Top Headlines

Not Just Brexit – EU Frets Next Crisis May Come from Money Managers, Clearing – Reuters

Changes in global financial rules and investment strategies have seen the emergence of new giants in global financial markets in recent years, among them clearing houses like London-based LCH and asset managers such as Blackrock. EU officials warn the swelling of their books has not coincided with a proportionate tightening of their oversight, however, meaning the potential risks they pose to financial stability are growing.

Brexit Fear Drives Futures Trades Out of London – (subscription)

As fears of a hard Brexit have grown, UK financial firms have transferred thousands of client futures positions to EU27 affiliates, assisted by a shortcut launched by the Futures Industry Association in September.

The Future of Clearing – Oliver Wyman and World Federation of Exchanges

Oliver Wyman’s joint report with the World Federation of Exchanges looks at the future of clearing. It finds that despite increasing transparency and stability of financial markets since the financial crisis, there is still work to be done for supervisors, CCPs and clearing members to maintain a robust financial markets ecosystem.

Regulatory News

Brexit: May to Meet Corbyn to Tackle Deadlock – BBC News

Theresa May will meet Jeremy Corbyn later to see whether there is common ground to break the Brexit deadlock.

FSB Says Fallbacks Should Kick in if Libor No Longer Accurate – (subscription)

Regulators have publicly called on the International Swaps and Derivatives Association to consider adding another trigger to Libor-based derivatives contracts that would automatically switch them on to an alternative reference rate: namely, in the event Libor is deemed no longer representative of underlying funding markets.

ESMA Updates its Q&As on MiFID II and MiFIR Transparency Topics – EU News

The European Securities and Markets Authority (ESMA) has updated its Questions and Answers regarding market structures and transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

EU Watchdog Told to Step Up Work on Share Price Tool to Tackle Market Fragmentation – Reuters

The European Union’s financial services chief has told regulators to prioritise work on a consolidated tape to collect share prices for investors to find the cheapest deals.

Crypto News

Bitcoin Hits Fresh 2019 High as Sudden Rally Shows Staying Power – Bloomberg

The biggest virtual currency climbed to a fresh 2019 high on Wednesday, building on a spike yesterday that many market participants struggled to explain. Rivals coins including Bitcoin Cash and Ether also advanced.

Amid Bitcoin Uncertainty, ‘The Smart Money Knows That Crypto is Not Ready’ – The New York Times

Some cryptocurrency enthusiasts had hoped that the entrance of Wall Street institutions would give them legitimacy with traditional investors. But their struggles –  and waning interest – illustrate the difficulty in bringing Bitcoin from the fringes of the internet into the mainstream financial world. Closes Funding Round Valuing Crypto Firm at ‘Over $1 Billion’ – CoinDesk

Crypto trading platform has been backed by Bitmain and IDG Capital in a funding round that, it says, makes it the latest crypto unicorn.

QuadrigaCX Crypto Exchange Could Soon Be Placed in Bankruptcy – CoinDesk

Ernst and Young, the court-appointed monitor for collapsed Canadian crypto exchange QuadrigaCX, has proposed transitioning the company from a restructuring process to bankruptcy proceedings.

Company News

Vela Expands DMA Platform to Asia with JPX – The Trade

Co-locating with access to JPX markets will allow Vela to offer low latency order routing and market data to Osaka Exchange, with one tier one bank among the first batch of clients at the co-location space.

Cafe to Join BNY Mellon – Profit & Loss

BNY Mellon has hired Joseph Cafe as VP, e-FX sales, in New York.

ASX Deploys Quantitative Brokers Algos and TCA to Derivatives Market – The Trade

Quantitative Brokers will provide its full suite of agency algorithms to clients trading on ASX. The algos are based on quantitative research, and engineered to address market microstructure features of the ASX futures markets to reduce slippage and streamline workflows.

Market Savvy

Sterling Gains on Soft Brexit Speculation – Reuters

Sterling held near the day’s highs on Wednesday as traders interpreted Prime Minister Theresa May’s announcement of cross-party talks with the opposition Labour party as a sign Britain could end up with close ties to the European Union after Brexit.

Trade Talk Optimism Fuels Gains in Aussie, Yuan – Reuters

Australia’s dollar and the Chinese yuan gained on Wednesday on hopes for an agreement between Beijing and Washington to end their trade conflict.

Mauricio Macri’s ‘Whatever it Takes’ Move Fails to Stem Peso Slide – Financial Times

The fate of Argentina’s pro-market president Mauricio Macri is riding on whether or not the central bank can pull off a difficult trick: stave off steep falls in the peso while stifling record levels of inflation.