Top Headlines

Euro is a ‘House of Cards’ Ready to Collapse, Key Single Currency Architect Warns – Independent

Professor Otmar Issing, the European Central Bank’s first chief economist who helped create the single currency at the turn of the century, has warned that the euro cannot survive in its current form.

Euro Steadies Under $1.10 Before ECB Meets – Reuters

The euro steadied ahead of a meeting of the European Central Bank on expectations that officials are beginning to consider reining in the volume of extra emergency aid they give to the euro zone economy next year.

Pound Will Cushion UK From Brexit Shock, BOE’s Broadbent Says – Bloomberg

Bank of England Deputy Governor Ben Broadbent said the pound’s slump since the UK vote to quit the European Union will help the economy overcome shocks from the decision.

Carney Faces Fallout From World’s Worst Performing Currency – Bloomberg

For a central bank that doesn’t target the exchange rate, the Bank of England is spending a lot of time talking about it.

Sterling Set For a Bumpy Ride as Brexit Uncertainty Persists – FX Week (subscription)

Strategists say this could push the pound lower towards parity with the euro.

China Foreign Currency Shares Plunge in Sudden Afternoon Selloff – Bloomberg

China’s foreign currency shares plunged the most since January in late trading, sending traders scrambling for reasons to explain the sudden volatility in a largely moribund market.

China in Better Shape to Avoid Currency-Manipulator Designation by US – Wall Street Journal (subscription)

China now meets only one of US Treasury’s three criteria for such a labeling, fewer than Germany or Japan.

German Government Has Ruled Out Taking Stake in Deutsche Bank – Wall Street Journal (subscription)

Officials told lawmakers last week state support for lender was ‘inconceivable’.

HFT Firm Virtu in Breakthrough Talks With €260bn Fund Manager – Financial News (subscription)

Virtu Financial is in talks to trade on behalf of Union Investment, a major German asset manager, in one of the clearest signs yet that high-frequency trading is becoming widely accepted by Europe’s traditional investment community.

Thomson Reuters Launches FX CLOB in Nigeria – Profit & Loss

Thomson Reuters launched an FX Central Limit Order Book for the Nigerian market, a move that it claims will enhance liquidity in the local FX market there.

Japanese Investors Look for Higher Yields at Home – Wall Street Journal (subscription)

A turn in an arcane but important corner of the currency markets is signaling a possible slowing of money outflows from Japan that have helped buoy bonds globally this year.

Top Forecasters Split on Rupee After Best Rally Since 2014 – Bloomberg

The Indian rupee’s top two forecasters are at odds as to how vulnerable the world’s fastest-growing major economy is to outside shocks.

Former Prop Traders Form Bitcoin Derivatives Exchange – FOW (subscription)

A group including former prop traders and finance professionals has registered Bitnomial, a bitcoin derivatives exchange, with the Commodity Futures Trading Commission.

Regulatory News

White House is Sticking With SEC Chief Mary Jo White – Wall Street Journal (subscription)

White House spokesman Eric Schultz reaffirmed the president’s support for the top US markets cop, hours after Sen. Elizabeth Warren called for her firing in a letter to Mr Obama.

ESMA Provides More Clarity on BestEx Rules – Profit & Loss

The European Securities and Markets Authority has published a Q&A document seeking to clarify expected standards around certain practices, including best execution.

EU Derivatives Margining Catch-Up Set for Early January – Financial News (subscription)

Major European banks could be forced to start exchanging collateral in relation to their uncleared over-the-counter derivatives trades early in the New Year, as the region’s lawmakers set about making up for lost time after missing an international deadline for implementing the rules.

Bank Indonesia Says Strong Rupiah Allows for More Reserves – Bloomberg

Southeast Asia’s best-performing currency is giving Indonesia’s central bank the opportunity to continue increasing foreign reserves from a four-year high, a senior official said.

Company News

Traiana Builds Out PB Kill-Switch Network and Credit Tool – FX Week (subscription)

As prime brokers seek more control, Traiana gets set to launch a dynamic credit-allocation product.

Oanda Launches New Trading Engine – Profit & Loss

Oanda has unveiled v20, its proprietary trading engine that the firm claims offers an execution speed of 1.3 milliseconds, four times faster than its legacy trading engine.

Market Savvy

Yen Holds Three-Week Decline as Hedge Funds Reduce Bullish Bets – Bloomberg

The yen held a three-week decline against the dollar as hedge funds trimmed bullish bets on the Japanese currency by the most since May and speculation increased that the Federal Reserve will raise interest rates this year.

Bullish Dollar, Fed Comments Weigh on EM Stocks, Currencies – Reuters

Emerging stocks and currencies came under pressure, weighed down by the dollar romping to its strongest level in nearly seven months and long-dated US bond yields climbing higher following comments by Federal Reserve Chair Janet Yellen.

Emerging Assets Fall Toward One-Month Lows as Fed Hike Nears – Bloomberg

Emerging-market currencies and stocks headed toward their lowest levels in a month as the prospect of a US interest-rate increase and concern over Chinese growth sapped demand for riskier assets.