Top Headlines

Goldman Sachs Joins the Trading Party – Bloomberg

Banks with big trading desks have reported huge year-over-year gains in revenue from fixed income, commodities and currencies.

Foreign Firms Say UK Profits Hit by Brexit Vote, Weak Sterling – Reuters

The drop in sterling and some weakening in demand following the vote to leave the European Union have eaten into the earnings of foreign firms operating in Britain, companies have been saying as they reveal their third quarter results this month.

Pound Gains One Percent on Hint Lawmakers Must Back Brexit – Reuters

Sterling jumped the most in three months in a rollercoaster session, as suggestions that parliament will have to ratify a British deal to leave the European Union outweighed concerns about a larger-than-expected rise in inflation.

Pound at 11-Day High Against Euro as Inflation Hits Highest Level Since Late 2014 – International Business Times

Pound rises above $1.22 as Office for National Statistics shows inflation hits highest level since November 2014.

LCH Under Scrutiny After Outsized Brexit Margin Calls – Risk (subscription)

CCPs estimated to have called for cumulative $30–40bn in margin.

FINRA Fines Merrill Lynch $2.8 Million for Reporting Violations – Reuters

The Financial Industry Regulatory Authority fined Bank of America’s Merrill Lynch $2.8 million for what it called systemic violations in record-keeping and how the firm reported trades and order audit trail system data.

Virtual Currencies Do Not Qualify as Currencies From a Union Perspective – EconoTimes

The European Central Bank said that virtual currencies such as bitcoin do not qualify as currencies from a Union perspective and has called for a definition that explicitly clarifies that they are not legal currencies or money.

Yuan Halts Eight-Day Retreat as Data Signal Economy Steadying – Bloomberg

The yuan halted this year’s longest run of losses as data showed the nation’s economy is stabilizing.

Worst Emerging Currency Seeks Oil Boost for Malaysia Budget – Bloomberg

The developing world’s worst-performing currency is forecast to strengthen as a rally in oil prices enables Malaysia to stimulate its slowing economy while curbing its budget deficit for a seventh straight year.

IMF Downplays Inflationary Risk as Egypt Seeks to Finalize Loan – Bloomberg

Egypt is unlikely to see a jump in inflation from measures to ease a foreign-exchange shortage because import prices already reflect the black market rate, a senior International Monetary Fund official said.

Regulatory News

Central Bankers Liking It Hot Doesn’t Mean Mandate Rethink – Bloomberg

No broad ‘regime change’ expected for inflation targets.

Japan Considers Regulating Pokémon Go Virtual Currency – Financial Times (subscription)

Ruling could oblige gamemakers to secure virtual money with real-world yen.

RBI to Keep a Close Watch on Rupee as Fed Readies to Tighten – Economic Times

The Reserve Bank of India plans to strengthen its monitoring of the rupee as the US Fed gears up to tighten its monetary policy, an event that could spark a world-wide volatility in currencies.

Company News 

US Eyes Prize in Brexit Battle Over Derivatives – Financial Times (subscription)

New York could be ‘big winner’ from EU-UK swaps tussle, says Morgan Stanley chief.

Brexit Prompts London Trading Venue to Threaten Move to Ireland – Bloomberg

LMAX Exchange said it will file with Irish regulators in January unless UK politicians take heed, joining the ranks of London-based firms looking to the island as a gateway to European Union access once the UK leaves the bloc.

Market Savvy

Dollar Steps Back From Seven-Month High; Aussie Trims Gains – Reuters

The dollar stepped back from a seven-month high against an index of currencies after US consumer prices showed a moderation in underlying inflation, prompting markets to trim bets on a December Federal Reserve rate hike.

Aussie Holds Steady, Kiwi Moves Higher in Late Trade – Investing

The Australian dollar held steady against their US counterpart, while the New Zealand dollar moved higher as sentiment on the greenback became more vulnerable and as higher oil prices supported the commodity currencies.

US Inflation Data Supports Asia FX; China Q3 GDP Reassures – Reuters

Most emerging Asian currencies rose as tame US inflation data caused investors to trim bets on a Federal Reserve interest hike in December and as Chinese growth data soothed some concerns about the world’s second-largest economy.

LatAm Stocks, Currencies Up as Fed Remains in Focus – Reuters

Latin American stocks and currencies rose as crude oil prices settled higher and traders assessed the likelihood of a US interest rate hike following mixed signals from Federal Reserve officials.