Market Recovery Gains Steam

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Top Headlines

Market Recovery Gains Steam – The Wall Street Journal (subscription)
A recovery in global markets gained steam Thursday after concerns about slowing growth in China triggered a rout earlier this week.

Fed’s William Dudley Cools Talk of September Liftoff – Financial Times (subscription)
A senior Federal Reserve official has damped expectations that the US central bank would raise interest rates next month, highlighting how turmoil spreading from China to global financial markets is rattling policymakers.

For Emerging Markets, 2015 Isn’t 1997 – Wall Street Journal (subscription)
Echoes of 1997 exist, but financial crisis is less of a risk today than economic stagnation.

Valuing the Superstar Salesperson – Profit & Loss (subscription)
As a result of a conversation had with a hedge fund manager, P&L’s editor Colin Lambert considers whether recent events will have a lasting impact on the FX sales force. He asks what value they received from their sales relationships at the banks. The answer? Not a lot.

‘Smart’ Derivatives Can Cure XVA Headaches – Risk Magazine (subscription)
Many traders would blame regulation or patchy collateralisation for the pricing add-ons that are making the swap market more complex. In fact, argue Massimo Morini and Robert Sams, the problem is outdated technology and the solution can be found in the world of cryptocurrencies.

Investment Banking: Titans Retreat – Financial Times (subscription)
And then there were two. After years of job cuts and reorganisations, most of the world’s biggest investment banks do very little investment banking today. Of the 10 largest global banks only two – Goldman Sachs and Morgan Stanley – still make most of their revenue from their investment banking operations, compared with six before the global financial crisis.

Traders Hunger for Volatility – Australian Financial Review
Faced with a docile market forex traders have been pushed into exploring new opportunities, such as yuan trading.

 

Regulatory News

Bank Regulators Considering Concessions on Key Capital Rule – Bloomberg Wall Street is making headway in a campaign to persuade regulators to soften a key rule that has forced banks to boost capital since the financial crisis. After financial firms complained for about a year that some of the new requirements will make it overly expensive to offer derivatives to clients, regulators planned to discuss possible concessions at a private meeting starting Wednesday.

Leverage Ratio Threat to the Cleared Derivatives Ecosystem – Letters – Financial Times (subscription)
Regarding Thomas M Hoenig’s article “Weakening leverage ratio undermines banks’ accounting” (FT Trading Room, FT.com, August 12): while we respect Mr Hoenig’s views regarding the value of the Basel Committee’s leverage ratio, we believe there are flaws in its application to cleared derivatives.

 

Company News

CME Fines Wolverine Trading $250,000 – Profit & Loss
Wolverine Trading has been fined $250,000 by CME Group for self-matching trades with itself in natural gas, agriculture and FX markets.

Deutsche Bank Libor Traders Said to be Interviewed by SFO – Bloomberg
UK prosecutors have interviewed current and former Deutsche Bank traders in recent weeks as a possible precursor to more charges in the Libor probe.

Ex-Currency Trader Sues HSBC as Unfair Dismissal Suits Grow – Bloomberg
Former HSBC Holdings Plc foreign exchange trader Serge Sarramegna sued the bank after he was dismissed amid a global probe into currency rigging, adding to a host of claims that have emerged from the investigation.

GLEIF Eyes October for LEI Engine Launch – FOW (subscription)
The Global Legal Entity Identifier Foundation (GLEIF) is ramping up development work on its new LEI search engine, with the body planning to launch the new tool in October. The organisation is working on the new search engine, designed to be a powerful tool for any interested party wishing to research LEI­-related data.

European Head of Prime Brokerage Departs JP Morgan Amid Reshuffle – The Trade.
David Clarkson, Europe, Middle East and Africa (EMEA) head of prime brokerage at JP Morgan has left the bank to pursue new opportunities, according to sources familiar with the matter.

Standard Chartered Goes Live on FXSpotStream – Profit & Loss
Standard Chartered Bank has gone live as a liquidity providing bank to FXSpotStream’s aggregation service, making it the 11th bank available for trading to clients connected to FXSpotStream’s API and GUI service.

 

Market Savvy  

Will the Next Recession Be Made in China? – Bloomberg
When the Dow Jones industrial average fell almost 1,100 points soon after the opening bell on 24 August, the world suddenly seemed like a very small place.

Euro as New Haven Moves Opposite to Stocks by Most in a Decade – Bloomberg
The tumble in equity markets in the past week has boosted the euro, confirming its new-found status as a haven asset.

 

Press Releases

FIA, FIA Europe and FIA Asia Announce Merger Plans
The respective boards of FIA, FIA Europe and FIA Asia today announced that they have reached an agreement to formally merge the three associations in the first quarter of 2016.

SimCorp Survey Reveals the Majority of Buy-Side Firms Are Processing Complex Swaps Manually
A recent survey released by SimCorp has revealed that 44% of buy-side asset managers are relying on mostly or completely manual processes for managing complex swaps across the investment lifecycle.

SGX Welcomes Sapien Capital as Derivatives Trading Member
Singapore Exchange (SGX) welcomes UK-based Sapien Capital as the newest trading member in its derivatives market.

 

Industry Events