Top Headlines

Banks to Face Australian FX Class Action – Profit & Loss

Australia has become the latest location for a class action lawsuit against a group of banks with a law firm filing a cartel class action in the Australian Federal Court claiming the banks “systematically manipulated foreign exchange rates to boost profits at the expense of Australian businesses and investors”.

May Quitting Throws Bank of England Governor Race Into Unknown – Bloomberg (subscription)

Theresa May’s resignation threatens to turn the race to lead the Bank of England on its head.A new prime minister – and the new chancellor of the exchequer that might accompany them – could have very different priorities from May and Philip Hammond, potentially opening the door for a different slate of candidates for the top BOE job.

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

This week’s podcast opens up with a discussion about a shift appearing in the Global Foreign Exchange Committee’s approach to encouraging adoption of the FX Code of Conduct, with the group more resolved to put pressure on buy side firms to commit to its principles. This in turn sparks a conversation about whether it is realistic, or even desirable, for platform providers to publicly publish more information regarding trading behaviour on their platform.

Fast Enough Should Be Good Enough (opinion) – Profit & Loss

Have we finally hit the wall in terms of our willingness, as a broad financial markets industry, to accept the continued race to cut a few microseconds off the speed of trading? I suspect we have.

China Regulator Downplays Trade War Impact, Warns on FX – Bloomberg (subscription)

The US escalation of trade tensions won’t solve any of its problems but will create volatility in global markets and hurt the world economy, according to China’s top financial regulator.

Regulatory News

Bankers Bemoan Mifid’s High Costs and Unclear Benefits – Financial Times (subscription)

For one of Europe’s most senior markets regulators, the arrival of Mifid II after seven long years has been a real tonic. That optimism is not widely shared. For the banks, exchanges and fund managers in the front line of Europe’s flagship markets legislation, the costly project has had little upside so far.

Talk of Delaying IM ‘Big Bang’ Sparks Backlash – (subscription)

A European Commission official has drawn a backlash by suggesting that the final phase of the uncleared margin rules could be deferred.

Evolution or Extinction: Ice Swap Rate’s Post-Libor Quandary – (subscription)

As Libor’s future hangs in the balance, so too does the fate of a lesser-known but widely used benchmark underpinning a gamut of financial instruments, including swaptions, rate-linked structured products and some floating rate debt.

Crypto News

Bitcoin Jumps Toward $9,000 in Best-Performing Month Since 2017 – Bloomberg (subscription)

Bitcoin jumped as much as 10% on Monday to almost breach $9,000 as it extended the best one-month rally since before the token’s historic surge in 2017.

Bitcoin Futures Volumes Wake to New Dawn on CME and Other Exchanges – FX Week (subscription)

After a lengthy period of hibernation, volumes of bitcoin futures on traditional exchanges spontaneously woke in April as cryptocurrency markets suddenly sprang to life once again.

The Cat-and-Mouse Game of Crypto Regulation Enters a New Phase – CoinDesk

In the relentless cat-and-mouse game between regulators and cryptocurrency developers, the cats are about to add some serious firepower – this time in the form of a global alliance.

Company News

Not So Fast: A Look at Eurex’s New Latency Mechanism – Profit & Loss

Speed bumps seem to be the topic de jour in the listed derivatives markets just now. Eurex is planning to implement something similar for FX products and German and French equity options, but if there’s one thing that Jonas Ullmann, head of market functionality at the exchange, wants people to know, it’s that this is not a speed bump.

Nilim to Head FX at Goldman Sachs Asset Management – FX Week (subscription)

Arnab Nilim has joined Goldman Sachs Asset Management as global head of FX. New York-based Nilim joins the asset manager at its London office from AllianceBernstein, where he was a lead currency portfolio manager for more than seven years.

Nasdaq Withdraws Offer for Oslo Bors – Financial Times (subscription)

Nasdaq has withdrawn its offer for Oslo Bors, ending a lengthy battle with Euronext for control of Norway’s main stock exchange. The US exchanges operator announced its decision on Monday after failing to garner enough shareholder support for the bid, effectively clearing the way for its rival to proceed with its buyout.

HSBC Looks to AI to Unearth Data Patterns Around Commercial Activity – FX Week (subscription)

HSBC is looking into ways it can use machine-learning applications of artificial intelligence to unearth patterns in payments and invoice data supporting clients’ commercial activities to enhance its corporate servicing model for foreign exchange transactions.

Market Savvy

Pound Pressured as Hard Brexiters Emboldened in Race to Succeed May – Reuters

Sterling languished just off four-month lows on Tuesday, with risks of a no-deal Brexit seen rising as the battle to succeed Prime Minister Theresa May got underway.

Euro Dips on Italian Debt Worries and Trade Tensions – Reuters

The euro dipped on Tuesday as investors nervous about trade tensions bought into the safe-haven dollar and fretted that political risks in Europe remain high, even though pro-Europe parties won a majority of European parliamentary seats.

Rand Suffers as Investors Question Ramaphosa’s Reform Agenda – Bloomberg (subscription)

As investors speculate who’s in and who’s out in President Cyril Ramaphosa’s cabinet, due to be announced this week, the market is clear on one contender.