Top Headlines

Banks Depict South African Rand Probe as Vague, Embarrassing – Bloomberg

Some of the banks accused of manipulating trades in the rand are objecting to the complaint by South Africa’s Competition Commission, calling it vague and embarrassing, and demanding it be amended or dropped.

Dollar Hits Eight-Week Highs vs Yen, Kiwi Tumbles as Central Bank Surprises on Outlook – Reuters

The dollar edged lower after notching an eight-week high against the yen in Asian trade, while the New Zealand dollar tumbled after its central bank suggested a tightening was further out than markets had priced in.

Sterling Shy of $1.30 Ahead of Bank of England Decision – Financial Times (subscription)

No change in official borrowing costs is expected, but traders will be keen to note the accompanying commentary and whether there is any sign of a shift in thinking among the rate-setting committee.

Euro Sees Off Macron Victory with a Gallic Shrug – Financial Times (subscription)

Volatility in the currency is already well below its five-year average.

Macron’s Ascent Stokes a Fight Over Euro in Germany – Bloomberg

Emmanuel Macron’s ascent to the French presidency is stoking an election-year fight over the euro in Germany, as the Social Democrats tell Chancellor Angela Merkel his resounding victory is the signal for her to dump fiscal austerity in Europe.

SNB’s Jordan Says Negative Rates Not Great but Necessary – Reuters

The Swiss National Bank’s (SNB) policy of negative interest rates is not ideal but is nevertheless necessary in order to weaken Switzerland’s “significantly overvalued” currency, Chairman Thomas Jordan said.

Buy Side Looking for Simplified Workflows – Profit & Loss (subscription)

As buy side workflows are becoming complex, these firms are looking for ways to simplify how they view and manage them, Basu Choudry, business intelligence, Nex Traiana, explains.

Making the Case for Hedge Funds – Profit & Loss

Speakers at the Alternative Investment Conference earlier this week spoke out in defense of hedge funds after years of muted performance from some of these firms.

Pimco and BlackRock Are Buying Up Assets in the ‘Fragile Five’ – Bloomberg

Four of five ‘fragile’ currencies have appreciated this year.

Argentina Central Bank Buys Dollars, Checks Strengthening Peso – Reuters

Argentina’s central bank this month has renewed its buying of dollars in the local foreign exchange market, checking the rise of the country’s peso currency.

This Is What Can Kill the Emerging Market Rally – Bloomberg

As bonds, stock and currencies rally, some see overheating.

Study: FX Dealers Narrowing Focus to Chase Profits – Profit & Loss

A new study from Greenwich Associates suggests that FX dealers are narrowing their focus in terms of which products and clients they will cover.

The Problem with Retail FX – Profit & Loss (subscription)

It is hard to escape the conclusion that some retail brokers used the French presidential election to create an easy payday for themselves.

Regulatory News

Head of US Derivatives Regulator Warns of Impact of Euro Clearing Decision – Financial Times (subscription)

The head of the US derivatives regulator has warned that Europe’s decision on its future policing of euro-denominated clearing would have an impact on the agency’s thinking as it committed to implementing president Donald Trump’s call to push US interests in financial markets.

Trump’s Newest Wall Street Watchdog Sidesteps Ethics Scrutiny – Bloomberg

The Trump administration used a highly unusual personnel move to skirt Senate confirmation and standard ethics requirements when it installed a financial services lawyer atop a powerful banking regulator.

Fed’s Kashkari: Keep Dodd-Frank Regulations in Place for Big Banks – Reuters

Minneapolis Federal Reserve Bank President Neel Kashkari said that there should not be any relaxation of regulations that have tightened oversight of Wall Street.

Warren Pushes Trump Administration on Plan to Break Up Megabanks – Bloomberg

US Senator Elizabeth Warren is eager to pursue legislation that would break up Wall Street megabanks and has pushed the issue with members of the Trump administration.

BOE Board Says Hogg’s Departure `Disproportionate’ to Offense – Bloomberg

Charlotte Hogg’s resignation as deputy governor of the Bank of England just weeks into the job was “entirely disproportionate” to the offense she was accused of, according to the central bank’s board of directors.

Company News

Nex Launches Yen Benchmark – Profit & Loss

Nex Data, a Nex Group business which delivers independent market intelligence and price information for OTC data and Nex Markets, a NEX Group business which provides electronic trading technology and services, have launched the EBS JPY Benchmark, which it claims is the first fully electronic, transaction-backed reference rate for the Japanese yen.

360T Launches ECN, Announces Record Volumes – Profit & Loss

360T has revealed that it officially launched its undisclosed marketplace, 360T ECN, in April.

IHS Markit Reports Spike in NDF Clearing – Profit & Loss

IHS Markit says that in 2017 it has processed a monthly average of 54,000 NDF contracts via Markitserv, a 920% increase compared to the same period last year.

Citadel Securities, XTX Markets Join Blockchain FX Venture Cobalt – Reuters

Electronic trading houses Citadel Securities and XTX have joined top global banks in signing up to blockchain currency settlement venture Cobalt, they said, in what could be one of the first large-scale financial market uses of the technology.

Revenues Rise for TP ICAP, Boosted in Part by the Weaker Pound – Financial Times (subscription)

TP ICAP, the world’s largest interdealer broker, reported a rise in turnover for the first four months of the year as the outlook for interest rate changes in the US and political uncertainty in Europe injected volatility into over-the-counter markets.

LMAX Exchange Reports Strong 2016 – Profit & Loss

LMAX Exchange has reported record high profitability with reported annual EBITDA of £5.6m in 2016.

Market Savvy

NZ Dollar Worst Off Among Asia Pacific Currencies – Financial Times (subscription)

The New Zealand dollar was faring badly in an otherwise relatively muted morning session for Asia Pacific currencies.

Oil Rebound Lifts EM Stocks Towards Two-Year High, Rouble Firms – Reuters

A sharp rebound in oil prices helped lift emerging equities towards a two-year high and boosted the currencies of oil producers Russia and Kazakhstan, whilst a weaker dollar allowed other currencies to make gains.

LatAm Currencies Up After Trump Fires FBI Chief – Reuters

Latin American currencies strengthened after US President Donald Trump unexpectedly fired FBI director James Comey, fueling expectations of delays in the implementation of the government’s economic agenda.