Top Headlines

Citigroup’s Brexit Warning for London – Bloomberg

Behind the Davos platitudes, Michael Corbat makes a veiled threat about Brexit’s impact on London’s position as a financial center.

HKEX Chooses Traiana for Central Clearing Connectivity of FX Deliverables – The Trade

CME Group’s Traiana is now providing direct central clearing connectivity to Hong Kong Exchanges & Clearing’s OTC Clear business for FX derivatives.

Ill-conceived and Illogical Claims in the Prosecution of Mark Johnson (opinion) – Profit & Loss

The stakes for the FX industry appear to have been raised even further thanks to the prosecution introducing new and even more illogical arguments in terms of how the FX market works. I don’t know if it is too late in the appeal process to educate the US legal system about some realities of OTC markets, but if it is then those who sat silent should hang their heads in shame for they stood by and did nothing while their industry was hung out to dry on a string of ill-conceived, illogical and, frankly, ignorant claims.

Carry Traders Are Winning as Emerging Market Volatility Tumbles – Bloomberg

Carry traders are profiting as emerging-market currency volatility drops to a more than seven-month low.

Arnott, Harvey: Machine Learning Dangerous When Data Thin – (subscription)

Rob Arnott and Campbell Harvey – two of the best known experts in quant investing – have warned investors against using machine learning to derive investment strategies from too-thin data. According to Arnott, using sparse data to train “powerful” machine learning algorithms is akin to driving a Ferrari on an off-road dirt track.

Regulatory News

Wall Street Braces for MiFID-Style Rules Descending on the US – Bloomberg

The firewall that Wall Street hoped would protect its US stock and bond analysts from tough European rules is starting to crack.

Brussels to Sue UK Over Tax Breaks for Commodities Traders – Financial Times

Brussels is to sue the UK in Europe’s highest court over tax breaks for commodities traders, according to EU diplomats briefed on the plans, escalating a battle that Britain said risked damaging the post-Brexit competitiveness of the City of London.

Fund Managers Dodge a Brexit Bullet – Bloomberg

On the long list of challenges facing the European fund management industry, one issue can be crossed out, at least for the immediate future – the risk that Brexit will pull up the drawbridge that allow firms to sell and manage investment products across European Union borders.

Crypto News

Cboe’s Bitcoin ETF Application Pulled After Repeated SEC Delays – Bloomberg

Cboe Global Markets Inc. pulled its application to list the first Bitcoin exchange-traded fund, blaming the US government shutdown. The decision was announced in a Wednesday filing with the US Securities and Exchange Commission. Bitcoin’s price fell following the disclosure.

FCA Takes First Steps Towards Crypto Regulation – Financial News (subscription)

The UK financial watchdog has taken its first steps towards regulating cryptocurrencies like bitcoin, as global bodies begin to answer the call for greater oversight of the growing but volatile market.

SeedCX Launches Spot Trading – Profit & Loss

Seed CX, a licensed exchange for institutional trading and settlement of digital assets, is now offering spot trading. The exchange has opened trading on BTC/USD, while ETH/USD, LTC/USD and BCH/USD pairs will start trading later this month. 

One of the World’s Largest Crypto Exchanges Looks to Go Public in the US Through a Reverse Merger – CNBC

Blockchain Industries announces it has signed a binding letter of intent to merge with Singapore-based Blockchain Exchange. The deal would mark the first cryptocurrency exchange to be publicly traded in the US.

Company News

State Street Appoints Former BNY Mellon Veteran as Global Markets Head – The Trade

State Street has appointed former long-serving BNY Mellon executive Nadine Chakar as head of its global markets business. In the role she will oversee all aspects of global markets’ trading, product and operations platforms.

Nasdaq, Citi Join Novogratz in Funding Blockchain Firm Symbiont – Bloomberg

Nasdaq and Citigroup are among firms that are investing $20 million in, a New York-based company that’s applying blockchain technology to capital markets. Their support for Symbiont shows Wall Street’s enthusiasm for the technology behind Bitcoin hasn’t completely cooled with the collapse in cryptocurrencies.

TransFICC Appoints De Vidts as Regulatory Affairs Advisor – Profit & Loss

TransFICC has appointed Godfried De Vidts as a regulatory affairs advisor. Prior to this appointment, De Vidts was the director of European affairs at NEX Group, where he advised on European financial and political issues and led the group’s relationship with the European Commission and Parliament.

Market Savvy

Sterling Gnaws at Key Level on Brexit Hopes – Reuters

Sterling consolidated gains on Thursday after rocketing to a 11-week high overnight on growing optimism that British lawmakers would be able to avoid a no-deal Brexit.

Euro Falls as Markets Prepare for Cautious ECB – Reuters

The euro fell on Thursday ahead of a European Central Bank meeting in which policymakers may express caution about slowing economic growth.

China Shifts Approach to RMB Internationalisation – Profit & Loss

China has fundamentally changed its approach towards RMB internationalisation, according to BNP Paribas China’s chief China economist XD Chen.

‘Doom Loop’ of Debt Threatens to Drag Down Australian Dollar – Bloomberg

The beleaguered Australian dollar faces another threat in addition to slowing global growth and the US-China trade war: an addiction to real estate has created a debt mountain.