Top Headlines

Dollar Charges to 14-Year High, Bonds in Full Swing – Reuters

The dollar scaled to its highest level in almost 14 years against a basket of currencies while US bond yields were set for the biggest fortnightly rise in 15 years on bets US inflation and interest rates are headed higher.

Dollar Heads for Best Fortnight vs Yen Since 1988 – Reuters

The dollar powered to its highest levels since 2003 against a basket of currencies with Donald Trump’s victory in the US presidential election helping to give the greenback its best fortnight against the yen in almost 30 years.

A Primer on the Dollar’s Surge – Bloomberg

This week, the dollar strengthened to levels not seen in more than a decade, raising questions about the causes and sustainability of the increase, as well as the consequences for the global economy.

Derivatives Traders Forced to Provide $27bn Collateral Post-Brexit – Financial Times (subscription)

Derivatives traders were forced to stump up tens of billions of dollars the day after Britain’s vote for Brexit to cover volatile price movements, testing the foundations of the market’s post-financial crisis architecture.

Euro Below $1.06 as Record Losing Streak Continues – Financial Times (subscription)

The US dollar might have little bit more work to do until it chalks up a record winning streak, but the damage it has done to the euro in the meantime has meant the single currency is suffering its longest losing run since becoming an accounting currency in 1999 and has slipped below $1.06 for the first time in nearly a year.

BoE’s Broadbent Warns of Rising UK Import Prices from Weak Pound – Financial Times (subscription)

The UK economy faces a period of significantly higher import prices on the back of a record slump in the pound, one of the deputy governors of the Bank of England has said, hinting policymakers were less willing to tolerate a sterling-induced inflation rise.

Mexican Peso Falls Despite Rate Hike, Fed Action Looms – Reuters

Mexico’s peso fell after an interest rate increase by the central bank fell short of expectations for stronger action to counter a slide in the currency sparked by Donald Trump’s US presidential election win.

China Weakens Renminbi for Record 11th Straight Day – Financial Times (subscription)

China has weakened the renminbi’s trading band for a record 11th straight day, taking its currency to an eight-year low as expectations of US interest rate rises buoyed the dollar against the region’s currencies.

China Ponders Implications for Renminbi of Trump Victory – Euromoney

The US president-elect has talked tough on China, but he could be good news for China’s economy and its currency.

It’s Friday, so Asian Central Banks are Back in Currencies – Bloomberg

For the second time in two weeks the shockwaves rippling through global markets after the US election have provoked Asian central banks to step in to calm their currencies – mindful of concerns the region might see a sequel to 2013’s so-called Taper Tantrum.

Malaysia’s Central Bank Intervening in the Foreign Exchange Market – Financial Times (subscription)

Malaysia’s ringgit is sitting weaker as its central bank said it was intervening in the currency market.

How Trump’s Victory Changed Markets: In Charts – Financial Times (subscription)

Donald Trump’s shock presidential election victory wrongfooted many investors and triggered a convulsion across financial markets – although not always in the way analysts expected.

Regulatory News

Swaps Industry Balks at Joining Trump in Gutting Dodd-Frank – Financial Times (subscription)

For much of the past decade the derivatives industry has been caught in the gravitational pull of the Dodd-Frank act, the sweeping piece of legislation meant to contain the risk of another financial crisis.

Suspend Bank Capital Rules Following an FCM Default, CFTC Told – Risk (subscription)

Banks may be more likely to bid in post-default auctions if temporary capital relief is granted.

Europe Delays Clearing by Smaller Firms to June 2019 – FOW (subscription)

The European Securities and Markets Authority has proposed delaying the European Market Infrastructure Regulation (Emir) clearing obligation for smaller category three firms to June 2019.

Audit Shows Risks for ECB’s Role as Bank Watchdog – Financial Times (subscription)

The ECB’s new role as top policeman for the eurozone’s biggest banks risks being undermined by a staffing shortage, according to a first audit of the institution carried out by EU officials.

Company News

Icap’s Spencer Reboots Market Stalwart with Bet on Digital – Bloomberg

Michael Spencer – tycoon, Tory, oenophile – is making the biggest trade of his career.

Sterling Bulls, Look Away Now: Goldman’s Top Trades for 2017 are Out – Financial Times (subscription)

Like the Christmas decorations that seem to spring up in shops earlier every year, the rush of “year-ahead investment themes” is already trickling out of the big banks, including Goldman Sachs, whose top trades are an annual staple. 

Barclays: Dollar is the Currency to Own as Funds Pull Out of Emerging Markets – CNBC

The dollar stomped emerging market currencies down further and that’s not going to end anytime soon, analysts said.

Market Savvy

Rand at Two-Month Low as EM Slump Continues – Financial Times (subscription)

The rand has fallen to its weakest level since the start of September, as the dollar’s longest rally in four years continues to batter emerging market currencies.

CAD Weakens as Yellen, Data Boost Fed Hike Bets – Reuters

The Canadian dollar weakened against its US counterpart as strong US economic data and comments from Federal Reserve Chair Janet Yellen solidified expectations of a US interest rate hike next month.

Taiwan Stocks, Currency Fall in Line with Asian Markets – Reuters

Taiwan’s stocks and currency fell tracking weaker regional markets, as a rise in US bond yields lifted the dollar.