Top Headlines

Euro Strikes Three-Year High on Optimism Over German Breakthrough – Financial Times (subscription)

The euro jumped to a three-year peak against the dollar after German political leaders took a significant step towards forging a new “grand coalition”.

US Dollar Falls as ECB Sends Hawkish Signal – Wall Street Journal (subscription)

The US dollar fell after minutes from the European Central Bank’s December meeting signaled the central bank may phase out its bond-buying program sooner than investors had expected.

Caution Grows After Sterling Climbs to Four-Month High – Reuters

Sterling rose more than half a percent to hit a four-month high against the dollar as investors dumped the greenback against a range of peers following strong euro gains but the pound lost ground against the single currency.

UK Promises to Prioritise Financial Services in Brexit Deal – Financial Times (subscription)

Theresa May has told City of London bosses she will put financial services at the heart of a new trade deal with the EU, in the first formal meeting between the prime minister and the financial services sector on Brexit.

South Korea Cryptocurrency Ban Talk Sends Bitcoin, Ethereum Tumbling – Profit & Loss

The price of bitcoin has dropped significantly following new reports that authorities in South Korea might ban the trading of cryptocurrency exchanges.

A Wall Street Consultancy Eviscerated Crypto in a Massive Report – And It Should Strike Fear Into the Heart of Every Bitcoin Bull – Business Insider

The consultancy laid out a bear case for bitcoin that puts it at just $1,800 at the end of 2018.

FX Options Traders Get Wake-Up Call from Central-Bank Signals – Bloomberg

The currency world showed signs of emerging from its low-volatility stupor this week after the Bank of Japan and the European Central Bank surprised traders with messages on their bond-buying policy that fueled rallies in the euro and yen.

The Technology Behind Bitcoin Is Only Halfway Through Its Evolution – Business Insider

In a wide-ranging report on blockchain and cryptocurrencies, Credit Suisse said blockchain would reach full maturity in 2025.

Regulatory News

AFMA Launches Code SoC Site for Australia – Profit & Loss

The Australian Financial Markets Association (AFMA), supported by ACI Australia, has launched a Public Register for Statements of Commitment to the FX Global Code by participants in the wholesale Australian foreign exchange market.

€210bn ‘Fat Finger’ Skews Early Mifid II Trade Report – Financial News

A €200bn-plus trade reported in error to one of Europe’s largest exchanges this week has thrown up more evidence of the struggles firms are having in adapting to vast new trading rules.

ESMA Voices Concern Over Trade Repository Fees – Global Capital (subscription)

ESMA has gone public with its concerns over the fees that trade repositories charge their clients and made recommendations for change.

Singapore Sounds Cautious Note on Cryptocurrencies – Financial Times (subscription)

MAS head is unconvinced that central banks should create digital currencies.

Senate Panel to Vote Again Wednesday on Powell’s Fed Nomination – Wall Street Journal (subscription)

The Senate Banking Committee will vote next week for the second time on the nomination of Jerome Powell to be the next Federal Reserve chairman, a spokeswoman said.

Company News

CTAs End 2017 on a Positive Note – Profit & Loss

The flash estimate for the Barclay CTA Index, compiled by BarclayHedge, indicates a 0.54% gain in December. The CTA Index ended 2017 with a 0.69% gain.

Bjurgert Joins Jump in Business Development Role – Profit & Loss

Jump Trading has hired Bo Bjurgert in a business development role, covering Europe, based in its London office.

FX: Firm Looks to Slash Banks’ Netting Costs – Euromoney

London-based Cash Netting Services is aiming to cut hundreds of millions of dollars in annual costs for banks by helping them find netting opportunities on a bilateral basis.

Market Savvy

Asian Currencies Broadly Firmer as Dollar Slumps – Reuters

Asian currencies were broadly firmer, as the dollar slumped in the wake of weak factory inflation data and hawkish comments from the European Central Bank.

CEE Currencies Firm on Dollar Selling, Hungarian Bonds Firm – Reuters

Central European currencies firmed as global dollar selling accelerated after reports that German parties reached a breakthrough in coalition talks.

The Australian Dollar Is on the Charge – Business Insider

The Australian dollar is on the charge, rising to the highest level in three months on the back of a bumper Australian retail sales for November and broad-based US dollar weakness.