Top Headlines

JP Morgan Hopes to Finish Justice Dept FX Deal In Weeks – Law360
JP Morgan hopes to complete a settlement with the US Department of Justice over alleged manipulation of the foreign exchange market in “the coming weeks,” the bank’s chief financial officer said Tuesday.

Report: Currency Hedging May Actually Increase Risk Exposure – Profit & Loss (free story)
Investment management firm GMO has issued a white paper warning US investors that currency hedging a foreign equity investment may actually increase the risk of that investment.

IMF to ‘Closely’ Examine Currency Swings – The Business Times
Top finance officials from the world’s leading economies are keeping a close eye on exchange rate swings and will discuss developments in China’s currency at talks in Washington this week, a German government source said.

Yuan Forecasts Rebounding Amid Push for Reserve Currency Status – Bloomberg
Analysts are raising yuan forecasts for the first time since September as China’s push for reserve currency status at the International Monetary Fund damps concern depreciation will be used to revive the economy.

Euro Tumbles as ECB’s Draghi Seen Sticking to Bond-Buying Plan – Bloomberg
The euro fell against the dollar before European Central Bank President Mario Draghi presents a review of the institution’s 1.1 trillion-euro asset-buying plan that aims to revive the region’s economy and stoke inflation.

Sterling Dips vs Dollar, All Eyes On Polls – Reuters
Sterling fell a third of a percent against a broadly stronger dollar on Wednesday, but was around 2 cents above 5-year lows hit earlier this week as questions continue about the impact of elections next month.

Turkish Lira Entering ‘Free Fall Territory’ – Financial Times (subscription)
The Turkish lira has hit yet another new low, despite the country’s central bank saying that it is considering further interventions to calm markets, leading to warnings that the currency is now entering “free fall territory”.



Regulatory News

CFTC Commissioner Calls for New Retail FX Regulations – Profit & Loss (free story)
Commissioner Sharon Bowen, of the US Commodity Futures Trading Commission, has once again called for the regulator to establish stricter rules for the retail FX swaps industry.

Asia Set for Smooth Reporting Switch: DTCC – FOW Magazine (subscription)
Asian markets are making a more orderly transition to new derivatives reporting regimes than their European peers, according to global trade repository the Depository Trust & Clearing Corporation (DTCC). Peter Tierney, regional head Asia – DTCC Deriv/SERV, told FOW the lessons learned from the implementation of the European Market Infrastructure Regulation have aided Asian regulators as trading firms move to their respective new derivatives reporting regimes.

Finance Industry Should Fund Swaps Oversight, CFTC’s Bowen Says – Bloomberg
Wall Street banks and other financial firms should pay new fees to bankroll their own government oversight, according to a member of the top US derivatives regulator.

Singapore Regulator Denies Currency Intervention Claims – Profit & Loss (free story)
The Monetary Authority of Singapore has refuted recent reports that it is intervening heavily to support Singapore’s currency, stating that these moves were instead due to “currency translation effects” and a transfer of FX swaps to the government.



Company News

JP Morgan’s Profits Boosted By Market Volatility – The Telegraph
The return of market volatility – as central banks around the world devalue currencies and fight inflation – has reaped dividends for America’s biggest bank. JP Morgan reported a 12% rise in first-quarter profit on Tuesday as revenues from bond and currency trading staged a comeback.

Saxo Shores Up Capital Base Three Months After Swiss Franc Shock – Reuters
Denmark’s Saxo Bank said it was expanding its capital base by issuing Tier-2 capital and fresh equity three months after it was left facing millions in losses when the Swiss National Bank removed its cap on the franc.

DTCC Finalises $400 Million Equity Capital Raising – Financial Times (subscription)
The Depository Trust and Clearing Corporation, one of the world’s largest clearing and settlement houses, is finalising a $400 million equity capital raising from its user-shareholders so it can meet tougher new regulations for market risk managers.



Market Savvy  

FX Survey and SEK Outlook: “Riksbank Krona Message Noted!”
Our survey of leading SEK trading corporates and institutions suggests that while the market regards the Riksbank as a very krona hostile central bank, it has adapted itself to the situation. Market SEK-positioning remains short with 90% of respondents expecting further easing from the Swedish central bank and FX interventions if EUR/SEK breaches 9.00 near-term. Our conclusion is therefore that unless the Riksbank acts on these elevated and dovish expectations, it is all but certain the krona will appreciate testing the patience of a central bank already stressed by the challenge of defending its inflation target.



Press Releases

JSE and Eris Exchange Announce Swap Futures Licensing Partnership
The Johannesburg Stock Exchange (JSE) has signed a multi-year licensing agreement with Eris Exchange, a US-based futures exchange group, to list swap futures on the South African Exchange. JSE will launch interest rate, cross-currency and credit default swap futures based on the Eris Methodology.

ICE Benchmark Administration Launches Consultation for LBMA Gold Price
Intercontinental Exchange has announced that ICE Benchmark Administration is launching a market consultation on three aspects of the LBMA Gold Price auction process.



Industry Events