Top Headlines
Pound Drops to Lowest Since 1985 as Angst Builds Over Brexit – Bloomberg
The pound tumbled to its lowest level in three decades amid mounting concern the UK is heading for a so-called hard Brexit that would restrict access to the European Union’s single market.
September Reporting Shows Platforms Bounce Back – Profit & Loss
The first FX platforms to report their monthly trading volumes show that trading activity bounced back in September after a significant slowdown in August.
ADS Securities to Pull Back From London, Watson Resigns – FX Week
ADS Securities is set to pull back from London and downgrade its UK office to a regional base in a restructuring move that will see main functions moved back to the company’s headquarters in Abu Dhabi.
Global Status Doing Little to Shore Up Softening Yuan – Nikkei Asian Review
The yuan’s long-awaited inclusion in the Special Drawing Rights basket has not kept the currency from falling, owing partly to new data showing that central banks have not significantly boosted their yuan reserves despite the change in status.
Deutsche Bank’s Derivatives Exposure Threatens Market, Finds JPM Analyst – The Trade
Deutsche Bank’s huge derivatives book could cause a contagion effect and threaten markets “if concerns continue”, according to an analyst at JP Morgan.
Currency Traders in Record Losing Run Pay for Languid Market – Bloomberg
Foreign-exchange traders suffering the worst losing streak on record are getting no help from the world’s most popular currency pair.
Japanese Investors Look Outward Despite Higher Forex Costs – Nikkei Asian Review
Japanese institutional investors are flocking to foreign bonds in a hunt for yield despite the growing cost of foreign-exchange hedges, which in turn has kept the yen from further strengthening against the dollar.
The Idea of BOJ Foreign-Debt Buying Just Won’t Go Away – Bloomberg
The idea of the Bank of Japan purchasing foreign bonds won’t go away, even after Prime Minister Shinzo Abe damped speculation about the possibility as recently as last month.
Unleashing China’s Untapped Wealth – Wall Street Journal (subscription)
Releasing pent-up demand for international assets would raise domestic incomes, but only if the market is free to work.
The Great Clearing Clearout – Global Custodian (subscription)
Innovations to enable buy-side firms to become direct clearing members at central counterparty clearing houses are generating interest as banks increasingly call time on their clearing businesses.
How to Leave a Currency Union – Huffington Post
EuroThinkTank, a group of economists and financial market experts, published a report that explains how an exit from a modern currency union should be handled.
Lawyers Unite to Aid Digital Currency Users Face Legal Issues – Crypto Coins News
A new coalition, called the Digital Currency and Ledger Defense Coalition, will help individuals facing legal concerns pertaining to digital currency and blockchain related cases.
Regulatory News
CFTC’s ‘Annual Ritual’ of September Crackdowns – Financial Times (subscription)
US regulator’s enforcement moves come at end of federal fiscal year.
UK Watchdog’s Crackdown on Individuals Begins to Bear Fruit – Financial Times (subscription)
A promised regulatory crackdown on individual behaviour rather than headline-grabbing fines on companies is beginning to bear fruit, with the number of people banned from holding jobs in the City of London rising for the first time in four years.
Industry Mulls UK Regulator’s ‘Assertive Stance’ on MiFID II Unbundling – The Trade
Following the publication of the UK regulator’s consultation on unbundling, industry participants have noted its more ‘assertive’ stance on implementing the rules.
BOJ Deploys US World War II Tactics That Failed to Spur Prices – Bloomberg
In deciding to target bond yields, Japan is deploying a monetary strategy to combat deflation used by its former enemy in World War II.
Company News
Pimco Quants Say Too Many Investors Are Getting Hedges Wrong – Bloomberg
Important to take ‘currency-by-currency’ approach, Pimco says.
Citi Prefers Turkish Lira to Sterling – Financial Times (subscription)
Citi is saying even shakier currencies such as the Turkish lira are worth buying in favour of the hobbled British pound.
ITG Announces Completion of TCA Integration With FX Connect – Finance Magnates
The solution provides an easy to use, powerful and flexible solution for institutional traders.
Oanda Japan Adds Two Yen Crosses in Response to Trader Requests – Finance Magnates
The brokerage has added TRY/JPY and ZAR/JPY to its portfolio of tradable currency pairs.
Market Savvy
Strong US Data Dents Asia FX; Singapore Dollar at Over Two-Week Low Ahead of MAS – Reuters
Most emerging Asian currencies eased as solid US manufacturing activity backed expectations of a Federal Reserve interest rate hike before year-end, lifting the dollar and US Treasury yields.
Dollar Gains on Upbeat US Data, ‘Hard Brexit’ Fears Beset Pound – Reuters
The dollar rose against the yen and euro, boosted by some upbeat US economic news, while the pound wallowed near a three-decade low on concerns over a potential “hard Brexit” for Britain.
CAD Strengthens as Oil Climbs to Near Three-Month High – Reuters
The Canadian dollar strengthened slightly against a firmer US counterpart as oil rose to its highest intraday level in nearly three months.
Ruble Climbs to 11-Month High, Fueling Verbal Intervention Bets – Bloomberg
The ruble rose to near the strongest level in a year lifted by $50-a-barrel oil, prompting speculation Russian officials will talk down the currency’s gains in a bid to keep exports from becoming uncompetitive.