Five Banks Fined $1.2 Billion for FX Rigging – CNBC
Barclays, Citigroup, JP Morgan, MUFG and Royal Bank of Scotland have been fined a total of 1.07 billion euros ($1.2 billion) by EU antitrust regulators for rigging the spot foreign exchange market for 11 currencies. Swiss bank UBS was exempted from a 285 million euro fine since it alerted the existence of two cartels to the European Commission.
ICE Gets CFTC Nod for ‘Speed Bump’ on US Futures Exchange – Reuters
Intercontinental Exchange Inc can introduce the first “speed bump” in the U.S. futures markets, the Commodity Futures Trading Commission said on Wednesday, prompting concerns by some market participants that market quality will suffer as a result.
- FIAPTG, CFTC Commissioners, Slam Commission Approval of ICE Speed Bump – Profit & Loss
- US Regulator Throws Sand in the Wheels of High-Frequency Traders – Financial Times (subscription)
Is FX a Dirty Word for Allocators? – Profit & Loss
Although FX as an asset class still offers potential for returns, asset managers are increasingly reluctant to allocate funds towards trading strategies that are only focused on FX trading.
The Problem with “Full Amount” Trading (opinion) – Profit & Loss
The entire process of giving information to a liquidity provider and then expecting them to do nothing but act as a personal broker until the order is finished is unrealistic, given the client numbers involved in FX markets and, more worryingly, a throwback to a darker time. In this instance the client is expecting the bank to clear their risk and do nothing with the information, something some people might call unrealistic.
Regulatory News
Big Banks to Fight Mifid Push for Extra Transparency in FX Markets – Financial Times (subscription)
Some of the biggest banks in the $5tn-a-day currency markets are pushing back at rules requiring them to disclose the charges they impose on customers, lining up a potential clash with regulators.
FCA May Delay Enforcement of UK’s Expanded Conduct Regime – Risk.net (subscription)
Firms that become subject to the UK Financial Conduct Authority’s Senior Managers and Certification Regime after its December 2019 expansion are unlikely to face immediate enforcement actions while they get their houses in order, said the head of the watchdog’s regulatory decisions committee.
Regulators Eye Principles-Based ‘Best Ex’ – Markets Media
US market regulators want to provide Wall Street with more specific guidance regarding best execution requirements and are mulling principles-based regulation.
Crypto News
Quants the Sole Bright Spot Amongst Crypto Funds – Profit & Loss
A new report published this week by PwC and Elwood Asset Management shows that while the median return for crypto hedge funds was a staggering -46% last year, quant funds managed a median return of 8%.
Bitcoin Rally is Masking Capital Flight from Crypto Exchanges – Bloomberg (subscription)
Lost among the current bout of cryptocurrency euphoria is the fact that capital outflows are exceeding inflows on some of the biggest digital asset exchanges.
Institutional Crypto Trading Gears Up for the Next Phase – MarketsMedia
Imagine if, at some point in the future, someone was to write the history of cryptocurrencies. Would that person look back at the current moment and see it as a turning point, as the start of the era when crypto went mainstream?
Industry Participants Differ on Blockchain Benefits – WatersTechnology (subscription)
Blockchain, a distributed-ledger technology – though the two terms are used interchangeably – has its fair share of skeptics, with many exchanges and banks still struggling to find use cases for the technology. In the post-trade space, however, blockchain may have a role to play.
Company News
Wallis Promoted at Morgan Stanley, Hong Kong – FX Week (subscription)
David Wallis took on the new role of Asia Pacific head of prime brokerage sales and derivatives clearing at Morgan Stanley in April.
Genesis Product Aims to Speed Up Time to Market – FX Week (subscription)
Capital markets software firm Genesis has launched a product to help institutions speed up the delivery of web-based solutions without writing additional code.
Goldman Sachs Asset Management said it had scaled back overweight exposure to emerging market currencies and emerging market debt, citing heightened trade tensions.
Market Savvy
Pound at Three-Month Lows as May’s Fate, Brexit Deal Hang in Balance – Reuters
The pound plumbed to three-month lows on Thursday as the fate of Britain’s Prime Minister Theresa May and her Brexit deal hung in the balance, renewing fears of a disorderly departure from the European Union.
More Woe for Aussie Dollar as Market Bets Swell on RBA Rate Cut – Reuters
The Australian dollar hit a fresh five-month low on Thursday as investors came close to fully pricing in a rate cut for July on bruising domestic economic data and a swelling trade conflict between the United States and China.
Federal funds futures suggest investors are more convinced than ever that the Federal Reserve will lower interest rates multiple times by the end of the year. Economic data suggest that is too drastic a bet.