealing banks are finally close to drawing a line under global regulatory investigations into the behaviour of their traders, as the EU prepares to announce the results of its probes.

Citi Scrape Could Change FXPB Skyline –

FXPB business is in the throes of profound changes – and CCPs could benefit.

How Much Will US-China Trade Tensions Damage Markets? – Financial Times (subscription)

With uncertainty, posturing, tactics and the prospect of eleventh-hour deals still swirling around the trade talks, foreign exchange trading in Asia will look to the yen as a barometer of market nerves and how far investors will price in a trade war.

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

In this week’s episode, the podcasters talk about why, when volumes are low and people are bemoaning the lack of volatility, are CTAs suddenly doing so well. They also discuss automation and the future of the FX swaps market.

Regulatory News

How Mifid II Hurts European Investment Banking – Financial Times (subscription)

Mifid II is contributing to the slow death of European investment banking, and regulators must act. The directive, brought into force in early 2018, demands the completely unnecessary unbundling of the cost of research from trading fees.

No More Delays on Mifid Open Access, EU Regulator Says – (subscription)

The far-reaching regulatory change designed to give European financial market users free choice of where to clear their trades, which faced lengthy delays and possible extinction, is now likely to apply from the middle of next year.

BNPP’s English Court Win Calms ‘Jurisdiction Shopping’ Fears – (subscription)

Unanimous decision reaffirms importance of English law provisions in derivatives contracts, say lawyers.

Giancarlo Defends Work on CCP Resolution – FOW (subscription)

The CFTC chairman said the Systemic Review Council’s criticism of CCP resolution was “ill-informed”

ISDA Outlines Key Steps to Initial Margin Compliance – Regulation Asia

Based on recent BCBS/IOSCO guidance, ISDA estimates that regulatory IM preparation can be deferred for upwards of 70-80% of Phase 5 counterparty relationships.

Crypto News

Bitcoin Jumps Above $7,000 to 9-Month High – Financial Times (subscription)

Bitcoin was hovering above $7,000 on Monday after climbing to a nine-month high over the weekend.

Institutional Crypto Faces Prospect of a Nuclear Winter – WatersTechnology (subscription)

While digital currency prices endure what enthusiasts call a ‘crypto winter,’ the problem appears to be far more acute when it comes to institutional appetites.

Crypto Hedge Funds Live to Fight Another Day – Financial Times (subscription)

About 150 cryptocurrency hedge funds, which together manage assets of $1bn, survived the volatility in the bitcoin market that saw the price of the most popular digital coin plummet by 72 per cent.

From Crypto Winter to DeFi: A Year of Loss and Opportunity – CoinDesk

As bitcoin’s price collapsed from its lofty peak of $19,783 in December 2017 to a low of $3,122 a year later, as ether retracted 94 percent peak-to-tough, and as countless ERC-20 tokens that were issued in the prior two years plunged to near worthlessness, the crypto community came under a barrage of criticism.

Company News

P&L Talk Series with Baton Systems’ Arjun Jayaram – Profit & Loss

Arjun Jayaram, CEO of Baton Systems, talks about how distributed ledger technology is already helping the FX market, why the hype cycle around this technology is coming to an end and who he expects to win the “blockchain wars”.

Darryl Hooker Sets Up Harperdan Consulting – FX Week (subscription)

London-based business consultant Darryl Hooker has become the founder and chief executive officer of Harperdan Consulting. The company offers foreign exchange consulting services, with areas of speciality including emerging markets, disruptive sales, and marketing strategies and education around the FX Global Code of Conduct.

Corporate Currency Hedging Slows as FX Volatility Slumps – Reuters

The striking calm in foreign exchange markets in recent months has led some US multinational companies to scale back on guarding against currency gyrations, potentially leaving them vulnerable if volatility rebounds from near five-year lows.

Live Order Book Automated Credit Trading is in Sight – Euromoney

The launch of MarketAxess’s Live Markets will speed automated execution for large, benchmark issues, but smaller deals remain a challenge.

Market Savvy

Sterling Steady as Cross-Party Brexit Deal Hopes Linger – Reuters

Sterling was little changed on Monday after a newspaper report suggested the British parliament might still reach a cross-party deal on Brexit, though doubts about such an agreement kept the currency from gaining.

China’s Yuan Slumps to 2019 Low as Trade War Escalates – Reuters

China’s yuan was set for its worst daily fall in nine months on Monday as trade negotiations between the U.S. and China ended after President Donald Trump raised tariffs on Chinese goods.

Emerging Markets Hit By Flight from Risk on Trade War Fears – Financial Times (subscription)

Emerging market assets were bearing the brunt of impact of the trade dispute between China and the US on Monday, as concern about the implications of the clash on global growth deepened. Turkey’s lira was the standout faller.