Top Headlines

Forex Turmoil Brings Regulatory Issues into Sharp Focus – Financial Times (subscription)
The implosion of several retail foreign exchange brokers following the wild swings of the Swiss franc last week has brought into sharp focus the lightly regulated industry long regarded in the City as an unsophisticated sideshow to the grander workings of high finance.

CME Group, BGC Again Raise Bids for Broker-Dealer GFI – Wall Street Journal (subscription)
The bidding war between CME Group and BGC Partners for fellow broker-dealer GFI Group has escalated, as both parties raised their bids to win over shareholders ahead of this month’s vote.

FXCM Owners Are Almost Wiped in Swiss Franc Turmoil – Bloomberg
FXCM, the currency trading firm that almost collapsed last week when the Swiss franc surged, saw its shares plunge after disclosing the terms of its bailout by Leucadia National Corp.

BlueCrest Said to Shut Trader’s Book on Losses Tied to Franc – Bloomberg
BlueCrest Capital Management shut a portfolio run by Peter Von Maydell after the Swiss franc’s surge last week sparked losses.

Hedge Fund Comac to Return Money After Swiss Franc Move – Reuters
Comac Capital is returning money to outside investors after suffering heavy losses last week, becoming the second hedge fund in less than a week to take dramatic steps after being battered by the Swiss franc’s unexpected surge.

CME Group to Impose 1% Charge on Swiss Franc Deposits – Reuters
CME Group will start to charge a 1% rate for member clearing firms on Swiss franc deposits held at CME beginning January 22.

FX Vol to Buoy Exchange Launches – International Financing Review (subscription)
A surge of currency volatility is providing a welcome backdrop for options exchanges planning to list new products in the asset class. After an historic year-long drought that saw currency vols flirt with their lowest levels since 2007, wild price swings have been sparked by divergent monetary policy regimes as the US ponders a potential rate rise while Europe prepares to embark on monetary easing.

Yen Rebounds After BOJ Disappoints Further Easing Bets – Reuters
The yen rebounded against the dollar on Wednesday after the Bank of Japan stood pat on monetary policy, as speculators who had anticipated more easing unwound bets on a weaker currency.

Strong US Dollar and Cheap Oil Help to Boost World Economy – Bloomberg
The plummeting price of oil and surging US dollar are increasing growth throughout the world, according to a Bloomberg Global Poll.

Denmark Vows to Keep Currency Peg, Likely to Cut Rates on Thursday – Reuters
Denmark’s political and central banking establishment is uniting in a campaign to kill speculation that the country might follow Switzerland in scrapping a currency link to the euro.

Is Dollar Next? Investors Reassess After Swiss Shock – Bloomberg
After Switzerland shocked markets by scrapping its currency cap, investors are beginning to ask whether a policy surprise may be lurking for the dollar, too.

FXPA News: Join by Feb 1 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

Regulator to Review Leverage Limits for Currency Trades – Wall Street Journal (subscription)
Regulators and currency dealing firms are considering tougher requirements on borrowed money used by mom-and-pop investors after an unexpected surge in the Swiss franc left traders and brokers with steep losses. The National Futures Association, a self-regulator responsible for policing the futures industry, said it is considering whether to alter a cap on borrowed money, or leverage, for currency bets.

Banks Have Benefitted From More Regulation says Deutsche Bank Boss – Evening Standard
Banks are better off for most of the new regulations that have been introduced in the wake of the financial crisis, according to Deutsche Bank chief Anshu Jain.

Central Bank Prophet Fears QE Warfare Pushing World Financial System out of Control – The Telegraph
“We are in a world that is dangerously unanchored,” said William White, the Swiss-based chairman of the OECD’s Review Committee. “We’re seeing true currency wars and everybody is doing it, and I have no idea where this is going to end.”

Powell Says Fed Working With Dealers to Find Libor Alternatives – Bloomberg
Federal Reserve Governor Jerome Powell said the central bank has convened a group of the largest global dealers to work with the Fed in promoting alternatives to US dollar Libor.



Company News

TriOptima to Deploy FX Compression Service with CLS – FX Week (subscription)
TriOptima has teamed up with foreign exchange settlement utility CLS to garner support for an FX forwards compression service they hope to bring to the market later this year.



Market Savvy  

Investor Implications of QE by the ECB
Merk Investments
Is European Central Bank (ECB) head Draghi’s determination to purchase government bonds turning Europe into a banana republic? What are the implications not only for the euro and U.S. dollar, but gold, stocks and bonds? Our analysis shows that conventional wisdom may be proven wrong in more than one way.



Press Releases

Russell Investments and Integral Launch Execution Service for Institutional Investors — Designed to Fix the Fix
Global asset manager Russell Investments and Integral Development Corp. have launched Russell FX Network (RFX Network), a new trading solution for the buy-side community for netting, execution and allocation of FX transactions. RFX Network is designed to help institutional investors including asset managers obtain currency exchange rates that seek to minimise tracking error with respect to the rates published by WM/Reuters.

Monex Europe Expands Global Footprint with New Madrid Office
Monex Europe has opened a new office in Madrid. The office, based in the heart of Madrid’s financial district, will be dedicated to serving increasing demand from Spanish clients, whilst enhancing Monex Europe’s foothold in mainland Europe.



Industry Events