Top Headlines

Sterling Consolidates After Election Surge – Reuters

Sterling hovered a cent below Tuesday’s six-and-a-half month highs against the dollar, the jury still out on whether it can make more progress on the back of optimism around the shock calling of a June 8 parliamentary election.

Theresa May’s Snap Election Opens New Chapter for the Pound – Financial Times (subscription)

Prime minister’s gamble has removed some uncertainties, but added new questions. 

Dollar Kicked by Ascendant Sterling After May Calls UK Vote – Reuters

The dollar index traded near three-week lows, dragged down by a resurgent sterling after British Prime Minister Theresa May called for an early general election ahead of Brexit negotiations. 

Goldman Becomes Latest Wall Street Bank to Ditch Bullish Dollar Outlook – Wall Street Journal (subscription)

Citing recent comments from Donald Trump, New York bank reverses its view on the dollar.

Euro Benefits from Weak Dollar, Sterling Close to Six-Month High – Reuters

The euro hit a three-week high, benefiting from a dollar weakened by lower US rates and doubts over President Donald Trump’s promised fiscal boost, while the prospect of a snap British election kept sterling near a six-month peak.

Twice-Bitten Traders Take No Chances with French Election Risk – Bloomberg

After last year’s political shocks from the UK and the US, investors are taking no chances with the risk of a French version.

US Treasury Chief Seeks to Allay Fears Over Trump – Financial Times (subscription)

Steven Mnuchin seeks to assuage fears of US launching currency or trade wars.

China Relaxes Some Cross-Border Capital Curbs as Yuan Steadies: Sources – Reuters

China’s central bank has relaxed some of its curbs on cross-border capital outflows put in place just months ago to shore up the yuan currency, banking sources said.

Beware the Rally in Emerging-Market Currencies – Bloomberg

Beware the rally in emerging-market currencies: the best quarterly performance in almost seven years is about to reverse.

Regulatory News

CFTC Extends Margin Rule Relief Pending Agreement with EC – Profit & Loss

The US Commodity Futures Trading Commission (CFTC) has further extended its no action relief for swap dealers that are subject to, and in compliance with, the margin requirements for non-centrally cleared OTC derivatives in the European Union (EMIR RTS) for failure to comply with the CFTC’s final margin rule.

Currency Traders Spot Fatal Flaw in Republicans’ Border Tax Plan – Bloomberg

In Washington DC, one of the selling points of an ambitious border-tax plan rests on a key economic assumption: the dollar will appreciate enough to offset any increase in the cost of cheap, imported goods that so many Americans have come to rely on.

Britain’s Finance Watchdog Says EU Access Vital for Healthy Competition – Reuters

Access to markets and workers in the European Union after Britain leaves the bloc is essential for maintaining healthy competition in financial services and avoiding disruption, the UK’s markets watchdog said.

SIFMA Wants a ‘Time Out,’ Seeking Longer Delay of DOL Fiduciary Rule – Investment News

Meanwhile, the Consumer Federation of America complains that the Trump administration has prematurely made up its mind to repeal or replace the fiduciary measure.

Dealers Crack Down on Clients with Dual Netting Sets – Risk (subscription)

Pricing adjustments for posting non-cash collateral can run to 100bp.

Justices Grill SEC Over Limiting Power to Make Wrongdoers Give Back Gains – Wall Street Journal (subscription)

SEC argues disgorgement shouldn’t be subject to statute of limitations.

Company News 

Deutsche Bank Deploys Artificial Intelligence to Help Meet Demands of Regulatory Compliance – Wall Street Journal (subscription)

The bank is using AI to reduce costs and improve accuracy as it parses voice and video recordings of bankers at work.

CME Patent Sees Derivatives Opportunity in Bitcoin Mining – Coin Desk

Derivatives giant CME Group is looking to patent a way for bitcoin miners to hedge against operational risks.

Market Savvy

Asia FX Creep Higher as Caution Over UK Election Seeps in – Reuters

Asian currencies eked out gains as caution set in following British Prime Minister Theresa May’s call for an early general election, which sent the sterling soaring to a more than six-month high.

Brazil Rate Futures Yields Fall on Central Bank Minutes – Reuters

Yields paid on Brazilian interest rate futures fell after minutes of the central bank’s last policy meeting showed officials considered a steeper rate cut, while Mexico’s peso sagged following aggressive comments by Donald Trump on trade.

Rangebound Australian Dollar in Prospect if RBA Stays on Hold – Financial Times (subscription)

Analysts see only a gradual shift away from Australian central bank dovishness.

Press Releases 

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