Top Headlines

European Banks Wield Axe after Bleak Fourth Quarter – Financial Times

One of the most brutal trading quarters in memory has sparked another round of soul-searching at Europe’s few remaining investment banks, with some concluding the only option is to wield the axe again.

EBS: An Expanded Franchise – Profit & Loss

Despite a general uptick in trading volumes in 2018, G3 volumes were – from a historical perspective – relatively subdued. Once upon a time this would have spelled bad news for EBS, but it is a testament to how the business has evolved in recent years that its spot FX volumes were instead actually up 9.5% year-on-year.

The ‘Witching Hour’ Sickness Stalking Currencies – Financial Times

A sickness is stalking the currencies market. Most recently, it hit the Swiss franc. Weeks beforehand, it was the yen. A year-and-a-half ago, the pound caught a terrible dose of it that alarmed even seasoned market participants.

Banks Use Machine Learning to ‘Augment’ Corporate Sales – (subscription)

Under pressure to cut costs, banks are all facing the same dilemma: how to do more with less. Many have embarked on transformation projects, leveraging big data to identify potential client interest. Now, some are going a step further by augmenting sales teams with machine learning algorithms that can comb through large datasets to flag up corporate risk management needs.

Derivatives Trading Costs Could Double in Times of Market Stress – The Trade

Initial margin could surge by up to 94% for some derivatives portfolios during periods of high volatility, research from OpenGamma finds.

Regulatory News

Clients Feel Forgotten by Giancarlo’s Swaps Trading Plans – (subscription)

Industry says the wider Sef mandate ignores the reality of the dealer-to-client market.

EU Expects May to Request Three-Month Delay to Brexit – Bloomberg

The European Union expects UK Prime Minister Theresa May to be forced to request a three-month delay to Brexit, two EU officials said.

US CFTC Official Warns of ‘Cliff Edge’ Effect in ‘No-Deal’ Brexit; Encouraged By Clearing Deal – Tabb Forum

The lack of a negotiated exit of the UK from the European Union could lead to a so-called ‘cliff edge’ effect in over-the-counter derivatives markets, given the legal uncertainty that would emerge over contractual obligations between counterparties, the CFTC’s Eric Pan said.

Yellow Vests Show Why Banks are Delaying Brexit Moves – Euromoney
The exodus from London’s financial sector is just beginning. Banks are shifting hundreds of people, and hundreds of billions of pounds in assets, into EU entities. 

The Investment Association Guides Buy-Side Through Libor Transition – The Trade

Industry body has produced a roadmap aimed at guiding asset managers through the transition from Libor to Sonia.

Crypto News

A European Exchange Giant is Gearing up to Jump on the Crypto Futures Bandwagon – The Block

Eurex, a derivatives exchange operated by Germany’s Deutsche Börse, is gearing up to launch a slew of new futures contracts tied to the digital asset market. 

A Price War is Heating Up in the Crypto Market, and 2 Exchanges are Leading the Charge – The Block

Seed CX and LMAX Digital have stood out among the crypto exchange pack for their low fees.

Global Cryptocurrency Trading Volumes Jump to 300-Day Highs – CoinDesk

The total volume of all cryptocurrency trading as tracked by market metrics leader Coinmarketcapp hit a 300-day high Tuesday, reaching $33.85 billion, the most observed in 10 months.

Crypto Exchange Risks Running Out of Money During Restructuring – Bloomberg

Quadriga Fintech Solutions Corp. is in danger of running out of cash to cover the cost of its restructuring unless the Vancouver-based crypto exchange can retrieve money from banks and payments processors, according to the firm overseeing the process.

Now Is the Time to Approve Bitcoin Exchange-Traded Products – Tabb Group

The SEC has the potential approval of two bitcoin ETFs on its agenda. We have been down this road before, but the market is maturing, says TABB Group, which offers four reasons why it finally is time to approve bitcoin ETFs.

Company News

Standard Chartered Sets Aside $900m for Fines in US and UK – Financial Times

The $900m provision will cover potential penalties related to “historical violations of US sanctions laws” and “previously disclosed investigations relating to [foreign exchange] trading issues”, the bank said in a filing to the Hong Kong Stock Exchange.

China Probes Local Firm Over Trading Losses That Hit Citi – Bloomberg

One of China’s biggest brokerages is being probed by the nation’s securities regulator after suffering large foreign exchange trading losses that also wound up hitting Citigroup.

Bloomberg is Diving in to the Booming Alternative-Data Field with a New Product That’ll Help the Market Become Mainstream – Business Insider

Bloomberg is the latest mainstream financial company to wade in to the once obscure alternative-data field with a new product that will give clients access to data from more than 20 niche firms.

Firms Carve Rosetta Stones for Non-English AI Surveillance – WatersTechnology (subscription)

Development of machine learning and natural-language processing is now turning to languages other than English to keep a better eye on traders and the market. But how easy is it to teach a machine a new tongue?

Former HSBC CEO, Ex-SEC Chairwoman Join HKEX Advisory Council – Finance Magnates

Stuart Gulliver and Mary Schapiro will be on the new board alongside Alibaba Co-Founder Joseph Tsai.

Barclays Notches up Victories against Activist Edward Bramson – Financial Times

Barclays notched up two victories in its fight against activist investor Edward Bramson on Thursday, as a major investor said it would support the bank after its trading floor posted industry-leading results.

Market Savvy

Sterling Set to Snap Three Week Losing Streak on Brexit Hopes – Reuters

Sterling consolidated gains on Friday and was set to snap a three week losing streak as investors eyed last-minute talks between the United Kingdom and the European Union on possible changes to the Brexit withdrawal agreement.

Dollar Crown Intact as Central Banks Emulate Fed Tightening Pause – Reuters

It was supposed to be the start of a dollar downturn. Instead, investors are scaling back those bets as a dovish shift by the Federal Reserve is emulated by central banks worldwide – keeping intact the greenback’s interest rate premium over other currencies.

Euro Nears Two-Week High, Aussie Rebounds after Slide – Reuters

The euro held near a two-week high on Friday as investors waited for signs of how the euro zone economy is faring, while the Australian dollar rebounded after China denied it had banned imports of the country’s coal.