Top Headlines

Ex-HSBC Trader’s Guilt Casts Shadow Over Colleague’s Extradition – Bloomberg

The fraud conviction of a former HSBC Holdings executive by a US jury may be a harbinger of what’s to come for London colleague Stuart Scott, as a judge prepares to rule on his extradition to face the same charges this week.

HSBC Trader’s Conviction Will Echo in $5 Trillion FX Market – Bloomberg

‘Lesson to senior executives:’ invest in more ethics training.

Dollar Boosted by Fed Leadership Talk; Aussie Dives – Reuters

The dollar traded near a three-month high against the yen, underpinned by reports that Republican senators were favouring John Taylor to become the next head of the US Federal Reserve.

Sterling Climbs as Strong GDP Data Bolsters BoE Hike Bets – Reuters

Britain’s pound climbed more than half a percent against the dollar after data showed the economy picking up speed, bolstering expectations that the Bank of England will raise interest rates next week.

Mexico Open to NAFTA Accord Against Forex Manipulation: Minister – Reuters

Mexico has no objection to any pledge with its NAFTA partners aimed at preventing currency manipulation, as long as it does not affect domestic monetary policy, Mexican Economy Minister Ildefonso Guajardo said.

Loonie Underpriced in Big Banks’ Eyes as 2017 Hike Risk Remains – Bloomberg

Wednesday’s Bank of Canada meeting is set to revive a six-month surge in the loonie that’s stalled in recent weeks, according to the country’s biggest lenders.

Clearinghouses Push Back Against Worries Over Their Size – Wall Street Journal (subscription)

Swaps clearinghouses are pushing back against the suggestion by a top Trump administration official that they have become too big and pose a market risk, saying regulatory and internal “stress tests” prove there is no cause for alarm.

Banks Win as EU Scraps Proposal to Split Off Trading Units – Bloomberg

The European Union drew criticism for abandoning one of its most controversial efforts to rein in the banking industry since the financial crisis, as supporters of a law to break up too-big-to-fail lenders said they still pose a risk to the public.

The Two Biggest Threats to Trust in Global Markets, According to a Senior Bank of England Adviser – Business Insider

The two biggest threats to trust in international markets are the fragmentation of global regulation and the electronification of markets, according to a senior adviser to the Bank of England.

Is the Stage Finally Set for FX Clearing? – Profit & Loss (subscription)

Central clearing for FX has endured a number of false dawns in recent years.

Regulatory News

Asian Banks Cry Foul Over FRTB’s Currency Risk Weights – Risk (subscription)

New market risk rules will unfairly penalise lenders that report their foreign exchange positions in less liquid currencies, emerging market lenders claim – putting them at a disadvantage to their international rivals when competing for the same business.

CFTC’s Quintenz: Dealer Threshold Could Exclude Cleared Swaps – Risk (subscription)

Brian Quintenz of the Commodity Futures Trading Commission (CFTC) says cleared swaps should not count towards the activity threshold that requires firms to register as swap dealers, coming into scope of strict compliance rules.

Trump Asks GOP Senators: Should Taylor or Powell Be Fed Chief? – Wall Street Journal (subscription)

President Donald Trump on Tuesday asked Republican senators for a show-of-hands poll on two candidates he is considering to be the next chairman of the Federal Reserve.

Emir III Reporting Paves Way for MiFID II – Markets Media

The next level of reporting under the European Market Infrastructure Regulation, which covers central clearing, goes live next month and should aid readiness for new regulations coming into force next year.

Putin Orders Government to Devise Cryptocurrency Regulations – Financial Times (subscription)

Russian president Vladimir Putin has ordered his government to devise a regulatory framework for cryptocurrencies, the clearest sign yet that the Kremlin intends not to ban them.

Hong Kong and Singapore to Collaborate on Fintech, Blockchain – Financial Times (subscription)

Traditional rivals Hong Kong and Singapore have signed an agreement to cooperate on fintech including a project using blockchain for trade finance.

Company News

Survey: Hedge Funds Skeptical on Cryptocurrencies – Profit & Loss

In a new survey conducted by BarclayHedge, two thirds of the hedge fund respondents said that are not planning to invest in cryptocurrencies, despite the current hype around these digital assets.

Bitcoin Is Paying Out Dividends Now – Just Not to Everyone – Bloomberg

On top of stupendous capital gains, investors in bitcoin are also getting a dividend – if they’re lucky.

Banking Jumps to Post Blockchain – Euromoney

Tearing out the old plumbing of the global payments system and switching to distributed ledger is an enormous and potentially risky transition that could take a decade or more, but there may be an easier way to capture efficiency.

Market Savvy

Aussie Dollar Sinks to Three-Month Low on ‘Quite Remarkable’ Inflation Drop – Financial Times (subscription)

The Australian dollar was trading at its lowest point since mid-July and tipped to weaken further after the release of weaker-than-expected inflation data.

China’s Yuan Weakens on Broad Dollar Strength, Fed Leadership in Focus – Reuters

China’s yuan weakened against the dollar, in line with a much softer fixing, following a rise in the greenback, which was underpinned by reports of Republican senators’ support for John Taylor to become the next US Federal Reserve chief.