Top Headlines

Citi to Tighten Rules for Currency Funds after Asia Debacle – Financial Times

Citigroup is tightening its services for currencies hedge funds after facing a loss of as much as $180m when one obscure Asian client’s emerging markets bets soured. The US bank is making it harder for smaller funds to trade using its specialist prime broking services.

Eurex Gains Permit to Handle Clearing for US Asset Managers – Financial Times

Deutsche Börse is set to ramp up its battle in swaps clearing with the UK’s LCH after US derivatives markets regulators approved its licence to handle trillions of dollars of deals from big American asset managers.

‘Most Important Thing Is the Dots’: Wall Street Reacts to Rate Hikes – Bloomberg

Stocks pared gains, short-term Treasury yields rose and the dollar trimmed losses in the minutes after the Federal Reserve raised borrowing costs and its “dot plot” showed one fewer interest-rate increase next year.

The State of AI in Capital Markets: Friend or Foe? – Tabb Forum

Images of empty trading floors have helped fuel the notion that traders are increasingly becoming redundant as artificial intelligence and machine learning take hold. But what do capital markets firms really think about these disruptive technologies? Are they seen as friend or foe?

Swaps Data: Volumes Up Amid Volatility – Risk.net (subscription)

As 2018 comes to an end, with Brexit dominating the news, trade tensions escalating and the Federal Reserve maintaining its rate-hike path, it is a good time to take stock of global swap volumes.

Regulatory News

EU Says Bulk of UK Financial Sector Would Be Cut Off By No-Deal Brexit – Reuters

Most banking, insurance and other financial firms in Britain would be cut off from the European Union if there is a no-deal Brexit, the bloc’s executive body said on Wednesday.

Regulators Welcome EC’s Recognition of UK CCPs – Profit & Loss

The Bank of England, European Securities and Markets Authority (ESMA), and the US Commodity Futures Trading Commission (CFTC) have all welcomed the decision by the European Commission to adopt a temporary equivalence regime for central counterparties and Central Securities Depositories.

Wall Street Faces Fewer Fines in 2019 as SEC Democrat Departs – Bloomberg

For Wall Street banks and other companies accused of malfeasance, the risk of getting slapped with a big fine by the US Securities and Exchange Commission will soon drop significantly. That’s because Kara Stein, the SEC’s lone Democraticcommissioner, has to leave the regulator at the beginning of next year.

EU Parliament Calls for Action on Blockchain – Coin Desk

The European Parliament has called for measures to boost blockchain adoption in trade and business across the region.

European Regulators Extend CFD Restrictions until May – Financial Times

Europe’s main markets regulator has further extended its temporary restrictions around trading contracts for difference, the retail derivatives targeted by authorities as being too complex for many consumers.

Crypto News

UK Government ‘Ready’ to Allow Regulator Oversight of Crypto Assets – Financial Times

The UK government said it “stands ready” to give the financial regulator more power to oversee cryptocurrency assets after parliamentarians warned of a “Wild West” crypto market that poses risks to consumers.

Crypto Market Rife With Pump-and-Dump Schemes, Study Shows – Bloomberg

Scammers have been successfully manipulating the price of digital assets including Bitcoin so they can dump their holdings onto unsuspecting traders at a higher price, according to a new academic paper mapping out the extent of market abuse in cryptocurrencies.

Bitcoin Fans Were Stockpiling Anew as Rout Hit, Chainalysis Says – Bloomberg

Bitcoin was showing signs of renewed popularity just before it suffered its worst monthly price drop of the year in November, according to data released Wednesday by researcher Chainalysis.

Crypto Is Far From Dead, as These Scaling Projects Show – Coin Desk

After a gloomy look at the state of cryptoland two weeks ago, it’s time for more of a glass-half-full assessment of the outlook.

Company News

CME May Expand its Board. Wait – What? – Crain’s Chicago Business

For years, the biggest futures exchange company in the world has sought to slim down its unusually large board, but now it may do the opposite. How come?

SGX Goes Live with LSE’s Post-Trade Technology – The Trade

The Singapore Exchange has gone live with a new post-trade platform provided by the London Stock Exchange’s technology arm.

LCH Launches Electronic Exercise Platform for CDS Options – Risk.net (subscription)

LCH has unveiled a new electronic platform for dealers and clients to exercise credit default swap options cleared at the central counterparty, in a bid to improve the speed and resilience of the market’s current phone- and email-based manual approach to settlement.

Morgan Stanley Moves to Speed Up Collaboration with Tech Startups – Reuters

Morgan Stanley is simplifying the way it acquires new technologies from small companies to speed up collaboration and address long running concerns by startups that working with big banks is slow and costly.

Blythe Masters and the End of a Blockchain Era – Bloomberg

Masters was the public face of the “blockchain, not Bitcoin” philosophy – the idea that behind the avowedly anti-bank and anti-government cryptocurrency, used to buy dark things in dark places, lay an ingenious technological infrastructure that could be cleaned up and adopted by blue-chip firms and, yes, banks.

CNH Contracts on SGX Break Daily Record in November – FX Week (subscription)

November was the third-highest trading month for USD/CNH since the contract began trading on the exchange.

CTAs Limp Into Positive Territory: BarclayHedge – Profit & Loss

The flash estimate for the Barclay CTA Index, compiled by BarclayHedge indicates a small profit of 0.01% in November. Year to date, the Index is down 3.00%.

Market Savvy

Dollar Pulls Back Following Federal Reserve Decision – Financial Times

The dollar slipped on Thursday while the yen rallied, as sentiment soured after the Federal Reserve’s tone appeared to disappoint investors looking for a more hawkish signal.

Sterling Rallies vs Dollar Ahead of BoE Meeting – Reuters

Sterling gained nearly half a percent against a broadly weakened dollar on Thursday, as traders prepared for British retail sales data and the Bank of England’s interest rate decision.

Brazil, Indonesia Expected to Lead Emerging Market Comeback in 2019 – Bloomberg

Forget the schnapps this season and grab a caipirinha. The new year will usher a rebound in beaten up emerging markets, with Brazil leading the charge, a Bloomberg survey shows.