Top Headlines

Euro Rallies as Italy Crisis Concerns Take Back Seat – Reuters

The euro rallied further as Italian parties made last-ditch efforts to form a government and avert elections, going some way towards easing concerns about the impact of a political crisis there.

The ‘Severe’ Costs of Leaving the Euro – Wall Street Journal (subscription)

Italy’s political crisis is reviving a familiar question for global investors and policymakers: what would it cost to exit the euro currency union? 

Sterling Climbs on Dollar Weakness – Reuters

Sterling rose above $1.33 as the dollar fell across the board, with traders identifying little in the way of UK-specific drivers until business surveys are published in coming days.

Emerging Markets Raise Interest Rates to Stem Dollar Strength – Financial Times (subscription)

More emerging market central banks are expected to raise interest rates to confront a resurgent dollar that is exposing their dependence on foreign borrowing.

Traders Warn Buy Side Must Embrace the FX Code Too – Euromoney

Adherence to the FX Global Code has gained momentum ahead of the one-year deadline on Friday, but senior traders are concerned the buy side is less committed than the sell side.

The Veracity of Using the Fix – Profit & Loss (subscription)

It is an abomination that put bank FX traders in harm’s way by leaving them no choice but to trade ahead of the rate setting.

G-Sib Swap Portfolios Reveal Transatlantic Divide – Risk (subscription)

Risk Quantum analysis of 17 global systemically important banks (G-Sibs) – four from the UK, five from the eurozone and eight from the US – reveals a transatlantic divergence in the make-up of derivative portfolios.

Regulatory News

Fed Unveils Rewrite of ‘Volcker Rule’ Limits on Bank Trading – Reuters

US regulators proposed simplifying a rule introduced after the 2007-2009 financial crisis that bans banks from trading on their own account in order to make compliance easier for many firms.

EU Close to Granting Swaps-Trading Equivalence to Singapore – Risk (subscription)

The European Commission is gearing up to deem Singapore an equivalent jurisdiction for trading over-the-counter derivatives, on the back of a new trading obligation being drawn up by the city state, according to two sources.

Crypto News

Fed’s Disdain for Cryptocurrencies Not Much of a Secret Anymore – Wall Street Journal (subscription)

Step by step, the Federal Reserve is moving from skepticism over privately issued digital money to outright disdain.

China’s President Endorses Blockchain as Economic ‘Breakthrough’ – Coin Desk

Chinese President Xi Jinping has acknowledged the potential of blockchain in a speech this week, endorsing the nascent technology for the first time in public.

AirSwap: Decentralised Trading for Cryptoassets – Profit & Loss (subscription)

AirSwap, a decentralised global marketplace for Ethereum tokens (ERC20), launched its peer-to-peer platform on April 25th, and saw $1 million worth of trades made over the platform within the first 24 hours.

Bitcoin Is the Market’s New Fear Gauge, Investor Says – CNBC

Price changes in bitcoin and other cryptocurrencies are a better indicator of volatility in the market – as good as the VIX, says Brian Stutland of Equity Armor Investments.

Company News

Senior FX Duo Step Down at Deutsche Bank Amid Trading Overhaul – Financial News (subscription)

Kenan Altunis, a specialist in foreign exchange sales who co-leads Deutsche’s institutional clients group, and Fabio Madar, the bank’s global head of FX coverage, are no longer in their roles, according to people familiar with the matter.

Euromoney FX Survey 2018: Results Released – Euromoney

Euromoney magazine has released the results of its 40th annual foreign exchange ranking, the most comprehensive quantitative and qualitative annual study available on the FX markets.

FX Settlement Provider CLS Invests in Blockchain Consortium R3 – Reuters

Foreign exchange settlement provider CLS has invested $5 million in R3, the New York-based blockchain startup, CLS and R3 told Reuters.

Deutsche Börse Reveals €270m Fintech War Chest – Financial News (subscription)

German exchange group moves on from abortive LSE deal saga with plan to invest and recruit in financial technology.

Market Savvy

Turkish Lira Rallies 5% in Strongest Week Since 2009 – Financial Times (subscription)

Turkey’s currency has rebounded strongly this week after hitting a record low last Wednesday after two top officials met investors in London and the central bank took measures simplify its monetary policy regime. 

Rupee’s Fall Points to Uncertain Future for Investment in India – Wall Street Journal (subscription)

The rupee is the worst performing currency in Asia this year, flirting with a record low on worries that India is headed for problems as oil prices remain high.

Indonesia’s Two Interest-Rate Hikes May Not Halt Rupiah’s Rout – Bloomberg

Analysts see more policy tightening to bolster currency.