Top Headlines

Dead Calm in Currency Markets Unnerves Investors – Financial Times

Corporate treasurers tend to like nothing more than a stable exchange rate, allowing them to budget and plan with a measure of confidence. But for Wall Street strategists and traders who earn a living from market movements, extreme calm can be unsettling.

Flash Crash Fears Haunt Traders Ahead of 10-Day Japan Break – Bloomberg

Japan’s retail investors have propelled their net long yen positions against the dollar to near a record ahead of the nation’s extended Golden Week holidays.

No-Deal Brexit Could Force European Swaps Trading to US Venues – (subscription)

London branches of banks such as BNP Paribas, Deutsche Bank and Societe Generale will be barred from trading the most liquid interest rate swaps and credit derivatives on platforms in both the UK and European Union unless the two jurisdictions deem each other’s financial regimes as equivalent prior to Brexit. Oddly, the only place they’d be able to trade with EU and UK clients will be on US platforms.

The New FX Market: Competing in a World of Global and Regional Players – Greenwich Associates

Although JP Morgan and Citi have distanced themselves from the pack of other major dealers in global foreign exchange, banks like UBS, HSBC and Barclays also won client relationships and trading share last year, albeit in their focus client and product segments, making an already competitive market even more so.

Regulatory News

CFTC Approves Proposed Rule to Improve Data Quality and Streamline Regulations for Swap Data Repositories – CFTC

The Commodity Futures Trading Commission (CFTC) has approved a proposed rule to improve the quality of swap data and to update and streamline regulations related to swap data repository operations and governance.

Uncleared Margin Rules Unlikely to Clarify Clearing Migration – Euromoney

FX prime brokers are expected to adapt to the pricing challenges of uncleared margin rules, but it remains far from clear whether these rules will push the market definitively in the direction of central clearing.

Japan OTC Derivatives Regime Deemed Equivalent Under EMIR – Regulation Asia

The European Commission recognises Japan’s rules on valuation, dispute resolution and margin exchange for uncleared OTC derivative contracts as equivalent to EMIR.

Libor’s Looming Demise Is a Mammoth Financial Engineering Task – Bloomberg

The end is coming for Libor and financial markets need to get ready. That’s the view of Morgan Stanley’s Tom Wipf. He heads the Federal Reserve’s Alternative Reference Rates Committee, which on Thursday released recommendations for language to enable contracts linked to the beleaguered London interbank offered rate to work even if the benchmark disappears.

Wall Street Nears a Big Win in the Latest Revamp of Volcker Rule – Bloomberg

In a win for Wall Street banks, the latest effort to overhaul the post-crisis Volcker Rule is moving toward a narrower and clearer definition of what types of trades are prohibited.

Crypto News

US Probe Claims Bitfinex Covered Up $850m Loss with Tether Reserves – Financial Times

The New York attorney general’s office has accused cryptocurrency trading platform Bitfinex of covering up an $850m loss with cash reserves from affiliated digital currency Tether.

Cryptocurrencies Lose $10 Billion on Tether Cover-Up Allegations – Bloomberg

Cryptocurrencies tumbled after New York’s attorney general cast fresh doubt on the stability of Tether, a virtual currency that plays a central role in trading on crypto exchanges around the world.

Crypto Trading Firm GSR Launches New Bitcoin Hedging Product – The Block

Algorithmic digital assets trading and market making company GSR announced the launch of its new bitcoin hedging product. Bitcoin Variance Swaps allow investors, traders and companies alike to hedge their portfolios against bitcoin volatility.

Company News

360T Looks to Drag FX Swaps Trading into the 21st Century – Profit & Loss

As 360T prepares to go live with a new electronic marketplace for banks trading FX swaps, Galen Stops takes a look at the details behind the launch.

Colinders Handed New Role at State Street – Profit & Loss

James Colinders has taken on a newly created role at State Street working on its money market platform, FundConnect.

Commerzbank Will ‘Evolve’ Strategy in Coming Months, CEO Says – Bloomberg

Commerzbank, following the collapse of merger talks with rival Deutsche Bank, will fine-tune its strategy over the coming months and update the market on its targets at the end of the third quarter, Chief Executive Officer Martin Zielke said.

Market Savvy

Sterling Headed for Worst Week in a Month as Dragged-Out Brexit Weighs – Reuters

The pound on Friday was headed for its weakest week in a month, with a stronger dollar and growing concern about stagnant Brexit talks punishing the British currency.

Dollar Holds Near Two-Year Peak as Markets Await US Growth Figure – Financial Times

The dollar held around some of its strongest levels in two years, European stocks were set to inch up after a mixed run for Asian equities and oil cooled from its 2019 highs as investors waited for US growth data due on Friday.

Euro Hovers Near 22-Month Lows as Market Awaits US GDP Data – Reuters

The euro hovered near 22-month lows on Friday as traders waited to see whether U.S. GDP data due out later will reinforce signs of economic strength and send the dollar surging even higher.

Turkish Removal of Hawkish Rate Pledge Worsens Lira’s Plight – Bloomberg

Turkey’s central bank dropped a commitment to deliver further monetary tightening if needed as it extended its interest-rate pause to seven months. The lira tumbled to its weakest since October.