Top Headlines

Does TCA Really Need to be Independent? – Profit & Loss

Mike Harris, president of Campbell & Company, discusses the pros and cons of independently-provided transaction cost analysis (TCA).

FX: Wary Investors Still Suspicious of Currency-Hedged ETFs – Euromoney

Investors continue to shy away from currency-hedged ETFs despite their positive short- and medium-term performance. 

Pound Stuck Near 20-Month Low as UK Gov’t Rules Out Second Brexit Referendum – Reuters

The pound languished near 20-month lows on Monday, with reports that more politicians are calling for a second Brexit referendum doing little to force the currency out of a narrow trading range.

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

The podcasters take a look at the first in-depth analysis from a broker of the CME-NEX deal and discuss the recent changes at Refinitiv, clarifying their thoughts on potential M&A activity involving that firm’s Matching, Dealing and FXall businesses. Will firms be willing to splash the amount of cash required to complete such a deal? And who would be the best buyers for the combined business or elements thereof?

Regulatory News

Regulators Need Joined Up Thinking to Spot Derivatives Risks : BIS – Reuters

Regulators should scrutinise clearing houses and banks together to spot financial stability threats from the world’s multi-trillion dollar derivatives market, the Bank for International Settlements said on Sunday.

FCA Taps Regtech Ascent to Simplify Regulatory Handbook – Business Insider

US-based regtech Ascent has formalized its collaboration with the UK’s Financial Conduct Authority (FCA) to componentize the regulator’s handbook.

Crypto News

The Trade’s Best of 2018: Crypto – The Trade

If 2017 was the year that crypto burst into the mainstream consciousness with the biggest of bangs, then 2018 could be viewed as the year it imploded. 

The Bitcoin Price is Wrong – Financial Times

After the heart-attack in crypto-thingies over the past year, you’d think some corners of the financial world would have dialled down on giving airtime to those pushing a decentralised future. After all, crypto has turned out to be a total nonsense.

Mapping Out the Coinbase Mafia – The Block

Coinbase, the $8 billion cryptocurrency exchange, is the1,000-pound gorilla of the crypto world. One of the largest effects that Coinbase has had on the industry is through its former employees. These employees have started multi-million dollar hedge funds, venture firms, and billion dollar protocols and are so influential in the industry that they have been unofficially dubbed the “Coinbase Mafia”

Crypto’s Market Structure Forcing Institutions Back to 80s – Markets Media

Market fragmentation has made trading crypto far more reminiscent of the 80s’ Wall Street propelled by slate grey brick phones, printed trade tickets and double-breasted blazers than any modern market. 

Company News

Swedbank Rejects Nasdaq Bid for Cinnober – Global Investor (subscription)

Swedbank Robur, which owns 9.7% of Cinnober’s shares, said the offer does not reflect Cinnober’s value.

Barclays, a Hedge Fund and Two Traders’ Hidden $400 Million Loss – Bloomberg

A hedge fund’s lawsuit has unearthed some trading losses that Barclays might have preferred to forget. Two metals traders at Barclays were dismissed seven years ago after racking up losses of $396 million, according to documents disclosed in a court case.

Deutsche Bonuses Evaporate as Bank Shares Tank – Financial News (subscription)

Deutsche Bank faces an uphill battle to hold on to its star performers after a slump in the German lender’s share price has left key staff sitting on paper losses of millions of dollars.

A Buy-Side Swaps Order Book – With a Difference – (subscription)

The euro swaps market is beginning an experiment with exchange-style trading, after the first of 20 clients signed up to a new central limit order book (Clob) offered by interdealer broker, Tradition.

BNY Mellon Hires Government Affairs Boss from CME Group – Financial News (subscription)

Ben Pott, who is known for his expertise on a range of EU trading rules, will be based in Frankfurt.

Malhotra Back to Barclays – Profit & Loss

Gaurav Malhotra has joined Barclays in Singapore as director with responsibility for the e-FX business in the Asia Pacific region.

Brexit Woes Spur $376 Billion Manager to Shut London Swap Trades – Bloomberg

Union Investment, which manages 333 billion euros ($376billion) of assets, is the first to declare that it will close existing euro-denominated swap trades at London’s LCH – the world’s largest clearinghouse and probably among the City of London firms most vulnerable to disruption over the next few months.

Market Savvy

Dollar Index Near 18-Month High on Safe-Haven Bid Amid Global Growth Worries – Reuters

The dollar held near an 18-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetites for riskier assets such as stocks and Asian currencies.

China’s Yuan Trading Likely to Get More Volatile, Goldman Says – Bloomberg

China’s exchange rate is likely to get more volatile intime as the country pushes greater international use of the yuan, according to Goldman Sachs.

Investor Sentiment Sours as Outlook for Dollar Goes into Reverse – Financial Times

Sentiment among leading investors is souring rapidly as they become more convinced that the global economy is likely to deteriorate over the coming year, according to new research on asset managers. 

Fed’s Powell Poised to Set Rates Policy Tone for 2019 – Financial Times

Wednesday’s meeting of Federal Reserve policymakers is their last of 2018 and, arguably, the most important. They are widely expected to raise rates for the fourth time this year to a range of between 2.25 and 2.50 percent, but it is what they signal for next year that should help shape asset allocation decisions for 2019.