Top Headlines

Riskier Currencies and Bonds Pressured While ‘Havens’ Rise – Financial Times (subscription)

A global shift away from riskier assets and into the safety of perceived havens was under way in European trade with investors eyeing deteriorating relations between several major world economies.

Dollar Near Three-Week Trough, Lower US Yields and Strong Euro Weigh – Reuters

The dollar wallowed near a three-week low against its peers as US Treasury yields fell sharply, while the euro’s recovery remained intact amid expectations the European Central Bank will begin unwinding its stimulus programme.

Sterling Flat Ahead of Key Week for Brexit, Economy – Reuters

Sterling traded flat, reflecting uncertainty among traders before a week in which Brexit talks and economic data may determine if the pound’s two-month losing streak continues.

Bearish Death-Cross Signal on Euro Urges Caution to Longs: Chart – Bloomberg

While the shared currency has rebounded almost three percent from a ten-month low that coincided with Italy’s political crisis, it formed a bearish technical pattern on the charts.

DoJ Asks for Discovery Stay in Benchmark Case Until ‘Cartel’ Case Ends – FX Week (subscription)

US tries to balance need to protect ongoing criminal investigations and lawsuits with civil attorneys’ desire for additional testimonies.

SocGen Executives Ordered Libor Rigging, US Prosecutors Believed – Financial Times (subscription)

Top executives at Société Générale ordered the bank’s manipulation of the US-dollar Libor interest rate, according to previously unreported court documents that show US prosecutors had evidence in 2015 indicating high-level involvement in the scheme.

Clearing House Supervision Debate Erupts at FIA IDX – Global Capital (subscription)

Top officials from global supervisory bodies furiously debated the implications of new European rules that change the oversight of foreign clearing houses, covering the role of central banks, national regulators, and arrangements in crisis situations.

Why P2P FX Hype Could Be Fading – Euromoney

Some of the early excitement around peer-to-peer (P2P) FX appears to have subsided, with firms suggesting that clients do not care whether trades are matched internally.

Regulatory News

Wall Street Banks to Face Fed Limits in Dealings With Each Other – Bloomberg

Wall Street’s megabanks can expect new limits on how much credit exposure they can have to one another as the Federal Reserve prepares to approve long-delayed Dodd-Frank Act restrictions next week. 

Wall Street Will Make More Risky Bets After Rule Change, with Goldman Sachs and Morgan Stanley Leading the Way – CNBC

Pockets of big risk-taking have persisted within the banks – and that could jump with last week’s proposed changes to the Volcker Rule.

Looser Swaps Trading Rules Could Boost Volumes by Up to 20% – The Trade

A looser regulatory approach to swaps trading in the US could see volumes boosted by as much as 20%, according to a new report from Greenwich Associates.

Regulator Calls for Term Sonia as Transition Talk Ramps Up – Risk (subscription)

The group tasked with finding an alternative rate to sterling Libor is set to launch a public consultation on developing a term market for the new rate, says a senior official at the UK financial regulator.

Crypto News

Bitcoin Endorsement from SEC Could Provide a Regulatory Domino Effect – The Trade

Lack of clarity on the regulation of cryptocurrencies has proved to be a major barrier for institutional investors looking to trade digital assets.

First AI-Brokered Crypto Trade Completed Between Rockwell Capital, TLDR Capital – The Trade

An artificial intelligence (AI)-powered broker startup firm has completed the first transaction of cryptocurrency between Rockwell Capital Management and TLDR Capital.

Who Really Owns Bitcoin Now? – Financial Times (subscription)

Long-term holders cashed out to short-term speculators, data show.

Lazard CEO Says Crypto Shows Reserve Status Isn’t Assured for the US Dollar – Bloomberg

US isolationism could undermine the dollar’s status as the world’s reserve currency, Lazard CEO Ken Jacobs said.

Company News

Trend Followers Drive CTA Losses in May – Profit & Loss

Following a marginal uptick in April, the SG CTA Index moved into negative territory in May, down 2.41% for the month, despite being up mid-month.

Englander Leaves Rafiki – Profit & Loss

Steven Englander has left his role as head of research and strategy at Rafiki Capital Management.

Market Savvy

Brazil’s Temer Sees No Currency Crisis; Central Bank Vows to Keep Acting – Reuters

Brazilian President Michel Temer said there was no risk of a currency crisis in Latin America’s largest economy despite sharp falls in the exchange rate, while the central bank chief pledged to maintain the bank’s intervention in the market.

Turkey Raises Interest Rates to Stabilise Lira Ahead of Polls – Financial Times (subscription)

Turkey’s central bank surprised markets with a higher than expected interest rate increase that will ease concerns about political interference in monetary policy before crucial elections.