Top Headlines

Fed Keeps Interest Rates Unchanged; Signals No More Increases Likely This Year – The Wall Street Journal (subscription)

Federal Reserve officials indicated Wednesday they are unlikely to raise interest rates this year and may be nearly finished with the series of increases they began more than three years ago now that US economic growth is slowing.

UK to Lose £1tn of Financial Assets to Europe Due to Brexit – Financial Times

Financial services companies have committed to move about £1tn of assets out of the UK into Europe as the industry triggers its worst-case contingency plans with no Brexit deal in sight, according to consultancy EY.

Europeans Try to Kill MiFID Rule in Brexit Derivatives Fight – Bloomberg

Lobbyists for Deutsche Boerse, Euronext and other exchanges are calling on EU officials to reverse a key part of the bloc’s trading law called open access – a policy that has wide support in London. The rule allows derivatives to be traded on one exchange and cleared at another.

The Lack of Action in FX Markets Will Not Change Dramatically (opinion) – Profit & Loss 

This is the new reality in FX markets. It resembles the classic description of warfare in that we experience long periods of boredom, interspersed with brief, intense moments of excitement. Whether this suits the business models of most banks is open to question – I would say it does not – but I equally doubt anything will change. Generally speaking, for a sharp move to occur without a dramatic event, we need an imbalance of positions, but how are we going to see that if people aren’t holding them long enough? 

Regulatory News

EVIA Provides Feedback to EU on MiFIR – Profit & Loss

The European Venues and Intermediaries Association (EVIA), formerly known as the Wholesale Markets’ Brokers Association (WMBA), has published its response to a call from Germany’s Finance Ministry for feedback on MiFID II and MiFIR one year on from their implementation. In the feedback, EVIA makes a number of points and stresses its belief that foreign exchange swaps should not be covered under the regulation.

Dealers Seek Clarity on Buy-Side IM Relief – (subscription)

The volume has been turned down on the initial margin ‘big bang’ after two global regulatory bodies lifted hundreds of buy-side firms from the documentation burden. Now, the derivatives industry is seeking clarity over the compliance requirements for an estimated 800 firms, which may be required calculate margin they will never need to post and seek regulatory approval for the use of industry-preferred models.

Bank of England Grants Recognition to Indian Clearing Corporations – Regulation Asia (subscription)

The Metropolitan Clearing Corporation of India is the first Indian clearing corporation to receive recognition from under the UK’s temporary recognition regime.

Crypto News

Criminal Past Haunts Surviving Founder of Troubled Crypto Exchange – Bloomberg

His crimes: identity theft related to a bank-and-credit card scam. His sentence: 18 months in US federal prison and, later, deportation to Canada. Once there, Omar Dhanani underwent a remarkable transformation – into a new identity and the wild world of cryptocurrencies.

Ex-CFTC Chairman Calls for SEC to Regulate Cryptocurrencies – JLN

Economic Studies at Brookings yesterday dropped a call for better regulation of the cryptocurrency and digital assets industries by none other than Tim Massad, the former chairman of the CFTC. 

Japan to Impose Margin Trading Limits in Cryptocurrency Sector – Regulation Asia (subscription)

New rules will limit cryptocurrency margin trading to two-to-four times initial deposits and require exchanges offering margin facilities to register separately with the government.

Company News

You Are Probably Not Working for a Top Tier Investment Bank – eFinancialCareers

Once upon a time, people used to talk about “bulge bracket investment banks.” Now it’s more normal to talk terms of banks that are tier one, tier two, or tier three – but which is which? And do you work for a top tier bank or something more diminutive? Today’s release from research firm Coalition answers all these questions and more.

BarclayHedge Confirms Positive February for CTAs – Profit & Loss

Data from BarclayHedge confirms previous Profit & Loss reporting that CTAs saw overall positive results in February, with the BarclayHedge CTA Index showing a 0.32% return last month.

SEC to Examine Competition Among US Asset Managers – Financial Times

The US financial regulator is set to examine whether investors’ choice of asset management companies will be damaged by competitive pressures that threaten to destroy smaller players.

Market Savvy

Brexit Delay Concerns Bubble Up in FX Derivative Markets – Reuters

Concerns about the British pound are growing in currency derivative markets as uncertainty rises over British Prime Minister Theresa May’s request to European Union officials to delay Brexit.

Hong Kong Dollar Firms on $450m Intervention and Dovish Fed – Financial Times

A persistently wide spread between Libor and Hong Kong’s interbank lending rate is putting pressure on the Hong Kong dollar, forcing the city’s de facto central bank to spend nearly $1.5bn in March to defend the currency’s peg to the US dollar.

Norwegian Crown Surges as Central Bank Signals Rates to Rise Again – Reuters

Norway’s crown surged on Thursday after the central bank raised interest rates and signaled more tightening would come as the domestic economy strengthened.