Top Headlines

No Brexit More Likely Than a Disorderly One: Economists – Reuters

The chances that Brexit will be cancelled are now greater than the chances Britain will leave the European Union without a deal, according to economists in a Reuters poll, who again pushed back their expectations for when the Bank of England will raise interest rates.


The UK Teeters on the Verge of a Brexit Breakdown –  Financial Times (subscription)

UK Manufacturing Chief Sees ‘No Good News’ in Brexit Extension –  Bloomberg

US, China Set Tentative Timeline for Next Round of Trade Talks – Wall Street Journal (subscription)

The US and China are planning two rounds of face-to-face meetings as they seek to wrap up a trade deal, with negotiators aiming for a signing ceremony in late May or early June, according to people familiar with the situation.

Trump Team Readies PR Offensive on North America Trade Deal’s Economic Effects – Reuters

Fed’s Policy Stance Will be Favourable for China’s Capital Flows – FX Regulator – Reuters

China’s foreign exchange regulator said on Thursday the U.S. Federal Reserve’s policy stance will be favourable for the nation’s capital flows, and expected the cross-border capital flows to remain steady despite some uncertainties.

Bondholders Take on Forex Risk as Hedging Costs Soar – Financial Times (subscription)

The soaring cost of buying protection against dollar gyrations is spurring more foreign investors to buy US bonds “unhedged”, raising the risk of painful losses and wider market ructions if the US currency weakens.

Turkey Props Up Reserves with Billions of Dollars in Short-Term Borrowing – Financial Times (subscription)

Turkey’s central bank has bolstered its foreign currency reserves with billions of dollars of short-term borrowed money, raising fears among analysts and investors that the country is overstating its ability to defend itself in a fresh lira crisis.

US Trade Deficit Hits Eight-Month Low on Weak Chinese Imports – Reuters

The U.S. trade deficit fell to an eight-month low in February as imports from China plunged, temporarily providing a boost to President Donald Trump’s “America First” agenda and economic growth in the first quarter.

Offshore Yuan Turnover Rises in London – Reuters

Daily turnover in the Chinese currency in London rose by nearly half in the last three months of 2018 compared with the same period in 2017, topping 76 billion yuan (£8.72 billion), a report by the City of London Corporation showed on Wednesday.

The Challenge of Fragmented Liquidity (Opinion) – Profit & Loss

If we get further fragmentation, or more specifically a dilution of liquidity away from primary venues, then FX will have to ask itself, as the swaps market inevitably will, how far does it want to push for efficiency at the risk of weakening market functioning?

Regulatory News

Citi’s Trader Firings Reflect Tougher Regulators – Euromoney
Citi’s decision to sack eight Hong Kong traders, for being a principal in trades while saying it was only an agent, should be seen in the context of greater strength among Asia-Pacific regulators.

Libor Deal Distribution ‘Problematic At Best,’ NY Judge Says – Law360 (subscription)

A plan to distribute a $30 million settlement struck to end allegations of Libor rate rigging against JP Morgan and Bank of America leaves questions unanswered and seems “problematic at best.”

Russia Central Bank Does Not Rule Out Raising FX Requirements For Banks – Reuters

Russia’s central bank does not rule out the possibility of raising reserve requirements for banks’ foreign currency deposits, First Deputy Governor Ksenia Yudayeva said on Thursday.

Regulator Calls for Law Change to End Big Four Dominance of UK Auditing – Financial Times (subscription)

The UK’s competition watchdog called on Thursday for rapid legislation to end the dominance of the Big Four accounting firms and address problems of poor working practices and conflicts of interest in the scandal-hit audit sector.

FCA Must Adapt to Changing Technology to Regulate City – Guardian

The main City regulator fears being left behind by a new wave of technological innovation that could increase the risk of financial firms making bad decisions and going bust, according to its latest business plan.

Crypto News

Do Cryptocurrencies Still Have a Role to Play in the Portfolio? – Profit & Loss

At the Forex Network New York event, Galen Stops, editor of Profit & Loss, sat down with Rob Catalanello, CEO of B2C2 USA, to talk about whether the case for including cryptocurrencies in an investment portfolio is as strong as ever.

Big Corporates Back Crypto ‘Plumbing’ Despite Currency Caution – Reuters

Major finance and tech firms are pouring money into startups building technology to develop the crypto market, even though they’re steering clear of the volatile currencies themselves.

Coinbase Expands Crypto-to-Crypto Services to 11 More Countries – Coin Telegraph

Major American cryptocurrency exchange and wallet provider Coinbase has expanded its crypto-to-crypto trading to more countries

Crypto Faithful Say Blockchain Can Remake Market Machinery – Wall Street Journal (subscription)

The brutal bitcoin selloff continues. But cryptocurrency supporters are plugging away with plans to use its underlying blockchain technology to reshape Wall Street’s machinery.

Company News

Asset Managers Strive to Cut Out Banks From Forex Dealing –  Financial Times (subscription)

Big investors are growing increasingly concerned that banks are able to decipher their trading patterns, and profit from the information, prompting a hunt for new ways to get deals done.

Santander and Credit Agricole to Create $3.78 Trillion Custodial Bank – Wall Street Journal (subscription)

Spain’s Banco Santander SA and France’s Credit Agricole SA are to combine their custody and asset-servicing operations, creating a €3.34 trillion ($3.78 trillion) custodian business with more scale to compete.

JPMorgan Shuffles Roles at Top – Wall Street Journal (subscription)

JPMorgan Chase & Co. put two women with decades of experience at the bank at the top of the list to one day succeed James Dimon as chief executive.

Morgan Stanley Boss Fears Return of Market Turmoil – Financial Times (subscription)

Morgan Stanley’s chief executive has warned that banks could soon be revisited by the market turmoil that crushed trading profits late last year despite his bank topping quarterly earnings forecasts and reporting a robust start to April.

Wall Street Banks Under Pressure to Make Deeper Cost Cuts – Reuters

Top US banks must make deeper cost cuts to drive earnings growth, with revenue expected to remain under pressure for the foreseeable future, analysts said.

Market Savvy

Currency Traders Should Get Ready for Big Move in the Dollar – Bloomberg

Currency traders should brace for a large move in the dollar, if past periods of low volatility are a guide.

Currency Markets Are So Sleepy That HSBC Is Out of New Ideas – Bloomberg

Foreign-exchange markets are so quiet that HSBC’s strategists are drawing a blank.

Fed May Need to Buy More Bonds Than Before Crisis to Manage US Rates: Official – Reuters

The Federal Reserve may need to buy more government bonds than it did before the 2008 financial crisis and conduct other money-market operations to implement its current approach to managing US interest rates, an official of the New York Fed said on Wednesday.

Euro Knocked After Weak Economic Data – Financial Times (subscription)

The euro took a knock on Thursday after further insight into the currency area’s struggling economy from weaker than expected data from Germany and France.

China Sees Brighter Outlook for Yuan and Foreign Investment as US-China Trade War Deal Nears – South China Morning Post

The odds of capital exodus from China and of a slide in the value of the yuan exchange rate have diminished thanks to China’s steady domestic growth, progress in trade talks with the United States and the decision by the US Federal Reserve to halt its interest rate increases, China’s foreign exchange regulator said on Thursday.

Lira Weakens on Renewed Worries Over Turkey’s Reserves – Reuters

The Turkish lira weakened as much as 2 percent on Thursday as concerns about the central bank’s foreign-currency reserves resurfaced and wiped out gains from a day earlier, when Turkey’s main opposition candidate took office as Istanbul mayor.

Japan’s Consumption Tax Hike Could Be Delayed Again – Japan Times

A close aide to Prime Minister Shinzo Abe on Thursday hinted at the possibility that the planned consumption tax hike to 10 percent from 8 percent in October could be delayed, depending on a key economic indicator to be released for June.