DoJ Pushes for Foreign Exchange Deal with Five Banks in May – Financial Times (subscription)

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DoJ Pushes for Foreign Exchange Deal with Five Banks in May – Financial Times (subscription)
The US Department of Justice is pushing for five banks, including JP Morgan Chase and Barclays, to resolve allegations they manipulated the foreign exchange markets in one mega settlement scheduled for mid-May, according to people familiar with the case.

No Evidence of Suspicious Behaviour Before RBA Rate Announcements, $A Moves: RBA – Sydney Morning Herald
The Reserve Bank of Australia (RBA) says authorities have found no evidence of suspicious behaviour that could have contributed to sharp movements in Australia’s dollar just seconds before the RBA’s interest rate decisions in February and March.

NDF Growth Challenged By Buy-Side Concerns, Product Competition – Euromoney
Non-deliverable forwards (NDFs) have experienced impressive growth in recent years, providing a solution to the problem of trading spot FX in many emerging markets where currencies are not deliverable. However, regulatory and liquidity concerns, combined with competing FX products, have moderated buy-side enthusiasm.

Hong Kong Buys $6.85 Billion in April to Defend Currency Peg – Bloomberg
Hong Kong’s de facto central bank bought US dollars for the second day in a row to maintain the local currency’s peg, taking this month’s purchases to $6.85 billion.

Emerging Market Central Banks: Doves into Hawks – Financial Times (subscription)
When it comes to monetary policy, 2015 has so far been the year of the “dovish” surprise. In the first quarter, more than 20 central banks around the world cut interest rates, many of them unexpectedly as far as investors were concerned.

Central Banks Prepare to Flood FX Markets with Euros – Reuters
Central banks keen to steer clear of negative-yielding assets in a rapidly depreciating currency could cut the foreign exchange reserves they hold in euros by a hundred billion dollars or more, analysts estimate.

Multinationals Expect RMB Transaction Volumes to Double in Five Years – Profit & Loss (free story)
More than six out of 10 of companies in Asia Pacific, Europe and the US expect renminbi (RMB) transaction volumes to more than double in the next five years, according to research by Allen & Overy.

Grexit and UK Election Déjà Vu for Unphased FX Markets – GlobalCapital (subscription)
Investors trading euro/dollar and cable options do not appear concerned about Greece’s potential eurozone exit or medium term effects of UK elections, according to strategists.

 

 

Regulatory News

Pimco Calls For Urgent Re-think of Basel III Capital Rules – Profit & Loss (free story)
Pacific Investment Management Company (Pimco), the US-based asset management firm, has warned regulators that new capital rules being introduced under Basel III could have a negative effect on derivatives clearing, concentrating market risk in the process.

Ex-Fed chief Volcker calls for merger of SEC, CFTC – Financial Times (subscription)
Paul Volcker, the former head of the Federal Reserve, has issued a radical call for the streamlining of US financial regulators.

Scott O’Malia: Time for a Regulatory Time Out – Risk Magazine (subscription)
Isda chief calls for a pause in rulemaking to “fix the errors”, as the association heads into its thirtieth annual general meeting.

 

 

Company News

Hotspot to Provide Free Gold Trading for Clients from 1 May – Profit & Loss (free story)
Hotspot, the FX platform recently acquired by BATS Global Markets, plans to offer free spot precious metals trading to its customers. The “Free Gold” campaign applies to spot gold and spot silver pairs.

Goldman Sachs, Morgan Stanley Find Different Paths to Profits – Wall Street Journal (subscription)
Goldman Sachs and Morgan Stanley embarked upon divergent paths after the financial crisis when they chose starkly different strategies. But the two rivals have been reunited by strong first-quarter earnings, showing that when the markets and customers cooperate, there is more than one way to rack up big profits on Wall Street.

Capital Concerns Take Shine off Credit Suisse’s Profit Rise – Reuters
Tough new rules on risk and a surging Swiss franc weakened Credit Suisse’s cushion against future losses in the first quarter. With regulators still working on capital requirements for banks’ trading operations, there are potential headwinds to come.

Saxo Sees Long Road to Deals with Swiss Franc Debtors – Reuters
It will take time for Saxo Bank to pursue the clients who lost millions of its money in the Swiss franc’s January surge, the Danish bank’s Chief Financial Officer said, puncturing any hopes of a quick settlement.

FXCM Outlines Institutional Business in Light of Non-Core Sell-Off – Profit & Loss (free story)
FXCM, an online provider of foreign exchange trading and related services, has announced its plans to continue specific institutional services despite having to dispose of a number of non-core assets.

Ex-CLS Chief Leaves ICE Clearing House – Financial News (subscription)
Robert Close, the former chief executive of foreign exchange settlement specialists CLS Group, has stepped down from his board role at ICE’s European clearing house after nearly two-and-a-half years.

 

 

Market Savvy  

China’s Yuan: Asia’s Future Anchor Currency?
Chow Hwee Kwan, Professor of Economics and Statistics, Singapore Management University (The Straits Times)
The yuan is becoming more widely used in pricing and settling intra-regional trade and investment. Asian currencies’ movements are likely to shift more in tandem with the yuan, leading to it becoming one of Asia’s lead currencies.

From the Floor: It’s all about Greece
Saxo Bank
We’re seeing action to the downside in the euro this morning on the back of news that the European Central Bank is considering curbs on its Greek bank support.

 

 

Press Releases

LCH.Clearnet Opens Australian Dollar Account with Reserve Bank of Australia
LCH.Clearnet, the global clearing house, has announced that it has established new deposit and liquidity facilities with the Reserve Bank of Australia.

CommerzVentures Invests into Social Investing Company eToro Group
Germany’s Commerzbank has made its first fintech investment through a new venture fund, pumping $12 million into foreign exchange social trading network eToro.

 

 

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