Top Headlines  

Hopes Quashed of Two-Year Delay for New Swaps Rules – Financial Times (subscription)
The world’s largest swap dealers may have only a few extra months to comply with new rules for swaps that cannot be processed through clearing houses, disappointing banks’ hopes of a two year delay, the top US derivatives regulator said. The CFTC is in the process of formalising rules regarding margin for the estimated $170tn in notional value of uncleared trades that are still expected to be left in the market, including cross-currency swaps, swaptions and inflation swaps.

Euro Calms After Drubbing; Weak US Data Crimp Dollar – Wall Street Journal (subscription)
The euro showed further signs of steadying Friday after its recent plunge, though analysts warned that the relief could be temporary with the currency remaining on course to hit parity with the dollar.

Goldman Slashes Euro Forecasts, Sees New Low $0.80 By End-2017 – Reuters
Goldman Sachs slashed its forecasts for the euro on Friday, predicting that it will fall through parity with the dollar within a year and plunge to a new record low of $0.80 by the end of 2017.

Are Currency Wars Looming in Asia? – Wall Street Journal (subscription)
Does the rising wave of surprise interest rate cuts in Asia portend a currency war? Central bankers won’t let the term leave their lips. Bank of Korea Gov. Lee Ju-yeol on Thursday, in announcing an interest-rate cut to a record low 1.75%, was studious in denying such a thing existed.

Dollar Landmark Level Triggers Profit-Taking – Financial Times (subscription)
The dollar’s relentless rise against most other currencies paused on Thursday, but not before it reached a key psychological level. The dollar index, which measures the greenback against a basket of other major currencies, reached 100.06 late on Wednesday, a level it last hit in April 2003.

Everest Said to Shut Most Funds as Clients Flee Over SNB Losses – Bloomberg
Marko Dimitrijevic, a hedge fund manager who survived a quarter century of gyrations in emerging markets, is returning most of the money in his Everest Capital after a disastrous bet against the Swiss franc in January caused clients to flee. The firm told investors that it’s closing six of its seven funds. Another fund, the $830 million Global Fund, was wiped out in less than a day in January after the Swiss National Bank unexpectedly let the franc trade freely against the euro.

Michael Lewis Reflects on His Book Flash Boys, a Year After It Shook Wall Street to Its Core – Vanity Fair
Flash Boys, Michael Lewis’ best-selling exposé of high-speed trading, made some of Wall Street’s richest people very angry. Dissecting the reaction, he argues that the furor has obscured his book’s real news.

Trading Firm’s Lawsuit Takes CME to Task – Crain’s Chicago Business
Failing to get any traction in a CME Group arbitration process, Chicago trading firm HTG Capital Partners filed a federal lawsuit yesterday against another firm it says manipulated CME’s futures market. The case is striking not only for its allegations, but also because HTG is led by Chris Hehmeyer, who is also chairman of the industry-led self-regulatory organisation, the National Futures Association.

Pound’s Outlook Clouded by Election Uncertainty – Financial Times (subscription)
Amid the currency cacophony stirred up by the euro’s sharp decline against the dollar, the steady rise of the UK pound against the single currency has almost gone unnoticed. But such a performance is ringing alarm bells among foreign exchange strategists, who are firmly fixated on the upcoming UK general election.

SA’s Currency Undervalued – Economist – South Africa News Agency
The South African rand is significantly undervalued and should be trading at R9 to the dollar, said Annabel Bishop, the chief economist at Investec, on Friday.



Regulatory News 

BoE Points to E-FX Platforms as Contributing to Swiss Chaos – Profit & Loss
Changes in FX market structure, specifically the advent of electronic trading, may have added to the extreme volatility experienced in the market following the sudden abolition of the 1.20 EUR/CHF cap, according to the Bank of England.

Europe, US Hint at Clearing Agreement – FOW Magazine (subscription)
The top regulators in the US and Europe have said they continue to talk about Europe’s recognition of US clearing houses and they remain confident of reaching a long-awaited agreement on this contentious issues.

European Commission to Review OTC Regulations for Pension Funds – Pensions & Investments
The European Commission will review legislation that could force pension funds to centrally clear over-the-counter derivatives transactions.



Company News

FXCM Estimates Circuit Breakers Saved Clients $100m During SNB Event – Profit & Loss
FXCM has published a blow-by-blow account of the severe lack of liquidity and extreme pricing during the ‘flash crash’ on 15 January, resulting from the Swiss National Bank’s shocking decision to remove the 1.2000 EUR/CHF floor.

EBS Turnover Bounces Back as FX Volatility Returns – Euromoney
EBS’s management team believes increased volume reflects more than just a general rise in FX market activity. It highlights, they say, a preference to use more established platforms during times of acute market stress, such as the sudden decision by the Swiss National Bank to remove its EUR/CHF currency floor on January 15.

UBS Raises Litigation Provisions, Lowers Reported Quarterly Profit – Reuters
Swiss bank UBS has revised down its fourth-quarter net profit by 105 million Swiss francs primarily because it increased litigation provisions to 3.05 billion francs because of a settlement in a US antitrust lawsuit in which investors accuse banks of collusion in the FX market.

IBM Looking at Adopting Bitcoin Technology for Major Currencies – Reuters
IBM is considering adopting the underlying technology behind bitcoin, known as the blockchain, to create a digital cash and payment system for major currencies.

Moscow Exchange to Start Rouble-Yuan Futures Trading Next Week – RT
Moscow trading in rouble-yuan futures will begin on March 17 with the currency pair expected to become the third most popular by volume.

Alpari Accounts Frozen Since Franc’s Surge May Pay Out in Weeks – Bloomberg
Clients of Alpari UK, the London-based currency broker that ceased trading in the wake of January’s Swiss franc turmoil, may receive payments based on their account balances within weeks, according to administrator KPMG.
Alpari UK Clients Meeting Results: $6M for IP, Most Assigning Claim to FSCS – LeapRate



Market Savvy  

The Strong, Weak Dollar
Bloomberg View
When there’s a significant currency move like the dollar’s rise against the euro over the past couple of weeks, it tends to be discussed in near-apocalyptic language. We are witnessing the euro’s “collapse,” or maybe its “demise,” at the hands of a “rampant US dollar,” to borrow the words of one especially dramatic currency analyst. Demise? Really?



Industry Events