Top Headlines

EU Steps Up Preparations for Euro Clearing in ‘No Deal’ Brexit – Reuters

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.

Deutsche Börse Hits $10 tn in Battle for London Clearing Market – Financial News (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.

FX Aggregation: When Less Can Be More – Profit & Loss

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.

The CTA Model is Not Dead (But Could Do with a Rigorous Health Check) – Profit & Loss

This is a pretty horrible time for CTAs, not only because of the sector’s visible performance issues, but because it’s even worse than the numbers suggest. After all, the big selling point for CTAs has always been thatthey are a good hedge in falling equity markets, but they clearly have not beenthis year. It may not be all doom and gloom, however, for using newtechnologies and techniques they have the opportunity to re-engineer theirmodels to meet the challenges of the modern market structure.

Brexit Drama Muddies Watersfor FX Options – FX Week (subscription)

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.

Regulatory News

Industry Bodies Call for Extended Benchmarks Regulation Transition Period – Regulation Asia

ISDA, FIA, GFMA and EMTA have jointly published a briefing advocating an extension of the Benchmark Regulation transition period for critical and non-critical benchmarks.

More Work Required to Remove Legal Barriers to Trade Reporting: FSB – Regulation Asia (subscription)

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.

Are ‘The Markets’ Going to Stop a Hard Brexit? – Financial Times (subscription)

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.

Banks Demand Greater Scrutiny of CCP Margin Add-Ons – (subscription)

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.

Crypto News

Bitcoin Futures: Was the ‘Smart Money’ on the Right Side of Last Week’s Drop? – Tabb Group

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.

UK Regulator Considers Cryptocurrency Derivatives Ban Due to Market ‘Integrity Issues’ – CoinTelegraph

The UK’s finance regulator, the Financial Conduct Authority (FCA), may ban cryptocurrency derivatives such as futures as part of its “most comprehensive response” to the industry, according to a speech published this week.

Former Goldman Partner Struggles to Build Crypto Bank in Bear Market – Financial Times (subscription)

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.

Bitcoin’s Crash is Not the End of Cyber Currencies – FinancialTimes (subscription)

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.

Company News

Cinnober Chief Wants Firm in “Good Shape” Ahead of Takeover – Global Investor (subscription)

Peter Lenardos says he wants to hand over a business that is in good shape should the Nasdaq acquisition go ahead.

Johns Swaps Nomura for Capula – FX Week (subscription)

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.

SIX Lists Crypto-Basket – Finextra

The Swiss stock exchange has become the first regulated market to list a multi-crypto exchange traded product.

Avelacom Provides Institutional-Grade Infrastructure for Crypto Market – Waters (subscription)

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.

Market Savvy

Sterling Slips on Spain’s Objections – Reuters

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.

Euro Falls on Economic Growth Fears – Reuters

The euro fell nearly half a percent on Friday after signs that economic growth could be slowing across the euro zone.

SocGen Says Euro Is Cheap But Might Not Rise Until Second-Half 2019 – Bloomberg Markets TV

Kit Juckes, chief FX strategist at Societe Generale, discusses the outlook for currencies including the euro, Turkish lira and the dollar. He also comments on Federal Reserve policy and oil prices.

Investing in Central and Eastern Europe: Special Report – Financial Times (subscription)

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.