Top Headlines

FXPA Welcomes Jump Trading as Governing Council Member – FXPA

The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of Jump Trading as the newest Governing Council Member of the FX trade group. 

US Said to Weigh HSBC Charge That Could Upend 2012 Settlement – Bloomberg

US prosecutors are considering a criminal charge against a unit of HSBC Holdings related to conduct on its foreign-exchange desk, according to two people familiar with the matter, imperiling an earlier deal that let the bank avoid prosecution.

The Amazing Vanishing FX Market: EBS Volumes Plunge – Financial Times (subscription)

More evidence that last month really was abnormally quiet in markets comes today from currencies trading system EBS, which has just revealed that it handled a daily average of just $68.4bn in flows last month.

FX CEO: The Currency Market is Open to Abuse and Regulators Aren’t Listening – Business Insider

Global regulators are “hearing but not listening” to the currency market’s calls about how to put a stop to foreign exchange manipulation, according to the CEO of a currency trading platform.

Downtrend in FICC Revenues Continues at Major Banks, Coalition Says – FX Week (subscription)

FICC revenues fell 11% in the first half of 2016 and 33% compared with five years ago.

BIS Stats: The Steady Decline of Foreign Exchange – Euromoney
The FX business is officially shrinking for the first time since 2001, as the world’s largest financial market battles an industry slowdown and a regulatory crackdown.

Why China Isn’t a Financial Center – Bloomberg

Amid all the buzz about China’s hosting the G-20 summit in Hangzhou – all the accords, arguments and alleged snubs – another symbolically significant event was largely obscured.

Czech Crown Rise vs Euro to Be Currency Trade of 2017 – Reuters

Positioning for a jump in the Czech crown’s value against the euro will be the trade of 2017, Dutch bank ING told clients on Tuesday, predicting the country would scrap its three-year-old currency peg early next year.

Brexit Fallout Turns Swedish Krona Into Carry Trade’s Big Short – Bloomberg

One development that has captured the attention of traders and strategists is the Swedish krona’s new role as a funding currency for so-called carry trades.

Swiss FX Reserves Hit New Record – Financial Times (subscription)

The Swiss National Bank is still amassing foreign currency reserves at quite a clip, despite having dropped its official upper limit for the franc back in 2015.

Support Grows for Canadian Currency ETF – Nasdaq

It could be a while before the Bank of Canada raises interest rates, but that has not stopped the CurrencyShares Canadian Dollar Trust from being a solid performer among developed markets currency exchange traded funds this year.

A Spin of the Globe: Where Foreign Markets Could Be Headed – Wall Street Journal

The outlook for Latin America, Asia and Europe for fund investors with, or considering, international exposure. 

Regulatory News

Japan’s Central Bank Should Wait for the Fed, Abe Advisor Says – Bloomberg

The Bank of Japan should wait until after the US Federal Reserve decides on interest rates before acting itself, said Koichi Hamada, an economic adviser to Prime Minister Shinzo Abe. 

Risk Is Worse When You Can’t See It – Bloomberg

Financial crises are becoming more frequent as markets and the rules that govern them grow ever more complex. 

Dealers Leave Buy Side Guessing on Mifid Trade Reporting – Risk (subscription)

Clients face tougher reporting rules if dealers don’t become systematic internalisers.

Mifid II and the Rise of the Market Structure Guru – Financial News (subscription)

Demand is surging for experts who can understand and explain Mifid II.

Why a Financial Transaction Tax Is a Bad Idea – Tabb Forum

Former Secretary of Labor Robert Reich claims financial transaction taxes are simply sales taxes on Wall Street traders and won’t harm markets or cause capital to flee.

Company News 

Saxo Bank FX volumes dip 17% in August to lowest level in 2016 at $221 billion – LeapRate

Denmark-based multi-asset broker Saxo Bank has reported that August volumes came in at $221 billion, or $9.6 billion per trading day during the month. 

BM&FBovespa Becomes First Exchange to Join R3 – Profit & Loss

BM&FBovespa is the latest financial services firm to join the R3 partnership that aims to design and apply distributed and shared ledger-inspired technologies to global financial markets.

LMAX Exchange Links Up With NY4 Matching Engine – Finance Magnates

LMAX Exchange, a multilateral trade facility that provides foreign exchange trading to retail and institutional clients, has launched a new global infrastructure expansion, linking up with Equinix’s NY4 Matching Engine.

CME Group Announces CME Authorization to Provide OTC Clearing, Settlement Services in Hong Kong – Reuters

CME Group announces CME authorization to provide OTC clearing and settlement services and designation as a central counterparty by Hong Kong’s securities and futures commission.

Market Savvy

Dollar Drops Most in Five Weeks on ‘Shockingly Weak’ Services – Bloomberg

A gauge of the dollar dropped by the most in five weeks after a report showed America’s service industries expanded in August at the weakest pace in six years, damping the outlook for higher US interest rates.

Deutsche Bank Joins Bears Seeking Shelter From Resurgent Pound – Bloomberg

The pound’s resilience following buoyant post-Brexit economic data is encouraging some sterling pessimists to rethink their short-term strategies. 

South African Rand Leads Currency Gains as GDP Beats Estimates – Bloomberg

The rand strengthened the most in three months, leading global currency gains after data showed South Africa’s economy expanded more than forecast in the second quarter while the trade balance swung to a surplus for the first time in more than a year.

Rupee Jumps to Four-Month High as Patel Begins Innings as RBI Chief – Bloomberg

India’s rupee jumped to the highest level since early May and stocks rallied as local markets opened after a public holiday.