Top Headlines

Big Banks Slip Into Bear Market Territory as Rates Rise – Financial Times (subscription)

Among the 39 “Sifis”, financial institutions considered systemically important by the Basel-based Financial Stability Board, 16 are down more than 20 per cent from their recent peaks in dollar terms, meeting the standard definition of a bear market.

Dollar Climbs Ahead of Fed Policy Meeting – Reuters

The dollar edged up against the euro and hit a three-week high versus the yen ahead of a Federal Reserve policy announcement that investors will scan for clues on how many more US rate hikes there will be this year.

Sterling at One-Week Lows as Inflation Below Forecasts – Reuters

Sterling slipped to a one-week low as inflation data failed to bolster chances of an interest rate increase in August with markets wary about headlines on Brexit negotiations.

Quantitative Tightening Puts Asian Markets on Volatile Path – Financial Times (subscription)

A stronger US currency has generated significant pressure across emerging markets, making dollar-denominated debt sold by EM countries and companies more expensive to service.

Two Big UK Banks Shift Some Euro Clearing from London to Frankfurt – Financial Times (subscription)

Barclays and HSBC are two of the major banks now clearing more of their euro interest rate derivatives in Frankfurt, underlining how Deutsche Börse has established a foothold in a market that has become hotly-contested since the UK’s Brexit vote.

Swinburne Warns on Equivalence – Markets Media

Dr Kay Swinburne, MEP, vice chairman of the economic and monetary affairs committee at the European Parliament, has warned that the United Kingdom cannot rely on equivalence for mutual access to European Union markets after the country leaves the trading bloc.

Morgan Stanley CEO Says Bank Will Move Up to 500 Jobs from UK – Bloomberg

Morgan Stanley Chief Executive Officer James Gorman said the bank expects to move 400 to 500 jobs out of the UK as the nation breaks from the European Union.

Industry Split Over Running of New Derivatives IDs – Risk (subscription)

The International Swaps and Derivatives Association is facing a pushback against its plan to become the brains trust behind a global scheme that could drive changes to the way Europe classifies products in derivatives trades.

Why the Conviction of an FX Banker Has Huge Implications for All Market Participants – Euromoney

Kevin Rodgers gives his personal views on the trial and conviction of FX banker Mark Johnson and its ramifications for global markets.

Regulatory News

Foreign Banks Push US Federal Reserve to Relax Capital Rules – Financial Times (subscription)

Foreign banks in the US are stepping up a fight for regulatory relief, complaining they have been unfairly hit by supercharged standards on capital developed under the Obama administration. 

A Brewing Issue on the Volcker Battleground – Wall Street Journal (subscription)

Under the current Volcker rule, trading positions held for fewer than 60 days are presumed to be part of a bank’s ‘trading account’.

Regulators Zeroing in On Non-Financial Risk, Say Banks – Risk (subscription)

Regulators are stepping up their focus on non-financial risks and banks should consider restructuring their risk management functions accordingly, operational risk managers said at a conference.

Crypto News

Bitcoin Futures Growth Could Prompt Bank Ratings Downgrades – Risk (subscription)

Rating agencies are considering downgrading banks that clear bitcoin futures – and potentially even those just exposed to the contracts through their central counterparties – should volumes continue to increase on the new, volatile contracts.

Tether Used to Manipulate Price of Bitcoin During 2017 Peak, New Study Says – Bloomberg

Tether, one of the most-traded cryptocurrencies, shows a pattern of being spent on bitcoin at pivotal moments, helping to drive the world’s first digital asset to a record price in December, according to research by a University of Texas professor known for flagging suspicious activity in the VIX benchmark.

Financial Services Blockchain Spending Jumps to $1.7bn – Profit & Loss

The financial services industry is spending about $1.7 billion per year on blockchain, according to a new report by Greenwich Associates.

Cryptocurrency Ethereum Classic Soars on Coinbase Listing Plan – Bloomberg

Ethereum Classic, an offshoot of the second-biggest cryptocurrency, soared as much as 22 percent after the digital exchange Coinbase said it will begin trading the virtual token in the next few months.

Blockchain Consortium R3 CEO Blasts Rumours of Financial Woes – The Trade

The chief executive of blockchain consortium R3 has come out fighting against rumours that the company is facing financial difficulty.

Company News 

eFX Pioneer Estes Leaves BNY Mellon – Profit & Loss

Richard Estes has left BNY Mellon after 23 years with the US bank, according to sources.

Two Leave ANZ’s FX Business – Profit & Loss

Market sources tell Profit & Loss that two staffers in ANZ’s FX business have left the firm.

AI Post-Trade Derivatives Platform Launches After First Buy-Side Transaction – The Trade

A ‘no-touch’ trade processing system for derivatives has launched after it processed its first buy-side transaction involving JP Morgan and hedge fund giant Citadel.

Market Savvy

Turkey’s Lira Slides Again Ahead of US Rates Decision – Financial Times (subscription)

The currency is under renewed pressure despite two aggressive tightening moves from the central bank in the last three weeks.

Argentina’s Peso Jumps After Latest Central Bank Intervention – Financial Times (subscription)

The Argentine peso jumped at the start of trading after the central bank again intervened in the market, despite agreeing to an IMF condition that it would allow its currency to float freely.

Brazil’s Central Bank in Firepower Test with Currency Speculators – Financial Times (subscription)

Brazil’s central bank president Ilan Goldfajn is facing the test of his career as the country’s currency has once more come under assault from foreign exchange traders.