Top Headlines

In FX, Clients Are Looking More Like Regulators – Euromoney

The absence of a regulatory imperative has not deterred FX traders from increasing their use of transaction cost analysis tools, in turn increasing the pressure on brokers at a time when margins are already thin.

CLS Volumes Reflect April Slowdown – Profit & Loss

The average daily volume of FX trades submitted to CLS in April was $1.63 trillion, down 12.5% from the $1.86 trillion reported in March 2019.

China is Armed with Powerful Market Weapons in Duel With Trump – Bloomberg (subscription)

China has a powerful financial-market arsenal for its trade tussle with America, including a hoard of Treasuries and its currency. But using those weapons is not without cost.

US to Vet More Trading Partners for Currency Manipulation – Bloomberg (subscription)

The Trump administration will expand the number of countries it scrutinizes for currency manipulation in an upcoming report. Vietnam may be named a manipulator outright for artificially holding down the value of the dong.

Regulatory News

Warning on Brexit Fragmentation – MarketsMedia

Market participants warned about the UK’s departure from the European Union leading to the fragmentation of both trading liquidity and regulatory data.

CFTC Seeks 12% Budget Increase in FY 2020 – FOW (subscription)

The bulk of the increase will fund the relocation of three regional offices.

Australian Regulators Urge Action on LIBOR Transition – Regulation Asia

The Australian Securities and Investments Commission has written to the CEOs of major financial institutions asking them to explain their preparations for the end LIBOR and related transition plans.

Crypto News

SocGen Introduces Crypto to a $2 Trillion Market – Bloomberg (subscription)

A bond market as old as capitalism itself has emerged as the latest proving ground for cryptocurrencies. A unit of Societe Generale sold 100 million euros of covered bonds in the form of digital tokens with the French bank as the only buyer. The idea of the pilot issue conceived by what the bank called an internal startup was to test how the technology behind virtual currencies can be used to cut costs and speed settlement for the securities.

Ethereum Co-Founder Says Tether, Bitfinex Mess Won’t Get Better – Bloomberg (subscription)

The turmoil surrounding Tether and Bitfinex, both of which are ensnared by allegations of wrongdoing, isn’t likely to subside, said Joseph Lubin, a co-founder of Ethereum and founder of crypto-related software company ConsenSys.

Beleaguered Bitfinex Says its Crypto Exchange Turns 97% Profit – Bloomberg (subscription)

Bitfinex is giving potential investors a peek into just how lucrative it can be to operate a cryptocurrency exchange. The controversial digital asset trading platform disclosed in a so-called white paper that IFinex, the company’s closely held parent, had a net profit of $404 million last year.

Blockchain Investments Survive the Crypto Winter – WatersTechnology (subscription)

Bitcoin may have fallen from grace in the eyes of investors, but blockchain’s bull run shows little sign of slowing down.

Company News

Former Deutsche FX Salesman Becomes CEO at Blockchain Bank – Financial News (subscription)

Kenan Altunis, who co-led Deutsche Bank’s institutional clients group until his departure in May 2018, is now running a new bank for fintech and cryptocurrency start-ups.

TraderTools to Allow Banks to White-Label Forwards and Swaps – FX Week (subscription)

TraderTools is broadening its foreign exchange forwards and swaps offering so regional banks can white-label the products and increase market access to their customers.

ICAP Information Releases New Data Sets – MarketsMedia

ICAP Information, part of TP ICAP, the world’s largest interdealer broker, has launched two new data sets, covering EURO interest rate options and global inflation. By making this data commercially available for the first time TP ICAP aims to provide market participants with greater transparency in a traditionally opaque asset class.

Market Savvy

Fed’s Next Move Will Be Rate Cut, More Economists Say – The Wall Street Journal (subscription)

Economists are increasingly saying the Federal Reserve’s cycle of interest rate increases is over – and that its next move will be a cut.

Sterling Little Moved By GDP Pick-Up as Brexit Concerns Weigh – Reuters

The British pound was little changed on Friday even after data showed the UK economy got a boost ahead of a Brexit that never came, with traders doubtful Prime Minister Theresa May can reach a deal with the opposition on how to leave the European Union.

Euro Poised for Second Week of Gains as China-US Trade Talks Eyed – Reuters

The euro edged higher on Friday and is poised for a second consecutive week of gains on growing fears that any escalation in the trade conflict between the US and China would force US policymakers to cut interest rates.

EM Currency Falls Bring Big Opportunities for Investors – Financial Times (subscription)

Last year saw trouble for two heavy-hitters. First, Turkey’s lira fell sharply as a credit-fuelled construction bubble turned to bust, then Argentina’s peso collapsed amid excessive foreign debt and soaring inflation. While it may sound counterintuitive, any sensible EM investor will now be concentrating efforts on building exposure to these two countries. The question is which one to prefer.