Banks’ Multi-Billion Dollar FX Settlements Delayed

globalFXsource0

Top Headlines

Banks’ Multi-Billion Dollar FX Settlements Delayed – Financial Times (subscription)
The latest multi-billion dollar round of settlements between banks and regulators for rigging foreign exchange markets has been delayed by about a week, people familiar with the situation said. Barclays, Royal Bank of Scotland, JP Morgan Chase, Citigroup and UBS were expected to be fined collectively more than $6 billion today, with most of the fines going to the US Department of Justice.

US Set to Rip Up UBS Libor Accord, Seek Conviction – Bloomberg
The US Justice Department is set to rip up its agreement not to prosecute UBS Group for rigging benchmark interest rates, according to a person familiar with the matter, taking a new step to hold banks accountable for repeat offenses. The move by the US would be a first for the industry.

Report: Top Five Banks Lost 2% of FX Market Share in 2014 – Profit & Loss (free story)
The top five dealers in global FX trading collectively ceded market share to rivals last year, according to a new report from Greenwich Associates.

Don’t Relax Just Yet, Euro-Dollar Parity’s Still On its Way – CNBC
The euro hung onto gains on Wednesday after the US dollar tumbled against the single currency on Tuesday, following a spike in German and US government bond yields which rattled markets and pushed investors to reconsider their short bets on the euro.

Euro Woes Won’t Hurt its Global Reserve Currency Status: Nomura – Reuters
Question marks over the euro’s prospects as a sought-after global reserve currency are premature even though its presence in central bank’s reserves is likely to drop to historical lows, Nomura said on Tuesday.

Yield-Hungry Investors are Re-Fuelling the Currencies Trading Market –Bloomberg
Foreign exchange managers are back in vogue. Millennium Global Investments has received $1.7 billion this year for funds that manage currency exposure to boost returns, after attracting no new cash in the same period of 2014. Adrian Lee & Partners, another specialist in the so-called overlay strategies, has grown its funds by 50% in the past year to $6 billion.

Regulatory News

ISDA Sees EU-US Clearing Equivalence in Q3 – FOW (subscription)
European and US regulators are unlikely to reach an agreement on US clearing house equivalence until the third quarter of the year despite last week’s high level talks between the EU Commission and its US peers, Scott O’Malia, CEO of the International Swaps and Derivatives Association, says.

EU, US Aim to Ease Capital Impact: FIA Europe – FOW (subscription)
European and US regulators are looking to amend the Basel III bank capital rules to take into account the risk reducing effects of segregated margin, a move that would bring much needed relief to the clearing industry, according to FIA Europe.

CFTC Releases Final Interpretation on Forward Contracts With Embedded Volumetric Optionality (press release)
The US Commodity Futures Trading Commission (CFTC) released its “Final Interpretation on Forward Contracts with Embedded Volumetric Optionality”. The interpretation identifies when an agreement, contract, or transaction would fall within the forward contract exclusions from the “swap” and “future delivery” definitions in the Commodity Exchange Act, notwithstanding that it allows for variations in the delivery amount.

Company News

Deutsche Bank’s Veteran Says He’s Leaving to ‘Walk the Earth’ – Bloomberg
Richard Herman, global head of fixed income and currencies at Deutsche Bank, told employees he’s leaving after 20 years at the company to pursue interests outside of finance.

Currency Strategist Sutton Assumes Global Head of FX Role at Scotiabank –The Globe and Mail (subscription)
Camilla Sutton, one of the more public faces at Bank of Nova Scotia and a frequent commentator on the health of the Canadian dollar, is taking on a new role as the bank’s global head of foreign exchange. Previously, she was chief foreign exchange strategist at Scotiabank, looking at how global currencies evolved and offering views on the risks and opportunities for clients.

Market Savvy  

Dollar Versus EM Currencies: Which Will Win?
Financial Times (subscription)
The US dollar has been a victim of the thinning of crowded trades. Short yields, short euro/long stocks, long dollar was the dominant strategy until just recently. But if the paring of such positions means the buck declines versus its developed-economy peers – the euro, sterling – how will it fare against emerging market currencies, which themselves may struggle as higher bond yields in the US and Europe supposedly suck out flighty funds?

Economic Calendar Heats Up in Wednesday Trade
LMAX
Wednesday is the big day on the calendar this week and could inspire plenty of volatility. Data is spread out across China, the Eurozone, UK and US and will likely offer more clarity on direction in markets. The US dollar remains under pressure, though bulls are starting to circle.

Press Releases

Cambridge Global Payments Announces Expansion with Specialised FX Emerging Markets Team
Cambridge Global Payments, a provider of global payments and risk management solutions, has announced the addition of a new emerging markets team for foreign exchange.

Industry Events