Top Headlines

Euro Posts Strongest Quarter in 5 Years Defying ECB’s Stimulus – Bloomberg

The euro surged this quarter by the most in five years, defying convention as the European Central Bank bolstered its monetary stimulus, a step that tends to debase a currency.

World’s Biggest Money Managers Can’t Agree on Dollar’s Direction – Bloomberg

Two of the world’s largest money managers are divided about where the dollar goes from here after the greenback’s worst quarter in more than five years.

Markets Take Hard Look at Abenomics Amid Downturn – Nikkei News

With the Abenomics-driven yen depreciation and stock market rally running out of steam, Japan will have to soon come up with a more convincing growth strategy to lure back foreign investors.

Swiss National Bank Has Room to Cut Deposit Rates Further: Board Member – Reuters

The Swiss National Bank has room to drop interest rates further into negative territory from the 0.75 percent it charges on some deposits today, board member Andrea Maechler said on Thursday.

PBOC Discloses Currency Forward Positions as Yuan Stabilizes – Bloomberg

China’s central bank revealed its short foreign-currency positions in forwards and futures for the first time, providing more clarity on the monetary authority’s efforts to shore up the yuan.

Dollar Gains Share of Global FX Reserves, Euro Shrinks – Reuters

The U.S. dollar’s share of allocated global currency reserves grew for a second straight quarter, while euro’s share declined further to its smallest in nearly 14 years, according to data from the International Monetary Fund released on Thursday.

China Faces Yuan Dilemma as Foreign Reserves Dwindle – Nikkei News

Investors are bracing for further downward pressure on the Chinese yuan, as foreign exchange interventions push the country’s currency reserves to the lower limit.

Corporates Proving Slow to Improve FX Risk Management Capabilities – Profit & Loss

Corporates have been slow to improve their FX risk management systems and processes despite the negative impact that these are having on their commercial interests, according to Deloitte’s Global Treasury Advisory Services.

Dudley Gets Political and Opposes Rash Changes to Fed – Reuters

Any legislative changes to the Federal Reserve should not be based on an “emotional” response to the financial crisis or recession and, if necessary, they should be limited to making the U.S. central bank more effective, a top Fed official said on Thursday.

Market Superheroes Always Fall to Earth in the End – Financial Times (subscription)

To men of a certain age and inclination, “acid-free stock” was once of great importance. It described a quality of the bags, boards and boxes required to store comic books in mint condition, unravaged by time or exposure to low pH enclosure.

Cash Squeeze Fuels Repo Rate Surge – Wall Street Journal (subscription)

Rates on overnight cash loans known as repurchase agreements rose threefold late on Thursday to their highest levels since September 2008, the latest sign of funding squeezes at quarter end.

BOK Expands Dollar Share of Foreign Exchange Reserves in 2015 – Yonhap News

South Korea’s central bank increased the portion of U.S. dollar-denominated assets in its foreign exchange reserves from a year earlier in 2015 amid the strengthening of the U.S. greenback, the Bank of Korea (BOK) said Thursday.

Regulatory News

Standard Chartered is Dropped, for Now, from US Currency Case – Reuters

A U.S. judge on Thursday dismissed Standard Chartered Plc from a class-action lawsuit accusing 16 banks of harming investors by rigging prices in the $5.3 trillion-a-day foreign exchange market.

ISDA Warns of Race Against Time on European Margin Rules – Profit & Loss

Scott O’Malia, CEO of the International Swaps and Derivatives Association (ISDA), has warned that market participants have been left racing against the clock in order to comply with the new European rules on derivatives margin requirements.

Basel Said to Weigh Change that Could Ease Derivatives Capital – Bloomberg

Global regulators are moving toward a new way of calculating leverage ratios that could ease capital requirements for some banks, especially in the U.S.

Esma Fines DTCC for European Trade Repository Failings – eFinancial News (subscription)

Europe’s top markets regulator has fined the Depository Trust & Clearing Corporation for failing to provide regulators with direct access to data in its trade repository – the largest of its kind in Europe.

G20 Regulators to Propose Rules for Asset Managers in the Summer – Reuters

Global regulators will propose safeguards in coming months to avoid asset managers destabilising markets with fire sales of assets or making promises to investors they can’t keep.

Company News

Currency Managers Up in February – Profit & Loss

Discretionary currency managers led the way in February as the Parker FX Index reported a 0.91% return for the month.

Growth of Fintech Forecast to Spur Almost 2m Banking Job Cuts – Financial Times (subscription)

European and US banks will cut another 1.7m jobs in the next decade as financial technology companies stalk profitable growth areas such as lending and payments, a new report by Citigroup has predicted.

GE Seeks Escape from Too-Big-to-Fail Tag as Revamp Nears End – Bloomberg

General Electric Co. asked U.S. regulators to drop its designation as a too-big-to-fail financial institution, one of the central goals of Chief Executive Officer Jeffrey Immelt’s decision a year ago to sell the bulk of the lending business.

SEF Volumes Down in February as IRS Trading Slows – Profit & Loss

Total trading volume on SEFs averaged $443.5 billion per day during the month of February, an 8.6% decrease from the previous month and a 2.7% decrease from February 2015, according to the Futures Industry Association’s (FIA) SEF Tracker.

Market Savvy

`Trade of a Decade’? It Doesn’t Bode Well for Emerging Markets – Bloomberg

Behind the best gains for emerging markets since 2009, there are some ominous signs that the rally is about to hit a wall.

Goldman Still Sees Three Rate Hikes This Year – Wall Street Journal (subscription)

Goldman Sachs is still sticking with its interest-rate prediction after Fed Chair Janet Yellen sounded a dovish note this week.

Fed Inaction is Creating Currency Crosswinds – Business Spectator

Janet Yellen’s restatement of the US Federal Reserve Board’s “dovish” stance on US interest rates is having a predictable effect. It’s threatening to make even bigger beggars of its already-impoverished neighbours.

5 Things to Watch in the March Jobs Report ­– Wall Street Journal (subscription)

The Labor Department releases its monthly picture of the U.S. job market Friday. Federal Reserve Chairwoman Janet Yellen has called job gains “solid,” but remains concerned about impacts from overseas economies on parts of the U.S. economy like mining and manufacturing. Here are five things to watch for in the report.

Press Releases

New York Fed Conference “Defining the Objectives and Goals of Supervision” – Speech by Andrew Bailey

I want to start with some important definitions.  Frequently, and mistakenly, “supervision” and “regulation” as terms are used interchangeably.  That’s wrong.  Regulation is to do with the framework of rules and guidance that put the structure around the objectives that as authorities we are usually given in statute.  In the UK, the PRA has a primary objective in terms of the safety and soundness of firms we authorise to do business, and safety and soundness are expressed in terms of the stability of the financial system.

ESMA Publishes UCITS Remuneration Guidelines

The European Securities and Markets Authority (ESMA) has published its final Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. ESMA has also written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector.

BNY Mellon’s First-Ever “People Report” Showcases a Talent Strategy that Powers Business Performance

In its first-ever People Report released today, BNY Mellon shares what it means to be invested in its people through wide-ranging, multi-media stories told by its own employees, representing more than 50,000 staff in 35 countries globally.