Top Headlines

Big Banks Are Struggling to Get to Grips With Life After Libor – Financial Times (subscription)

Scrapping Libor is a noble and sensible aim. But replacing a number embedded in everything from derivatives prices to households’ monthly mortgage repayments and banks’ internal transfer systems, in the timeframe available, is a mind-bendingly tricky task. The complications for internal systems of banks, investors and companies have barely even been considered outside of the dark rooms where spreadsheet warriors are still trying to understand what happens when the music stops.

Big Banks Break Away from Lobby Groups in Brexit Trade Deal Talks – Reuters

The finance ministry has asked global banks – including Citi and Goldman Sachs – to come up with ideas that could be slotted into a broader UK trade deal with the EU to cover financial services.

Investors Oblivious to Rising Costs of Trading FX Options – HedgeWeek

Investors are being left in the dark as to the huge additional costs their asset managers are incurring to transact highly complicated derivatives, according to research from analytics firm OpenGamma, which reveals that transaction costs incurred when trading FX options can be misrepresented to investors by as much as 400 per cent. 

Regulatory News

Critical EU Benchmarks to be Approved By Year-End – (subscription)

Eonia and Euribor will be authorised for use by European entities by the end of the year, with the latter on course to gain approval by the summer, the regulator overseeing the benchmarks has said.  

Bank of England Deputy Governor Warns Against Curbing Financial Regulations Post-Brexit – CNBC

Light touch financial regulation after the UK leaves the European Union will not help the British financial sector to gain a competitive advantage and is not on the agenda, according to Dave Ramsden, Deputy Governor for Markets and Banking at the Bank of England.

ESMA Pushes Local Regulators for Permanent CFD Restrictions – ForexNewsNow

The European Securities Markets Authority has published another extension to its rules on promoting and marketing CFDs across the European Union. The news does not come as a surprise since it is the third time ESMA has renewed its restrictions since it was first introduced on the European trading market.

Esma Pushes Back Date for Publication of Systematic Internaliser Regime Data – Finextra

Due to a technical issue, the European Securities and Markets Authority will delay the publication of the systematic internaliser regime data for equity, equity-like instruments and bonds. This publication will now occur by the end of next week.

Crypto News

ErisX Launches Crypto Spot Market on Heels of New $20 Million Raise – CoinDesk

Aspiring crypto derivatives provider ErisX took one step closer to its ultimate goal with the launch of a spot market. The exchange announced that it will immediately support dollar trading pairs with bitcoin, bitcoin cash, litecoin and ethereum, as well as bitcoin trading pairs with the other three cryptocurrencies at launch. While ErisX has a number of firms looking to trade on its platform at launch, it did not disclose any names.

BNY Mellon Partners With Crypto Exchange for Revolutionary Custody Model – The Trade Crypto

BNY Mellon has made its first foray into the cryptocurrency world by collaborating with digital currency exchange Bakkt to help it launch a custody service.

Turkey: The Country Where Crypto Exchanges Are Beating the Bear Market – CoinDesk

With the Turkish lira dropping to a six-month low against the dollar last week, bitcoin is continuing to pick up even more traction in Istanbul. Crypto exchange OKEx says over 30,000 Turkish users signed up for the platform since it expanded services to Turkey on March 26. Turkey’s growth as a leading bitcoin market is supported by other data as well.

Barclays Ex-Bitcoin Man Joined Fidelity Investments – eFinancialCareers

The man who tried – and ultimately failed – to bring Bitcoin to Barclays has just got a new job at Fidelity Investments as head of digital assets.

SEC’s Digital Asset Framework Falls Short – MarketsMedia

Until the SEC issued its framework, firms considering initial coin offerings needed to navigate the four-prong Howey Test, which defines a security as an investment of money with a reasonable expectation of profit delivered from the efforts of others. However, the lack of further guidance has left many questioning when to apply the test.

Company News

Traiana Offers FXPBs Additional Risk Control – Profit & Loss

Traiana has made changes to its Credit Risk Hub that will enable FX prime brokers to define trade information in more detail in order to increase credit risk controls and reduce the risks of credit over-allocation.

How to Train Your Machine: JP Morgan FX Algos Learn to Trade Better – Reuters

JP Morgan has started applying a new technology that enables machine-trading programs to learn from previous trades and search for the most profitable way to execute them.

GlobalLink CTO Set to Depart – Profit & Loss

Harsha Bhat is set to leave his role as senior vice president and CTO of GlobalLink at State Street. In this role he was responsible for overseeing the technology underpinning Currenex, FX Connect, Fund Connect and Trade Services, managing an engineering department of over 150 people.

Brusso Leaves ICE – Profit & Loss

Scott Brusso has left ICE Futures US, where he was senior director, FX and metals. It is understood that the FX business is now being led by Matthew Ryan, a senior director who has traditionally been focused on the soft commodities markets.

Lieff Cabraser, Kessler Topaz Seek $23.2M for BNY Deal – Law360 (subscription)

Attorneys for a class of investors want 30% of the $72.5 million settlement they negotiated with the Bank of New York Mellon over claims that it overcharged for certain foreign currency conversions. 

Societe Generale Resigns as London Gold and Silver Market Maker – Reuters

The London Bullion Market Association said Societe Generale had resigned as a market maker for gold and silver, as France’s third-largest bank pushes ahead with a downsizing of its commodities business.

Market Savvy

Sterling Strengthens Ahead of Bank of England Interest Rate Meeting – Reuters

The pound held at a two-week high on Wednesday, maintaining some momentum after tentative signs of progress in Brexit talks between the British government and the main opposition party.

Dollar and Treasuries Steady Ahead of Fed Rate Call – Financial Times (subscription)

The dollar stayed shy of its recent 2019 highs and US Treasury yields kept clear of their late March lows as investors looked ahead to a rate call from the Federal Reserve, with a range of global stock markets closed for a public holiday.

New Zealand Dollar Hurt By Jobs Setback; Investors Eye Fed Meeting – Reuters

The New Zealand dollar fell on Wednesday after weak jobs data added to expectations for an interest rate cut as investors worldwide waited for news from Federal Reserve Chairman Jerome Powell at the end of a two-day policy meeting.