Top Headlines

Dollar Snaps Three-Day Losing Streak on US Tax Plan Bets – Reuters

The dollar rose half a percent against a trade-weighted basket of currencies after the US Senate approved a tax overhaul at the weekend, though gains were limited by doubts that interest rates would rise as a result.

Deal or No Deal? Sterling Slips as Traders Eye Brexit Summit – Reuters

Sterling slipped against a stronger dollar as investors awaited the outcome of a summit in Brussels where British Prime Minister Theresa May hopes to break a deadlock in Brexit talks with a new divorce offer.

The Pound Has Little Room to Rebound, Even with a Brexit Breakthrough – Bloomberg

A market that is already positioned for a breakthrough in the talks, as well as the possibility of the Federal Reserve raising US interest rates in December, could put a cap on sterling’s gains, according to Stuart Bennett, head of Group-of-10 currency strategy at Banco Santander.

Yen Is at Risk of Big Move, Like Euro in June, Evercore ISI Says – Bloomberg

The second quarter of 2018 is shaping up to be a potentially sensitive time for the yen, when new – or newly reappointed – leaders at the Bank of Japan could opt to telegraph a tweak in monetary policy, according to Evercore ISI analysts.

Confusion Reigns as Banks Scramble to Price FX, Bond Research Under EU Markets Revamp – Reuters

Having grappled with the issue for the past 18 months, no consensus or preferred pricing model appears to have emerged on macroeconomic, fixed income and foreign exchange research, taking discussions down to the wire.

BofA’s Brexit Planners Are Said to Have Mulled Bigger Paris Move – Bloomberg

Bank of America has been debating proposals from Chief Operating Officer Tom Montag’s subordinates to rapidly build out a European trading hub in Paris, according to people with knowledge of the talks.

Anger and Confusion as Crypto Traders Lose Thousands in ‘Flash Crash’ on $54 Billion Exchange – Business Insider

A “flash crash” on the world’s biggest cryptocurrency exchange has left customers demanding answers and refunds, with many claiming to have lost thousands of dollars.

Tax Changes for Overseas Cash Could Ripple Through Markets – Wall Street Journal (subscription)

A provision in the GOP tax plan giving US companies a one-time cut for repatriation of earnings and cash held overseas could ripple through financial markets, including currencies, foreign savings vehicles and dollar funding for global banks.

Big Six US Banks Add $170bn to Trading Firepower – Financial Times (subscription)

Big Wall Street banks have begun to rebuild their trading arsenals under the lighter-touch regime of Donald Trump, who has promised to rip up Obama-era rules designed to rein in risk-taking.

Quants Find Hidden Currency Risk in Domestic Stocks – Risk (subscription)

Pure exposure to home equities harder to isolate than previously thought, new paper says.

The Irrationals Return – Profit & Loss (subscription)

We will limp through December by paying homage to the great and the no-so-great of the FX world.

Regulatory News

Bitcoin Futures Set to Start Trading as Regulator Gives Thumbs Up – Wall Street Journal (subscription)

The US Commodity Futures Trading Commission said it would allow two major Chicago exchanges to launch bitcoin futures.

Quarles: Fed to Propose More Transparent Bank Stress Tests – Wall Street Journal (subscription)

The Federal Reserve will propose changing its stress tests for big banks to allow for “significantly more transparency” in how the tests are run, Fed Vice Chairman for Supervision Randal Quarles said.

EU Sparks Hopes of Securitisation Margin Reprieve – Risk (subscription)

The Council of the European Union has raised hopes of securitisation special-purpose vehicles being exempt from posting margin on over-the-counter derivatives when new legislation is finalised next year.

Senior EU Official Pushes China to Live Up to Xi Jinping’s Promise to Open Up Country’s Markets – South China Morning Post

European Commission vice-president says Brussels is looking for action to match Chinese leader’s comments in speech to Communist Party congress.

FCA Chief Backs Carney’s Call for Review of Banker Bonus Cap – Financial News

The head of the UK’s financial regulator has backed calls by Mark Carney for a review of the cap on banker bonuses after Britain leaves the European Union.

Dodd, Frank Reunite to Protest CFPB Leadership Change – American Banker

While most lawyers have declared the leadership battle at the Consumer Financial Protection Bureau all but over, former lawmakers Barney Frank and Chris Dodd teamed up again to make a last-minute protest to the Trump administration’s recent installation of an acting director at the agency.

Company News

Chrystal Departs Traiana – Profit & Loss

James Chrystal has left Nex Traiana, the firm that he co-founded in 2000.

R5FX, Shanghai Clearing House to Launch FX Trading Platform – Profit & Loss

R5FX and the Shanghai Clearing House (SHCH) will launch a new electronic marketplace next month, in a move which will enable Chinese banks to directly trade offshore RMB with London for the first time.

Gain Capital Launches Bitcoin Trading – Profit & Loss

Gain Capital has joined the ranks of retail FX brokers offering Bitcoin trading, with the launch of the functionality on its City Index platform, its FCA regulated service in the UK.

CME Announces Bitcoin Launch Date, CBoE Self-Certifies – Profit & Loss

The two giant Chicago exchanges, CME Group and CBoE, have self-certified new contracts for Bitcoin futures products ahead of a full trading launch.

trueEX and Markit Settle Legal Dispute – The Trade

US interest rate swaps trading venue trueEX has settled a legal dispute with Markit after it sought legal action against the firm for anti-competitive reasons earlier this year.

BNP Paribas To Become Systematic Internaliser – Markets Media

BNP Paribas announced that it will voluntarily opt in to become a Systematic Internaliser for MiFID II in-scope instruments that are traded or admitted to trading on trading venues (TOTV), as of 3 January 2018.

Market Savvy

Bitcoin Sets Another Record High as Crypto Fever Reaches Venezuela – Financial Times (subscription)

Bitcoin rallied as high as $11,800 in Asia trading, adding to its vast returns this year and providing good news for advocates of cryptocurrencies – a group that now apparently includes Venezuelan president Nicolas Maduro.

Japan Investors Shy Away from Aussie as Yield Spread Shrinks – Bloomberg

The Aussie has weakened against all except one of its Group-of-10 counterparts in the past month as slowing growth pushes back expectations for when the Reserve Bank of Australia will raise interest rates.