Top Headlines

Hotspot and Thomson Reuters Tackle ‘Last Look’ with New Protocols – Profit & Loss (free story)
Hotspot and Thomson Reuters have both released new standards for market makers to limit the controversial practice of “last look” on their FX platforms.

Bank of England Official Received Emails Relating to Libor Manipulation, Prosecutor Says – Wall Street Journal (subscription)
A senior Bank of England official received emails that were part of an alleged campaign to rig benchmark interest rates, according to evidence presented in a London trial Wednesday. Martin Mallett, who at the time was the chief currencies dealer at the Bank of England, was among a couple dozen recipients of emails sent in 2007 by brokers allegedly working at the behest of former bank trader Tom Hayes.

Will the Fix/Chatroom Issue Fizzle Out? – Profit & Loss (subscription)
Chatting to a friend the other day he asked the question (regarding the Fix/chatroom issue) “do you think this will just fizzle out?” It’s an interesting question because although it seems impossible to see how it can, with all the press and political attention currently on it, I suspect it will.

Forensic Approach Required by Investors Seeking Redress Over FX Manipulation – Euromoney
Benchmark fixing and manipulation has created the potential for a large volume of FX-related litigation, but the claims process is both arduous and expensive.

Data Quality ‘Jeopardising’ Asia OTC Trade Reporting – Asia Risk (subscription)
The smooth implementation of the third phase of Australian and Singaporean trade reporting means firms are now switching their attention to meeting data quality standards – with market participants saying that failure to do so could undermine the whole purpose of monitoring over-the-counter derivatives trading. When Europe introduced trade reporting wholesale on February 12 last year it resulted in widespread chaos and massive backlogs.

Dollar Hits 12-1/2 Year High vs Yen; Euro Rises on Greece Hopes – Reuters
The dollar hit a 12-1/2-year high against the yen on Thursday, as investors bet that US interest rates will rise later this year while monetary policy will remain ultra-loose in Japan. Separately, the single currency was given a boost by tentative signs that cash-strapped Greece may be nearing a deal to secure fresh funding before a loan to the International Monetary Fund falls due on 5 June.

Renminbi Tops Currency Usage Table for China’s Trade with Asia – Financial Times (subscription)
China’s renminbi has become the main currency for payments between China and the rest of the Asia-Pacific region, more than tripling in use over the past three years and outstripping the Japanese yen, the US dollar and the Hong Kong dollar in the process, according to data from the clearing system, Swift.



Regulatory News

FEMR Expected to Propose Equity Market Standards for FICC: Report – Profit & Loss (free story)
The UK’s Fair and Effective Markets Review (FEMR) will reportedly formally propose an industry ban on front-running of client orders in FX in addition to extending the Bank of England’s senior managers regime to hold a broader range of bank and the buy side managers accountable.

Exchanges to Police Position Limits: CFTC – FOW (subscription)
Exchanges could grant exemptions under the Commodity Futures Trading Commission’s new federal position limits regime, according to the US regulator’s chairman Timothy Massad. Speaking at a roundtable in Washington DC on Tuesday, Massad said the regulator was “taking a closer look” at the possibility of giving exchanges responsibility for granting exemptions for certain hedges.



Company News

JP Morgan’s Dimon Expects Bank to Lose Some Business Due to FX Guilty Plea – Wall Street Journal (subscription)
JP Morgan Chief James Dimon said the bank’s recent foreign exchange guilty plea didn’t cripple the bank, but it was a scary outcome that will probably cost it some business.

Frankfurt-Based Renminbi Platform to Launch in Q4 – The Trade
A joint venture between Deutsche Boerse, Shanghai and the China Financial Futures Exchange, the China Europe International Exchange is expected to launch in the final quarter of 2015.



Market Savvy  

Dollar’s Wild Ride Could Be About to Slow
Financial Times
If the dollar and euro, the two biggest reserve currencies, are anything to go by, China should not expect stability. This year the dollar has risen 16% against the euro, fallen 5%, rebounded all the way back up again, plunged 8% and then, in the past seven trading days, jumped 5.8% to Wednesday’s high. These sort of swings are highly unusual.

Russia Currency Splash has Analysts Saying Ruble Rally Tamed
Foreign currency purchases by Russia’s central bank will put a stop to the rouble’s world-beating rally, according to a Bloomberg survey of economists. Buying as much as $200 million a day to replenish reserves will halt gains in the rouble, 19 of 28 economists said. While reserves may swell to $380 billion this year, they’ll stay below the level they were when Russia annexed Crimea last March, a median of 25 estimates showed.

Worries Over FX Wobbles May Linger
Financial Times
Major currency crosses have been pretty twitchy of late. The JP Morgan G7 forex volatility index averaged 7.2 in 2014, near record lows. So far this year, the average is 10.3. Why more worry over wobble?



Industry Events