Fed’s Dudley Concerned About Downside Risk on US Inflation

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Top Headlines

Fed’s Dudley Concerned About Downside Risk on US Inflation – Reuters The drop in oil prices and a strong dollar have raised the risk of U.S. inflation expectations heading lower, hampering actual inflation from reaching the Federal Reserve’s 2 percent goal, a Fed official said on Friday.

China to Start Implementing RRR for Offshore Banks’ Domestic Deposits – Reuters China’s central bank said on Monday it will start implementing a reserve requirement ratio (RRR) on offshore banks’ domestic deposits, in what appears to be its latest attempt to stem speculation in the yuan and manage money flowing in and out of the country.

Dollar Gains on Exodus from EMs – Financial Times (subscription) The dollar exuded calmness in a tense week for currency traders, though it gained strength more from investors turning their face against emerging market FX than outright optimism in the US economy.

Italy Versus Germany: Europe’s Latest Fault Line – Wall Street Journal (subscription) Rome’s discontent reflects the view that rules of the EU game are rigged in Berlin’s favor.

Bitcoin Declared An “Inescapable Failure” – Forbes Bitcoin, a distributed and decentralised digital currency dubbed “the currency of the Internet”, has been declared a failure by one of its most ardent supporters and developers.

Winding Up Forex Traders, One Year On – Financial Times (subscription) Winding up currencies traders is good fun, and very easy. One way is to say that someone from compliance rang for them. Something to do with electronic chat rooms? Anyway, call them back.

Hong Kong’s Central Bank Says Has No Plan to Change Currency Peg – Reuters The head of Hong Kong’s central bank said on Monday it has no plans to change the Hong Kong dollar’s peg to the U.S. currency despite recent volatility in the market.

Switzerland: A Test Case for Currency Shock – Wall Street Journal (subscription) A year after the Swiss central bank scrapped its policy of limiting the value of the franc, the Alpine country has become a test case for the economic effects of a starkly stronger currency.

Angola’s Dollar Shortage Deepens – ThisisAfricaonline (Registration) Plummeting oil prices are pushing the kwanza, Angola’s currency, to record lows. Black market exchanges are stepping into the breach.

 

 

Regulatory News

Basel Committee Softens New Rules on Bank Capital – Financial Times (subscription) Global banking supervisors have softened new rules forcing investment banks to hold much more capital against their trading books, after heavy lobbying from the banking industry.

EU and US Close in on Derivatives Oversight Agreement – Financial Times (subscription) The EU and US are closing in on a deal to close a gap in financial markets regulation that traders have warned could fracture global derivatives trading.

 

 

Company News

Banks Post ‘Living Wills’ Showing How They Would Avoid US Bailout – Reuters More than 120 banks and other financial institutions on Friday posted plans for how they would wind down their operations if they fail without the help of public money.

Biggest Banks Rue Millions Lost on Trader Who Failed Before – Bloomberg BNP Paribas SA and Nomura Holdings Inc. are among five banks nursing losses of about 120 million pounds ($171 million) on the demise of an obscure bond-trading firm called Invexstar Capital Management Ltd. They shouldn’t be surprised.

 

 

Market Savvy  

Is the Market Right That the Fed Is Wrong? – Wall Street Journal (subscription) Wall Street is learning what life is like with less central-bank support.

China’s Investment Landscape Has Shifted and the Ripples are Spreading Far and Wide – South China Morning Post As investors seek to puzzle out which direction asset markets will take after a fractious start to 2016, perhaps it is still the case that “no-one who is really involved in the landscape ever sees the landscape”, as British author George Orwell once wrote.

China’s Currency Has Arrived on the World Stage – Australian Financial Review (subscription) China’s currency is on a path to becoming a global reserve currency, just as the greenback did a century ago.

Oil Extends Slide Below $30 as Market Braces for Iran Oil Influx – Wall Street Journal (subscription) Crude oil futures extended a fall below $30 a barrel on Monday, as the removal of sanctions over Iranian oil exports sparked concerns that oil prices would move even lower amid a global glut.

 

 

Press Releases

GFMA, IIF and ISDA Statement on The Fundamental Review of The Trading Book –GFMA The Global Financial Markets Association (GFMA), the Institute of International Finance (IIF) and the International Swaps and Derivatives Association (ISDA) have issued a statement on the Fundamental Review of the Trading Book (FRTB) framework issued by the Basel Committee on Banking Supervision (BCBS).

Banks Battle to Maintain Dominance of UK’s Business Foreign Exchange Market – East & Partners As businesses across the UK seek to minimise the risks of currency fluctuations, the business foreign exchange market shows strong growth as well as fierce competition, according to new research from market analysts East & Partners.

 

 

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