Top Headlines

Citi to Combine Rates, FX in Paco Ybarra’s First Major Reshuffle – Bloomberg (subscription)

Citigroup is combining its foreign exchange and rates businesses into a single unit, two months after Paco Ybarra took over as head of the institutional-clients group. Itay Tuchman will continue to lead the currencies business, while Deirdre Dunn and Pedro Goldbaum will co-lead the rates businesses.

Limits of Algorithms Highlighted By e-FX Specialists – FX Week (subscription)

While use of electronic trading and algorithms in the foreign exchange industry is generally perceived to have improved liquidity, e-FX faces challenges to wider adoption as it seeks to analyse ever more complex events such as the battle over the UK’s departure from the European bloc.

Facebook’s Answer to Bitcoin Poses a Double Threat – Bloomberg (subscription)

Regulators will be watching closely when Facebook unveils its cryptocurrency project this week. Their vigilance is warranted. Mark Zuckerberg, the social network’s founder, isn’t going to gamble with what remains of his public image by replicating the worst excesses of the Bitcoin craze. Nevertheless, his bid to launch an online payments revolution carries plenty of risks, from antitrust concerns to the threat that it might pose to financial stability.

Single-Dealer Platforms: Moving Beyond eFX White Label – OTC Space

When people talk about single dealer FX platforms a large number think about the original platforms, which were bank branded and offered to clients – names like UBS, Autobahn, AVT and Reuters RET. But the market has changed significantly since the early 2000s, as modern SDPs have been affected by two major factors. The first is the natural progression of technology, and the second is the introduction of numerous rules and regulations within the banking sector. 

Regulatory News

ICE Approved as Benchmark Administrator by FCA – The Trade

Intercontinental Exchange has been granted approval by the UK’s financial watchdog to operate as a third country benchmark administrator under the European Benchmark Regulation.

UK and China Regulators Approve London-Shanghai Stock Connect – The Trade

Financial authorities in the UK and China have approved the launch of the London-Shanghai Stock Connect scheme, which went live today during a ceremony at the London Stock Exchange.

Banks Making Progress on Compensation Practices: FSB – Regulation Asia

Most banks now have compensation policies in place that reduce the potential for inappropriate risk-taking, but the challenge now is to develop frameworks for assessing their effectiveness. The Financial Stability Board has published its sixth progress report on financial institutions’ implementation of its Principles and Standards for sound compensation practices.

GLEIF Welcomes FSB Recommendations to Improve LEI Adoption – Regulation Asia

Global Legal Entity Identifier Foundation (GLEIF) has strongly welcomed the recommendations from the Financial Stability Board to expand the adoption of the Legal Entity Identifiers.Established by the FSB in June 2014, GLEIF supports the implementation and use of the LEI, which is a 20-character, alpha-numeric code that was introduced following the global financial crisis to uniquely identify legally distinct entities that engage in financial transactions.

Crypto News

Bitcoin Climbs to One-Year High on Facebook Crypto  Pact Report – Bloomberg (subscription)

Bitcoin climbed past $9,000, to its highest since May 2018, as reports that Facebook is due to unveill a digital currency added to optimism that cryptocurrencies are becoming more widely adopted by mainstream finance.

Regulators Need to Get More Involved for Wider Institutional Crypto Adoption – WatersTechnology (subscription)

There are a multitude of reasons as to why institutional investors have been slow to lend their full-throated support behind the crypto space. Some will tell you that while improvements are being made, it still lacks the institutional tools and infrastructure necessary for broader adoption. And there are others who feel that the regulators – from the Securities and Exchange Commission to the Commodity Futures Trading Commission to the Financial Conduct Authority and the various other major regulatory bodies – need to move faster and be more proactive when it comes to overseeing these new instruments.

Private Blockchain’s Biggest Startups Integrate in Unprecedented Tie-Up – CoinDesk

A historic change in strategy is taking place at R3 and Digital Asset, who are now collaborating to maximize their respective blockchain ecosystems.

Bitcoin is Hedge Against Global Liquidity Crises: Grayscale Study – CoinDesk

Grayscale Investments, the cryptocurrency asset manager backed by Digital Currency Group, has released a report showing what it argues is bitcoin’s potential as a hedge against global liquidity crises.Overall, the authors suggest bitcoin ought to be considered a strategic position within long-term investment portfolios considering its transparent, immutable and global liquidity. 

Company News

Buy-side Q&A: Lee Sanders, AXA Investment Managers – The Trade

Lee Sanders, head of execution FX and UK & Asia fixed income trading at AXA Investment Managers, talks about the asset manager’s approach to automation, fixed income liquidity provision and the evolving trading desk skill set.

Buy-side Q&A: Dan Veiner, BlackRock – The Trade

Dan Veiner, global head of fixed income trading at BlackRock, talks about how the world’s largest asset manager is approaching new technology advancements and where the fixed income markets need further innovation.

UBS Introduces Smart Contracts for Structured Products – (subscription)

UBS is spearheading the use of smart contracts for some Asian structured products to reduce manual inputs required for trades, which it believes will save costs and boost profit margins. The Swiss bank is using Digital Asset Modeling Language (DAML) – the smart contract language created by blockchain technology firm Digital Asset – for the initiative and is testing the concept with two large clients in Asia-Pacific.

Crédit Agricole’s Head of Forex Options Departs – (subscription)

Crédit Agricole Corporate and Investment Bank’s global head of foreign exchange options trading, Andrew Soper, has left the bank to focus on private investment and business opportunities.

Deutsche Bank Considers Closing US Equities Trading in Revamp – Bloomberg

A little over one year since Deutsche Bank chief executive officer Christian Sewing unveiled his first turnaround plan, his second is taking shape.

The Future of the Trading Desk – The Desk

Erik Tumasz and Josh Grodin of Wellington Management on honing trillion-dollar Wellington Management’s technology-driven edge in trading.

Market Savvy

Gauge of Treasury Market Volatility Hits Highest Since 2016 – Financial Times (subscription)

A widely watched measure of volatility in Treasury markets hit its highest level since 2016, as investors gird themselves for potential price swings ahead of an important Federal Reserve meeting on Wednesday. 

No-Deal Brexit Chills Send Pound to a Five-Month Low vs Euro – Reuters

Signs that arch-Brexiteer Boris Johnson may be a step closer to becoming Britain’s next prime minister sent the pound tumbling to a five-month low versus the euro on Tuesday as investors worried about the risks of a hard exit from the European Union.

Dollar Heads Towards 3-Month Lows Before Fed Meeting; Draghi Eyed – Reuters

The dollar weakened against its rivals on Tuesday, heading back towards a recent three-month low before a US central bank meeting gets underway with expectations growing the Fed will signal its first rate cut in a decade.