Top Headlines

BIS to Hear Initial Verdict on Sterling Crash in November – Reuters

Central bank officials looking into the factors behind the dramatic fall sterling took on October 7 will make an initial report to the Bank for International Settlements in early November, sources with knowledge of the investigation said.

UBS’s Currency Trading Volume Hit Record as Pound Crashed – Bloomberg

UBS Group, the world’s third-biggest currency trader, said it processed a record number of currency trades during the minutes of the pound’s flash crash this month.

Euro Skids to Lowest Level Since March, Rattled by Draghi Comments – MarketWatch

The euro fell to a seven-month low against the dollar while the yuan hit a record low in offshore trading as overnight comments from European Central Bank chief Mario Draghi weakened the common currency and buoyed the greenback in Asia trade.

Dollar Heads for Third Weekly Gain as US Rate Rise Bets Firm – Reuters

The dollar was on course for its third consecutive week of gains against the basket of currencies used to measure its broader strength, driven by hardening expectations of a rise in interest rates in December.

British Pound Slides Lower Against the Euro, US and New Zealand Dollar – Exchange Rates

The British pound slipped against the euro, US dollar and New Zealand dollar as it was sold against most currencies amid a new lack of interest in the Brexit-worn currency.

EU Watchdog Says MiFID II Securities Rules May Need Tweaks After Brexit – Reuters

A sweeping reform of European Union securities rules to apply lessons from the 2008 financial crisis may need to be adapted after Britain leaves the bloc, a senior regulatory official said.

UK Determined to Retain Eurozone Clearing After Brexit – Financial Times (subscription)

Keeping hold of the City’s vital eurozone clearing functions following its decision to leave the EU is one of the British government’s “major aims”, the country’s Brexit minister has said.

Brexit and MiFID II Cause Anxiety for Exchange Operators – FX Week (subscription)

“The outcomes are going to be interesting,” says CME Group chief executive Phupinder Gill.

LCH to Relax Margin Model After Brexit Backlash – Risk (subscription)

Excess intra-day margin will offset other collateral calls from November 3.

Shafik Calls for “Ethical Lift” – Profit & Loss

Outgoing deputy governor of the Bank of England, Manouche Shafik, has called for a move from what she terms “an ethical drift” to an “ethical lift”.

Dudley Repeats Call for “Banker Database” – Profit & Loss

The president of the Federal Reserve Bank of New York, William Dudley, has reiterated his call for a database of banker misconduct that will “stop rolling bad apples”.

Hotspot Teams with IPC FX Hub to Extend Access to Outright Deliverable Forwards – Finance Magnates

The integration into IPC FX Hub will see improved access to outright deliverable forwards.

ICE Warms to Expanding US Clearing Model – The Trade

Intercontinental Exchange is currently exploring new direct clearing models for the US derivatives market.

US Judge Picks Monitor for Deutsche Bank Over Regulator’s Choice – Reuters

A US judge approved a US Commodity Futures Trading Commission deal with Deutsche Bank in which a monitor would be appointed to ensure the bank reports swaps data properly, but named someone other than the regulator’s choice.

Blockchain Platform Developed by Banks to be Open-Source – Reuters

A blockchain platform developed by a group that includes more than 70 of the world’s biggest financial institutions is making its code publicly available, in what could become the industry standard for the nascent technology.

Swedish Krona Weakness a Boon for Carry Trades – Financial Times (subscription)

Negative rates encourage sale of the currency to invest in higher yielding assets.

Conditions Improving for Co-Location in FX – Euromoney

Rising activity in Asia is proving to be a welcome boost for co-location providers, many of whom are still dealing with the consequences of the Swiss central bank’s decision to abandon its peg to the euro in January 2015.

New Zimbabwe Notes Stir Memory of 500,000,000,000% Inflation – Bloomberg

Zimbabwe’s tentative return to its own currency is getting a hostile reception from citizens, who fear a recurrence of the 500 billion percent inflation that plagued the southern African nation before it abandoned its dollar seven years ago.

Regulatory News

EU Trading Obligation Threatens US Equivalence – Risk (subscription)

Rigid criteria and poor data could make EU regime too narrow to achieve US recognition.

Trade Bodies Push Greater transparency for Clearing Members – The Trade

FIA, GFMA, IIF, ISDA and TCH have responded to recent CPMI-IOSCO guidance urging for greater transparency for clearing members. 

CFTC Chairman: Managers’ Concerns Over Algorithm Codes Disclosure to Be Addressed – Pensions & Investments

The Commodities Futures Trading Commission will address concerns from market participants over the agency’s proposed Regulation AT, which would require money managers’ algorithm codes to be disclosed to the agency, said Timothy Massad, CFTC chairman.

CCPs Defend Direct Clearing Models for the Buy Side – Risk (subscription)

FCMs unsure if direct margin posting will deliver capital savings.

Derivatives Exchanges Firm on Bank Inclusion in Clearing – The Trade

The leaders of the world’s largest derivatives exchange groups remain firm on the importance of banks in central clearing, despite new models that involve greater buy-side participation.

Company News 

UK SMEs Unprepared for Impact of Brexit on FX Costs – Profit & Loss

UK small- and medium-sized businesses remain exposed and unprepared for the economic impact of the Brexit vote on their FX costs, according to a survey by EarthportFX, a cross border payment network.

New Study Highlights Hedge Fund Tech Spending – Profit & Loss

Hedge fund managers are increasing their investment in technology to create competitive advantages and address regulatory and operational concerns, according to a new study by KPMG International, the Alternative Investment Management Association and the Managed Funds Association.

Pragma Completes Migration to NY5 – Profit & Loss

Pragma has completed the upgrade and migration of its New York trading and connectivity infrastructure to Equinix’s NY5 data centre.

Market Savvy

Yuan Outflows Surge to Record as Currency Sinks to Six-Year Low – Bloomberg

China’s outbound yuan payments surged to a record in September, indicating greater pressures on a currency that has weakened to a six-year low in both onshore and overseas markets.

Post-ECB Dollar Strength Hurts Asia FX; Yuan at Fresh Six-Year Low – Reuters

Emerging Asian currencies slid as the dollar hit a seven-month peak on the euro’s weakness after the European Central Bank dampened speculation about plans to reduce stimulus, while lower oil prices soured risk sentiment.

Emerging Assets Pare Best Weekly Gain in Month on Dollar, Oil – Bloomberg

Emerging market currencies and shares fell, trimming the biggest weekly gains in a month, after Mario Draghi’s comments on quantitative easing sent the euro tumbling against the dollar and a drop in crude prices curbed demand for higher-yielding assets.

Rupee Volatility Drops to the Lowest Since January 2008 on RBI support – Economic Times

The dollar-rupee volatility index has hit a more than eight and-a-half-year low as the Reserve Bank of India’s tight interventions have checked the local unit from wild swings, especially at a time when other emerging market currencies including the Chinese yuan, and Korean won continue to remain volatile.