Top Headlines

China vows to protect South China Sea sovereignty, Manila upbeat – Reuters
China vowed to take all necessary measures to protect its sovereignty over the South China Sea and said it had the right to set up an air defense zone, after rejecting an international tribunal’s ruling denying its claims to the energy-rich waters.

• Testing the Rule of Law in the South China Sea – New York Times

Britain Wins Currency Wars With One Vote: Ex-Fed’s Fisher – CNBC
The United Kingdom vote to leave the European Union served to devalue the pound at a time when many world powers have been spending trillions to weaken their currencies to give them an advantage on trade, former Dallas Fed President Richard Fisher said Wednesday.

German Leaders Demand Brexit Clarity From New British PM – Reuters
German leaders stepped up the pressure on Britain’s incoming prime minister Theresa May on Tuesday by demanding she swiftly spell out when she will launch divorce proceedings with the European Union.

Theresa May Gets Set for UK Leadership, With Brexit Top of Agenda – Wall Street Journal (subscription)
May is set to become prime minister Wednesday, capping three weeks of turmoil.

• Theresa May’s First Job as UK Leader is Naming Brexit Czar –Bloomberg

Malaysia Unexpectedly Cuts Rate to Shield Growth as Risks Mount ­– Bloomberg
Malaysia’s new central bank Governor Muhammad Ibrahim unexpectedly cut interest rates for the first time in seven years, joining Asian counterparts from Indonesia to Taiwan in easing policy as global risks mount.

Digital Currency Steem Soars 1,000% in Value in Two Weeks – The Guardian
Steem, the digital currency behind the new social media website Steemit, soared more than 1,000% in value on Tuesday to more than $150m, two weeks after it first paid people who posted on its website, according to coinmarketcap.com.

Regulatory News

Former Barclays FX Trader’s Hearing Begins – Profit & Loss
Preliminary hearings of former Barclays FX trader Chris Ashton’s unfair dismissal and whistleblowing claim against the bank started on Tuesday at the East London employment tribunal.

Staying Ahead of the Regulatory Curve in FX – Finextra 
Regulatory reform, including Basel III, Dodd-Frank, Emir, and Mifid II has led to significant changes in market dynamics including the move to-exchange-style trading and centralised clearing for products that traded over the counter, even within the FX market.  However, despite years of discussions and proposals, many aspects of the regulation of OTC FX markets remain unresolved.

Company News

Referendum Trading Surge Breaks ‘Malaise’ for Broker Icap – Financial Times(subscription)
The wee small hours of June 24th were clearly good for brokers, with ICAP reporting that the plunge in sterling led it to transact more than double its average daily volumes. More than $200bn passed over the books of its currency-trading operations that day.

• Icap’s Sales From Electronic Markets Drop Despite Brexit Spike –Bloomberg
• Icap FX Volumes Surged to Hit $200bn on Brexit Day – Financial Times(subscription)
• ICAP’s Currency Trading Volumes Fall Despite Brexit Surge – Reuters

Hedge Fund Investors Increasingly Active: Survey – Profit & Loss
In addition to more volatile markets, hedge fund managers are facing the additional challenge of more active investor behaviour according to Credit Suisse’s mid-yearHedge Fund Investor Sentiment Survey.

Market Savvy

Risk Sentiment Supports Asia FX; Ringit Dips Ahead of Policy Review –Business Recorder
Most emerging Asian currencies rose on Wednesday as risk sentiment improved on views of more economic stimulus, especially from Japan, and prospects of strong US economic growth. Malaysia’s ringgit, however, slid ahead of the central bank’s interest rate policy announcement later in the day. Bank Negara Malaysia is widely expected to hold its benchmark rate unchanged at 3.25 percent.

Yen Recoups Some Losses, Sterling Firms – Reuters
The yen clawed back some of this week’s losses in Asian trading on Wednesday, after it sank to 2-1/2-week lows reached this week as the prospects for more economic stimulus in Japan helped bolster risk sentiment.

Top Rupee Forecaster Sees Record Low by Yearend on Brexit Clouds –Bloomberg
The top forecasters for the rupee aren’t convinced the currency can sustain its rebound from the brink of a record low in February.

Japan Cuts Growth, CPI Forecasts as Pressure Mounts on Abenomics –Bloomberg
Japan’s cabinet office cut its forecasts for growth and inflation as the government considers a stimulus package to support the ailing economy.

Industry Events

Profit & Loss Scandinavia, 13 September, Copenhagen
Profit & Loss Forex Network Chicago, 28-29 September, Chicago, IL
Sibos 2016, 26-29 September in Geneva, Switzerland
FIA: Expo, 18-20 October in Chicago, IL