Top Headlines

FXPA Webinar: “The CFTC’s SEF Reform Rule: Its Key Aspects and Prognosis” Tuesday, December 11th at 9-10am (ET) – FXPA

Justin Slaughter, former counsel to a CFTC Commissioner and current counsel to the Foreign Exchange Professionals Association (FXPA), will provide a detailed breakdown of the CFTC’s new regulatory proposal to fully overhaul SEFs. Justin will provide a summary of the major changes contemplated, including changes to the made-available-to-trade process, SEF accessibility, and pre-execution communication requirements. Justin will also discuss the timeline for the rule, the motivations underlying it within the CFTC, and its prospects for finalization in its current form.

Derivatives Trader Don Wilson Cleared in Manipulation Case – Financial Times (subscription)

The outcome is a serious setback for the US Commodity Futures Trading Commission, the federal agency that polices derivatives markets worth tens of trillions of dollars. The futures industry viewed the case as a test of the CFTC’s definition of manipulation.

Competition Continues to Heat Up Amongst Liquidity Providers – Profit & Loss

As more non-bank liquidity providers become active in the FX space, firms need to find ways to differentiate themselves to their counterparties, says Giovanni Pillitteri, portfolio manager at HC Technologies.

Early FX Reports Show Steady Volumes – Profit & Loss

The data from the first set of FX platforms to report volumes suggests that any changes in trading activity were fairly minimal in November.

Investors Bet on Rate Volatility as No-Deal Brexit Fears Mount – Financial Times (subscription)

Growing concern over how a no-deal Brexit could unbalance the British economy has sparked a record-breaking surge in demand for derivatives contracts betting that the UK faces volatility in interest rates incoming months.

Regulatory News

EU Finance Ministers Strike Eurozone Reform Deal – Financial Times (subscription)

EU finance ministers have agreed on steps to bolster the eurozone against future financial crises, striking a deal after negotiations that went through the night and pitted French-led reform ambitions against the reluctance of northern European capitals to share more financial risk.

Banks Warned on Holes in EU’s Proposed Brexit Relief – Risk.net (subscription)

There may be 28 signatures on the Withdrawal Agreement, but swaps market participants are being warned to continue preparing for legal obstacles in trades between European Union and UK counterparties in the event of a no-deal Brexit. That’s despite moves from EU rulemakers to soften the blow.

CFTC Adds Four UK-Based MTFs to SEF Exemption List – The Trade

With the addition of four MTFs – ICE’s Creditex MTF for credit default swaps, State Street’s Currenex and FX Connect MTFs, as well as the Thomson Reuters MTF – the CFTC’s list of EU-based venues exempt from SEF registration now totals 20.

US is Still Studying Ideal Way to Release Treasuries Trading Data – Bloomberg

The US government continues to study the best way to publicly release data on Treasuries trading, according to Craig Phillips, counselor to Treasury Secretary Steven Mnuchin.

UK Bank Misconduct Charges Dwindle – Risk.net(subscription)

UK banks’ rosy performance in the Bank of England’s stress tests was helped along by lower stressed misconduct charges, which were nearly half in the 2018 round what they were the year prior. Actual misconduct charges reported by six of the seven participating firms at end-2017were also half their prior year level and have continued to trend lower in 2018.

Crypto News 

Bitcoin is Near to Becoming Worthless – FinancialNews (subscription)

The world’s most famous cryptocurrency is falling below its cost of mining, and could be close to a death spiral.

Crypto Winter Is Here and We Only Have Ourselves to Blame – CoinDesk

Some view cryptocurrency solely as a tool of the rich, as a way for the privileged few to keep their property away from the prying hands of the state. If I eventually discover that they’re right, that that’s all it can be, I’ll quit.

Crypto Markets Need Big Bank Financing and Credit – FX Week (subscription)

Acquiring the backing of a bank with a sizeable balance is more important than custodial services at this stage, says cryptocurrency market maker.

Crypto Miners Undeterred By Market Collapse, Argo Blockchain says – Financial Times (subscription)

London-listed Argo Blockchain on Tuesday said crypto enthusiasts are still clamouring for its coin mining services despite a market collapse that has severely dented the profitability of such operations.

Company News 

LCH SwapClear Sees $1 Quadrillion Notional Cleared Record – The Trade

The London Stock Exchange Group’s clearinghouse LCH has set a new record for its over-the-counter interest rate swaps clearing service after surpassing the $1 quadrillion mark.

ABN AMRO Offers Clearing for Eurex FX Futures – Profit& Loss

ABN AMRO Clearing today has started clearing Eurex FX futures and options for its clients. The group now provides immediate support for the “classic FX” derivative contracts with attributes including monthly and quarterly expiries, as well as the rolling spot futures product that is now live. 

Bloomberg and CFETS to Collaborate on China’s Bond Market Development – Bloomberg

Bloomberg says that it and its global affiliates will, in the coming weeks, finalize plans to offer qualified investors access to China’s interbank bond market via the Bloomberg Terminal. 

Eurex Plans to Appeal CME Antitrust Case Ruling – Financial Times (subscription)

Eurex plans to appeal against the loss of a 15-year old lawsuit it brought against CME Group alleging the Chicago exchange had violated US antitrust laws to stop a rival venture from getting off the ground.

StockExchanges Are Beating Other Stocks – The Wall Street Journal (subscription)

A pickup in volumes on higher volatility in 2018 has been a boon to exchanges and market makers.

Market Savvy 

Sterling Jumps after EU Court Adviser Says Britain Can End Brexit Unilaterally – Reuters

Sterling jumped on Tuesday after the European Court of Justice’s advocate general said Britain has the right to unilaterally withdraw its notice that it is leaving the European Union.

Euro Rises as Treasury Yield Drop Whacks Dollar; Yuan at Two-Month High – Reuters

The euro rallied above $1.14 on Tuesday as a fall in US Treasury yields encouraged further selling of the dollar, with the yen and trade-linked currencies such as the Chinese yuan also racking up strong gains.

Renminbi Climbs Above 2-Month High as Dollar Slips – Financial Times (subscription)

China’s renminbi hit its highest level in more than two months on Tuesday as the currency built on previous gains made on the back of a Beijing-Washington trade truce while the dollar also weakened further against a number of its international peers.

Dollar Dealt a Blow as ‘Buy Everything Else’ Emerges After G-20 – Bloomberg

The dollar’s struggles may bleed into the new year as USPresident Donald Trump and Chinese leader Xi Jinping’s tariff cease-firee stokes a relief rally in risk assets and fuels optimism that global economic growth may pick up.