Top Headlines

CFTC Chair Complains to European Commission Over Regulation Jibe – Financial Times (subscription)

Christopher Giancarlo, chair of the Commodity Futures Trading Commission, wrote last week to Valdis Dombrovskis, the European Commission vice president responsible for financial services, to publicly criticise comments made by Patrick Pearson, head of unit, financial markets infrastructure at the commission, at an event in London.  Mr Pearson had said the US “fell for” an agreement it had struck with the EU in March in which they emphasised the need to trust local regulators and for sustained dialogue.

Fed Scraps Patient Approach and Opens Door to Potential Rate Cut – Bloomberg

While Federal Reserve Chairman Jerome Powell and fellow central bankers left their key rate in a range of 2.25% to 2.5% on Wednesday, they dropped a reference in their statement to being “patient” on borrowing costs and forecast a larger miss of their 2% inflation target this year.

Stable Relationships Still Vital in FX, Say Asset Managers – FX Week (subscription)

Having a stable relationship with foreign exchange counterparties is critical for a well-functioning trading business, asset managers say. For them, accessing liquidity at the time they need it trumps price any day.

Keeping the Robots Honest – (subscription)

The robots need minding. But the human monitors needed to make algorithmic trading safe are in short supply in an arena where the losses can be crippling in minutes.

Regulatory News

Foot-Dragging Over Ditching Libor Could Be Punished, Regulator Says – Reuters

Banks could be punished if they don’t switch enough contracts from the Libor interest rate benchmark to a Bank of England alternative by the end of 2021, a senior British regulator said on Wednesday.

CFTC Director of the Division of Clearing and Risk to Take Early Retirement – CFTC

Brian Bussey, the director of the Division of Clearing and Risk at the Commodity Futures Trading Commission (CFTC), is taking early retirement from government service.

MPs Renew Calls for City Feedback on Life After Brexit – Financial News (subscription)

The UK parliament’s influential Treasury Committee has issued a fresh call to London to respond to its inquiry into the future of the City after Brexit. Deadlines for submissions to the Future of Financial Services inquiry had been extended because of the Brexit delay.

FMSB Proposes Statement of Good Practice on Conflicts of Interest – Profit & Loss

The FICC Markets Standards Board (FMSB) has published a transparency draft of a new statement of good practice on conflicts of interest. The primary aim of the latest statement is to provide guidance for FICC market participants as they consider ways in which to identify, prevent, manage or mitigate conflicts of interest that arise both specifically in connection with their FICC markets business and more generally across their firm.

Exchanges Want Another 2nd Circ. Look At ‘Flash Boys’ Suits – Law360 (subscription)

A group of seven major US stock exchanges are hoping the Second Circuit will take a second look at a consolidated group of class actions inspired by the high-frequency trading exposé “Flash Boys” that recently survived a dismissal bid.

Goldman, Citi Among Banks Delaying Brexit Asset Shifts – Bloomberg (subscription)

Goldman Sachs and Standard Chartered are among global firms postponing the transfer of several billion euros of capital outside the UK despite regulatory pressure to complete the move. Other lenders including Citigroup have only shifted part of the assets they were planning to relocate due to the delays in Brexit.

Crypto News

Bringing the Pure Concept to Digital Assets – Profit & Loss

For all the talk of institutionalising crypto markets, progress is slow. Campbell Adams, founder and CEO of Pure Digital, discusses how he plans to accelerate the transformation.

Bitcoin Faces Technical Hurdle as Libra Steals Crypto Spotlight – Bloomberg (subscription)

While it seems like everyone is fixated on Facebook’s Libra cryptocurrency, Bitcoin aficionados are looking toward the $10,000 mark as the next price hurdle for the largest digital asset. But a key technical obstacle lies ahead. Bitcoin failed to breach the level when it last approached it in May 2018. In addition, the token’s relative strength index, which identifies general price trends, is nearing overbought levels.

Facebook Triggers Fresh Washington Fury Over Crypto Project – Bloomberg (subscription)

House Financial Services Committee Chairwoman Maxine Waters has urged Facebook to halt development of its token until Congress and regulators can examine it. Other lawmakers demanded hearings and questioned whether the Libra coin will have appropriate oversight.

Cryptocurrency Startups Are in Limbo as Regulators Grapple With Risks – The Wall Street Journal (subscription)

Dozens of startups that want to make the leap from unregulated cryptocurrency dealer to licensed brokerage are waiting for regulators to open the door to let them proceed.

Company News

2019 FoXys Winners – Profit & Loss

More than 3,000 votes were cast in this year’s Profit & Loss Readers’ Choice Awards – the FoXys – which created strong competition throughout the categories. For the first time categories for cryptocurrency markets were introduced and proved to be very popular, alongside the more traditional categories. 

Buy-Side Trading Heads Scorn Use of Transaction Cost Analysis for fixed Income – The Trade

AXA’s Lee Sanders and Pictet’s Carl James reject the use of transaction cost analysis in fixed income markets due to the nature of the products compared to equities.

Bank of China Becomes SwapClear Member – Profit & Loss

Bank of China (UK) Limited has joined LCH’s SwapClear service as its first clearing member from a Chinese banking group, thus gaining access to clearing of interest rate derivatives. The bank will also act as a clearing broker, offering clearing services to its client base.

Market Savvy

Bank of England Chops Second Quarter Growth Forecast, Sees Bigger Global and Brexit Risks – Reuters

The Bank of England cut its growth forecast for Britain’s economy to zero in the second quarter of 2019 and highlighted risks from global trade tensions and growing fears of a no-deal Brexit.

Dollar on Track for Biggest Two-Day Drop This Year on Dovish Fed – Reuters

The dollar sank on Thursday and is on track for its biggest two-day drop this year after the US Federal Reserve signalled it was ready to cut interest rates as early as next month.

US Treasuries and Gold Rally as Fed Sets Pace for Global Markets – Financial Times (subscription)

The Federal Reserve’s dovish turn set the pace across global markets for a second session on Thursday, as investors measured the implications of the central bank’s signal that its next move on interest rates would be a cut.