Top Headlines

Dollar Weakens to New 33-Month Low as Euro Continues to Climb – Financial Times (subscription)

Major currencies gained across the board against the dollar as the greenback weakened to a new 33-month low and the euro climbed further following Thursday’s meeting of the European Central Bank’s governing council.

Euro Nears $1.21 as Divergence Trades Bloom – Reuters

The euro rose to a fresh 2½ year high as currency bulls judged the central bank’s concerns about the strengthening currency at Thursday’s policy meeting as lukewarm at best.

Sterling Holds Ground Before Production Data – Reuters

Britain’s pound resisted further losses against a broadly stronger euro as investors awaited the first big batch of monthly data on the pace of economic growth.

Yuan’s Surprise Strength Handcuffs China’s Ability to Manage Economic Decline – Wall Street Journal (subscription)

A recent surge in the value of the yuan has blindsided Wall Street and stands to complicate China’s efforts to simultaneously manage a slowdown in growth while deepening its ties to global markets.

Watch Gold to Figure Out Where Yen Is Going, Says UniCredit – Bloomberg

A statistical analysis of the drivers of the dollar-yen exchange rate this year suggest that gold is the “principal” determinant, according to UniCredit strategist Vasileios Gkionakis.

France Wants Right to Veto Euro Clearing in UK After Brexit: EU sources – Reuters

France wants European Union regulators to have a veto over how Britain supervises UK-based clearing houses of euro denominated transactions after Brexit, EU sources said.

FIA Warns Against EU Clearing Relocation Proposals – Reuters

The Futures Industry Association has warned against plans by European Union lawmakers to force euro-denominated derivatives clearing into the bloc, noting that contracts must remain freely traded and cleared in order to preserve the euro’s status as a reserve currency.

UK Finance Sector Seeks Clarity on Contracts During Brexit – Bloomberg

The British finance industry urged the government to provide “early clarity” on whether contracts involving financial transactions will remain valid after Brexit.

Fed Policies Aren’t Distorting Asset Prices – Bloomberg

The notion that higher interest rates were “normal” while current ones are “unnaturally” low is false.

State Street to Pay $35 Million to Settle SEC Probes – Wall Street Journal (subscription)

State Street will pay $35 million to settle US claims that it overcharged customers using secret markups and failed to fully inform other clients about how its platform for trading Treasury securities worked.

Regulatory News

White House Considering at Least Six for Fed Chair – Bloomberg

The White House is considering more than a half-dozen candidates to be the next head of the Federal Reserve, including economists and business people, with a goal of filling out a depleted board with expertise ranging from financial regulation to community banking, according to three people familiar with the matter.

Foreign Banks Face New EU Set-Up to Allow More Scrutiny – Reuters

Nineteen foreign banks in the European Union will need to set up new holding companies so that regulators can scrutinise them more closely, an EU discussion paper says, mirroring steps taken by the United States.

Compliance Fears Slow Use of Synthetic Swaps to Cut IM – Risk (subscription)

Dealers want firmer guidance on whether technique to slash margin costs contravenes clearing mandate.

House Lawmakers Grill Finra CEO Robert Cook on Fine Money, Executive Pay, Transparency – Investment News

House lawmakers pressed Finra CEO Robert Cook on a host of concerns, including how fine money is spent, the regulator’s $1.6 billion reserve fund and executive pay.

Company News

ISDA Releases Updated SIMM Model – Profit & Loss

The International Swaps and Derivatives Association (ISDA) has announced the launch of the latest version of the Standard Initial Margin Model (SIMM), which incorporates a number of enhancements to further develop the methodology.

LCH SwapAgent Processes First Trades from Citi and Deutsche Bank – The Trade

LCH SwapAgent now has 14 dealers using its platform including Barclays, Citi, Credit Suisse, Goldman Sachs, Morgan Stanley and JP Morgan.

Fortex and CNS Deliver NY Cross Connect – Profit & Loss

ECN provider Fortex and Commercial Network Services (CNS), an online service provider that hosts low latency algorithmic trading systems, have announced the release of an optical fibre cross connect between the companies’ facilities in the NY4 Equinix datacenter in New York.

Flax Joins Pefin – Profit & Loss

Catherine Flax, formerly managing director, head of commodities, FX and local markets, Americas, at BNP Paribas, has joined financial advisory firm Pefin.

Tom Robinson Moves to Jefferies from MahiFX as Head of eFX Sales – Finance Magnates

Jefferies continues to develop its exposure to the FX market space.

Market Savvy

Asian Currencies Rally as Greenback Flounders – Reuters

Asian currencies rallied against the dollar as investors took weakening of the greenback as a cue to buy into Asian markets, with the Chinese yuan hitting a near 21-month high.

PBoC Strengthens Renminbi Trading Band to 16-Month High – Financial Times (subscription)

The renminbi climbed to a 21-month high against the dollar after China’s central bank strengthened the currency’s trading band and the greenback languished at its weakest level since the start of 2015.

Hong Kong Dollar Gains Sharply on Greenback to Strongest Level in Three Months – Financial Times (subscription)

The Hong Kong dollar firmed suddenly to the strongest level against its US counterpart in three months after once again edging into the weak end of its permitted trading range.