Top Headlines

Goldman, Deutsche Bank Say Pound Plunge Is Just Getting Started – Bloomberg

The pound’s plunge isn’t over yet, according to three of the world’s top currency traders.

Europe Banks Close to Breaching Crisis Lows on Italy Woes: Chart – Bloomberg
European banks have fallen to levels not seen since the worst days of the region’s debt crisis as turmoil surrounding Italy’s lenders intensified.

S&P warns of possible downgrade to Australia’s coveted rating, cuts outlook – Reuters

Standard & Poor’s on Thursday warned of a downgrade to Australia’s coveted triple-A credit rating within two years, saying the knife-edge July 2 election may have weakened the government’s ability to tackle its budget deficits.

U.K.’s Long-Awaited Chilcot Report into Iraq War Criticizes Legal Basis for Invasion – WSJ (subscription)

A high-profile inquiry into the U.K.’s role in the Iraq war delivered a scathing account of Britain’s decision under then-Prime Minister Tony Blair to join the invasion, saying his government overstated the threat posed by Saddam Hussein, hadn’t exhausted diplomatic options and devised “wholly inadequate” plans for dealing with the invasion’s aftermath.

Danone Boosts U.S. Business With $10 Billion WhiteWave Deal – WSJ (subscription)

Danone has agreed to buy organic foods producer WhiteWave Foods for about $10 billion, boosting the world’s largest yogurt maker’s presence in the U.S.

Regulatory News

De Groot Seeks GBP 5.1 Million for “Unfair Dismissal” – Profit & Loss (subscription)

BNP Paribas’ former global head of FX trading Bob de Groot is claiming GBP 5.1 million compensation over his dismissal from the bank last year, arguing he was dismissed because of his whistleblowing over over-stated trading volumes.

China Imposes FX Reserve Requirement on Foreign Banks – Profit & Loss (subscription)

China has moved to limit speculation against the yuan by imposing reserve requirements on foreign banks trading in the forward FX market.

U.S. SEC approves NYSE request for new market volatility rules – Reuters

The U.S. Securities and Exchange Commission has approved plans by the New York Stock Exchange to speed up and smooth early morning trading in times of market stress.

Company News

Deutsche FX Chief Formally Leaves – Profit & Loss (subscription)

Ahmet Arinc, Deutsche Bank’s global head of FX and EM debt, has left the bank according to well-placed sources – whispers of his departure were first reported by Profit & Loss in April.

Currency Managers Down in May – Profit & Loss (subscription)

Currency managers struggled in May according to the Parker FX Index which reports a 0.31% decline for the month with 18 of the 28 reporting programmes in negative territory.

EBS Volumes Down YoY in June, but up MoM on Brexit – Profit & Loss (subscription)

Icap’s EBS average daily volumes (ADV) were down 3% year-on-year in June, standing at $97.4 billion, the firm reports. However, volumes were up sharply on a month-on-month basis in June, rising by 29% compared to May.

Market Savvy

Central Banks Put Squeeze on Sovereign-Debt Market – WSJ (subscription)

Christopher Sullivan, a money manager in New York, is worried that when he needs U.S. Treasury bonds one day, he might not be able to get them.

Emerging markets focus on dollar amid Brexit turmoil – Financial Times (subscription)

Those emerging market investors worried about the contagious effects of Brexit might want to paraphrase the advice election strategist James Carvile gave former US president Bill Clinton about voter concerns during the 1992 presidential campaign. For when it comes to what really matters for EM, “it’s the dollar, stupid”.

For whom BOJ toils? – Nikkei Asian Review

The Bank of Japan’s negative rate policy is a growing source of frustration for domestic banks, which have seen their earnings deteriorate while foreign investors make easy profits at their expense.

Yuan Tumbling Again Leaves Investors Unperturbed in Win for PBOC – Bloomberg

The last time China’s currency was sinking this fast, investors around the world responded by fleeing riskier assets. Now, they’re taking the declines in stride.