Top Headlines
Pound’s Biggest Gain Since 2009 Signals `Brexit’ Anxiety Easing – Bloomberg
Easing anxiety over Britain’s potential exit from the European Union may be complemented next week by signs of a stronger U.K. economy, supporting the pound further after its best week since 2009 against the dollar.
Carry Trades at Heart of China Capital Outflows – BIS – Reuters
Heavy outflows of capital from China have mainly been a result of the unwinding of carry trades aimed at benefiting from rising interest rates and an appreciating yuan, the Bank of International Settlements (BIS) said on Sunday.
Key Tips China to Devalue Yuan – New Zealand Herald
New Zealand prime minister John Key is tipping that China will inevitably be forced to devalue its currency in a move that will increase its competitive tensions with the US.
BIS e-FI Study Paints a Familiar Picture – Profit & Loss
A Bank for International Settlements paper studying the electronification of fixed income markets delivers policy challenges and conclusions that will be familiar to e-trading observers in other markets, including the suggestion that electronic trading and market making has changed the dynamics of the market and may be an “amplifier” in times of market stress.
Egypt’s Central Bank Holds Exceptional $500 Million FX Auction – Reuters
Egypt’s central kept bank kept the pound stable at 7.7301 pounds against the dollar at an exceptional auction on Sunday for the sale of $500 million to cover imports of strategic goods, bankers said, pumping more foreign exchange into an economy that has been starved of dollars.
IMF Will Identify Yuan in FX Reserve Database from October – Bloomberg
The International Monetary Fund said it will start identifying the yuan in its official foreign-exchange reserves database starting in October, advancing China’s push for a bigger international role of its currency, which is also known as the renminbi.
- China Says Will Keep Yuan Basically Stable Against Basket of Currencies – Reuters
- Currency Composition of Official Foreign Exchange Reserves (COFER): Q&A on the separate identification of renminbi-denominated reserves holdings – IMF
China Says Illiquid Assets Not Included in its Forex Reserves – Reuters
Illiquid assets are not included in China’s foreign exchange reserves, central bank vice governor Yi Gang said on Sunday.
Top Chinese Official Rebutts Soros Prediction for Hard Landing – Bloomberg
China will avoid the kind of hard landing predicted by the likes of billionaire investor George Soros as policy makers still have enough tools to maintain reasonable growth as they seek to overhaul the world’s second-largest economy, the country’s top economic planner said.
Trading volume in Hong Kong’s opaque privately owned exchanges, known as “dark pools,” has plunged since the implementation of new regulations forcing greater transparency in the industry, the latest exchange data show.
BoE’s Broadbent Explores Potential of Central Bank Digital Currency – Profit & Loss
Ben Broadbent, deputy governor for monetary policy at the Bank of England, examined the theoretical impact that the creation of a Central Bank Digital Currency (CBDC) might have on the UK economy in a speech delivered at the London School of Economics last week.
Regulatory News
The Federal Reserve Board on Friday proposed a rule to address the risk associated with excessive credit exposures of large banking organizations to a single counterparty. As demonstrated during the financial crisis, large credit exposures, particularly between financial institutions, can spread financial distress and undermine financial stability.
In line with the Financial Services Act 2012, the FCA and the Bank of England reviewed the operation in 2015 of their Memorandum of Understanding (MoU) that sets out how they should co-operate with one another in relation to the supervision of markets and market infrastructure.
Faith in Central Banks’ Healing Powers Faltering: BIS – Reuters
Financial markets’ shaky start to the year shows they are losing faith in the “healing powers” of central banks, the Bank for International Settlements (BIS) said on Sunday while voicing concerns over sub-zero interest rates and emerging economies.
GAO to Probe ‘Regulatory Capture’ at New York Fed – Wall Street Journal (subscription)
A congressional watchdog is launching an investigation into whether Wall Street has too much influence over the Federal Reserve’s financial oversight.
BoE Set to Review Market Risk Managers – Financial Times (subscription)
The Bank of England is set to review operations of the market risk managers at the heart of the bid for the London Stock Exchange Group, as average daily trading payments held at the utilities topped £80bn last year.
MEPs draft Mifid II Amendments to Avoid HFT Trap – Financial News (subscription)
Lawmakers have taken advantage of the likely delay to Mifid II to table draft amendments to the overhaul of Europe’s trading rulebook that aim to stave off the prospect of non-finance companies becoming caught up in rules meant to govern high-frequency traders.
Bankers Jostle to be Junior as UK Accountability Rules Kick In – Reuters
New rules to hold bosses responsible for wrongdoing at British banks is deterring some bankers from taking on senior management roles and even prompting big-hitters to play down their own importance, say legal and compliance experts.
Company News
HP Enterprise’s Results Reassure Investors on Tech Spending – Wall Street Journal (subscription)
Hewlett Packard Enterprise Co. sent reassuring signals about corporate technology demand, though currency issues continued to weigh on its revenue.
Exchanges Merger Will Settle London Versus Frankfurt Fight – Financial Times (subscription)
A commercial decision will determine whether euro clearing is located in eurozone or the City.
Brevan Howard Hedge Fund Said to Gain and Beat Peers in February – Bloomberg
Billionaire hedge fund manager Alan Howard, who predicted there will be “exceptional opportunities” to make money this year, in February beat peers who were whipsawed by volatile markets, according to two people with knowledge of the matter.
Market Savvy
Funds Call Emerging Market Currency Turn Again – Reuters
After three years of negative returns in emerging market currencies and local bonds, and at least as many false dawns, some investors are punting again on a turning point – this time hopeful of a downturn in the dominant U.S. dollar.
Week Ahead in FX – ECB Aggressive Easing Expected After NFP Miss – Seeking Alpha
The U.S. non-farm payrolls (NFP) report for February painted a mixed picture of U.S. employment. The American economy added 242,000 jobs, far exceeding expectations of around 195,000; the unemployment rate remained unchanged at 4.9%, the lowest level in 8 years. The big miss on Friday was on wage growth.
Brazil’s Battered Currency May Be On the Cusp of a Turnaround – MarketWatch
With Brazilian President Dilma Rousseff’s political future in doubt, analysts say the country’s battered currency and stocks could be on the verge of a lasting turnaround.
Press Releases
A new DB X-trackers bond index ETF from Deutsche Asset Management’s product offering has been tradable via Xetra and Börse Frankfurt since Monday, 7 March.
BIS Quarterly Review March 2016 – Media Briefing
On-the-record remarks by Mr Claudio Borio, Head of the Monetary and Economic Department, and Mr Hyun Song Shin, Economic Adviser and Head of Research, 4 March 2016.
Industry Events
FX Post-Trade: Ripping Off the Band-Aid, 8 March, Profit & Loss/Markit Webinar
FX Week Australia, 10 March in Sydney, Australia
FIA: Boca 2016, 15-18 March in Boca Raton, FL
FOW: Derivatives World, 12-13 April in Hong Kong
FX Week FX Invest North America, 12 April in Boston, MA
Profit & Loss Forex Network London, 14 April in London, UK
Profit & Loss Latin America, 20 April in Mexico City
ACI World Congress 2016 – Indonesia, 26-30 April, Jakarta
Eurofinance: Asia Treasury, 18-20 May in Singapore
Profit & Loss Forex Network New York, 26 May, New York City
FIA: IDX 2016, 7-8 June in London, England
Profit & Loss Scandinavia, TBD September, Copenhagen
Profit & Loss Forex Network Chicago, 28-29 September, Chicago, IL
Sibos 2016, 26-29 September in Geneva, Switzerland
FIA: Expo, 18-20 October in Chicago, IL