Top Headlines 

Second Johnson Amicus Brief Highlights “Intrinsic” Pre-Hedging Role – Profit & Loss

A second Amicus Brief filed in the Mark Johnson appeal stresses the risks associated with providing FX services to clients around the Fix and argues that pre-hedging is intrinsic to handling orders at the mechanism.

Cartel Lawyers Zoom in on Government Witness – FX Week (subscription)

The attorneys for three UK nationals – Christopher Ashton, Rohan Ramchandani and Richard Usher – accused of currency market manipulation have asked a New York court to help them obtain documents from the US Department of Justice that reveal how the agency allegedly helped a key witness in its case avoid prosecution overseas. 

Bogucki Lawyers Subpoena HP’s Trading Data – FX Week (subscription)

Robert Bogucki’s lawyers have moved to subpoena documents from Hewlett Packard to aid his defence at a trial scheduled for early 2019. Bogucki, a former head of FX trading at Barclays, is accused of conspiracy and wire fraud affecting a financial institution.  

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

This week’s In the FICC of it looks at the implications of an FX market where intermediaries are sometimes more profitable than the risk-taking firms that are using their services; the FX Global Code; and whether the blockchain fad is really over in FX.

Spring Time for Hedge Funds? – Profit & Loss

Hedge funds have been much maligned post-financial crisis due to a perceived lack of performance. Is this criticism fair? And what is the prognosis for currency funds in particular? 

Trend Following Drives Positive CTA Performance in August – Profit & Loss

Following a challenging period in July, CTA performance improved in August as all the indices posted positive performance. 

Seven Countries at Risk of Exchange Rate Crises: Nomura – Financial Times (subscription)

Seven emerging market economies are at risk of an exchange rate crisis, according to a gauge published by Nomura, as investor fears about contagion from recent currency crunches in Turkey and Argentina continue to build.

Regulatory News 

How Mifid II’s Second Seismic Shift is Reshaping the Trading Landscape – Financial Times (subscription)

Companies are facing challenges over transparency around liquidity and best execution. 

Berkovitz Sworn in at the CFTC – Profit & Loss

Dan Berkovitz has been sworn in to serve as a Commissioner for the US Commodity Futures Trading Commission.

What We Need to Fight the Next Financial Crisis – The New York Times

Congress has taken away some of the tools that were crucial to us during the 2008 panic. It’s time to bring them back. By Ben S. Bernanke, Timothy F. Geithner and Henry M. Paulson Jr.

Libor Reform Threatens Risk Modelling Under FRTB – (subscription)

A dearth of liquid products and historic data threatens banks with capital hit under new market risk rules.

JP Exec Calls for Derivative Margin Changes – (subscription)

JP Morgan’s head of clearing is calling for changes to the initial margin regime, to take into account developments in market structure in the wake of new data showing there have been 13 significant margin breaches in listed derivatives markets so far this year.

The Financial Crisis Made Us Afraid of Risk – For a While – The Wall Street Journal (subscription)

Risk-taking never disappears; it just changes shape, often to slip past the institutional and psychological defenses erected after the last crisis.

Crypto News 

Bitcoin Tracker One and Ether Tracker One Suspended by US SEC – Bloomberg

The US Securities and Exchange Commission temporarily suspended trading in two securities linked to cryptocurrencies on Sunday, citing investor confusion regarding the assets.

Cryptocurrency Wipeout Deepens to $640 Billion as Ether Leads Declines – The Telegraph (subscription)

The cryptocurrency bear market plumbed a fresh 10-month low, led by a slump in Bitcoin’s biggest rival.

Citigroup Has Created a New, Less Risky Way of Investing in Crypto — and it May Be a Game Changer for the Industry – Business Insider (subscription)

Citigroup has created what it’s calling a Digital Asset Receipt or DAR, thought to be the most direct way to invest in cryptocurrencies without owning them.

Coinbase Doubles Staff, Aims to Become the NYSE for Cryptocurrencies – Bitcoinist

Leading US cryptocurrency exchange Coinbase has reportedly managed to double its staff members, thus hitting its 2018 target.

Can Bitcoin Save Argentina? – CoinDesk

Over the past 30 years, Argentina has tried a diverse toolkit of mainstream economic solutions to its persistent drift into chaos, and each has failed. Perhaps a new, outside-the-box, crypto-friendly approach is needed. 

Company News 

Deutsche Börse to Launch FX Market Data Offering – Profit & Loss

Deutsche Börse Market Data + Services and the exchange group’s FX trading venue 360T are launching a product offering covering the FX spot market as well as FX swap market data. The swap market information is based on a contribution model of liquidity providers developed in cooperation with the Germany-based company Digitec. 

LCJ Investments Joins Kettera’s Hydra Marketplace – Profit & Loss

Kettera Strategies, which operates a managed account marketplace for macro, commodities and liquid equity hedge fund strategies called Hydra, says that Geneva-based LCJ Investments will offer its discretionary-driven FX strategy on Hydra.

Litwak Named Global Head of FXPB at BNP Paribas – Profit & Loss

BNP Paribas has appointed Nathaniel Litwak as global head of FX prime brokerage within its prime solutions and financing division.

Goldman Adds Bilateral Derivatives as Rivals Cut Back – Risk Quantum (subscription)

Goldman Sachs grew its outstanding bilateral derivatives positions 4% to $26 trillion in the second quarter from the first, overtaking JP Morgan and Citigroup to become the bank with the largest bilateral portfolio by notional amount. 

Market Savvy 

Scandinavian Currencies Lead Rebound Versus Struggling Dollar – Reuters

The dollar struggled against its rivals on Monday, especially against the Scandinavian currencies, as some investors took profits after a strong rally in recent weeks although strong US data kept the pressure on emerging market currencies. 

Sterling Edges up After Biggest Weekly Drop in a Month – Reuters

Sterling edged higher on Monday after posting its biggest weekly drop in a month last week against a broadly stable dollar as investors cut some large short positions, but Brexit concerns checked the gains.