Top Headlines

Mexico Peso Trades at One-Month High After Presidential Debate – Bloomberg

The Mexican peso traded at a one-month high after Hillary Clinton and Donald Trump exchanged barbs in the second US presidential debate.

Here We Go again: Sterling Drops Below USD 1.24 and Falls Against the Euro – City AM

A bad start to the week for currency traders, as the pound dropped to below USD 1.24 in early trading in London.

Carney Asks BIS Committee to Investigate Pound Flash Crash – Bloomberg

Bank of England Governor Mark Carney has asked the Bank for International Settlements to look into the pound’s sharp drop in trading overnight, which sent the currency to a 31-year low. 

What Next After Sterling Collapse? – Profit & Loss

After Cable’s apparent flash crash, analysts are trying to determine what caused the move and the broader impact that it could have. 

Pound Plummet Blamed on ‘Liquidity Holes’ – Financial Times (subscription)

Sterling’s flash crash was triggered during Asian ‘graveyard shift’ when US/European traders away.

Liquidity Illusion Burns Traders Blindsided by Pound’s Crash – Bloomberg

The inexplicable volatility that roiled the British pound last week came as no surprise to Bank of America, which just days earlier warned that liquidity in the $5.1 trillion-per-day global currency market was far worse than anyone imagined.

The Unhealthy Imbalance Between Man and Machine – Profit & Loss
The time has come to accept that what happened Friday morning in Asia is a mess of our own making; to take our heads out of the sand and at least acknowledge there is a problem with liquidity in FX markets.

Pound’s Pounding Helped UK Absorb Brexit Shock – Wall Street Journal (subscription)

There is a silver lining to the beating sterling has taken in recent days.

Citigroup Denies Trading Too Slowly in Swiss-Franc Rout Suit – Bloomberg

Citigroup denied moving too slowly to close out a client’s trades in a lawsuit linked to the market turmoil that followed the Swiss National Bank’s surprise decision to scrap its currency cap last year.

China’s Yuan Sinks to Six-Year Low, Then Erases Losses – Reuters

China’s yuan fell to its lowest level in six years, breaching a key psychological threshold, before erasing the losses on the first day of trading after a week-long holiday.

No Basis for Long-Term Depreciation of the Yuan – Reuters

There is no basis for long-term depreciation of the Chinese currency, the country’s FX trading platform operator said.

BlueCrest Closes FX Vol Desk? – Profit & Loss

Market sources tell Profit & Loss that systematic hedge fund BlueCrest Capital Management is closing its FX volatility desk.

Modifications Sought in Johnson’s Release – FX Week (subscription)

The defence attorney in the case against HSBC executive Mark Johnson has asked a district court judge to modify his client’s bail conditions so his wife can put up security for the $1 million bond agreed in July to secure his release.

Libor Trader Goes to Court in Bid to Overturn Ban – Telegraph

A former UBS trader is pushing the financial watchdog to reveal the details of its investigation into the bank during the Libor scandal, in a bid to have his ban from the City reversed.

A Short History of Sudden Market Moves – Wall Street Journal (subscription)

Financial markets are no strangers to sudden movements and extreme volatility that at first seem unexplained.

Regulatory News

Central Bank Chief Warns Brexit Will Lead to More Currency Volatility – Irish Independent

The Governor of Ireland’s Central Bank, Philip Lane, has warned of further volatility in financial and currency markets in the wake of last June’s Brexit poll.

As London Loses EU’s Bank Regulator, Sweden Pitches Its Capital – Bloomberg

There are plenty of reasons why the European Banking Authority should move to Stockholm from London, according to Per Bolund, Sweden’s financial markets minister.

Top US Brokers Lose Assets to Mid-Tier – FOW (subscription)

Seven of the ten top US futures brokers saw their clearing units lose business to smaller rivals earlier this year, according to new data from the US Commodity Futures Trading Commission.

Buy-Side Dealers Ready Their Post-Trade Report Cards – Financial News (subscription)

MiFID II will place new trade reporting requirements on fund managers’ dealing desks.

Company News

FXecosystem Expands in Asia – Profit & Loss

FXecosystem has opened its new regional headquarters in Singapore and a point of presence in the Equinix SG1 Singapore data centre.

“FX is Back,” Says FX Strategist Team – Financial Times (subscription)

Foreign-exchange trading hasn’t been the best way to express macro views this year but BofA Merrill Lynch FX strategists say that’s changing.

Rand Bulls See Currency Breaking Five-Year Trend of Declines – Bloomberg

South Africa’s currency may be about to end a pattern of annual declines, according to Informa Global Markets, which analyzes technical trends. 

Market Savvy

Dollar Falls After Weaker-Than-Forecast US Jobs Report – Wall Street Journal (subscription)

The dollar fell Friday after a weaker-than-expected US jobs report, while the British pound pared steep losses after a night of chaotic trading.

Asia FX Up as Clinton Seen Winning; Baht Near Three-Month Low – Reuters

The Thai baht hit a near three-month low after a palace statement said the 88-year-old King Bhumibol Adulyadej’s health was unstable.

Australian Dollar Enjoys Further Positive Momentum Against the Pound, but Move Lower Could Soon Wane – Pound Sterling Live

Momentum favours the Australian Dollar at present with some latent selling pressure extending from last Friday’s flash crash into the new week.