Top Headlines

Fallout Continues After Swiss Rout – Profit & Loss (free story)
The fallout from events on Thursday when the Swiss National Bank unexpectedly removed the Swiss franc’s peg to the euro has continued over the weekend with some estimating industry losses exceed $2 billion from the sharp move higher in the CHF. Whilst the focus has largely been on the retail FX market with brokers collapsing or requiring rescue, hedge funds and banks have also been hit hard.

Swiss Franc Wiped Out Everest’s Main Fund – Bloomberg
Marko Dimitrijevic, the hedge fund manager who survived at least five emerging market debt crises, is closing his largest hedge fund after losing virtually all its money this week when the Swiss National Bank unexpectedly let the franc trade freely against the euro, according to a person familiar with the firm.

FXCM, Brokerage Hit by Swiss Shock, Gets $300 Million From Jefferies Owner Leucadia – Bloomberg
Leucadia National gave FXCM a $300 million cash infusion, extending a lifeline to the currency brokerage hobbled by the Swiss central bank’s decision to let the franc trade freely against the euro.

John Hancock Currency Fund Sheds 8.7%, Hardest Hit by Swiss Franc Turmoil – Bloomberg
The market turmoil sparked by the Swiss franc’s record surge has turned the $1.9 billion John Hancock Absolute Return Currency Fund into the biggest loser among US peers.

Retail Struggle Re-Ignites Agency Versus Principal Debate – Profit & Loss (free story)
The struggle of retail FX brokerages to handle Thursday’s CHF moves has re-ignited the debate regarding whether a principal or agency execution model is the most effective for these firms from a risk perspective.

Swiss Franc Shock Shuts Some FX brokers; Regulators Move In – Reuters
The Swiss franc shock reverberated through currency trading firms around the world on Friday, wiping out many small-scale investors and the brokerages that cater to them and forcing regulators to take a closer look at the sector.

Swiss Franc Trades Back to Euro Parity – Financial Times (subscription)
The Swiss franc has slipped back to trade on a level footing with the euro this morning, after rocketing last week following the central bank scrapping its ceiling versus the common currency.

Trading Platforms Receive Volume Boost Amid CHF Volatility – Profit & Loss(free story)
Amid the chaos that engulfed the markets following last week’s surprise decision by the Swiss National Bank (SNB) to abandon its EUR/CHF floor at 1.2000, it seems that institutional trading platforms performed well despite the volatility.

Banks Lose Tens of Millions of Dollars After Swiss Move – Wall Street Journal(subscription)
Some global banks suffered tens of millions of dollars in losses this week due to unprecedented swings in currency markets, according to banking industry officials.

Individual Investors Lose More Than $400 Million on Bad Swiss Currency Bets – Fortune
In the wake of the 2008 market crash, a growing number of individual investors jumped into currency trading under the impression that it was a safer bet than stocks. On Thursday, investors learned just how wrong they were.

Swiss Franc Fallout Will Last for Months, Says Buy Side – FX Week(subscription)
The dearth of FX liquidity will make the unwinding of short Swiss positions a lot harder for the buy-side community to handle

Barclays and Deutsche Bonuses to Fall Foul of Swiss Franc? – eFinancial Careers
We’re in 2015. What happens now should not, in theory, affect the bonus pools for last year. Any losses of hundreds of millions of dollars in January should be immaterial to bonuses that have already been allocated, but not announced. At least this is what FX traders at Barclays and Deutsche Bank need to hope.

Alpari Sale Talks Seems to Have Collapsed, Final FCA Meeting Imminent –Forex Magnates
Forex Magnates has also learned that the broker must report to the FCA within the next hour if any deal has materialized to prevent the insolvency declaration, and according to Forex Magnates sources, no deal has been reached.

Swiss Corporates Suspend Hedging After CHF Spike – (subscription)
Swiss corporate treasurers are waiting for volatility to subside before deciding how to hedge exposure to a strengthening franc Swiss corporate treasurers have put foreign exchange hedging decisions on hold after the removal of the Swiss franc’s currency cap led to extreme volatility.

Switzerland Could Act on Currency Again, Central Banker Says – Wall Street Journal (subscription)
The Swiss central bank is ready to intervene in the currency markets again to weaken the franc if necessary, the bank’s head said, just two days after the removal of a cap on the franc triggered a surge in the currency’s value.

Strong Franc is Bad News for Swiss Hedge Funds – Financial Times(subscription)
Headhunters believe the Swiss National Bank’s decision to scrap its currency ceiling could result in a flight of hedge fund and asset managers from the country if the Swiss franc continues to strengthen.

FXPA News: Join by 1 Feb to Qualify for Time-Limited Membership Category
The special founding member category of the Foreign Exchange Professionals Association (FXPA) will close on 1 February. Join today to be part of the first wave of founding members that enjoy the distinct benefits that this class offers. FXPA recently crossed the critical threshold of 15 members, triggering elections for the first permanent Board of Directors and Officers. FXPA’s Board will include 50% representation by Founding Members that join prior to the 1 February deadline.

Regulatory News

CFTC’s Massad Stresses Importance of Global Regulatory Coordination
US Commodity Futures Trading Commission chairman Timothy Massad, in his keynote address to the Asian Financial Forum in Hong Kong, stressed the need for the US, Europe and Asia to work together to build a global regulatory framework for the derivatives markets.

Company News

BATS Closing in on Hotspot Deal – Profit & Loss (subscription)
BATS Global Markets is closing in on a deal for KGC Hotspot, according to market sources. Profit & Loss understands that the equities exchange operator is in the final stages of negotiations with KGC Holdings to buy the ECN in a deal worth under $400 million.

BGC Pays Tullett $100 Million as Firms Settle Poaching Dispute – Profit & Loss(subscription)
The long-running legal wrangle between inter-dealer brokers Tullett Prebon and BGC Partners over the latter’s “poaching” of 80 staff in New York, appears to have come to an end after the firms agreed to settle and end all outstanding legal action last week.

LMAX Exchange Partners With Trade – Automated Trader
LMAX Exchange, an FCA regulated MTF for FX trading, has announced a partnership with retail FX provider Trade UK, a member of the Japan-headquartered GMO CLICK Holdings Inc. group of companies.

Leading FX Entrepreneurs Launch Travel Currency Startup in London – City A.M.
Three foreign exchange entrepreneurs will today launch a new travel money firm, Centtrip, a London-based startup which aims to cut currency conversion charges for consumers.

Nasdaq to Provide Trading Platform for Japan’s Biggest Derivatives Exchange – Wall Street Journal (subscription)
Nasdaq, the world’s largest exchange company, will provide a new trading platform for Japan’s largest derivatives bourse, in a significant deal for a foreign financial technology operator and a step toward internationalizing Japan’s financial markets.

FMA Aware of Global Brokers NZ’s Breach –
The Financial Markets Authority knew bust forex broker Global Brokers NZ was in breach of financial regulations, but appears to have taken no action.

OzForex Slumps on Westpac Move – SBS
OzForex shares dived by more than 10% after one of its major banking partners decided to sever ties to the foreign exchange business.

Market Savvy  

Euro Struggles Near 11-Year Low as Investors Bet on ECB Quantitative Easing
The euro edged up against the dollar on Monday but was still close to an 11-year low as investors braced for the European Central Bank to take its boldest steps yet to combat deflation and revive the euro zone’s moribund economy.

Press Releases

Netagio Launches Credit and Debit Card Payments for Bitcoin, GBP, USD and EUR Marketplace
Netagio, a Bitcoin, GBP, USD and EUR marketplace, has launched credit and debit card payment options for Netagio trading accounts as part of a strategic expansion plan, making it quicker and easier for both institutional and retail investors to buy, sell and trade Bitcoin with GBP, USD and EUR.

Industry Events