Top Headlines

Citadel, Vanguard Call for End to Controversial FX Last Look – Bloomberg

More opponents of “last look,” the controversial practice in currency markets that allows dealers to back out of losing trades, have come forward to air their grievances to central bankers and industry participants.

Dollar Hampered by Uncertainty Over US Tax Reforms – Reuters

The dollar held steady versus a basket of currencies, but its near-term outlook was seen clouded by worries over possible delays to US President Donald Trump’s tax reform plans.

FX Traders Read Technical Tea Leaves as Macro Drivers Stall – Bloomberg

The dollar’s rebound has petered out in recent days as traders remain divided on macro drivers ranging from trade and taxes to personnel picks at the Federal Reserve.

Sterling Skirts Westminster Turmoil, Holds Steady vs Dollar – Reuters

Britain’s sterling inched up as expectations for a gradual tightening of policy from the Bank of England protected the pound from the political turmoil engulfing Prime Minister Theresa May’s government.

Brexit Talks Breakthrough Would Bestow Biggest Boost on Sterling: Poll – Reuters

Progress in Britain’s divorce talks with the European Union would give the biggest boost to sterling in the coming year, according to foreign exchange strategists who painted a benign outlook for the pound.

BOE’s McCafferty Says Banks May Leave Before Brexit Deal Agreed – Bloomberg

Bank of England policy maker Ian McCafferty said clarity on Brexit will be needed early next year to prevent banks starting to shift jobs out of the country.

US Fixed Income’s Appeal Hinges on the Cost of Currency Hedging – Financial Times (subscription)

Higher cost will boost allure of European credit and emerging markets, says Brad Tank.

Bitcoin Futures and Circuit Breakers – Profit & Loss (subscription)

On at least 65 occasions in 2017, trading would have ceased for the 7% threshold – that’s a lot of market halts.

Bitcoin, Beware: Citigroup’s CEO Predicts State-Sponsored Digital Currencies – Bloomberg

What if the feds got in on the cryptocurrency craze?

Financial Extranets Become All-Important in a World of Fragmented Liquidity – Euromoney

Fragmented liquidity has helped make financial extranets fundamentally important tools for global FX market players, but traders need to do their due diligence in picking the right fit for their strategies.

Bigger Than Brexit: Libor Replacement Creates New Headaches – Financial News

As regulators urge the industry to use a different benchmark from 2021, questions remain over how trillions in contracts will be affected.

European Leaders Seem Determined to Remake the “Global Savings Glut” on a Massive Scale – Financial Times (subscription)

It’s harder to have a currency crisis when you’re a net lender to the rest of the world.

Regulatory News

Bipartisan Dodd-Frank Rollback Could Benefit Banks Big and Small – Bloomberg

The top Republican on the Senate Banking Committee is getting closer to striking a deal on a bipartisan bill to ease financial rules that could have wins for banks both big and small.

Fed Chair Nominee Powell Is No PhD, But No Pushover Either – Bloomberg

Years before he was tapped to lead the Federal Reserve, Jerome Powell brought to the world’s most powerful central bank a lesson he learned in the business world: manage or be managed.

Softened Liquidity Rule Would Still be Misguided: US Asset Managers – Risk (subscription)

Treasury proposals welcome, firms say, but watered-down SEC rule would leave risks unaddressed.

MiFID II: Making Markets Fair – Bloomberg

Banks and brokerages are scrambling to prepare for the rules, which come into force January 3, 2018.

China’s New Effort to Tame Its Financial System May Disappoint – The New York Times

China released fresh details about a new financial regulatory body intended to calm a financial system that in recent years has endured a stock market crash, a huge exodus of money outside the country and the rapid accumulation of debt.

Company News

Thomson Reuters Commits to Global FX Code – Profit & Loss

Thomson Reuters has signed the statement of commitment to the Global FX Code of Conduct, formally pledging adherence to the Code’s standards to promote integrity, fairness, transparency and the effective functioning of the global foreign exchange markets.

Deutsche Hires Two in New York – Profit & Loss

Deutsche Bank has unveiled two hires for its North American FX business with the hire of Winfield Sickles and Donna DiDomenico.

The London Stock Exchange Is Flirting with a Crisis – Bloomberg

The LSE’s strategy and independence is directly intertwined with the row.

Market Savvy 

Bitcoin Hits Record High After Developers Suspend Plans to ‘Fork’ Currency – Reuters

Bitcoin hit a record high just shy of $8,000 after a coalition of developers and investors suspended a software upgrade planned for next Thursday that could have split the digital currency in two.

US Dollar Falls Against Canada’s Loonie – Wall Street Journal (subscription)

The US dollar fell, softening against the Canadian dollar as investors bet the recent rise in oil prices will support the loonie.

Strains on Emerging Market Currencies Begin to Build – Financial Times (subscription)

Emerging market currencies are weakening in the face of US rate expectations and political uncertainty, casting doubt on investors’ hopes that they can withstand a mix of pressures that has in the past thrown them into turmoil.