Top Headlines

CLS to Expand Currencies for Its New Netting Service – Profit & Loss

CLS has announced plans to expand its bilateral payment netting service, due to launch in 2018, to support more than 140 currencies at launch as opposed to the 24 currencies initially planned.

Dollar Sags on Xi-Trump Summit Nerves, Geopolitical Worries – Reuters

The dollar nursed losses against a basket of currencies, weighed down by caution over the impending US-China summit and geopolitical concerns.

Signs Point Away from Trump Labelling China Currency Manipulator – Reuters

US President Donald Trump looks unlikely to formally declare China a currency manipulator next week just days after meeting Chinese President Xi Jinping, foreign exchange policy experts say, leaving a vocal Trump campaign pledge unmet, at least for now.

The US Dollar Bull Run “May Be Turning”, MUFG Says – Financial Times (subscription)

The US dollar has slipped from its post-election highs, and strategists at MUFG see deeper falls in the buck’s future as other global economies perk up and after the “disastrous failure” of the Trump administration’s first attempt at healthcare reform.

Yen Hits Five-Month High, US Dollar Eases – Financial Times (subscription)

Currencies were mixed in Asian trading, but with the yen the strongest among the majors and trading at a five-month high. 

Biggest Pension Fund Faces Yen Risk as Trump Rally Fades – Bloomberg

The world’s biggest pension may find that when it comes to returns on its $1.3 trillion in assets, Donald Trump giveth and taketh away. 

Uncertainty Over Brexit Negotiations Keeps Sterling Under Pressure – Reuters

Britain’s pound edged lower against the dollar, as investors saw uncertainty surrounding Britain’s departure from the European Union outweighing some signs of economic resilience.

Euro Hits Three-Week Low as Draghi Cools Tightening Expectations – Reuters

The euro hit a three-week low after the head of the European Central Bank said he saw no need to deviate from the ECB’s policy path, which includes record-low interest rates and bond-buying until at least the end of the year.

Czech Central Bank Removes Cap on Crown Currency Strength – Reuters

The Czech central bank (CNB) ended its intervention regime keeping the crown on the weak side of 27 per euro, allowing the currency to float to stronger levels.

Mexican Central Banker Says Trump’s Tweets Modified Peso Strategy – Reuters

Mexico’s central bank chief said the bank altered course on how to protect the peso after a couple of tweets by US President Donald Trump in early January pummeled the local currency to near historic lows and wiped out the effect of a $2 billion currency intervention.

Japan’s Retail Investors Pour Into Rand Trading Even as Political Crisis Hits – Reuters

Japanese retail investors have become a significant force in the trading of the South African rand, which has been roiled by a political crisis in recent weeks.

Frankfurt-London Truce Died Along with Deutsche Boerse Deal – Bloomberg

As the German company plans for life without LSE, it’s back in competition with its former merger partner in over-the-counter clearing – a key business that Brexit has made even more politically charged.

Clearing Houses See Record Volume as New Rules Boost Activity – Financial Times (subscription)

Clearing houses are experiencing record activity as banks and investors comply with new derivative rules and push their over-the-counter fixed income and foreign exchange swaps towards centralised venues that bolster risk management for the industry.

Emerging Market Bid Is So Hot Thailand Faces US Watchlist Risk – Bloomberg

The Southeast Asian nation has seen $3.42 billion flood in this year, an influx that’s driven the baht to its highest since mid-2015.

LMAX Commits to Global Code, With a Caveat – Profit & Loss

LMAX Exchange has publicly committed to support the impending Global Code of Conduct in FX markets, however the operator has done so with a small caveat.

The Last Look Problem: Solved – Profit & Loss (subscription)

You’re welcome.

Regulatory News

Empty Seats at Regulators Hold Back Trump Bid to Undo Dodd-Frank – Bloomberg

President Donald Trump’s push to roll back Wall Street regulations is being held up by his inability to fill open seats at the two main agencies charged with overseeing the financial industry.

White House Tallies $10 Billion Saved by Repeal of Regulations – Bloomberg

The White House estimates it will save $10 billion over 20 years by having rescinded 11 Obama-era regulations under a relatively obscure 1996 law that lets Congress fast-track repeal legislation with a simple majority. 

A Federal Reserve Farewell Meaning More Than Most: QuickTake Q&A – Bloomberg

The departure of Daniel Tarullo from the Federal Reserve is a momentous event for Wall Street, which says goodbye (or maybe good riddance) to one of its most enthusiastic regulators.

Fed Funds-Linked Swaps Outstrip Libor for First Time – Risk (subscription)

Banks point to money market reform, Libor changes and Fed expectations as catalyst.

FCA to Banks: You’re Not Off the Hook – Institutional Investor

The UK regulator warns banks and financial services firms that just because the agency is focused on improving the behavior of senior investment professionals, companies are still subject to fines.

ESMA Clarifies SI Networking Position – The Trade

Market participants will not be able to network multiple third parties under the systematic internaliser (SI) regime, although could be authorised to hedge positions from executing client orders.

The Clock Is Ticking for Firms Seeking MiFID II Waivers – Law360 (subscription)

Firms bound by onerous new European Union financial rules are running out of time to apply for exemptions, as lawyers warn they risk being unable to serve the UK if caught in a last-minute gridlock.

SEC’s Revolving Door Would Benefit from More Disclosure – Wall Street Journal (subscription)

The SEC’s revolving door works both ways, from regulator to Wall Street and vice versa.

Wall Street and Washington: A New Love Affair – The New York Times

The people whom Mr. Trump has appointed to positions of power can wield significant influence over how business is conducted in America.

Company News 

Traders Go All-In on Interest Rate Derivatives in Q1 – The Trade

Volumes in interest rate futures and swaps reached new records during the first quarter, with expectations of a rate hike in the US, the end of quantitative easing, and regulation driving trading. 

Brexit: European Bankers in UK Sick of Location Limbo and Are Volunteering to Leave – The Independent

Staff at Citigroup, Goldman Sachs and HSBC have asked to return to their native countries inside the EU. 

Wolf Departs EBS BrokerTec – Profit & Loss

Bruce Wolf has left his position as head of Americas sales at EBS. 

A Lighter Footprint – Profit & Loss (subscription)

Increased attention on market impact has prompted non-bank market making firm XTX to release a new analysis tool, XTX-ray.

MahiFX Gets FCA Authorisation – Profit & Loss

Technology provider MahiFX says it has received authorisation to provide regulated products and services by the UK’s Financial Conduct Authority (FCA).

SocGen Launches New Risk Event Tracker App – Profit & Loss

Societe Generale (SocGen) has launched a new Web app that uses FX options to monitor the pricing of risk events, such as elections, central bank meetings or economic releases.

Financial Institutions Risk 24 Percent Revenue Loss from Fintech: PwC – Reuters

Large financial institutions across the world could lose 24 percent of their revenues to financial technology companies over the next three to five years, according to a new study by PricewaterhouseCoopers.

Major Industry Players Target Collateral Lending Using R3 – Global Custodian

Blockchain working group R3, five of its members and financial resource and liquidity management firm HQLAx have created a collateral lending offering for liquidity transfers.

LMRKTS Signs Up for Cobalt BlueSky Platform – Profit & Loss

Compression service provider, LMRKTS (Lmrkts), has become the first firm to sign up to Cobalt DL’s BlueSky service, the shared ledger component of Cobalt’s platform.

Market Savvy

Yen Strengthens Past ¥110.5 Per Dollar as Rand Steadies in Asia Trading – Financial Times (subscription)

Japan’s yen was firmer against the dollar in early Asia trading after Prime Minister Abe confirmed he had spoken with Donald Trump about the latest missile launch by North Korea, while South Africa’s rand appeared to have found a floor following a late Wednesday dip.

C$ Dips as Oil Prices Ease Off One-Month Highs – Reuters

The Canadian dollar edged lower against the greenback as oil prices eased off one-month highs, while minutes from the Federal Reserve’s latest meeting supported the view that Canadian and US monetary policy will diverge.

The Australian Dollar Is Still Going Nowhere – Business Insider

It was another lacklustre session for Australian dollar, oscillating in a thin range throughout the trading session.