Top Headlines
Speculators Mount Largest Short Sterling Position Ever as Pound Keeps Slumping – WSJ (subscription)
Bullish bets on the British pound are now among the loneliest positions in global markets. Since the June 23 Brexit vote and the Bank of England’s recent decision to cut interest rates, the currency has depreciated sharply, and most see the selloff going further.
The Rise of the Buy Side – Bloomberg
It’s not Wall Street, where the biggest names in banking stalk the canyons of Manhattan. And it’s not the City of London, where grand financial institutions new and ancient grace the shores of the slate-gray Thames. No, this is Columbus, Ohio, and John McClain, a portfolio manager at Diamond Hill Capital Management, surveys a panorama unlike the traditional citadels of capitalism.
Banks Won’t Wait Around to See What Brexit Deal the U.K. Can Get – Bloomberg
Big investment banks with their European headquarters in London will start the process of moving jobs from the U.K. within weeks of the government triggering Brexit, a faster timeline than their public messages of patience would imply, according to people briefed on the plans being drawn up by four of the biggest firms.
How the BOE’s Stimulus Measures Up to the ECB’s – Bloomberg
The Bank of England is being decidedly less ambitious than the European Central Bank with its plan to purchase corporate bonds, but it will be no less effective, according to Wells Fargo & Co.
Hunting for Yield? They’re Handing It Out in the Money Market – WSJ (subscription)
Something that has been hard to find recently is showing up in the money markets: yield.
Russia’s Mysterious, Unemployment-Light Recession – Bloomberg
Policy makers in the U.S. and Europe have in the past been vexed by the presence of a “jobless recovery.” Russia is now experiencing something less annoying, but no less puzzling: a recession without unemployment.
Regulatory News
U.S. Said to Uncover Evidence of Criminal Acts in VW Probe – WSJ (subscription)
U.S. prosecutors and Volkswagen AG are negotiating a settlement that could result in significant financial penalties after Justice Department officials found evidence of criminal wrongdoing in the car company’s diesel-emissions cheating, said people familiar with the matter.
EU Looks to Level Regulatory Playing Field With Apps, Telecoms – WSJ (subscription)
The European Union’s executive body is set to propose more rules for so-called over-the-top telecommunications services such as Microsoft Corp. ’s Skype or Facebook Inc. ’s WhatsApp, in a bid to level the regulatory playing field with the bloc’s big telecom operators.
Company News
Northern Trusts Signs with Bex – Profit & Loss
Northern Trust has entered an exclusive partnership with execution services software provider Bex to develop customised FX software, including components used in Northern Trust’s electronic FX trading platform.
OTC Clear Claims First in USD/CNH Swaps Clearing – Profit & Loss
OTC Clearing Hong Kong (OTC Clear) has launched a clearing service for cross-currency swaps (CCS), which will initially focus on swaps in the USD/CNH currency pair.
Market Savvy
Dollar Slumps on Fed Rates Bets as European Equities Retreat – Bloomberg
The dollar weakened versus all of its major peers and gold jumped the most in two weeks as prospects for a U.S. interest-rate hike this year remained subdued. Equities declined in Europe and Asia.
Strong Yen and Weak Oil Hit Asia Stocks- WSJ (subscription)
Shares in Asia were mixed on Tuesday, with record levels seen in the U.S. market overnight offset by a dip in oil prices and a much stronger yen.
Assets Retreat With World Markets Despite Czech GDP Surprise – Reuters
The forint and the zloty retreated on Tuesday alongside worldwide stock markets and as receding U.S. interest rate hike expectations bolstered the euro.
Asia Stocks at 1-Year High on Global Easy Money Policy, Oil Jumps – Reuters
Asian shares rose to one-year highs, expanding their gains this year to 10 percent, supported by a jump in oil prices and investor expectations of an extended phase of easy monetary policy around the globe.