Pound Extends Losses as Concern Over No-Deal Brexit Increases – Bloomberg 

The pound fell against all of its major peers as renewed concern the UK may be headed for a no-deal Brexit spurred traders to dump the currency.

Investment Banks Forecast Dollar to Head Lower Next Year – Financial Times

The rush of investment banks’ market forecasts for 2020 is almost complete, and many agree on one key point: the dollar is heading for a modest fall.

Two Fed Officials Say Rates Should Hold Steady, While Trump Calls for More Cuts – Wall Street Journal

Two Federal Reserve officials said they expect to hold interest rates steady for the time being, even as President Trump once again lobbied for lower borrowing costs.

Fed’s Kaplan Says Trade Issues with China to Go On for Years – Reuters

A “phase one” trade agreement that reduces some U.S. tariffs in exchange for increased Chinese purchases of American farm goods that was agreed last week between Washington and Beijing does not mean tensions are going to fully dissipate any time soon, Dallas Fed President Robert Kaplan said.

Lighthizer Says Trump ‘Focused’ on EU Trade – Financial Times

Robert Lighthizer, the US trade representative, suggested the Trump administration was ready to escalate its trade confrontation with the EU, potentially through new tariffs, after sealing a truce with China and enacting the USMCA agreement with Canada and Mexico to replace Nafta.

Trump Denounces House Democrats as Impeachment Vote Looms – Wall Street Journal

President Trump assailed the House impeachment probe and accused Democrats of trying to overturn his election, as lawmakers prepared for a final day of debate followed by a vote that is expected to make Mr. Trump the third US president to be impeached.

EU Executive Urges Eurozone to Use Fiscal Policy to Help ECB – Reuters

The European Commission called on euro zone governments on Tuesday to use fiscal policy and to invest in their economies, if possible, to help the European Central Bank’s efforts to boost inflation and job creation.

Trade and Fiscal Policy Action Needed to Avoid Global ‘Liquidity Trap’: BoE’s Carney – Reuters

Central banks risk their policy tools becoming ineffective unless there is better cooperation from governments on trade and fiscal policy, Bank of England Governor Mark Carney said.

Regulatory News

Australian Regulator Identifies Areas of Improvement in Banks’ FX Businesses – Profit & Loss

The Australian Securities and Investment Commission has published a review of its investigation into practices in the wholesale FX market and says that while it has identified conduct and process improvements in banks’ FX businesses, there remain a number of areas in need of further improvement.

Regulator Tightens Rules to Strengthen Audit Independence – Financial Times

UK regulators have banned audit firms from providing a number of advisory services to listed companies and financial institutions in an effort to strengthen auditor independence after a series of scandals.

Westpac Faces First Class Action Over AUSTRAC Scandal – Australian Financial Review

Westpac has been served with a class action lawsuit alleging it breached its disclosure obligations and deceived investors by failing to give them the full picture of AUSTRAC’s risk management concerns.

US Firms Must Rerun Non-Cleared Margin Test in March – Risk

Proposed CFTC calculation delay offers in-scope firms a chance to trade out of phase five compliance.

Crypto News

Fidelity Expands Crypto Business into Europe – Profit & Loss

Fidelity Investments has announced it is establishing a new entity to serve European institutions investing in digital assets. 

State Street Announces Digital Asset Pilot with Gemini – Profit & Loss

State Street has announced a new digital asset pilot in collaboration with Gemini Trust Company, a cryptocurrency exchange and custodian.

Ether Turns Negative for the Year as Crypto Sell-Off Accelerates – Bloomberg

Ether, the second-largest cryptocurrency, extended a three-day losing streak to turn lower for the year, bucking an uptrend set by most other major digital assets.

Is Bitcoin a Currency, a Technology-Based Product, or Something Else? – Technological Forecasting & Social Change

Most jurisdictions have not regulated cryptocurrencies. Whether existing regulations apply to cryptocurrency turns ultimately on if we classify cryptocurrencies as currencies, securities, or derivatives, or a money services (transfer) vehicle.

Company News

Asian Business Sentiment Bounces Back, but Caution Abounds – Reuters

Confidence among Asian businesses rebounded sharply this quarter to hit an 18-month high with firms reporting a pickup in sales, though most are holding off on hiring as trade war uncertainty weighs, a Thomson Reuters/INSEAD survey found.

Why India’s Asset Managers are Beating Most of Their Global Peers – Bloomberg

Indian asset managers’ shares are trouncing global peers this year as domestic money managers benefit from the tectonic shift in savings from gold and real estate to stocks and bonds.

Value Hedge Funds May Be Due a Comeback – Financial News

Funds following the ‘buy cheap’ mantra of Warren Buffett have struggled to outperform in recent years, but some are betting it is time for a change.

Market Savvy

JPMorgan Flips to Favour Emerging Assets as Recession Risk Slides – Bloomberg

JPMorgan Asset Management has turned bullish on emerging-market bonds and currencies as the threat of a global recession recedes.

Hong Kong’s Dollar Peg Has Been Crucial During the Crisis, and Should be Maintained When It Ends – South China Morning Post

It might seem odd, given that the economy entered a technical recession in the third quarter of 2019, but as growth picks up – and it will – Hong Kong may find that sticking to its linked exchange rate system means both accepting lower interest rates than might otherwise be warranted and having to address any undesired consequences that flow from that.

Japan to Trim Total Government Bond Issuance Next Fiscal Year – Reuters

Japan plans to trim its overall government bond issuance to the market by 0.5% next fiscal year from current year’s levels, government officials said on Wednesday, as Prime Minister Shinzo Abe balances supporting growth and reining in huge public debt.