Top Headlines

NY Bank Regulator Says Currency Probe Could Last Months – Bloomberg
New York bank regulator Benjamin Lawsky indicated he won’t block Barclays from settling a probe into its foreign currency trading operations by the US Justice Department provided the bank agrees to cooperate with a probe of his own that could stretch for months afterward.

EC Calls for More Time to Vet Foreign CCP Oversight – Risk Magazine (subscription)
The European Commission has run out of time to vet the supervisory regimes for almost 40 clearing houses in 14 jurisdictions, and is calling for the existing June 15 deadline to be pushed back by a further six months – the third time it would have been extended. The postponement would give more breathing space to CME Group, which has yet to be approved by the EC.

Sterling Retakes $1.50 after BoE Minutes – Financial Times (subscription)
The pound moved higher on Wednesday as investors pointed to hawkish signs within the minutes from the Bank of England’s April monetary policy committee (MPC) meeting. The MPC voted unanimously to keep interest rates on hold at historic lows, with two members saying their decision was “finely balanced.”

Why Are These FX Brokers Offering So Much Leverage? – Euromoney
While EU regulators debate the merits of introducing a leverage cap, one online broker offering extreme levels of leverage makes a case for the defence.

Ex-Currency Chief Sees Bank of Japan Exit Nightmare on Debt Pile – Bloomberg
Japanese government debt twice the size of the economy will make exiting stimulus a nightmare for central bank Governor Haruhiko Kuroda, according to the nation’s former top currency official.

Why Turkey’s Central Bank Isn’t Rattled by Worst Currency Slump – Bloomberg
This year’s worst-performing emerging-market currency isn’t as weak as it first appears. Even after the lira fell to repeated records this month, once inflation is taken into account, it’s still stronger than it was in January 2014 when its runaway decline forced the central bank to more than double its benchmark interest rate at an emergency meeting.



Regulatory News

ESMA is Seeking Information on New Developments in Virtual Currency Investment (press release)
The European Securities and Markets Authority (ESMA) is seeking information and views from stakeholders on new developments in how virtual currency technology is used to issue, buy and sell and record ownership of securities. ESMA is interested in how different virtual currencies and associated blockchain, or distributed ledger, can be used in investments and to what extent the use of the blockchain could enter the financial mainstream.

No Evidence of Monetary Policy Leak: RBA Minutes – Profit & Loss (free story)
The Reserve Bank of Australia (RBA) has found no evidence that the outcome of its monetary policy meetings in February and March were leaked ahead of official announcements, in spite of sharp movements in the Australian dollar just seconds before the decisions.

CFTC Charges UK Resident Navinder Singh Sarao and His Company Nav Sarao Futures Limited with Price Manipulation and Spoofing (press release)
The US Commodity Futures Trading Commission (CFTC) has released details of civil charges against high-frequency futures trader Navinder Singh Sarao and his company Nav Sarao Futures Limited. The statement alleges market manipulation and spoofing over five years, and as recently as 6 April. The Complaint had been kept sealed until the arrest of Sarao by British authorities acting at the request of the US Department of Justice (DOJ). After the arrest, the DOJ unsealed its own criminal Complaint charging Sarao with substantively the same misconduct.

US Treasury Warns Congress Currency Push Could Derail Pacific Pact – Reuters
US lawmakers’ proposals to sanction countries that deliberately weaken their currencies could derail a Pacific trade pact that is a key part of the Obama administration’s pivot to Asia, the Treasury warned on Tuesday.

Hedge Fund Push on Swaps Trades Hits Snag with CFTC’s Giancarlo – Bloomberg
Hedge fund lobbying hasn’t persuaded a key US regulator that the government should step in to curb Wall Street banks’ power over the $700 trillion swaps market.



Company News

BNY Mellon First Quarter Profit Rises on FX Trading – Reuters
BNY Mellon Corp said Wednesday first quarter earnings rose 16%, beating Wall Street estimates, as the bank lowered expenses and saw revenue from trading foreign currencies surge from year-ago levels.

Thomson Reuters March FX Volumes Rise 13% From Month Ago – Reuters
Daily foreign exchange volumes on currency platforms run by Thomson Reuters rose to $402 billion last month from $355 billion in February.

RPT-Prime-Broking Changes May Halt Global FX Volumes Growth: Saxo – Reuters
Major banks’ growing reluctance to do business with smaller hedge funds will stifle growth in the foreign exchange market, the head of prime broking at Denmark’s Saxo Bank said.

US, UK Aim for Deutsche Bank Libor Settlement on Thursday: Sources – Reuters
US and British officials are preparing to announce a settlement with Deutsche Bank as soon as Thursday over allegations it tried to rig benchmark interest rates such as Libor, two sources with knowledge of the matter said.

MoltenFX ECN Adds Precious Metals Trading – Profit & Loss (free story)
Molten Markets has made precious metals available for trading on its MoltenFX ECN, citing strong demand from clients. The company moved to a new central counterparty last quarter, which allows it to offer precious metals and a wider range of currencies, according to Rich Wenzel, head of the MoltenFX ECN.



Market Savvy  

A TIC-up in US Inflows, But It’s the Domestics in the Driving Seat
Deutsche Bank
With so much focus on international capital flows, an update on the US picture is overdue. This continues to improve. The broad basic balance (excluding treasuries) recorded its smallest deficit since early 2013 according to February’s TIC data. Breaking down the basic balance into its constituent parts, the improvement has been led by portfolio flows.



Press Releases

i-Swap and Icap Information Services launch i-Swap History
Icap Information Services, the market data business of Icap, has partnered with i-Swap, its electronic trading platform for over-the-counter interest rate swaps to launch i-Swap History, a full historical euro swap tick data product.

DTCC Announces Plans to Link Omgeo ProtoColl to GlobalCollateral Limited’s Margin Transit Utility
The Depository Trust & Clearing Corporation has announced that Omgeo ProtoColl, its front-end collateral management system, is integrating with DTCC-Euroclear Global Collateral Limited’s Margin Transit Utility. With the integration, Omgeo ProtoColl clients will gain a view of all transactions processed in the MTU from their existing ProtoColl user interface, streamlining margin call activities and enabling better monitoring of the collateral management process from a single interface.



Industry Events