Top Headlines

Brexit Threatens Pound’s Status as Global Currency, Surveys Says – Financial Times (subscription)

Brexit is likely to threaten the pound’s status as a global reserve currency according to a survey of central bank money managers who say Britain’s departure from the EU will alter their views on sterling.

Global Investment Banks Signal Slump on Calm Markets, Brexit – Bloomberg (subscription)

The world’s biggest investment banks are mostly painting a bleak picture of business in the first quarter. Nomura Holdings, the troubled Japanese bank, is leading the slump, even as some European lenders staged slight recoveries after years of losing share to their US rivals.

Europe Blew Up Financial Research, Hedge Funds and US Firms Won – Bloomberg (subscription)

Recent European rules concerning payment for research, known as Mifid II, may have benefited hedge funds and US-based asset managers more than the European clients they were written to help, according to an analysis by Evercore ISI.

Debating the Changing Economics of Credit in FX – Profit & Loss

Credit provision and intermediation for non-spot FX products could be set to undergo some significant changes in the near future, although there is some debate about how these changes could play out.

In the FICC of It (podcast) – Profit & Loss

The podcasters discuss the attempt by a futures exchange to introduce an asymmetrical speed bump, which some market participants compared to “last look” functionality. They also discuss recent CTA performance; a new initiative from 360T that is focused on the FX swaps market; and the decision to re-brand FastMatch as Euronext FX.

Regulatory News

Former US CFTC Commissioner Bart Chilton Dies at Age 58 – Bloomberg (subscription)

Bart Chilton, the former US Commodity Futures Trading Commission official who called for tighter regulation of swaps and derivatives has died.

Brexit’s Financial Turf  War Enters A New Phase – Bloomberg (subscription)

Don’t count on the delay to Britain’s departure making life any easier for the City of London as it prepares for a new regulatory reality.

Data Reveals Emir Swaps Report Matching Rates at 40% – (subscription)

Only 40% of swaps trades reported under the European Market Infrastructure Regulation are properly matched up at trade repositories, data from the European Securities and Markets Authority has revealed.

SEC Extends BDs’ Compliance Deadline with Amended Reg NMS – Think Advisor

The Securities and Exchange Commission has extended the deadline for broker-dealers to comply with recently adopted amendments to Rule 606 of Regulation National Market System, or Reg NMS, which requires BDs to provide additional disclosures concerning the handling of customer orders.

Why are Firms Failing on Mifid II Reporting? – Citywire

Earlier in April, regulatory consultancy Bovill suggested that nearly one in four firms submitting transaction data under Mifid II rules filed inaccurate returns. We dug further into the findings and asked compliance experts why firms are struggling to comply with the new regulations.

Hong Kong Proposes Enhancements to OTC Derivatives Regime – Regulation Asia

In a joint consultation, the HKMA and SFC propose to mandate the use of unique transaction identifiers in OTC derivatives trade reporting, and to discontinue masking relief for all jurisdictions but China.

Crypto News

Times Talks: SEC Chairman Jay Clayton & Andrew Ross Sorkin – The New York Times

US Securities and Exchange Commission Chairman Jay Clayton talks about cryptocurrency and the growing market impact of blockchain.

We All Become MF Global Eventually, Tether Edition – Financial Times (subscription)

At no point does Bitfinex seem to acknowledge that all its banking challenges stem from a lack of regulated status and a known reputation for not conducting proper KYC or AML checks. One could ask: why won’t a group that describes itself as a good corporate citizen and a strong supporter of law enforcement just bite the bullet and get regulated?

UAE Token Sales Make It a Global Crypto Capital, Passing US – Bloomberg (subscription)

Coming from way behind, the United Arab Emirates has just emerged as the world’s capital for sales of digital tokens, accounting for more than a fourth of all funds raised in offerings this year through early April, according to CoinSchedule.

E*Trade Is Close to Launching Cryptocurrency Trading – Bloomberg (subscription)

E*Trade Financial Corp. is getting ready to let customers trade cryptocurrencies on its platform. The firm will start by adding Bitcoin and Ethereum, and will consider adding other currencies in the future.

Company News

A Closer Look At: Real-Time Transaction Cost Estimation – Profit & Loss

Morgan Stanley’s Matt Thomas, global head of MSET macro sales, and Jian Chen, head of quantitative solutions and innovations (QSI), explain how transaction cost analysis is evolving into a real-time estimative framework tool.

Moore Set to Launch Buy Side Matching Platform – Profit & Loss

Jay Moore has officially announced his plans to launch a new buyside-to-buyside matching platform for passive FX hedging programs. The new platform, where Moore will serve as CEO, is called FX HedgePool and is designed to allow institutional investors to trade directly with one another.

Eye on the Client: The 2019 Digital FX Awards – Profit & Loss

If there was one takeaway from the demonstration sessions that form part of the process in judging these awards, it was the air of optimism amongst the bankers showing their wares. Probably for the first time in a decade, just about every institution seen had budget for the coming year and, apparently, a pipeline of projects that were already funded.

SwapClear to Introduce Three OIS Currencies – FOW (subscription)

LCH SwapClear is also looking to clear Ester and Honia as it supports the transition from Ibors.

Wall Street Accelerates Shake-Up in Market for New Bonds – Bloomberg (subscription)

A group of banks led by Bank of America, Citigroup and JPMorgan, has set up a company and appointed a chief executive officer to develop an electronic system for investors to request allocations of new debt. The new system, dubbed Project Mars, aims to modernize the process of buying new corporate bonds, streamlining communication in a market that still relies on phone calls, instant messaging and emails to handle billions of dollars in orders from investors.

Market Savvy

Sterling Gains Against Dollar, Little Changed Elsewhere – Reuters

Sterling rose to a three-day high against the dollar on Monday but was little changed against other major currencies before a central bank policy meeting this week.

Dollar Rally Stalls Underlining Slowdown Fears – Reuters

A rally in the dollar faltered on Monday with strong US data doing little to lift the currency or convince investors that a slowdown in activity is over.

Fed May End Up Seeing 1995-96 Rate Cuts as a Template for Today – Bloomberg (subscription)

As Federal Reserve Chairman Jerome Powell and his colleagues gather this week for a policy making meeting, some of them will likely have 1995 on their mind. That was the year that the Fed initiated a mid-course correction in monetary policy, cutting interest rates after a sustained bout of tightening. Now investors are beginning to wonder if the Fed will again have to ease its stance after raising rates four times in 2018.

History Points to Rand Decline After South Africa’s Poll: Chart – Bloomberg (subscription)

South Africa’s rand may be in for a rough ride after elections set for May 8, if history is any guide. Since the start of the post-apartheid era, the currency of Africa’s most-industrialized economy has tended to strengthen in the month before the vote, but weaken in the 30 days afterward, according to data compiled by Bloomberg.