Top Headlines

Data Remains the Key Battleground for FX Platforms – Profit & Loss

On the one hand, FX trading venues are increasingly looking for ways to package and sell their market data, creating new revenue streams for the business. On the other, seemingly all of them are investing in developing trade analytics tools that will enable users of these platforms to derive greater insights from their trading activity and more effectively evaluate the liquidity and pricing available there.

FX Fines and Lawsuits – Banks Might Not Go So Quietly Next Time (opinion) – Profit & Loss

I can’t count how many times I have expressed the opinion in this column that banks rolled over on too many occasions when faced with a fine or lawsuit, but I have to say that my sense from talking to senior people in FX businesses now is that those days are over.

Prosecuting Bankers Proves Exercise in Frustration – The Wall Street Journal (subscription)

The Justice Department is having more success at prosecuting banks than going after the bankers who work for them.

The Traders who are Winning and Losing the First Quarter – eFinancialCareers

Keefe, Bruyette & Woods has estimated first quarter trading revenues for fixed income and equities across the nine largest investment banks. The majority of the numbers are sobering on the surface, but it’s important to recognize that the estimated totals are being compared to Q1 of 2018, when trading conditions were ideal. 

In the FICC of It (podcast) – Profit & Loss

This week’s edition takes a look back as managing editor Colin Lambert is joined by P&L’s founder Julie Ros, 20 years to the day since she incorporated Profit & Loss. The names of the leaders in e-FX may have changed, but the two podcasters agree that there is much that remains the same, in both the single and multi-dealer platform world especially.

One of Wall Street’s Most Popular Trading Strategies is Now Failing – Bloomberg

Sometimes machines are only as smart – or dumb – as the humans who program them. Hedge fund investors learned that the hard way last year when data-crunching computers that invest $220 billion based on historical price trends did worse than most other managers, robot or human.

Why You Must Be Seen to Spend Your Bonus When You Work for a Bank – eFinancialCareers

When you work for an investment bank, your manager derives vicarious pleasure from the way you spend your bonus. If there is one thing a manager won’t forget, it’s how much he (or she) paid you.

Regulatory News

London Has No Rival in Derivatives Markets, CFTC’s Giancarlo Says – Bloomberg TV

CFTC Chairman Christopher Giancarlo discusses London’s importance to the global derivatives markets, the need for continuity in US and UK markets in the face of Brexit, and the performance of Bitcoin futures.

Invesco, Wellington and Dodge & Cox Eye Global Adoption of Mifid II – Financial Times

Invesco, Wellington Management and Dodge & Cox are pushing the Wall Street regulator to allow them to apply Mifid II cost transparency rules in the US, a move that underlines the growing global impact of the EU legislation.

Halfhearted Regulators are to Blame for Mifid and Priips Confusion – Financial Times

More questions will rightly be asked about the competency of financial regulators after the UK City watchdog last week said it had uncovered further evidence of problems with two landmark reform packages intended to improve standards across the European investment industry.

FCA Rocked by Claims of Bullying and Harassment – Financial News

The Financial Conduct Authority has been rocked by a sharp rise in the number staff making accusations of bullying and harassment at the powerful UK watchdog, raising questions over the FCA’s ability to stamp out misconduct in the City.

EU Gives Investors in Irish Assets the All-Clear in Hard Brexit – Financial Times

European regulators have stepped up preparations for the risk that the UK leaves the EU abruptly at the end of the month, issuing a licence to ensure that investors in Irish markets can continue to settle trades in London.

Companies Give Investors a Peek at Life after LiborThe Wall Street Journal (subscription)

Corporate finance teams are rifling through loans, investments and derivatives to assess the potential fallout from moving to a new benchmark for short-term borrowing costs.

Vendors Prep for Initial Margin Big Bang – WatersTechnology (subscription)

Tech providers are emerging from all corners as the final phases of initial margin rules closes in, which are expected to capture over 1,000 buy-side and sell-side firms over the next 18 months.

Crypto News

Quadriga Crypto Mystery Deepens With ‘Cold Wallets’ Found Empty – Bloomberg

When Quadriga Fintech Solutions Corp. founder Gerald Cotten died, account holders feared the encrypted access keys needed to recover C$190 million ($143 million) of cryptocurrencies held by the exchange in offline storage could be lost forever. It looks now like the storage Quadriga is known to have used – dubbed cold wallets – has been empty since April.

Gemini Ups Institutional Drive with BT Radianz Connection – The Trade Crypto

Gemini steps up efforts to reach incumbent crypto market players by joining a network of brokers, institutions, exchanges and clearing and settlement houses.

More Funds Testing Water on Crypto-Related Assets – Pensions & Investments

Institutional investors, including public pension funds, have begun taking bets on fledgling funds, which invest heavily in cryptocurrency and blockchain-related companies.

Another Bitcoin Indicator Signals Price Bottom May Be Forming – CoinDesk

A technical indicator that incorporates both bitcoin’s price and trading volume is signalling the cryptocurrency may have bottomed in December.

Company News

360T: Executing on its FX Strategy – Profit & Loss

The biggest move that 360T made last year was the acquisition of GTX for $100 million. The logic behind this purchase was that because GTX is primarily an interdealer platform that is spot FX focused and US-centric it can help round out 360T’s more dealer-to-client, European-centric FX business.

Virtu Closes $1 billion ITG Acquisition – The Trade

High-speed trading firm Virtu Financial has officially closed its $1 billion acquisition of agency brokerage ITG, after announcing plans to merge in November.

FX Volumes Dip In February – Profit & Loss

Anecdotal evidence that February was a much quieter month for FX markets is reinforced by the first set of average daily volume data reported by FX trading venues with all showing a month-on-month decline.

ESMA Approves DTCC’s Trade Repository as Bloomberg Withdraws Registration – The Trade

Europe’s market regulator has approved DTCC’s in Ireland as the post-trade provider plans its strategy for a potential no-deal Brexit. At the same time, the European Securities and Markets Authority confirmed that Bloomberg’s registration has been withdrawn on request with its clients transferred to alternative providers.

Jyske Bank Signs NCFX for Data – Profit & Loss

Denmark’s Jyske Bank has selected New Change FX (NCFX) as an independent data source for its capital markets business. The bank’s Markets division will use the data from the independent entity to analyse its FX business.

IHS Markit Expands Valuation Services to Support Best Execution Requirements for OTC Derivatives – IHS Markit

The time-stamped valuation data can help firms monitor intraday and historic transaction costs across interest rate, equity, FX, credit, commodity and structured product OTC derivatives.

Market Savvy

Pound Rises on Signs Pro-Brexit Lawmakers are Softening Demands of PM May – Reuters

Sterling gained on Monday on signs some pro-Brexit lawmakers were increasingly willing to compromise with Prime Minister Theresa May, increasing the chances the British leader will get her Brexit deal through parliament next week.

Long Dollar Bets Thrive in Low Volatility – Reuters

The dollar consolidated gains on Monday after posting its biggest monthly rise in four months, as low volatility prompted investors to buy the currency, particularly against the yen.

Why Central Banks are Wary of Bouts of March Madness – Financial Times

This month contains important deadlines that have long been flagged as having the power to spark renewed financial stress.FX: The Complexities of Commodity-Linked Currencies – EuromoneyMacro and monetary policy factors are affecting some currencies more than traditional commodity triggers.