Top Headlines

Daily FX Volumes Fall Back to $4.64 Trillion in April: CLS – Reuters
Average daily volumes in the global foreign exchange market fell back below $5 trillion a day in April, data from FX settlement bank CLS shows.

Deutsche’s Former FX Head Says Transformation is Coming – Euromoney
The headline results of Euromoney’s 2015 foreign exchange survey show the leading banks have been remarkably consistent, despite the upheavals in the sector. But, beneath the surface there are changes that will transform the competitive landscape of the industry. Deeper analysis of the survey results demonstrates that’s already starting to happen.

Libor trial: Libor fixed with £336,000 in Bribes – Prosecution – (subscription)
Former UBS and Citigroup trader Tom Hayes asked for Libor submissions to be doctored in hundreds of messages to his brokers in exchange for hundreds of thousands of pounds in “bribes”, London’s Southwark Crown Court heard on May 28.

Find Me a Prime – FTSE Global Markets
Tougher capital standards, lower liquidity and eroding margins have kept up the pressure on major prime-brokerage players, compelling many to cut loose less-profitable, higher-risk fund clients. The steep currency losses incurred following the Swiss National Bank’s decision to remove its three-year-old Swiss franc-euro cap last January only accelerated the rate of rationalisation, as Citi, Deutsche Bank and other PBs subsequently raised minimum thresholds in an effort to weed out smaller, riskier participants such as FX and fixed income arbitrage, among others, leaving many fund clients without a home.

Wall Street Executives Strike Subdued Tone on Trading Revenues – Wall Street Journal (subscription)
Within FICC, activity has slowed versus the seasonally strong first quarter, but should compare favourably to a weak year-ago level, driven by rates and FX.

Star Managers Battered By Rocky Ride in Yields, Currencies – Reuters
Some of the biggest names in the investment world have been whipsawed by the recent rise in global yields and the strength in the euro against the dollar, with investors bracing for more sharp moves later this year stemming from central bank actions.

Private-Bank Clients Mull FX Strategies – Euromoney
Opinion is divided on the extent to which private-bank clients should be encouraged to consider FX as an asset class and to look at strategies to generate returns from currency volatility. In any case, most private-bank clients are dollar bulls.

Greek Exit From Euro is ‘a Potential’, Says Lagarde – Financial Times (subscription)
The head of the International Monetary Fund has acknowledged that Greece could leave the euro, while insisting that this would not mark the end of the single currency.

Asia Currencies Have Worst Month Since November on Fed Rate Bets – Bloomberg
Asian currencies completed their biggest monthly drop since November, led by South Korea’s won, on signs the Federal Reserve is moving closer to raising interest rates.

Only Three Major Currencies Outdid the US Dollar in May – Financial Times (subscription)
May was a mighty month for the US currency, as it was propelled higher by a sense that the US Federal Reserve is inching closer to its first interest rate hike since 2006. But three currencies managed to squeak just ahead of the dollar, despite its wild ride: the Turkish lira, Mexican peso and the Chinese renminbi.



Regulatory News

EC’s Hill Points to April 2016 Start for Swaps Clearing – Risk Magazine (subscription)
Europe’s long-awaited swap clearing regime could take effect from April 2016, according to Jonathan Hill, the European Commission’s commissioner for financial stability, financial services and capital markets union, who was speaking this morning at a public hearing in Brussels. The roll-out of the European regime is a multi-step process, and the start date is still not final.

FXCM’s Swiss Franc Losses Prompt Call for Tougher Currency Rules – Bloomberg
The US derivatives industry’s front-line regulator wants retail currency dealers to face higher capital and risk-management standards after Swiss franc losses this year left a leading brokerage needing a $300 million rescue. Dealers would have to hold more capital in trades with large customers and foreign affiliates under rules proposed Thursday by the industry-funded National Futures Association.

ESMA Fosters Derivatives Market Transparency (press release)
The European Union’s derivatives markets are becoming more transparent through the public availability of harmonised aggregate data reported to the six trade repositories registered with the European Securities and Markets Authority.

ASIC Consults on Central Clearing Obligations for OTC Derivatives (press release)
The Australian Securities & Investments Commission (ASIC) has proposed draft rules to implement mandatory central clearing requirements for certain over-the-counter derivatives. The proposals are the next stage in Australia meeting its Group of 20 commitments to reform OTC derivatives markets following the global financial crisis.



Company News

Poised for Revolution, Currency Trading Gets Veteran Combatant – Bloomberg
Bats Global Markets is betting on a revolution in currency trading like the one in stocks 20 years ago. It began its crusade with a $365 million acquisition followed by a price war.

CME Group Readies Launch of Interest Rate Swap Curve – International Financing Review (subscription)
CME Group will on Monday launch for testing a new curve for pricing interest rate swaps that clear through the firm’s over-the-counter derivative clearing house, according to a letter sent to clients today.

FXCM to Sell Another Unit to Rakuten for $36 Million – Wall Street Journal (subscription)
FXCM has agreed to sell its Hong Kong business to Rakuten for $36 million, the second business FXCM has unloaded to the e-commerce giant as it sells off assets to repay debt.



Market Savvy  

Dollar Lower Against Yen on Profit Taking
The dollar was drifting lower against the yen in Asia trade Friday, with some investors locking in profits ahead of the weekend following this week’s high-profile rally.

World’s Best Carry Trade Fizzles as Rouble Slides with Oil Price
Russia no longer needs to convince investors the world’s biggest currency rally is over. The drop in oil and looming foreign debt payments are making the case for it.

When Fed Policy Hits Emerging Economies, Some Do Better Than Others. A New Paper Suggests Why
Wall Street Journal
What happens in the US doesn’t always stay in the US when it comes to monetary policy. But emerging economies may be better positioned to weather spill overs from the Federal Reserve’s actions if they start out on a strong foundation, according to a recent analysis by central bank economists.



Press Releases

KDPW-CCP Clears First OTC Trades in PLN
KDPW_CCP has cleared the first interbank market (OTC) trades denominated in PLN between Citi Handlowy and mBank. Trade on the interbank market is processed and guaranteed in the dedicated module, otc_clearing, developed by KDPW_CCP in co-operation with Poland’s biggest banks operating on the interbank market.



Industry Events