Top Headlines

Six Banks Face Lawsuits Over Last Look – Profit & Loss

Six banks are facing a class action lawsuit over alleged abusive practices involving the use of last look in their e-FX businesses.

Are Last Look’s Chickens Coming Home to Roost? – Profit & Loss (subscription)

It’s hard to escape the feeling that what started as a genuine attempt to protect from latency costing LPs millions of dollars has, through natural evolution, become a ticking time bomb for yet more legal cases and, possibly, pay outs.

Dollar Heads for Weekly Loss as Headline Inflation Seen Slowing – Bloomberg

The dollar headed for a weekly decline before data forecast to show that the US annual inflation rate slowed for a fourth month in June.

Sterling Inches Higher, Investors Split on BoE Rate Hike – Reuters

Sterling rose against the dollar, investors still weighing the likelihood of an interest rate rise from the Bank of England after labour market data this week offset some worries over Britain’s exit from the European Union.

Yen Walks Back Gains, Weakens Past ¥113.5 – Financial Times (subscription)

Japan’s yen weakened past ¥113.5 per dollar, walking back some of its previous weekly gains and making it the worst-performing major currency in Asia trade.

Why Prediction of a Firm Renminbi Was a Winning Bet – Financial Times (subscription)

Beijing keen to keep currency steady ahead of this autumn’s 19th Congress.

Asian Currencies Subdued, US Inflation in Spotlight – Reuters

Most Asian currencies drifted, while the US dollar steadied, with investor focus turning to US inflation due later in the day for clues on the pace of interest rate rises in the world’s largest economy.

Regulatory News

EU Says Regulators Should Stop ‘Letter-Box’ Financial Firms – Reuters

Regulators should prevent investment firms from setting up shop in one jurisdiction to avoid stricter controls in their home state, the European Union’s markets watchdog said, as centers such as Dublin, Frankfurt and Paris vie for business.

Fed Chair Yellen: Tougher Capital Rule for Stress Tests Might Not Be Ready by 2018 – Wall Street Journal (subscription)

Rule change would add a capital ‘surcharge’ for the biggest US banks.

Model Risk Managers Grapple with Interconnectedness – Risk (subscription)

US regulators ask banks to assess cross-dependencies of models – prompting some to employ network theory.

Company News 

AIMA Publishes MiFID II Best Execution Guide – Profit & Loss

AIMA’s MiFID2 Best Execution Guide, which is only available to AIMA members, outlines the MiFID2 obligation to achieve the best possible results when executing transactions. 

Vela Buys Object Trading – Profit & Loss

Market data, and analytics technology provider Vela Trading Technologies, has signed a definitive agreement to acquire Object Trading, a provider of a direct market access (DMA) platform, pre-trade risk controls, and analytics applications.

Cobalt Fends Off Blockchain Competition – Euromoney

Despite the progress of other projects applying blockchain technology to FX, Cobalt’s CEO remains confident that his post-trade processing network can reach critical mass.

They’re the World’s Fastest Traders. Why Aren’t They Thriving? – Bloomberg

Even as critics of high-frequency firms have argued their speed and technology give them an unfair advantage, the traders are facing diminishing returns.

Market Savvy

Mexican Peso Up on Central Bank Rate Hike Comments; Brazil Shares Rise – Reuters

Mexico’s peso currency firmed after the central bank governor said interest rate hikes could be paused for some time, but he knocked down market speculation that there would be rate cuts before mid-2018.

Cautious Fed Helps Emerging Stocks, Currencies to Weekly Gains – Reuters

Emerging stocks were on track for their best week since March and currencies looked to chalk up solid weekly gains, sailing the slipstream of cautious tones from the US Federal Reserve and a tepid dollar.

CEE Currencies Firm on Fed and C/As, Bonds Tread Water – Reuters

The forint hit a one-month high against the euro as Central European units continued to firm, still buoyed by Fed comments that were less hawkish than expected, and a healthy outlook for the region’s current accounts.