Top Headlines
Industry Bodies Must Step Up to Fight FX Industry’s Corner – Profit & Loss (subscription)
In this column on June 7 2018 I wrote that the time had come for someone to show industry leadership when it comes to arguing the foreign exchange industry’s corner specifically around pre-hedging and Mark Johnson’s pending appeal. This week it has been revealed that ACI – The Financial Markets Association is to draft a response to Mark Johnson’s defence team’s call for Amicus Briefs – independent expert submissions – to support his appeal. I understand that other Briefs are also being written for submission; however, they are not from associations. I cannot stress enough how important it is for the associations that represent so many of their members contribute to this case.
Q&A With Bruno Langfritz – ACIFMA to Deliver Amicus Brief in Johnson Trial – Profit & Loss
We have been monitoring this case in our Working Groups and noted the call by the defence team with regard to an Amicus Brief. Accordingly we have asked to see some further evidential materials and are looking to draft a response. This response will be sent out in my name.
Bogucki’s Defence Fights for Dismissal Again – FX Week (subscription)
A foreign exchange specialist at Hewlett-Packard who told US prosecutors that he never trusts banks admitted to intentionally “bluffing” to get better pricing from Barclays, while negotiating a £6 billion options trade in 2011 with the bank and Robert Bogucki, its former head of FX trading in New York.
FX: Machine Learning Use Grows, But Lags in HFT – Euromoney
Machine learning has gained influence in FX in the last year, although many observers doubt whether the technology has completely mastered the demands of high frequency trading.
Platform Volumes Dip in July, Remain Strong YoY – Profit & Loss
The first group of FX platforms to report average daily volume indicate that activity slowed in July from June, although it remains strong on a year-on-year basis.
Regulatory News
Q&A: EU’s Hübner on Brexit and Future of Equivalence – Risk.net (subscription)
Top EU lawmaker discusses improvements to equivalence, contract continuity and clearing relocation.
Record’s Wood-Collins: More Disclosures Needed – FX Week (subscription)
Despite the proliferation of disclosure documents about foreign exchange practices, more transparency is needed regarding embedded costs and mark-ups, while the buy side needs to do more work around best execution, the chief executive of Record Currency Management says.
The SEC’s Hester Peirce Isn’t a Bitcoin Champion, Just a Regulatory Realist – CoinDesk
Regulators like the Securities and Exchange Commission shouldn’t be acting as gatekeepers to new technologies like bitcoin, according to Commissioner Hester Peirce.
Foreign Exchange Bureau Welcomes a New Deputy Director – Asia Times
Xuan Changneng, assistant to the chairman of the China Securities Regulatory Commission, has been promoted to deputy director of State Administration of Foreign Exchange.
Crypto News
Investment Banks Set to Soften Stance on Crypto – The Trade Crypto
Cryptocurrency is increasingly being tipped for adoption in the institutional financial markets and infrastructure is being readied for some of the biggest players to enter.
AlphaBot Adds Performance Data for Cryptocurrencies – Profit & Loss
AlphaBot has added performance data and analysis tools enabling investors to compare, portfolio build and compile reports on more than 1,600 cryptocurrencies and tokens.
Bitcoin’s Use in Commerce Keeps Falling Even as Volatility Eases – Bloomberg
Who’s using Bitcoin to buy and sell goods and services? A lot fewer people than you probably would have guessed. After peaking at $411 million in September, the amount of money the largest 17 crypto merchant-processing services received in the best-known cryptocurrency has been on a steady decline.
Crypto Markets Dump $15 Billion in 18 Hours – News BTC
Markets have dumped overnight and the selloff has continued leaving crypto land in a sea of red this morning. Roughly $12 billion has been shed from cryptocurrencies on the day as total market capitalization plummets back to just over $270 billion.
Jamie Selway Joins Blockchain to Beef Up Institutional Business – Financial Times (subscription)
James “Jamie” Selway, a well-known figure in the US equity market, will join Blockchain, a cryptocurrency wallet provider, as part of its plan to move into trading and custodial platforms for digital currencies and securities.
Silvio Schembri Explains How Malta Has Become The World’s Blockchain Island – Forbes
Malta, the tiny European island situated in the central Mediterranean Sea between Sicily and the North African coast, has become a leading innovator in the blockchain, cryptocurrency and DLT space. On July 4, the Maltese Parliament passed three bills into law, establishing the first regulatory framework for blockchain, cryptocurrency and DLT.
Company News
CLS Adds Japanese Funds to Settlement Service – Profit & Loss
CLS has announced today that the first Japanese-domiciled funds have access to CLS Settlement as third-party clients.
ICE to launch SOFR futures on Oct 1 – Global Investor (subscription)
One and Three Month SOFR futures will be available for trading on ICE Futures Europe from October 1.
Blackstone executive Martin Brand describes some of the areas where it plans to invest once Thomson Reuters’ Financial & Risk unit is spun off later this year.
LSEG’s chief financial officer says swaps clearing will never be about one currency as LCH remains the global leader.
ICE Plans Futures on Euro, Swiss Franc “Risk-Free” Benchmarks – Reuters
The Intercontinental Exchange has said it will offer futures contracts based on the euro zone’s new “risk free” interest rate benchmark – once the market agrees on one.
Market Savvy
Dollar Rallies on Renewed Trade War Worries and Upbeat Fed – Reuters
The dollar rallied on Thursday as the Federal Reserve’s upbeat assessment of the economy combined with a flare-up in the trade tensions between the United States and China to boost demand for the US currency.
- Fed Leaves Key Rate Unchanged With Economy Growing at ‘Strong Rate’ – Bloomberg
- Fed Holds Interest Rates Steady but, Defying Trump, Signals Increases to Come – The New York Times
China’s Yuan Weakens on Renewed Sino-US Trade Tensions, Despite Firmer Fixing – Reuters
China’s yuan eased against the US dollar on Thursday despite a firmer official midpoint, pulled down amid the latest escalation in Sino-US trade tensions.
- China’s Yuan Skids While Global Equities Bourses Decline – Financial Times (subscription)
- China’s Currency Slide Risks a Horrible Misunderstanding With Trump – The Telegraph (subscription)
Sterling Hits Nine-Day Low as Markets Look Beyond Expected BoE Rate Hike – Reuters
The pound fell on Thursday before a widely anticipated interest rate increase by the Bank of England, as investors bet that no further hikes were likely before Britain leaves the EU in March.
Most Asian Currencies Down After Trump’s Latest Salvo on Tariffs – Reuters
Most Asian currencies weakened against the dollar on Thursday as US President Donald Trump raised the stakes in the trade dispute with Beijing with a threat to slap even higher tariffs on Chinese imports.
Turkish Lira Drops to All-Time Low After US Imposes Sanctions – MarketWatch
The Turkish lira slid to a record low Wednesday after the White House announced it would sanction the country over the detention of a US pastor, dealing a fresh blow to what has been one of this year’s worst-performing currencies.
India’s Central Bank Flags Currency Wars as It Hikes Rates – Bloomberg
India’s central bank governor raised the prospect of global currency wars as he led policymakers in raising interest rates to the highest in two years to shore up the rupee and tackle inflation pressures in the world’s fastest-growing major economy.