Top Headlines

Predictions for 2019: Trading and Regulation – The Trade

Experts from across the industry provide their predictions on what will be the biggest trends of the coming year.

In the FICC of It (podcast) – Profit & Loss

It’s the end of year special podcast. Listen in as the podcasters each identify a key theme from the past year and look to re-assess them with the benefit of hindsight, before moving into less certain territory by providing a price prediction for everyone’s favourite out-of-control child, Bitcoin. They also – this being the season of making a wish – share their onehope for 2019.

Wall Street Is Making the Most Money Ever. So Why the Long Face? – Bloomberg

Holiday spirits across Wall Street are being spoiled by anxiety that markets are getting uglier, frustration over the industry’s own miserable stock prices and fears that a recession will finally hit. Another explanation for the tempered mood: Bankers are savvy enough not to flaunt record-setting profits a mere decade after taxpayers bailed them out during the financial crisis.

Brussels Accuses Four Banks in Bond Trading Cartel Probe – Financial Times

Brussels has accused four banks including Credit Suisse and Deutsche Bank of price rigging in the market for some types of US dollar-denominated government bonds, marking an escalation of the bloc’s efforts to root out collusion in financial trading.

Regulatory News

LCH Applies for EU Equivalence in Preparation for No-Deal Brexit – The Trade

London’s LCH has applied for equivalence with Europe’s regulatory watchdog to carry on doing business in the continent in a no-deal Brexit situation, while also applying to the Bank of England as an overseas derivative clearer.

NatWest Kick-Starts Brexit Swaps Transfer –

NatWest Markets has become the third UK-based dealer to seek court approval for a big-bang transfer of swaps contracts to an EU 27 subsidiary, as it seeks to ensure it can continue serving European clients in the event of a no-deal Brexit. Barclays and UBS filed their own plans with UK courts in October.

Republican Frustrations Grow as SEC Chair Proves Frequent Ally of Democrats – Reuters

Republicans are starting to wonder if they accidentally picked a Democrat to run the country’s top securities regulator.

Crypto News

Year in a Word: Crypto – Financial Times

Crypto (noun) abbrev. cryptocurrencies. Digital currencies lacking the backing of authorities, central banks or common sense. Useful as an anonymous means for buying timeshares in horses (apparently) or drugs on the internet.

First Futures Contract to Pay Out in Bitcoin Poised for Green Light – The Wall Street Journal (subscription)

The first futures contract that will pay out in cryptocurrency rather than cash is expected to soon get regulatory approval. The contract, launched by New York Stock Exchange owner Intercontinental Exchange, is aimed at institutional players who have stayed out of cryptocurrency markets out of concerns that they are unregulated and susceptible to manipulation.

Cryptocurrency Industry Faces Insurance Hurdle to Mainstream Ambitions – Reuters

Cryptocurrency exchanges and traders in Asia are struggling to insure themselves against the risk of hacks and theft, a factor they claim is deterring large fund managers from investing in a nascent market yet to be embraced by regulators.

Litecoin Founder Who Beat 90% Plunge Now Finds Shadow Over Coin – Bloomberg

Litecoin founder Charlie Lee says he’s focusing on increasing use of the eighth-largest cryptocurrency rather than dwelling on his fortuitous decision a year ago to sell all his holdings at the height of the digital-asset market bubble.

Company News

Euronext FICC Head Steps Down – Profit & Loss

Paul Humphrey, global head of FICC at Euronext, is leaving the firm to pursue other opportunities a spokesperson for the exchange confirms. He has been at Euronext for three years and was responsible for building and managing the FICC business and led the group’s purchase of a majority stake in FX platform Fastmatch.

ISDA Confirms Benchmark Fallback Results – Profit& Loss

The International Swaps and Derivatives Association (ISDA) has published a report summarising the final results of a consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates (IBORs).

Marex Spectron Acquires Customer Base of RCG – Profit & Loss

Commodity broker Marex Spectron has signed an agreement to acquire the customer business of Rosenthal Collins Group (RCG), an independent Futures Commission Merchant. 

Citi Connects to Eurex to Clear Swaps for US Clients – Global Investor (subscription)

Eurex Clearing has been granted CFTC approval to offer swaps clearing to US-based FCM clients.

Matrix to Launch Forex Late Q1 – Global Investor (subscription)

The Chicago-based derivatives broker also plans to expand services to Hong Kong and Singapore.

Market Savvy

Dollar Set for Biggest Weekly Drop in 10 Months – Reuters

The dollar consolidated overnight losses on Friday and is set for its biggest weekly drop in 10 months as the threat of a US government shutdown and lower bond yields on the back of concerns of slowing economic growth weigh.

Skeptics Abound as Wall Street Sees Year of Dollar Losses – Bloomberg

A familiar theme is percolating through currency markets: The dollar’s going to weaken next year.

Gold Rallies to 6-Month High as Investors Flee Stocks – Financial Times

Gold prices surged to a nearly six-month high on Thursday as political uncertainty and the Federal Reserve’s latest rate rise sent investors scrambling out of equities and into the safety of so-called haven assets.

Why it May Be Time for Emerging Market FX Traders to Shine – Financial News (subscription)

Beaten-down assets of 2018 may be comparatively attractive to investors next year, strategists say.