Fed and BoE Hiking Cycles Expected to be Slow and Steady

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Top Headlines

Fed and BoE Hiking Cycles Expected to be Slow and Steady – Profit & Loss (free story)
An overwhelming majority (89%) of respondents to a recent survey predict that the Federal Reserve will raise its policy rate ahead of the Bank of England, however, respondents are less sure about the exact timing of the start of the hikes.

News of Bitcoin’s Death Greatly Exaggerated – Bloomberg
Bitcoin startup Xapo recently announced that three financial eminences had signed on as advisory board members: former US Treasury Secretary Larry Summers, former Citibank chief executive officer John Reed and Visa founder Dee Hock.

Libor Trial: BofA, Deutsche Bank Recruited Hayes after Citigroup Firing – Bloomberg
Bank of America and Deutsche Bank tried to hire Thomas Hayes after he was fired by Citi in 2010, the trader told investigators. But those efforts were dropped after the reasons for his dismissal came out.

Why Greece Might Still Choose to Leave the Euro – Financial Times (subscription)
Officially, Syriza wants Greece to remain in the euro area – but the strength of this desire obviously depends on the circumstances. There is no point in avoiding the costs of exit if staying in the single currency only guarantees years of stagnation, perhaps with the added pain of unhelpful “structural reforms” imposed for ideological reasons.

 

 

Regulatory News

ESMA Updates List of Authorised Trade Repositories – ICE Trade Vault Europe Adds Forex Derivatives to its Services (press release)
The first registrations took effect on 14 November 2013, with the reporting obligation beginning on 12 February 2014, i.e. 90 working days after the official registration date. The list is published by ESMA in accordance with Article 59(3) of EMIR and it is updated within five working days following the adoption of a registration decision.

British Central Bank Said it Has Not Yet Reached Decision on ICE Clear Europe – FOW (subscription)
The Bank of England has chosen not to approve London­-based ICE Clear Europe to operate under new European rules amid fears the authorisation would hamper ICE in its battle with US rivals, leaving the ICE clearing house as the last major European player that has not been approved. A spokesman for the Bank of England told FOW: “The Bank has not yet reached a decision on ICE Clear Europe’s application for Emir authorisation.”

CFTC Steps Up Enforcement of Data Reporting Violations – Risk.net (subscription)
The CFTC has recently been flexing its muscles to ensure firms comply with data reporting rules, handing out fines to companies such as ICE, JP Morgan and Marubeni.

 

 

Company News

Icap Weighs Treasurys Trading Controls – Wall Street Journal (subscription)
Turbulent government bond markets are prompting one large brokerage firm to take a cue from the stock trading world and consider installing circuit breakers.

Deutsche Börse to Launch Singapore Derivatives Arm – Financial Times (subscription)
The derivatives exchange will launch in the second quarter of 2016 and will be called Eurex Exchange Asia, taking the name of Eurex, Deutsche Börse’s existing derivatives arm.

 

 

Market Savvy  

Headline EM FX Reserves Distort the Real Story
Olivier Desbarres
The headline fall in emerging market central bank FX reserves in recent months is causing much consternation and talk of EM demise. But dig below the raw numbers and a more benign picture emerges. First, the sharp fall in the USD-value of emerging market central bank FX reserves in Q1 2015 was due to FX valuation effects, namely the slump in EUR-USD.

SocGen’s Edwards: Yen Collapse Will Spur More Economic Turmoil
Newsmax
The Japanese yen’s decline to a 13-year low against the dollar may trigger more global economic turmoil as other countries take steps to devalue their currencies in an effort to be competitive, said Albert Edwards, head strategist at Société Générale.

The Dollar as a Safe Haven is a ‘Fact that is Not a Fact’
MarketWatch
In recent years, few things in the investment world have attained the status of received wisdom more than the idea that the US dollar is a “safe haven” in tumultuous times.

Euro Bulls Retreat with Draghi Set to Stick to Stimulus Message
Bloomberg
One day after the euro’s biggest gain in 10 weeks versus the dollar, the bulls are in retreat with European Central Bank President Mario Draghi set to maintain stimulus measures even amid signs of revival in the region’s economy.

 

 

Press Releases

DGCX Launches Indian Rupee Quanto Futures
The Dubai Gold and Commodities Exchange (DGCX) today announced that it will launch three new Indian Rupee Quanto Futures and India Gold Quanto Futures. A quanto is a type of derivative in which the underlying is denominated in one currency, but the instrument itself is settled in another currency at some fixed rate.

AIMA Updates Due Diligence Questionnaire for Selecting a Fund of Hedge Funds Manager
The Alternative Investment Management Association (AIMA), the global hedge fund industry association, has published an updated edition of its due diligence questionnaire for pension funds and other investors to use when selecting a fund of hedge funds manager.

SGX’s Derivatives Activities Grow in May
The INR/USD futures was the most active among FX futures with record volume of 253,296 contracts.

 

 

Industry Events