China Cuts Yuan Rate Against US Dollar for Second Day

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Top Headlines

China Cuts Yuan Rate Against US Dollar for Second Day – AFP
China cut the yuan’s value against the dollar for the second consecutive day Wednesday, roiling global financial markets and driving expectations the currency could be set for further falls.


Change to Broken Benchmarks ‘Years Away’ – Operational Risk & Regulation (subscription)
After the UK’s Financial Conduct Authority produced a review criticising banks for not learning the lessons of Libor and FX, experts predict there will be no major benchmark reform until regulators co-ordinate their efforts with the industry.

CCP Basis Driving CME Clients to LCH, Traders Say – Risk Magazine (subscription)
Client-cleared notional at LCH.Clearnet has more than doubled since April – probably the result of the higher cost of pay-fixed US dollar interest rate swaps cleared at rival CME Group, traders say.

OTC Swaps Collateral Declines As More Trades Clear – International Financing Review (subscription)
Collateral backing non-cleared derivatives transactions fell by more than 6% to $5.01trillion last year, according to the 2015 ISDA Margin Survey, as trades shifted away from over-the-counter markets to centrally-cleared venues.

FX Providers Mull Outsourcing through the Cloud – Euromoney
Areas of the FX market where outsourced or cloud solutions have the potential to exert a greater impact include platforms that electronify the workflows associated with FX options trading, although bank conservatism is likely to prolong the lifespan of in-house solutions.

 

Regulatory News

Intra-Group Margin Will ‘Stifle’ Internal Hedging, Banks Warn – Risk Magazine (subscription)
Banks in the US will be forced to rework how they manage risk if they are granted no exemption from posting initial margin on uncleared derivatives in intra-company trades, dealers have warned. A carve-out exists under European Union and Japan rules but not in the US, which will double costs and ultimately be passed on to end-users, the dealers say.

Post-Wheatley FCA May Be Friendlier to Banks – Operational Risk & Regulation (subscription)
Martin Wheatley is due to leave his position as chief executive of the UK’s Financial Conduct Authority (FCA) in September. While his sudden resignation, announced on July 17, raised eyebrows, it probably lowered the blood pressure of UK bankers.

FIX Creates Working Groups for Pending MiFID II Regs – The Trade
FIX Trading Community has created new subgroups focused on six of MiFID II’s most impactful regulations. The groups will cover – clock synchronisation, reference data, transparency, best execution, microstructure, order data and record keeping.

European HFT Lobby Group Chairman Steps Down – Financial News (subscription)
Remco Lenterman, the outspoken chairman of one of Europe’s most influential lobby groups for proprietary traders, is stepping down from the role he has held since the body’s formation in 2011. The departure comes at a time of intense debate over market structure and the role of high-frequency trading firms.

 

Company News

Goldman Sachs to Give Out ‘Secret Sauce’ on Trading – Wall Street Journal (subscription)
In a major shift for Goldman Sachs, the firm is preparing to give away some of the “secret sauce” behind its trading ideas. Goldman will soon offer clients access to more of its in-house tools, such as high-powered databases that analyse markets and manage risk, according to the firm’s executives.

CME Eliminated 3% of Staff, With Half Coming From Technology – Bloomberg
CME Group eliminated about 3% of its employees, with about half the cuts coming from technology staff. The world’s largest futures exchange dismissed about 80 workers on 6 August.

More FX Platforms Show Volume Declines in July – Profit & Loss
Thomson Reuters, Gain Capital and Saxo Bank are the latest FX trading venues to report decreases in trading activity for the month of July.

M&A Trend Continues in FX with £200 Million Acquisition of Currencies Direct – Profit & Loss
M&A activity is continuing in the FX market with Palamon Capital Partners and Corsair Capital agreeing to buy Currencies Direct, a provider of FX and international payment solutions to private and corporate clients, for over £200 million.

Markit Eyes Next Products for Trade Confirmation Tool – FOW (subscription)
Data vendor Markit plans to expand its recently­ launched trade confirmation service to non­-deliverable forwards, forwards and exotic options next year, as well as new options products later this year.

Moscow Exchange Releases Monthly FX Market Analysis Reports – Inside Market Data (subscription)
The Moscow Exchange has launched a new monthly foreign exchange market report that leverages historical trade and order data to provide algorithmic traders with analysis of trading activity on the exchange’s FX markets.

Data Overload: One of the Many Problems Bloomberg Is Solving – Institutional Investor video (subscription)
Bloomberg’s Shawn Edwards and Vlad Kliatchko discuss the company’s new initiatives, like open-sourcing its software and taking a statistical approach to solving problems.

GMEX Moves to Boost European, US Trading – FOW (subscription)
The chief executive of GMEX said the new exchange is to hire a salesperson in Europe and has applied to start selling to US clients, underlining his plan to expand geographically just days after launch. GMEX launched on Friday with the backing of Bank of America Merrill Lynch, RJ O’Brien and Societe Generale.

 

Market Savvy  

Dollar Drops as China Move Raises Doubts Over Fed Hike Timing
Reuters
The dollar fell 0.6% against a basket of currencies on Wednesday, coming under pressure as Treasury yields dropped on doubts over whether the US Federal Reserve will raise interest rates in the wake of China’s devaluation of the yuan.

Asian Currencies Hit New Multi-Year Lows
Financial Times (subscription)
Losses for emerging market currencies accelerated on Wednesday, touching new multi-year lows.

Currency Move by China Clouds Its Policy Goals
New York Times
As President Xi Jinping of China prepares for a state visit to Washington next month to smooth over troubled relations, his government has just turned the spotlight back on a recurring issue: the value of his country’s currency.

 

Press Releases

CSC Agrees to Acquire Fixnetix
CSC has signed an agreement to acquire Fixnetix, a provider of front-office managed trading services in capital markets.

 

Industry Events