Investors to Pause FX Litigation Amid US Government Probe – Reuters

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Investors to Pause FX Litigation Amid US Government Probe – Reuters
Lawyers pursuing an antitrust lawsuit by investors accusing 12 major banks of rigging prices in the FX market agreed to put most of the litigation on hold amid a related criminal probe by the US Department of Justice. In a letter filed in Manhattan federal court, the Justice Department said the plaintiffs agreed to a six-month stay, with a few exceptions, on depositions and document exchanges.

ECB Official Says Banks’ Progress on FX “Fixing” Reforms is Slow – Reuters
Banks are only slowly making progress on changes recommended by regulators in how they deal with foreign exchange “fixing” orders, a key part of a global investigation into market manipulation, according to one European Central Bank official.

BOE’s Carney Hints at Multiple Banks’ Involvement in Fraud Probe – Bloomberg
Mark Carney, the governor of the Bank of England, hinted to lawmakers that a probe into money-markets auctions by the UK’s Serious Fraud Office will examine both external traders and central bank officials.

Prepare For Euro-Dollar Parity – and Soon – CNBC
As the euro trades around a 12-year low against the dollar, analysts believe euro-dollar parity will be reached soon – and that the single currency could weaken even further.

No End in Sight for Surging Dollar – Wall Street Journal (subscription)
There is no end in sight for the global forces pushing the dollar higher. The euro is now hurtling down toward parity as the European Central Bank launches its bond-buying program. Meanwhile, economic weakness in other parts of the world – a disappointing batch of January-February data in China and an unexpected decline in UK manufacturing – are underscoring the comparative strength of the US economy.

Aussie Dollar Decline Puts FX Hedging Strategies in the Spotlight – Risk Magazine (subscription)
The rapid slide of the Australian dollar has refocused attention on currency risk by local firms.

Emerging Market Currencies Rocked by Fed Fears – Wall Street Journal (subscription)
The euro and yen are slumping sharply against the dollar, but currencies in some emerging markets are feeling even more strain.

 

 

Regulatory News

US CCPs Dispute Need for FSOC’s Direct Oversight – Profit & Loss
Having another regulatory body directly intervening into risk management and transparency standards for central counterparties is neither necessary nor appropriate, according to four US CCPs.

BoE’s Carney Looks at Global Approach for Revoking Banker Licences – Reuters
British regulators are looking at whether global agreement is possible on revoking licences of bankers who break rules, Bank of England Governor Mark Carney said on Tuesday.

ESMA Publishes Responses Received to Consultation on MiFID II/MiFIR
The consultation is primarily of interest to authorities and firms that are subject to MiFID II and MiFIR – in particular, investment firms, credit institutions performing investment services and activities, data reporting services providers and trading venues.

CFTC’s Giancarlo Explains his Ideas for Changing Swaps Rules – GlobalCapital (subscription)
Swaps regulation needs to be overhauled in the US in order to stop trading flow moving away from trading centres in New York and elsewhere in the US to foreign marketplaces, according to Christopher Giancarlo, Commissioner at the Commodity Futures Trading Commission.

 

 

Company News

Swaps Pioneer Blythe Masters to Lead Virtual-Currency Startup – Bloomberg
Former JP Morgan executive Blythe Masters is heading a cryptocurrency start-up that aims to overhaul the way traded assets are settled and recorded.

CME and JP Morgan Re-Ignite Debate Over CCP Contributions – Profit & Loss
The debate between CME Group and JP Morgan about how much ‘skin in the game’ CCPs need to have continued at FIA Boca yesterday. The dispute erupted last year when JP Morgan published a policy paper in September saying that CCP operators, such as CME, should equal 10% of the guaranty fund size at the clearing house.

SGX Ramps Up US Expansion Plans – FOW Magazine (subscription)
The Singapore Exchange has pledged to expand aggressively into the US and grow its presence in London and Tokyo as part of its plan to boost international trading. Magnus Bocker, the chief executive of SGX who is to step down in June, said the US was the firm’s main focus in terms of regional expansion.

SGX to Add New Asian Currency Futures in Q3 – Profit & Loss
The Singapore Exchange will add new Asian currency futures contracts on the Taiwanese dollar (TWD/USD) and renminbi crosses (SGD/CNH, CNY/SGD and EUR/CNH) in the third quarter of 2015, subject to regulatory approval.

Citadel Shaking Up Swaps Competition – Risk Magazine (subscription)
The Chicago firm has become a top-four market-maker on Sefs – but rivals question whether its prices are sustainable. In the four months since Citadel Securities switched on its pricing algorithms full time, its market-making arm claims to be beating the incumbent banks on price and on speed.

China Turns Up the Heat on ICE – Financial Times (subscription)
Intercontinental Exchange (ICE) was due to launch two commodity futures contracts on its new Singapore exchange this month. They were based on similar contracts already offered by the Zhengzhou Commodity Exchange (ZCE). Not only did ZCE send a “cease and desist” letter to ICE, but the China Securities Regulatory Commission, the country’s securities regulator, got in touch with the Monetary Authority of Singapore to reinforce what a dim view it took of the plans.

 

 

Market Savvy  

Euroglut Here to Stay: Trillions of Outflows to Go
Deutsche Bank
Last year we introduced the Euroglut concept: the idea that the Euro-area’s huge current account surplus reflects a very large pool of excess savings that will have a major impact on global asset prices for the rest of this decade. Combined with ECB quantitative easing and negative rates we argued that this surplus of savings would lead to large-scale capital flight from Europe causing a collapse in the euro and exceptionally depressed global bond yields.

 

 

Press Releases

R.J. O’Brien to Acquire The Kyte Group from GFI Group
R.J. O’Brien Europe will acquire GFI’s subsidiary, The Kyte Group. Terms of the transaction were not disclosed. The UK Financial Conduct Authority has approved the transaction, which is expected to close no later than March 17.

CME Group and TAIFEX Sign Letter of Intent for Greater Collaboration
CME Group and the Taiwan Futures Exchange (TAIFEX) today signed a Letter of Intent regarding the exploration of cross-border collaboration opportunities and models, and to forge greater collaboration between the exchanges.

 

 

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