Top Headlines

Politics ‘Tightening Grip’ on Financial Market Behavior: BIS – Reuters

Investors are focusing more on politics and have become more selective in what they buy, the Bank for International Settlements (BIS) said in its latest signal that markets may be breaking free from a dependence on central bank support.

Sterling Slips to Seven-Week Low vs Euro – Reuters

Sterling slipped to a seven-week low against the euro, weakened by uncertainty over when the formal mechanism for Britain’s departure from the European Union would be triggered, as well as a run of weak UK data. 

Euro Falls After France’s Juppe Says Not Standing in Election Race – Reuters

The euro fell after former French prime minister Alain Juppe said he was not prepared to be a candidate in the country’s presidential elections, with investors worried that made a victory by anti-EU leader Marine Le Pen more likely.

Dollar Retreats from Fed-Inspired Rally – Reuters

The dollar slipped in European trading, as investors took profits after the currency’s boost last week on the expectation that the US Federal Reserve will hike interest rates this month.

Mexican Peso Surges as US Commerce Chief Signals Softer Stance – Financial Times (subscription)

Mexico’s peso surged to its highest level since the day after Donald Trump’s election victory after Wilbur Ross, his new commerce secretary, adopted a more conciliatory approach to relations between the two nations, including offering to work with its neighbour to stabilise its currency.

Onshore Renminbi Once Again Weaker Than Offshore Rate – Financial Times (subscription)

The onshore renminbi is once again trading at a weaker level against the dollar than its offshore counterpart, returning to form after the latter began trading at a softer level late last week. 

China Signals Change of Course on Long-Standing Yuan Policy – South China Morning Post

China has changed its long-standing rhetoric on its yuan policy, signalling Beijing may alter its course on exchange rates this year under pressure from US Federal Reserve rate rises and US President Donald Trump’s threats of a trade war.

Mixed ADV News from Platforms – Profit & Loss

The second group of platforms to report results confirm that February was a quieter month than January, as well as compared to February 2016.

Nigeria’s FX Market Posts Dollar Trades at Near Record Low – Reuters

Nigeria’s interbank forex market traded $540,000 in early deals at 375 naira per dollar, near a record low exchange rate hit last November, Thomson Reuters data showed.

Thailand’s Rallying Currency Proves a Headache for Its Central Bank – Bloomberg

Some $2.1 billion of foreign money has flowed into the nation’s debt this year, making it the top destination among Southeast Asia’s emerging markets.

The Problem with Ridiculously Wide FX Spreads – Profit & Loss

Patchy liquidity and the lack of pre-positioning cannot alone account for why we get some wild moves in markets – sometimes the liquidity providers should wear some of the blame.

Regulatory News

EU Markets Watchdog Looks to Stop Unfair Brexit Sweeteners – Reuters

The European Union’s market watchdog is investigating ways to stop national regulators competing unfairly with each other as they try to attract firms from Britain after Brexit in a beauty parade of financial centers.

FX Service Providers Witness Probable Delay of Controversial Fiduciary Rule – Profit & Loss

For those FX providers who were ensnared by the US Department of Labor’s (DOL) controversial fiduciary rule, the recent proposed delay of the rule may provide relief.

Republican Tax Reform Could Shake Up Global Economy – Financial Times (subscription)

If economic orthodoxy holds true — and whether it would is the subject of significant debate — it could also lead to the biggest surge in the dollar since the 1980s with potentially damaging consequences, particularly in emerging economies.

Basel Regulators Say Determined to Finalize Bank Rules – Reuters

Global banking regulators said they had narrowed their differences over a suite of new capital rules for banks and remain determined to finish the work, but did not give a date when it would be completed.

Buy-Side Brace for Further Regulatory Scrutiny – The Trade

Regulators are set to shift focus from large banks to asset managers, according to a recent report.

Regulators May Consider Portability in CCP Fire Drills – Risk (subscription)

BoE, BaFin and CFTC move signals concern over whether client positions can be moved between banks in a crisis.

Clearing Data Falls Short: Office of Financial Research – FOW (subscription)

The Office of Financial Research has said in a report the data disclosed by central counterparties do not give a complete picture of clearinghouse resilience.

Fed’s Powell Warns of Digital Currency’s Risks – Reuters

A top US Federal Reserve official raised caution about central banks issuing digital currencies as they are vulnerable to cyber attacks and criminal activities along with privacy issues that still need to be addressed.

Company News

Lawyers to Search Files of 35 Deutsche Bank Staff – FX Week (subscription)

Includes traders and others who were not part of the production of information given to regulators.

Citi Reorganises, Creates Single FX Business – Profit & Loss

Following the retirement of head of G10 FX James Bindler, Citi is reorganising its business structure by merging its G10 and emerging markets FX activities into a single global foreign exchange trading business.

More Than Just a Voice Broker? TP Icap Has Electronic Potential – Financial News

Liberum analysts think that in the long-run the interdealer broker will develop electronic platforms or post-trade business.

Johnson Exits Tower – Profit & Loss

Ture Johnson, director of e-FX liquidity distribution and relationship management at Tower Research Capital in New York, has left the firm after nearly five years.

Market Savvy

North Korea Rattles Asian Markets, But Key Focus Remains the Fed – Financial Times (subscription)

European and US equity gauges are moving lower after Asian markets were rattled by North Korea firing missiles into the Sea of Japan, while markets continue to price in a rate rise by the Federal Reserve next week, particularly following the latest comments from Fed chief Janet Yellen.

Forint Eases on Changes in Central Bank, Fed Expectations – Reuters

Hungary’s forint eased after the central bank further reduced the responsibilities of Deputy Governor Marton Nagy, and Poland’s zloty again retreated behind a psychological line at 4.3 against the euro.

Oil Gain Helps Stronger C$ at End of Tough Week – Reuters

The Canadian dollar made a slight gain against its US counterpart on Friday but posted its sharpest weekly decline versus the greenback since May as the two countries’ central banks extended the divergence in their policy views.