Top Headlines

FXPA Welcomes Fifth Third Bank as Associate Member – FXPA

The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of Fifth Third Bank as the newest Associate level member of the FX trade group.

May Suffers Historic Brexit Defeat – What the City is Saying – Financial News

The UK Prime Minister has suffered a crushing defeat to her EU withdrawal agreement, increasing the likelihood that the country will have to delay its exit from the bloc or suffer a no-deal Brexit.

Surprise, Surprise, Timing Blamed for Increased Volatility Following SNB’s Unexpected 2015 Move – Profit & Loss

A new research report from JP Morgan Chase Institute highlights the impact of central bank communication choices on financial market volatility.

The Future of AI Will Be About Less Data, Not More – Harvard Business Review

Companies considering how to invest in AI capabilities should first understand that over the coming five years applications and machines will become less artificial and more intelligent. They will rely less on bottom-up big data and more on top-down reasoning that more closely resembles the way humans approach problems and tasks.

Ex-Barclays Trio ‘Cheated Global Financial System’, Euribor Trial Told – Reuters

Three former Barclays bankers cheated the global financial system to gain an unfair edge over counterparties in a five-year plot to rig Euribor interest rates, a London prosecutor alleged on Tuesday.

Regulatory News

Firms Should Revisit OTC Reporting Frameworks: Study – Profit & Loss

A new report from Tabb Group argues that with regulators becoming increasingly strict on OTC derivative trade reporting it is time for firms to consider a comprehensive review of the trade reporting process.

FICC Markets Group Issues Best Practice Guidelines – Profit & Loss

The FICC Markets Standards Board (FMSB) has published the final version of its Statement of Good Practice (SGP) on Suspicious Transaction and Order Reporting.

Brexit Clouds Future for Euribor and Eonia in UK – (subscription)

The UK’s attempt to provide a smoothing two-year grace period for European benchmark rates will not help Euribor, or its sibling Eonia, if they are not registered with the European Securities and Markets Authority (Esma) by the rapidly approaching Brexit date – a highly unlikely scenario.

Best Ex Meets TCA in the Fixed Income Markets – Tabb Forum

Best Ex and TCA have been thrust into the spotlight in recent years. But both have rested very uncomfortably in fixed income trading. TABB Group examines the challenges of applying best ex and TCA to fixed income instruments and offers a possible new approach to optimizing FI trade execution.

The New Normal of European Research – Institutional Investor

UBS and Citi lead the pack in the post-MiFID race to win and retain research dollars.

Ocasio-Cortez Poised to Join Panel Overseeing Wall Street – Bloomberg

The New York lawmaker, who has become a sensation among progressives, will almost certainly join the House Financial Services Committee after a group of fellow Democrats on the party’s steering committee voted to recommend her for the panel on Tuesday, according to people familiar with the matter.

Crypto News

Understanding Blockchain Forks – Profit & Loss

Forks happen all the time. Two miners discover a block of the same height at the same time. You have an accidental micro-fork. Both chains are equally valid, but we can’t follow both and keep calling each of them “Bitcoin”.

Ethereum Seeks to Prove a Crypto Fork Need Not Be Contentious – Bloomberg

The term “fork” has acquired a negative connotation in cryptocurrency circles lately. A November software upgrade of the Bitcoin Cash network wiped out nearly half its market value. Yet for Ether investors, a pending update should be good news.

Coinbase Launches Crypto Custody in Apac – Global Investor (subscription)

Kayvon Pirestani, director of institutional sales in Apac will oversee Coinbase’s institutional business in the region, including custody.

Hong Kong-Based Digital Currency Exchange BitMEX Ditches Clients in US, Quebec Amid Regulatory Pressure – South China Morning Post

BitMEX, the bitcoin futures exchange, has been shutting down client trading accounts in the US and the Canadian province of Quebec, as global regulators intensify their crack down on unlicensed cryptocurrency trading platforms.

Company News

Uggla Eyes Financial Services Growth for IHS Markit – Global Investor (subscription)

IHS Markit boss praised new partnerships across liquidity analytics, collateral management and initial margin calculations

The Trading Business on Wall Street is Struggling and That Could Mean Bad News for These Banks – CNBC

Trading stocks and bonds on behalf of clients has historically been a cash-cow, especially in choppy markets. But as the top U.S. banks report results from the last quarter of 2018, it’s becoming clear that trading wasn’t a boost to banks’ bottom lines.

BNP Paribas to Shutter US Commodities Trading Desk – Bloomberg

BNP Paribas is shuttering its US commodities derivatives desk, the second trading unit to be wound down within days as France’s largest bank seeks to protect profitability.

A Tale of Two CCPs – (subscription)

Clearing houses are designed to manage the derivatives market’s systemic counterparty risks, by centralising them, collecting margin and applying rules for the orderly sharing of losses. In theory, when a default hits, the pain is kept within the thick walls of the central counterparty, rather than spilling out into the wider markets.

Market Savvy

Pound Clings to Gains vs Euro Before No-Confidence Vote – Reuters

The pound held at a two-month high against the euro on Wednesday as markets looked towards a no-confidence motion against Prime Minister Theresa May’s government, a day after British lawmakers overwhelmingly defeated her Brexit divorce deal.

Euro Dips as Dreary Economy Weighs, Brexit Vote Bolsters Pound – Reuters

The euro slipped against the dollar and the pound on Wednesday as worries about the outlook of the euro zone economy weighed on the single currency while sterling edged higher before a no-confidence vote on Prime Minister Theresa May’s government.

Wary Investors Drawn to Gold’s Allure – Financial Times

If gold is anything to go by, investors are increasingly anxious about the state of the world.

Why 2019 Won’t Be a Rerun of 2016 for Emerging Markets – Financial Times

For most of last year an angry US bond market took the sword to emerging market assets. But now, enamoured of the Federal Reserve’s newly confessed flexibility, the hope of trade rapprochement and easing from China, many investors are wondering if, similar to 2016, policymakers have underwritten them again.