RBA’s Debelle to Head FX Conduct Group

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RBA’s Debelle to Head FX Conduct Group – Automated Trader
The Foreign Exchange Working Group (FXWG), announced by Bank for International Settlements (BIS) Governors in May to strengthen code of conduct standards and principles in foreign exchange markets, has now been established. The group, which operates under the auspices of the Markets Committee, is headed by Guy Debelle of the Reserve Bank of Australia.


Fed and BoE Take Pole Positions in Rate Race – Financial Times (subscription)
The market thinks the Federal Reserve will raise interest rates later this year, the Bank of England early in 2016. And then? It is hard to find a currency strategist forecasting a rate increase by another G10 central bank this side of 2017.

Dishonesty Central Issue of Hayes Case, Judge Reminds Jury – Operational Risk & Regulation
Judge Jeremy Cooke has begun to summarise the Tom Hayes Libor-rigging trial for the jury at Southwark Crown Court. The summing up, carried out to help the jury reach a verdict, is expected to take three days and Cooke made “no apologies” for the amount of detail he will go into, due to the complexity and length of the case.

Success of Cultural Change Rests with Local Managers – Operational Risk & Regulation (subscription)
No matter what messages are coming from the board and senior management, local managers at large financial firms need to play a major role in setting consistently desirable risk behaviour, research assessing the risk culture of banks shows. Perception of culture differs significantly between business units within the same bank, research from Macquarie University in Sydney has found.

FX Transaction Cost Analysis Takes Centre Stage – Euromoney
Providers of FX transaction cost analysis (TCA) are proof ‘it’s an ill wind that blows nobody any good’, as they aggressively promote their services to institutional clients after fixing scandals.

Swap Execution Facilities: Be Careful What You Wish For – Global Investor (subscription)
As the swap execution facility (SEF) regime approaches its second anniversary, the aspiration – an open, all-to-all market – has yet to materialise. Data from the Futures Industry Association supports the view that SEFs have made uneven progress.

Trends in Retail FX: Weathering the Storm – FX-MM (subscription)
With volumes expected to double between 2012 and 2017, FX trading for retail investors is still a story of growth despite recent events.

Lawsuit Accuses 22 Banks of Manipulating US Treasury Auctions – Reuters
Twenty-two financial companies that have served as primary dealers of US Treasury securities were sued in federal court on Thursday, in what was described as the first nationwide class action alleging a conspiracy to manipulate Treasury auctions that harmed both investors and borrowers.

 

Regulatory News

What Happened to the Dream of Consistent Regulation? – GlobalCapital
After the financial crisis, regulators and politicians promised that really, this time, they meant it. The Basel Committee was to be obeyed; regulators would talk to each other, global firms would have a level playing field and standards would be raised. But it didn’t happen.

DTCC Backs Extension of LEIs to More Asset Classes – FOW (subscription)
The Depository Trust & Clearing Corp. (DTCC) has welcomed moves by regulators to extend the global legal entity identifiers (LEI) regime beyond derivatives markets to cover all asset classes.

Key Regulatory Job Created at Federal Reserve Still Vacant After Five Years – Los Angeles Times
In expanding the role of the Federal Reserve in the wake of the 2008 financial crisis, lawmakers created a high-ranking position at the central bank to oversee the new authority and report regularly to Congress about its progress. Five years after the Dodd-Frank financial reform law was enacted, however, the job remains vacant.

 

Company News

Deutsche Boerse, CME Final Bidders for FX Platform 360T – Sources – Reuters
Commodities and currency exchange operator CME Group is competing against Germany’s Deutsche Boerse in a final round of bidding for German-based foreign exchange trading platform 360T, three industry sources told Reuters on Friday.

ParFX to introduce Decimalised Pricing – FX Week (subscription)
ParFX is introducing decimalisation on its trading platform in selected currency pairs and adding USD/CNH to its universe of currencies – the first non-CLS settled currency that clients will be able to trade on the venue.

Thomson Reuters’ Data Plans Face Backlash; Delays Randomisation Plans – FX Week (subscription)
Thomson Reuters Matching could be on the way to triggering a latency race for data as it seeks feedback from customers on its plans to offer a new, faster data feed from a different datacentre from where its matching engine is located, at the same time as it delayed the implementation of randomisation on its platform, a person familiar with the situation says.

ANZ Ramps up Derivatives to Capture Intra-Asia Trade Flows – Asia Risk (subscription)
Australia’s third largest bank has been aggressively pushing into Asia for the better part of a decade; it is now looking to increase its derivative offering in order to capture the increasing trade flows it sees between Asian countries. “Intra-Asia flows account for $5 trillion a year. That is more than flows between Asia and Europe or between Asia and the US – and we expect that to account for 60% of global GDP by 2050,” says Eddie Listorti, global co-head of fixed income, currencies and commodities at ANZ.

 

Market Savvy  

IMF Seeks More Overhauls as China Pursues Reserve Status for Yuan
Wall Street Journal (subscription)
The International Monetary Fund says it wants more financial-system overhauls from China as Beijing pushes for the IMF to label the yuan a reserve currency.

Euro Bucks Trend, Holds Up Despite Negatives
LMAX Exchange
There were many negative drivers for the euro on Thursday and yet, the single currency managed to shrug off all of them and extend its recovery. Friday’s economic calendar is fairly light, though the market will have some data to chew on in the form of Eurozone PMIs, and US new home sales.

Australian Dollar Hits Six-Year Low on China Data
The Australian
The Australian dollar has dipped to its lowest level in more than six years on the back of weak Chinese manufacturing data and a note of caution from a key ratings agency.

Dollar Runs Out of Puff as Traders Grow Least Bullish This Year
Bloomberg
A gauge of the dollar headed for its smallest weekly gain in more than a month as traders cut bets to the lowest this year that the currency will appreciate against seven of its major peers.

Calling End to Latin American Currency Rout Now a Fool’s Errand
Bloomberg
The $5.3 trillion foreign exchange market is losing confidence in the ability of Latin America’s leaders to turn the region’s flagging economy around. Brazil’s real is the world’s worst-performing major currency this year, plunging 19%.

 

Press Releases

International Banking Statistics at End-March 2015: Bank for International Settlements
Euro-denominated cross-border claims and lending to the euro area surged during the first quarter of 2015. Greece was a notable exception: cross-border lending to residents of the country fell by $22 billion between end-December 2014 and end-March 2015.

 

Industry Events