Top Headlines

FXPA Elections for First Permanent Board Set for Feb 10
The Foreign Exchange Professionals Association (FXPA) will hold elections for its first permanent Board of Directors and Officers on Feb 10. FXPA, which launched Sept 25, 2014, now has 18 members representing the diversity of participants in the institutional FX market. To find out how you can support the FX industry through education, research and advocacy, visit our website at www.fxpa.wpengine.com, become an institutional member, and sign up for our newsletter, FXPA globalFXsource.

Icap to Face EU Fine Over Yen Cartels – Financial Times (subscription)
Icap faces an EU fine this week for allegedly facilitating cartels on yen-denominated inter-rate benchmarks. The world’s largest interdealer broker has strongly denied wrongdoing, refused to settle and has informed the European Commission that it will appeal any fine as wrong in fact and law.

BGC Has the Scale to Make GFI Deal Work: Lutnick – Bloomberg
GFI Group urged its shareholders to take no action on a bid by BGC Partners to acquire the company. Cantor Fitzgerald chairman and CEO Howard Lutnick weighs in on the proposed deal on “Market Makers.”

Swiss Central Bank Now Has ‘Unofficial Euro Target’ – The Guardian
The Swiss National Bank, which last month scrapped the cap it had imposed on the value of the franc, is unofficially targeting an exchange rate of 1.05 to 1.10 Swiss francs per euro, a Swiss newspaper reported.

• Switzerland Rejoins Currency Wars – Bloomberg

PBOC Said to Mull Policy Options to Address Capital Shifts – Bloomberg
Two options under consideration are widening the band in which China’s currency, the yuan, is allowed to fluctuate and guiding the exchange rate gradually lower by adjusting the fixing against the greenback.

Stumbling Australian Dollar Has Room to Fall – Financial Times (subscription)
The Australian dollar fell to a five-and-a-half-year low of US$0.7667 on Tuesday after the Reserve Bank of Australia cut interest rates by 25 basis points to a record low of 2.25 per cent – its first rate move in 18 months. The currency has plunged in value by almost 20% against the US dollar since July and most economists predict it has further to fall.

• Australia Cuts Interest Rates to Record Low – Wall Street Journal (subscription)

Parker FX Index Remains Positive for Six Consecutive Months – Profit & Loss
The Parker FX Index, which tracks the world’s largest FX hedge funds, has remained in positive territory for the sixth month in a row. The index reported a 0.67% return in December for the currency funds it tracks.

CLS Ends Year Nearly Level Despite December Drop – Profit & Loss
CLS indicates that the FX market has ended the year with overall activity relatively level to 2013, despite reporting a monthly drop in volume for December.

Regulatory News

Lawyers Back Esma in Clearing Dispute with EC – Risk.net (subscription)
Lawyers are backing the European Securities and Markets Authority (Esma) over objections it has raised with the European Commission’s proposed clearing exemptions for intragroup trades, but warn it leaves the regulatory process in “uncharted territory”.

CME Fears Futures Clearing Retreat – Risk.net (subscription)
The incoming leverage ratio in the US could prompt futures commission merchants to stop clearing certain futures products or even shut up shop completely – extending a trend that has already seen three firms retreat from over-the-counter derivatives clearing.

Roe and Koutoulas Re-Elected to NFA Board – Profit & Loss
National Futures Association (NFA) board members James Koutoulas and John Roe won re-election to the board despite their calls for reform at the self-regulatory organisation.

ASIC Tightens FX Licence Rules for New Entrants – The Australian
The corporate watchdog has clamped down on retail foreign exchange brokers by tightening the conditions for new licence ­applications as the fallout from the Swiss franc crisis reverberates.

Company News

Julius Baer Cuts Costs in Bid to Offset Swiss Franc’s Surge – Financial Times (subscription)
Julius Baer is to cut its costs by $108 million in a bid to offset the appreciation of the Swiss franc, which has surged since the country’s central bank stopped capping the currency’s exchange rate against the euro.

Deutsche Bank Picks up 5.4% of Retail FX Broker Plus500 – LeapRate
Today, as per a filing by the London Stock Exchange, whose Alternative Investment Market lists Plus500 stock, Deutsche Bank has purchased a 5.4% stake in the company.

CME Posts FX Volumes, Decline by 1% in January, But Option Trading Grows – Forex Magnates
Early indications are that despite last month’s black swan Swiss franc event, FX volumes traded in January have remained around the strong levels experienced during the last four months of 2014. Figures from CME Group support this notion, with average daily volumes  of futures and options only declining slightly by 1% to 945,940 contracts when compared to December 2014’s activity.

Tickmill Moves into Retail FX After Armada Markets Exit – Profit & Loss
Seychelles regulated FX broker Tickmill has made further changes to its business with the appointment of a new CEO, Sudhanshu Agarwal.

HFT Firm Allston Trading Exits the US Equities Markets – Profit & Loss
High frequency trading firm Allston Trading has stopped operating in the US stock market in order to focus on its derivatives business.

Gain Capital Increases Margin Requirements on Pegged Currencies – Forex Magnates
According to an announcement sent out to clients of the company, Gain Capital is set to increase margin requirements on a number of currencies. Starting with the fixed exchange rates, the changes will affect the Danish krone, the Hong Kong dollar and the Chinese yuan where leverage will be reduced to 1:10.

Market Savvy  

Surprise! Investors Face Need to Expect the Unexpected on Rates
Bloomberg
Another day, another central banking surprise. Today it was the Reserve Bank of Australia’s turn to wrong-foot investors. Just seven of 29 economists surveyed by Bloomberg News anticipated the 25 basis-point cut in its benchmark interest rate to a record low of 2.25%.

Press Releases

ADS Securities London Launches New FX and CFD Trading Service
ADS Securities London is launching trading for individual clients in the UK and across Europe.  It will include FX, CFDs and spread betting with access to proprietary technology and liquidity.

Pershing Securities Australia Signs with Broadridge to Advance Multi-Asset Post-Trade Processing
Pershing Securities Australia Limited, part of BNY Mellon, has selected Broadridge’s Australian post-trade processing solution as its new middle- and back-office processing platform for third-party domestic clearing.

FX in 2015: Ron Leven, Head of FX Pre-Trade at Thomson Reuters, On The Key Trends Shaping the Markets This Year
Ron Leven, head of FX pre-trade and economic strategy at Thomson Reuters, examines what the year has in store for the markets.

Industry Events

• ACI World Congress 2015, 3-7 February in Milan, Italy
• FIA/SIFMA Asset Management Derivatives Forum 2015, 4-6 February in Dana Point, CA
• FX Week Australia, 12 February in Sydney, NSW
• FX Invest Europe, 24 February in Frankfurt, Germany
• AFME 10^th Annual European Market Liquidity Conference, 25 February in London, UK
• FIA International Futures Conference Boca 2015, 10-13 March in Boca Raton, FL
• IFM Lifecycle of Derivatives Trades: Uncovering the Middle and Back Office Functions, 12 March in Chicago, IL; 7 May in New York, NY; 14 May in Chicago, IL
• FX Invest North America, 14 April in Chicago, IL
• Profit & Loss Forex Network London, 23 April in London, UK
• Profit & Loss Forex Network New York, 28 May in New York, NY
• Profit & Loss Toronto, 3 June in Toronto, Canada
• Profit & Loss Forex Network Chicago, 24-25 September in Chicago, IL