Top Headlines

German Bundesbank: High-Frequency Trading Can Worsen ‘Flash Crashes’ – Wall Street Journal (subscription)

High-frequency trading firms tend to aggravate financial-market swings and could contribute to “flash crash” events, in which market prices collapse and rebound very rapidly, Germany’s Bundesbank warned in a report.

Saxo Braces for US Election – Profit & Loss

Saxo Bank is increasing margin requirements on certain FX pairs, equity and fixed income products ahead of next month’s US election.

US Election: Mexican Peso is Worth Watching Whoever Wins – Financial Times (subscription)

If Donald Trump’s conviction he can reach the White House is ebbing, he could do worse than turn to the foreign exchange market for consolation.

PM May Sparks Volatility in British Pound Against Euro and Dollar – Pound Sterling Live

The pound fell, and then recovered, on the contents of Prime Minister Theresa May’s briefing to lawmakers in the UK’s Parliament confirming this currency remains primarily driven by Brexit-related headlines.

Lord McFall Think Tank Proposes 39 Steps to Better Financial Regulation – Financial News (subscription)

On the eve of a new mission statement from the UK’s Financial Conduct Authority, the country’s financial regulators have been warned big change is needed to avoid sleepwalking into the next crisis.

Impact on Yuan From Expected US Rate Hike Will Be Limited – Reuters

A potential US interest rate hike in December will have limited impact on the yuan, the People’s Bank of China chief economist Ma Jun told reporters.

 Dollar Holds Near Seven-Month High on Policy Divergence Outlook – Bloomberg

The dollar was close to its highest level since March amid bets the Federal Reserve will raise interest rates this year while other major central banks maintain monetary easing.

The Yen is Tumbling – Business Insider

The yen is down by about 2.5% against the dollar for the month of October.

Why China’s Falling Exchange Rate Undermines Their Reserve Currency Ambitions – Forbes

China’s managed exchange rate is falling again, creeping steadily downwards against the US dollar, just as it has been included in the IMF’s SDR basket of reserve currencies.

How Monetary Policy, Not Data, Is Driving Currencies – Nasdaq

The upside surprises are a testament to the positive impact of a lower currency.

Barclays Warns ‘Politics of Rage’ Will Slow Global Growth – Bloomberg

Globalization is fundamentally incompatible with rising nationalist anger.

Are Central Banks Warming Up to Digital Currencies? – Market Mogul

Although it is still early days for blockchain and digital currencies in the financial services industry, the central banks of the world will have a significant role to play.

Regulatory News

US Banking Group Forms Unit Aimed at Reducing Cyber Risk – Reuters

The Financial Services Information Sharing and Analysis Center, an influential US financial industry group, said it had formed a unit to enhance collaboration among its members and the US government as a way to help reduce cyber security threats to the financial system.

Euro Central Bank Backs Money Laundering Rules for Virtual Currency Exchanges – The Register

Plans to bring virtual currency exchanges and digital wallet providers within the scope of EU anti-money laundering legislation have been backed by the European Central Bank.

Iceland Poll Brings Hope of End to Capital Controls – Financial Times (subscription)

US investors see potential resolution to offshore krona problem.

Currency Swap Agreement between South Korea and Japan Likely to Be Based on US Dollar – Business Korea

This is expected to play a positive role with uncertainties in the foreign exchange market mounting in the form of an interest rate hike by the Fed around the corner, Brexit, etc.

Company News

Visa, Chain to Launch Blockchain Payments System – Profit & Loss

Visa is partnership with Chain to launch a new business-to-business payments platform using blockchain technology.

Citadel Becomes First Buy-Side to Compress on TriOptima – The Trade

Hedge fund giant Citadel has become one of the first buy-side clients to use TriOptima’s swap compression service, as firms look to reduce their derivatives exposures.

Barclays First to Utilise DTCC’s Liquidity Coverage Ratio Data – The Trade

The Depository Trust and Clearing Corporation has announced a growth in its data business, as Barclays bank becomes the first to go-live with its newly launched liquidity coverage ratio data service.

INTL FCStone Global Payments Division Enhances FXecute Payments Platform – Finance Magnates

INTL FCStone announced that its Global Payments Division has enhanced its proprietary FXecute global payments technology platform with the addition of streamlined functionality, aiming to bridge its clients’ foreign exchange and payments services.

Market Savvy

China’s Renminbi at Multiyear Lows, Euro Hovering Near Weakest Level for Eight Months – Financial Times (subscription)

Currency markets are in the spotlight as the buoyant dollar pushes China’s renminbi to multiyear lows, the euro hovers near its weakest in almost eight months, and the softer yen helps Japanese stocks record a six-month high.

Stable Yuan Supports Asia FX; Doubts Over Rebound Remain – Reuters

Most emerging Asian currencies edged up on a stable Chinese yuan, although regional units stayed under pressure as solid US manufacturing data and a Federal Reserve official’s comments cemented expectations of December tightening.

CAD Sentiment Slumps, USD/CAD Exchange Rate Holds Near Highs – Exchange Rates

The US dollar to Canadian dollar exchange rate has been bolstered over the last week by higher Fed rate hike bets and poor Canadian data.