Top Headlines
Post-Brexit London “Certain” to Lose Euro Clearing – Financial News
Charlie Bean, a former deputy governor of the Bank of England, sees it as a certainty that London will lose its role in clearing euro-denominated derivatives and other financial contracts.
China Reserves at Lowest Since 2011 as PBOC Supports Yuan – Bloomberg
China’s foreign-exchange reserves, the world’s largest foreign currency hoard, slipped to the lowest level since 2011 as the central bank continued its defense of the currency.
BOC Holds Steady on Rates – Profit & Loss
The Bank of Canada (BOC) announced that it is maintaining its target for the overnight rate at 0.5%.
CTAs Report Negative Performance in August – Profit & Loss
New data from Societe Generale Prime Services shows that CTA performance was down across the board in August for its SG CTA indices.
BOJ’s Nakaso Dismisses Idea of Buying Foreign Bonds to Affect FX – Reuters
Bank of Japan Deputy Governor Hiroshi Nakaso on Thursday dismissed the possibility of the central bank buying foreign bonds for the purpose of weakening the yen.
UK Banks Call for Transitional Trade Arrangements After Brexit – Reuters
Britain should negotiate transitional arrangements with the European Union to avoid “cliff edge” disruption to financial markets when the country leaves the bloc, a top British banking official said on Wednesday.
Brexit: The Great Headscratcher for the Pound – Financial Times (subscription)
Brexit is a brainteaser for a $5tn foreign-exchange market that typically struggles to hold two apparently contradictory thoughts at the same time.
China CFOs Are Swapping Dollars for the Yuan in Statements – Bloomberg
Chinese companies in Hong Kong are abandoning a long-held practice of reporting earnings in dollars in favor of the yuan.
Aussie Drop Just What Bonds May Need to Woo Foreigners Back – Bloomberg
Australia’s government could do with a weaker currency to help lure back foreign bond buyers and provide a boost to demand as it ramps up sales.
Fund Tracking Index of Digital Currencies Like Bitcoin to Launch – Reuters
A London-based start-up said on Wednesday it would launch the first fund to track an index of digital currencies such as bitcoin in the coming weeks.
Tumbleweed: The Eerie Market Lull in Five Charts – Financial Times (subscription)
By some metrics, it was the calmest summer in decades.
SNB Policy ‘Pretty Successful’ in Keeping Franc in Check – Bloomberg
The Swiss National Bank’s efforts to keep the franc in check with currency-market interventions and negative interest rates has been “pretty successful,” according to Oliver Adler, head of economic research at Credit Suisse.
Regulatory News
Bank of Japan: Reading Kuroda has Never Been this Hard – Financial Times (subscription)
Review of its own monetary policy is fanning uncertainty ahead of September gathering.
Speculation Grows Riksbank Must Do More QE as Draghi Sets Agenda – Bloomberg
As much as it probably doesn’t want to, Sweden’s central bank is expected to deliver one final injection of stimulus to keep up with record measures from the European Central Bank.
Yuan Intervention Signs Intensify as Offshore Loan Rates Surge – Bloomberg
The cost of borrowing yuan in Hong Kong surged to a seven-month high amid speculation China’s central bank is intervening to discourage bearish bets on the currency.
South Korean Won More Volatile Than Asian FX: Authorities Say Watching Markets – Reuters
The South Korean won’s volatility has been greater than other Asian currencies of late and authorities are watching the situation very closely, a foreign exchange official told Reuters on Thursday.
India’s New Central Bank Chief Looks About to Get Positive News on Rupee – Bloomberg
India’s new central bank chief Urjit Patel, faced with high inflation that limits his room to spur flagging growth, looks about to get some positive news on the rupee.
Company News
Singapore Creates Group to Boost Market Stability Weeks After Glitch – Bloomberg
Singapore Exchange said it has formed a committee to look at ways to improve the operational resiliency of its markets.
CME Approved to Launch Clearing in Mexico – FOW (subscription)
The Chicago Mercantile Exchange has been recognised as a foreign clearing house by the Mexican central bank.
Market Savvy
Yuan Intervention Signs Intensify as Offshore Loan Rates Surge – Bloomberg
The cost of borrowing yuan in Hong Kong surged to a seven-month high amid speculation China’s central bank is intervening to discourage bearish bets on the currency.
Sterling Trades Below Seven-Week High as BoE’s Carney Keeps Easing Option – Reuters
Sterling was subdued on Thursday, trading below a seven-week high against the dollar, with investors steering clear of the currency after Bank of England Governor Mark Carney kept the option of further monetary easing on the table.
Euro edges up as all eyes turn to ECB – Reuters
The euro edged toward a two-week high against the dollar on Thursday, with traders waiting for a European Central Bank policy decision that many doubt will have any significant impact on the euro, even if monetary policy is eased further.
Asia FX Rally as Gloomy US Data Hurts Fed Rate Hike Bets – Reuters
Most emerging Asian currencies rose on Wednesday as disappointing US services sector data eased expectations of an immediate interest rate hike by the Federal Reserve, helping investors keep seeking higher yields in the region.
Ebbing Fed Bets Boost Emerging Stocks to 13-Month High, Boost Currencies – Reuters
Emerging stocks touched 13-month highs on Wednesday as investors priced out the likelihood of a September U.S. rate rise and stronger currencies raised expectations that some central banks could act to curb the gains.
Best G-10 Currency Rally Fueled by Yield Hunt as Fed Doubts Grow – Bloomberg
New Zealand’s dollar rose for a seventh day versus the greenback, its best winning streak since June, as bets the Federal Reserve will move slowly in raising interest rates enhanced the allure of the highest-yielding developed-market currency.
Mexico Currency Falls on 2017 Budget Uncertainty – Reuters
Mexico’s currency weakened on Wednesday, slipping back from its strongest level in 1-1/2 weeks as investors waited for the government to deliver the 2017 budget after news of the replacement of the finance minister.