Top Headlines

Is the Johnson Appeal Raising the Stakes for the FX Market? – Profit & Loss

Written testimony has been lodged relating to former HSBC FX trading head Mark Johnson’s appeal against his conviction for wire fraud in the US and it contains a few surprises – some of which may indicate stronger implications for the FX industry than the original trial.

FX Options Skews: A Complicated Story – Profit & Loss

A new research note from CME Group looks at whether FX options skews can be used to predict where certain currencies will move relative to the US dollar.

May Agrees Revised Brexit Deal with Juncker – Financial Times

Theresa May has agreed a revised Brexit deal in last-ditch talks with European Commission President Jean-Claude Juncker, as she seeks to avoid a crushing Commons defeat.

Bank by Bank, Here’s Where You Can Expect to Work after Brexit – eFinancialCareers

What will happen to your London banking job when and if Brexit takes place? City thinktank New Financial has issued a report summarising the current state of play.

Nearly 5,000 Bankers in EU Earn More than $1 Million a Year: Watchdog – Reuters

The number of bankers in the European Union paid over a million euros ($1.1 million) a year rose in 2017 to nearly 5,000, even after regulators capped bonuses.

Regulatory News

Regulators Turn to Artificial Intelligence for Market Surveillance Challenges – The Trade

Regulators and policymakers exploring AI for market surveillance face their own challenges around unstructured data use and retaining relevant talent.

London’s Finance Industry Has Decided: Brexit Is Already a Reality – The Wall Street Journal (subscription)

Parliament votes Tuesday to ease UK’s exit from the EU, but some in the financial industry haven’t waited to forge their own path.—

Firms Fear Mifid-Style Reporting Crunch for Brexit Day One – (subscription)

There is too little time left to prepare reporting systems fully for amendments to financial market transparency requirements if the UK leaves the European Union without a deal on March 29, the industry fears.

The Brexit Threat to London’s World-Class Legal Business – Bloomberg

London’s lawyers have thrived on the back of the City. But their primacy may come under threat in areas like the $742 trillion derivatives market.

US Financial Transaction Tax Would Put Unfair Burden on Savers – Financial Times

Along with touting proposals for wealth and income taxes aimed at the affluent, some Democrats on Capitol Hill last week unveiled a bill to impose a financial transaction tax. This particular revenue raiser, beloved by leftists in Europe, would levy a 0.1 per cent tax every time a share, bond or derivative changes hands.

Banks Increasingly Focused on Conduct Risk: FSB – Regulation Asia (subscription)

At an FSB workshop on compensation practices, banks reported an increased focus on conduct risk, management accountability and culture reform.

Trump’s Push to Ease Wall Street Rules Hindered by Missteps – Bloomberg

President Donald Trump has repeatedly vowed to loosen Wall Street’s leash, but some of regulators’ most meaningful efforts to revamp post-crisis constraints on big banks are running into problems.

Crypto News

Deutsche Boerse Steps into the Digital Asset World with Full Ecosystem Plans – The Trade

German exchange group has partnered with Swisscom and FinTech company Sygnum to build a regulatory compliant financial market infrastructure for digital assets.

Cryptocurrency Exchanges Tap Traditional Firms for Market Surveillance – WatersTechnology (subscription)

Digital currency exchanges are using established market surveillance services in a move that steps closer to institutional-level infrastructure.

Crypto Pushes Operations into Uncharted Waters – Traders Magazine

Digital assets may be the hottest asset class in decades with approximately $10.2 billion of them currently under management, but the buy-side middle and back offices find it difficult supporting the novel assets.

Company News

LCH Expands Non-Deliverable Interest Rate Swaps Offering – LCH

LCH has expanded its non-deliverable interest rate swaps offering to include five additional currencies. Market participants are now able to clear this product denominated in Brazilian real, Chilean peso, Colombian peso, Taiwan dollar and Thai baht.

Cboe Europe Gains Approval for Dutch Trading Venue – The Trade

Cboe will operate a multilateral trading facility (MTF) and approved publication arrangement (APA) from Amsterdam as the UK’s departure from the European Union grows closer.

Macquarie Expands Macro Strategy, FX Team – Global Investor (subscription)

Macquarie has hired FX experts Trang Le in Hong Kong and Eimear Daly in London.

Market Savvy

Sterling Overnight Volatility at Highest Since June 2016 – Reuters

Sterling implied volatility rose sharply on Tuesday as lawmakers prepared to vote on a divorce deal after Prime Minister Theresa May won last-minute assurances from the European Union.

Dollar Falls as Brexit Hopes Boost Investor Demand for Riskier FX – Reuters

The dollar fell on Tuesday after an apparent breakthrough in Brexit negotiations between the European Union and Britain encouraged buying of riskier currencies.

Morgan Stanley Says Market Overpricing Goldilocks Scenario – Bloomberg

It’s possible that global economic growth will stabilize while inflationary pressure remains absent and the top central banks stay on hold for the next 24 months. But that scenario is being overpriced by the markets, according to Morgan Stanley.