European Union regulators began on Friday to implement plans to ensure that trillions of euros in cross-border derivatives transactions would not be disrupted in the event of a “no deal” Brexit.
- TheRace to Avoid a Lehman Moment for Bankers after Brexit – Bloomberg
- ESMAWelcomes No-Deal Brexit Central Clearing Equivalence Plans – Global Custodian
ofFranceGovernor Sets Sight on Clearing after Brexit – Financial Times (subscription)
The German stock exchange’s Brexit-inspired attempt to wrestle trillions of dollars of derivatives clearing away from the City ofLondon is gathering steam. After eleven months of steadily acceleratinggrowth since December 2017, Deutsche Börse’s Eurex Clearing has broken throughthe $10tn mark on a crucial measure of how much business it is amassing in itsbattle against LCH.
There’s anintuitive logic which states that the more liquidity providers that a clientputs in their aggregator, the better prices they should get. After all, increased competition should cause LPs to tighten their prices in order to winthe trade. However, as Roel Oomen, managing director, electronic FX spottrading at Deutsche Bank, explains, this logic only holds up in a staticenvironment, which the FX market most certainly is not.
This is a pretty horrible time for CTAs, not only because of the sector’s visible performance
Foreign exchange options traders are revising their Brexit strategies and positions after recent political ructions caught them unawares. Fierce domestic opposition to the proposed terms of the UK’s withdrawal from the European Union sparked a three-day, 30% surge in GDP/USD volatility last week – and is now forcing the market to consider a wider range of outcomes, dealers say.
ISDA, FIA, GFMA
- Briefing on the Need to Extend the Transition Period of the Benchmark Regulation in Respectof Critical and Non-Critical Benchmarks – ISDA
While a number of legal barriers on reporting and accessing of trade data have been removed, some still remain. China’s positionon trade data access remains uncertain.
The Tories have a minority government. All it will take to pass the Brexit deal is for the markets to freak Labour MPs out, right? That’s where the minor flaw in this cunning plan lies. If you were to try and design a Labour Party which looked less like it cared what ‘themarkets’ think, you’d be hard-pressed.
More should be done to ensure margin concentration add-ons are calculated appropriately by central counterparties – perhaps with the involvement of regulators – say market participants, following hefty losses at Nasdaq Clearing on a position that was not deemed concentrated enough to warrant a margin top-up.
Bitcoin broke through a support level last week that had been in place for months. Using the CFTC’s Commitment of Traders Report, TABB Group looks at where institutional traders were positioned ahead of the drop and identifies a few differences in the Cboe and CME bitcoin futures contracts.
Mike Novogratz keeps crossing his fingers that this year’s bitcoin crash, which has seen the cryptocurrency lose three-quarters of its value and counting, is about to bottom out.
While this may not be the end for bitcoin and company, the crash underlines the question of whether it is worth trying to bring cryptocurrencies into the mainstream at all.
Peter Lenardos says he wants to hand over a business that is in good shape should the Nasdaq acquisition go ahead.
William Johns has joined Capula Investment Management as a portfolio manager, based in London, reporting to David Sobotka, head of macrotrading. Johns joins the UK hedge fund from Nomura, where he was headof correlation trading for nearly eight years.
The Swiss stock exchange has become the first regulated market to list a multi-crypto exchange traded product.
The network provider has also opened an office in Singapore to foster growth among crypto exchanges in the region, as well as its more traditional clients.
Sterling fell a quarter of a percent on Friday as Spain’s eleventh-hour objections over Gibraltar before a Sunday summit to endorse the Brexit deal prompted some traders to take profits after an overnight rally.
The euro fell nearly half a percent on Friday after signs that economic growth could be slowing across the euro zone.
Hungary has hitched its fortunes to the German car industry, the Czech Republic is considering how to replace its nuclear power plants and Romania is hoping to cash in on new gas deposits in the Black Sea but energy companies are holding back.