BOJ Shock Heralds Currency War Return as Yen Drops Most in Year – Bloomberg The yen dropped the most in more than a year after Bank of Japan Governor Haruhiko Kuroda unexpectedly adopted negative interest rates, risking another round of competitive devaluations.
Currency War: US Hedge Funds Mount New Attacks on China’s Yuan – Wall Street Journal (subscription) Some of the biggest names in the hedge-fund industry are piling up bets against China’s currency, setting up a showdown between Wall Street and the leaders of the world’s second-largest economy.
El-Erian Says Countries Weakening Currencies in Fight for Global Growth – Reuters Mohamed El-Erian, the chief economic advisor at Allianz, said on Friday the Bank of Japan’s shocking move to take one of its main interest rates into negative territory underscored the country’s hope to weaken the yen to re-inflate its economy.
Currency Managers Close Out Tough Year on a Negative – Profit & Loss While currency managers were able to point to positive returns for 2015 a decline in performance in December put the stamp on a downbeat 2015, with the Parker FX Index falling 0.51% on a reported basis and 0.23% on a risk-adjusted basis.
‘Seismic’ Shock Awaits Bond Liquidity – Financial Times (subscription) Fund managers have made a last-ditch attempt to convince European regulators to water down proposed trading rules designed to prevent a repeat of the market turmoil encountered during the financial crisis.
Where is China’s Central Bank Chief? – South China Morning Post Doubts over yuan’s direction grow, but no-one’s seen or heard from Zhou Xiaochuan.
FX Prime Brokerage Enters New Era – Euromoney The past 12 months have seen fees rise in FX prime brokerage, with many admitting there is probably more to come this year – but it has not all been bad news for clients, with the business benefiting from innovation, with technology, and particularly risk-management systems, an increasing priority among providers.
The New Threat to Bank-to-Bank Lending – Wall Street Journal (subscription) A dispute over technology could pose a new threat to Wall Street’s plumbing by severing a link that allows big banks to borrow freely from one another, according to market participants.