Top Headlines

Dollar Hits One-Month High Vs. Yen on Mnuchin Bond Hints – Reuters

The dollar hit a one-month high against the yen, lifted by a surge in US government bond yields after US Treasury Secretary Steven Mnuchin commented on the possibility of ultra long-term bond issuance.

Don’t Fade the Donald and Other Adventures in Trump Tweet FX Vol – Financial Times (subscription)

“The impact of Trump’s tweets on the FX market has been low in aggregate.” Sad.

‘Pound Is Not Bulletproof’ But Markets Show No Alarm at Tone of UK/EU Talks – Financial Times (subscription)

If investors are worried, they are hiding it well, with sterling, a reliable measure of ‘hard Brexit’ nerves, holding steady above $1.29.

Le Pen Supporters Shrug Off Euro Flip-Flops, Back Frexit Idea – Reuters

Supporters of far-right presidential candidate Marine Le Pen shrugged off her ditherings over the week-end on the euro, saying they trusted her with taking France out of Europe’s single currency and back to the Franc.

Brussels Set for Power Grab on London’s Euro-Clearing Market – Financial Times (subscription)

Brussels is rushing out proposals to impose EU control on the City of London’s lucrative euro-clearing market, forcing UK operators to either relocate or be policed by European authorities.

Yen Weakens to ¥112 Per Dollar for First Time Since March – Financial Times (subscription)

Japan’s yen fell to its weakest level against the dollar in more than a month as dissipating investor anxiety undermined demand for havens.

Steady FX Volumes in April – Profit & Loss

The first group of FX platforms to report average daily volume (ADV) indicate the steady start to the year continued through April.

Asian Currencies Advance Against Dollar – Financial Times (subscription)

Asian currencies are largely higher against the US dollar, with investors wading through a raft of readings on Asia’s manufacturing sector.

Peso and Ringgit Finally Flourish and Spur Equity Gains – Bloomberg

Better late than never. The Philippine peso and Malaysian ringgit have clambered aboard the Asian currency rally, advancing against the dollar and spurring flows into equity markets.

Argentina’s Carry Trade Bonanza Driven by High Interest Rates – Financial Times (subscription)

A big inflection point may be the midterm legislative elections due in October.

UBS, BNP, RBS Get Subpoenas in US Treasuries Probe – Bloomberg

Federal prosecutors have subpoenaed several banks as part of a criminal investigation into possible manipulation of the US Treasuries market, according to people familiar with the matter.

Regulatory News

Industry Bodies Criticise Reg AT Rules (Again) – Profit & Loss

The Futures Industry Association (FIA) and the FIA Principal Traders Group (PTG) have yet again submitted comments to the Commodity Futures Trading Commission’s (CFTC) opposing what they describe as the overly prescriptive regulation of automated trading proposed by the Commission.

Trump Preparing to Replace Top Banking Regulator – Wall Street Journal (subscription)

The Trump administration, looking to make its first major imprint on US banking regulators, is preparing to replace Comptroller of the Currency Thomas Curry as chief overseer of federally chartered banks, according to people familiar with the matter.

Jay Clayton Moves a Step Closer to Being SEC Chairman – Wall Street Journal (subscription)

Jay Clayton, President Donald Trump’s nominee to lead the Securities and Exchange Commission, cleared a key Senate hurdle, paving his way to take over the top US markets regulator.

President Trump Says He’s Looking Into Breaking Up Wall Street Banks – Wall Street Journal (subscription)

President Donald Trump turned his attention to breaking up Wall Street banks, a campaign promise that has yet to materialize despite frequent chatter on the subject.

ECB’s Nouy Wants Basel Deal on Bank Rules as Quickly as Possible – Reuters

Global regulators should agree “as quickly as possible” on the minimum amount of capital that banks must hold, a so called ‘floor’ that has held up the completion of a new rulebook known as Basel III, the European Central Bank’s top supervisor said.

China Leverage Rising at ‘Alarming Pace’: Central Bank Official – Reuters

China’s level of leverage is rising at an “alarming pace”, particularly in the finance sector, a senior central bank official said in a commentary, amid growing concern by the country’s senior leaders over financial security.

Company News 

AP CEO Exits TP Icap – Profit & Loss

Market sources say that Hugh Gallagher, CEO of TP-Icap in Asia-Pacific and head of Icap’s Asian business, has resigned from the firm.

BNY Mellon Adds Three in FX? – Profit & Loss

Market sources tell Profit & Loss that BNY Mellon has continued to add to its ranks as it builds out its FX business. 

TriOptima Adds MVA Calculations to XVA Service – Risk (subscription)

Nex Group is aiming to kick-start the practice of pricing in the cost of funding initial margin on non-cleared derivatives trades with the launch of a margin valuation adjustment (MVA) calculator for dealers and buy-side firms.

The Recent Fixed Income Party Won’t Stop Investment Banks’ FICC Desks Shrinking – eFinancial Careers

The best way for the FICC markets to transition out of a low-rate environment and into a market that seems perpetually marked by volatility is to embrace, not resist, the move towards digitization.

Cluster Model Relies on Op Risk ‘Storms’ – Risk (subscription)

The rare but catastrophic operational risk tail events that dominate total losses – and capital calculations – do not occur at random, argue researchers at the University of Sousse in Tunisia.

Market Savvy

EM Stocks Hit 20-Month High on Tech Rally, Currencies Gain – Reuters

Emerging stocks hit a 20-month high, lifted by a global tech stock rally and easing geopolitical concerns, while the main emerging currencies gained against a steady dollar, shrugging off a batch of mixed data.

RBA Holds Rates, Australian Dollar Rises on Upbeat Policy Tone – Financial Times (subscription)

Australia’s central bank has kept interest rates steady, with its slightly more upbeat stance on the domestic labour market helping send the Australian dollar higher.

Solid PMIs Fail to Lift Currencies as Focus on Fed, France – Reuters

Central European currencies were steady or weaker, shrugging off robust manufacturing surveys from the region amid low turnover ahead of the Federal Reserve’s meeting and the second round of France’s presidential election.