BIS Report Highlights Shift in FX Trading Styles – Profit & Loss

The latest Bank for International Settlements Quarterly Review provides execution method data relating to the recent Triennial Survey of FX Turnover and finds that while e-ratios generally are stable, there have been some significant shifts in the channels handling the volume.

Even as Pound Rallies, Traders Wary of Post-Election Downside, Options Show – Reuters

Expectations of a Conservative Party victory in Thursday’s UK election have sent the pound rocketing – but some investors are hedging themselves against a surprise outcome that could deal the currency a mighty blow.

Democrats Expected to Unveil Two Articles of Impeachment Against Trump – Reuters

Democrats in the US House of Representatives were expected to unveil two articles of impeachment against Republican President Donald Trump, a senior Democratic aide said, setting the stage for a possible vote this week on impeachment.

Time Running Out for New Trade Deal, but New Tariffs Unlikely – South China Morning Post

Sources from Beijing and Washington continue to believe that tariffs planned for Sunday will be averted, due to economic pressure on both the US and China.

Lagarde’s Green Ambition Risks Losing Out to ECB Inflation Goal – Bloomberg

European Central Bank President Christine Lagarde is discovering that her grand ambitions for fighting climate change will have to take a back seat to her new job of reviving inflation.

US, Canadian Officials Converge on Mexico City to Seal Final Changes to Trade Deal – Reuters

Senior US and Canadian officials were set to fly to Mexico City to work on the final changes to a languishing North American trade pact that could clear the way for a vote in the US Congress before the end of the year.

Central Bankers Must Beware the Political ‘Lower Bound’ – Financial Times

Central banks have underestimated the political lower bound, under which public support erodes.

Former Fed Chief Paul Volcker, Inflation Slayer, Dies at 92 – Reuters

Paul Volcker, the towering former Federal Reserve chairman who tamed US inflation in the 1980s and decades later inspired tough Wall Street reforms in the wake of the global financial crisis, died on Monday at the age of 92, according to his daughter.

Regulatory News

FX Settlement Risk Has Increased; Exposures Down: BIS – Profit & Loss

FX settlement risk has increased since 2013, according to the Bank for International Settlements, both in relative and absolute terms, however the gross market value of outstanding FX and OTC derivatives has fallen, thanks largely to the growth in clearing.

Big Banks Making Most Progress in Libor Transition, Study Finds – Wall Street Journal

Large banks are making the fastest progress in the transition away from the troubled London interbank offered rate, which underpins trillions of dollars in financial contracts.

Euribor Fallbacks Could Hit Thin Legal Ice – Risk

In Italy and Germany, compound interest – the foundation of Euribor fallbacks – is actually illegal.

CFTC Backs Activity-Based Rules for Non-Banks – FOW

US Commodity Futures Trading Commission Chairman has come out to support an activity-based approach over the systemically-important label

Crypto News

LedgerX Founders Placed on Administrative Leave – Profit & Loss

LedgerX co-founders and senior executives, Paul Chou and Juthica Chou, have been placed on administrative leave by the board of directors of the platform’s parent company, Ledger Holdings.

State-Backed Crypto is a Contradiction – Financial Times

We like a little futurism, but elements of Deutsche Bank’s boldly titled “Imagine 2030” report, the latest edition of its “Konzept” periodical, already belong in the past. Chiefly what they have to say about the rise of “crypto”. 

Bitmain Chief Plots Crypto Comeback After Co-Founder Ouster – Bloomberg

Bitmain Technologies Ltd.’s billionaire Chief Executive Officer Wu Jihan is back in the driver’s seat following the ouster of his co-founder, touting new sales initiatives to attract clients as the company fends off rivals.

Bakkt Goes Live with Options, Cash-Settled Futures Products – CoinDesk

Barely three months after launching its long-anticipated physically settled bitcoin futures product, the Intercontinental Exchange’s Bakkt has gone live with its bitcoin options and cash-settled futures contracts.

Crypto Liquidity Issues Clear as MATIC Collapses 70% in an Hour – News BTC

The reason the majority of the cryptocurrency market has under-performed this year is lack of liquidity. Add margin trading to that and the potential of massive cascades in price arises as holders of the altcoin MATIC have just found out.

With Hashes and Hedges, Power-Hungry Crypto Miners Court Investors – Reuters

The old image of bitcoin miners is of young techies in their bedrooms, hunched over laptops that solve maths puzzles to earn new coins. Now they’re more likely to be savvy startups with ultra-high-speed chips and massive, power-guzzling machines.

Company News

LCH Appoints New Operating Officer for SwapClear and Listed Rates – The Trade

LCH has named Matthew Fetta as the clearinghouse’s new chief operating officer for its SwapClear and listed rates business.

Fund Managers Push Against the Flow in Global Macro – Financial Times

Some investors are betting that rumours of the death of the global macro fund have been greatly exaggerated.

GAM Fixed Income and FX Trading Head to Exit – Financial News

Move is the latest in a series of senior departures from the investment company since its new CEO was appointed in September.

New Settlement Workflow Use Case Live – Profit & Loss

AccessFintech has announced the completion of production launch and says it is now live with a new industry use case aimed at enhancing and improving the market’s settlement exception resolution process.

Morgan Stanley Cutting Jobs Due to Uncertain Global Environment – Reuters

Morgan Stanley is cutting about 2% of its workforce globally due to an uncertain global economic outlook, according to a source familiar with the matter.

Dymon is Betting on Cheap Tail Risk Amid Market Complacency – Bloomberg

Dymon Asia Capital (Singapore) Pte. is positioned so that almost one-third of its macro hedge fund’s portfolio would benefit from black-swan market events and dislocations, Chief Investment Officer Danny Yong said.

China’s Elastic Yuan Rates Give Rosy Tint to Foreign Investment – Nikkei Asian Review

China’s Commerce Ministry may have inflated its monthly foreign direct investment figures to show that the trade war with the US is not discouraging foreign companies from making outlays, according to a closer look at the data.

Market Savvy

Major Currencies Mark Time as Investors Brace for Key Risk Events – Reuters

The dollar and yen mostly held the safe-haven high ground on Tuesday, with investors wary of a looming deadline for US tariffs on China, the British election and upcoming Federal Reserve and European Central Bank meetings.

Gold’s Been on a Tear This Year and 2020 May See More Reward – Bloomberg 

Gold’s impressive advance in 2019 — aided by trade war frictions, easier monetary policy across the world’s leading economies and sustained central bank buying – may be set to spill into the new decade.

Wall Street’s Fear Gauge is Acting Up. That Could Signal Trouble – Bloomberg

At this point, most investors probably just want the year to be over to book their gains – especially now that the Cboe Volatility Index is behaving in a way that’s preceded market losses in the past.

Could Trump’s Trade Wars Scupper Europe’s Fragile Recovery? – South China Morning Post

Supportive ECB policies and green-shoot growth in several European economies, as Germany successfully avoided a recession, are good news for the market, but the US threat of tariffs on French goods could portend an escalation of tensions.

Investors Warm to Bruised Brazilian Real – Financial Times

The Brazilian real has had a challenging time in recent months, with the currency sinking to a record low against the US dollar at the end of November before the country’s central bank intervened to limit losses in the currency, but investors are anticipating a turnaround.