Top Headlines

Giancarlo in the Frame for Mark Carney’s Job – Financial News (subscription)

Christopher Giancarlo, the high-ranking US financial regulator, has emerged as a surprise candidate for the top job at the Bank of the England.

Electronic Trading Pioneer to Launch FX Derivatives Exchange – Financial News (subscription)

One of Wall Street’s electronic trading pioneers will launch a new currency derivatives exchange before the middle of next month, and has recruited two industry heavyweights to jointly manage the business. Dmitri Galinov, who founded FastMatch, plans to unveil 24 Exchange by the end of August.

Big Banks’ Trading Desks Suffer Despite Market Rally – Bloomberg (subscription)

Banks are bracing for a third-straight quarter of declines in the business of dealing stocks, bonds and currencies. Three of the biggest US banks – Bank of America, Citigroup and JP Morgan – have said in recent weeks that trading revenue was on track to fall roughly 5% in the second quarter from a year earlier.

In the FICC of It (podcast) – Profit & Loss

The podcasters discuss the market structure in cryptocurrencies and the latest burst of extreme volatility. They also look at whether the recognition of the FX Global Code by the UK’s Financial Conduct Authority is significant before turning to the trend of VC and PE firms moving into the FX fintech space.

Regulatory News

US Parries EU Jab on CCP Oversight – (subscription)

Tensions have flared between European and US supervisors on the subject of cross-border clearing house oversight after acerbic comments from one of Europe’s top officials left his US counterparts livid. The two sides were again pushing diametrically opposed ideas on the supervision of each other’s clearing houses, as the US bangs the drum of ‘regulatory deference’ and Europe burrows ever more feverishly into regulation in a charged response to Brexit.

Financial Regulation is Costly and Complex – Time for a Big Tech Solution – The Guardian

Cryptocurrencies, new payment systems and digital banking all signal a financial revolution that needs better oversight.

HKMA, PBoC Extend CNY Access to Hong Kong Stock Connect Investors – FX Week (subscription)

The Hong Kong Monetary Authority has granted onshore yuan access to northbound Stock Connect investors in Hong Kong for transaction settlement. The regulatory change means investors who buy equities traded on China’s exchanges via the Stock Connect schemes can now settle in onshore yuan (CNY) rates, compared with offshore yuan (CNH).

Isda Backs Regulatory Push on Derivatives Data Project – (subscription)

Financial authorities should force markets to adopt a single format for transaction reporting, a senior figure at the International Swaps and Derivatives Association has said. The call comes as Isda promotes its own data standardisation project, the common domain model.

Trump and Xi Call Time (For Now) on Their Trade War – Bloomberg (subscription)

The presidents of the world’s two biggest economies today struck a truce in their trade war, meeting on the sidelines of the Group of 20 summit in Osaka, Japan. It’s the second time they’ve used their personal rapport (Trump called the Chinese leader a “great leader” and friend) to revive talks after an impasse.

Crypto News

Bitcoin’s Surge Leaves Smaller Digital Currencies in the Dust – The Wall Street Journal (subscription)

This year’s cryptocurrency rally has so far been all about bitcoin. Bitcoin has more than tripled since January, rising as high as nearly $14,000 on Wednesday before falling back to around $12,000. Other cryptocurrencies have largely been left behind in this year’s surge.

Cryptocurrencies: Finding the Right Audience – Profit & Loss

Since the price of crypto assets spiked dramatically in 2017, many have been predicting that a wave of institutional money is going to come into the cryptocurrency market, bringing with it a flood of change. However, speakers at Forex Network London argued that the “institutionalisation” of the crypto markets will play out differently than many envisaged and that some crypto-focused firms have been targeting the wrong client base.

As Blockchain Projects Sputter, Capital Markets Firms are Having Second Thoughts – Waters Technology (subscription)

Blockchain: The industry was promised a panacea – what has been delivered so far is aspirin. While there have been small implementations to date, there are many in the industry who are underwhelmed by this purported revolution.

Central Bank Plans to Create Digital Currencies Receive Backing – Financial Times (subscription)

Global central banks may have to issue their own digital currencies sooner than expected, the general manager of the Bank for International Settlements has said, after Facebook recently unveiled plans to create its own stablecoin.

Bitcoin’s Second Coming Makes Wall Street Think Again on Crypto – Financial Times (subscription)

After bitcoin fizzled and popped early last year, Wall Street seemed to lose interest. Goldman Sachs went quiet on plans to open a desk trading digital assets as the price of the cryptocurrency plummeted, falling as much as 80 per cent. But now that prices for bitcoin have climbed back up, some senior figures in the financial services industry are thinking again, wondering whether it was the spike or the crash that was the anomaly.

Goldman Sachs Explores Creating a Digital Coin Like JP Morgan’s – Bloomberg (subscription)

David Solomon may take a leaf out of Jamie Dimon’s book by exploring a digital coin for payments.

Company News

FX Volumes Rebound Slightly in June – Profit & Loss

The first two platforms to report June average daily volume indicate that activity rose slightly from May, reinforcing a small rebound from April’s lows. CboeFX ADV was unchanged month-on-month at $33.1 billion per day, while Euronext FX has reported ADV of $19.3 billion, up 11.6% from May.

360T Launches Direct Trading Via GTX – Profit & Loss

360TGTX has launched a new product, GTX Link, which leverages the established connectivity of GTX to enable clients to access each other bilaterally.  

Celebrating 20 Years (opinion) – Profit & Loss

July 1 marks 20 years since the first issue of Profit & Loss. Two things stand out from Issue 1/1 – the first being that there was a tremendous amount happening in the third party research industry. The second is that clearly the industry was on the cusp of a great age of innovation.

TP Icap’s European Head to Depart – Financial News (subscription)

Frits Vogels, who has led the European business at TP Icap since its creation through a merger of two City brokers, is leaving the firm. He will be replaced by Martin Lynch, who will become head of global broking for Europe, the Middle East and Africa, alongside his role as chief operating officer for global broking.

Market Savvy

Short the Dollar as Trade Truce Won’t Stop Fed Rate Cuts – Bloomberg (subscription)

The US-China trade truce hasn’t been enough to shake out one favorite trade: shorting the dollar. The agreement has done little to shift overall market pricing for Federal Reserve interest-rate cuts, which means markets will keep selling the greenback.

Haven Currencies Drop as Yuan Rallies in Wake of Trump-Xi Truce – Bloomberg (subscription)

The dollar fell against the yuan and commodity-related currencies in Asia-Pacific trading on Monday after the US and China backed down from threats to escalate their trade war. Haven currencies weakened.