Top Headlines

Sterling Recovers from Dip as Election Called – Profit & Loss

Sterling dropped around 80 points as the market was spooked by news that UK Prime Minister Teresa May was to make a major announcement imminently, Cable falling to 1.2515 from1.2585 in a matter of minutes.

Dollar/Yen Off Five-Month Low But US-Japan Trade Issues Limit Rise – Reuters

The dollar pulled away from five-month lows versus the yen, with comments from US Treasury Secretary Steven Mnuchin and higher debt yields giving the bruised greenback some breathing space.

President Trump Abandons the Strong Dollar Policy – Financial Times (subscription)

President Trump’s remarks last week about the dollar and US monetary policy offer more evidence that America’s strong dollar policy, launched in 1995 by Treasury Secretary Robert Rubin when the dollar was near post-war lows, is now changing.

Euro Volatility Soars to Highest Levels Since Brexit Vote – Financial Times (subscription)

Investors remain uneasy at fluctuations in French presidential election polls.

Are Markets Headed for a Nasty Shock? – Profit & Loss (subscription)

When assessing which large tail risk events are likely to take place in 2017, speakers at Profit & Loss’ Forex Network London emphasised that there are other risk factors being overlooked that might have a greater impact on financial markets.

This is a Dangerous Time to Own Emerging Markets – Wall Street Journal (subscription)

Some worry a recent buying spree has resulted in lofty valuations as geopolitical tensions rise.

US Treasury Has Switzerland in Its Sights – Bloomberg

Switzerland was again included among the countries singled out by the US Treasury for the value of their currencies and exports.

Japan, US Did Not Discuss Currencies in Economic Talks: Government Official – Reuters

Japanese Deputy Prime Minister Taro Aso and US Vice President Mike Pence did not discuss currencies in the first round of a bilateral economic dialogue, a senior government official said. 

Brazil Currency Firms After Central Bank Intervention – Reuters

The Brazilian real firmed as the central bank stepped up intervention, while the view that the government will stick to its plans to push a pension overhaul also helped to boost the currency as well as local stocks.

Lira Reverses Brief Post-Referendum Rally – Financial Times (subscription)

Turkey’s lira is trading steadily in the aftermath of the country’s constitutional referendum, wiping out brief gains made following the slim margin of victory for the ruling government which is being contested by opposition parties.

Rupee Runs Into Seasonality Wall After Best 1Q Since 1975 – Bloomberg

The rally that’s made the rupee Asia’s best performer in the past three months is threatened as the Indian currency enters a seasonally weak period.

Regulatory News

FCA Sets Out ‘Mission’ as British Bank Regulator Ushers in New Era – Bloomberg

The UK Financial Conduct Authority will prioritize supporting the government with Brexit and helping consumers mis-sold payment-protection insurance, according to its business plan published alongside a “Mission” statement that aims to usher in a new era at the regulator.

Bank Brexit Exodus Seen Hastened by Close Regulator Scrutiny – Bloomberg

European and UK regulators risk inadvertently hastening the loss of some banking operations from London by pushing lenders to make detailed plans for the worst-case Brexit scenario, according to people familiar with the matter.

Paul Volcker Stands Tall Against Attacks from Banking Industry – Financial Times (subscription)

The Volcker rule could survive Trump’s attempts to deregulate the financial system.

What a New Glass-Steagall Wouldn’t Do – Bloomberg

The Glass-Steagall Act, the Depression-era rule that separated plain-vanilla commercial banking from higher-octane investment banking, has come back into the spotlight as Trump administration officials suggest that they might try to reinstate it.

Securities Regulators Should Target Culture Rather Than Pay, Executives Say – MLex FS Core (subscription)

Securities regulators should home in on corporate culture rather than employee compensation to curtail excessive risk-taking and wrongdoing, brokerage executives said at a global forum.

Data Woes Force Dividend Swaps Out of Simm Update – Risk (subscription)

Dealers have different approaches to pricing dividend risk factors.

I Was a Whistleblower. The Fed is Not Doing Enough to Fix Wall Street’s Culture of Fear – Pro Market

Deutsche Bank whistleblower Eric Ben-Artzi publicly rejected a multimillion dollar award from the Securities and Exchange Commission this summer.

Company News

Research Finds Ways to Tame FRTB’s Biases in Forex Charges – Risk (subscription)

New paper shows ways to reduce influence of reporting currency.

Chicago Emerges as the New Fintech Hub – News BTC

The US City of Chicago is the latest entrant into the fintech race after it found a place for itself in the recent study published by Deloitte — one of the “Big Four” consulting firms.

Ex-Susquehanna Engineer Arrested for Trading Code Theft – Markets Media

You can’t outrun the long arm of the law – even on Wall Street.

Market Savvy

Australian Dollar, SA Rand Lead Declines for Currencies – Financial Times (subscription)

It was a mixed day for currencies around Asia with a pause in tensions around North Korea.

Crown Bucks Rebound, Weakest Since Removal of Its Cap – Reuters

Central European currencies after Turkey’s referendum gave new powers to President Tayyip Erdogan, removing some political uncertainty in emerging markets.

C$ Ends Slightly Firmer in Quiet Trade – Reuters

The Canadian dollar gave up early gains to settle slightly higher against the US currency as oil prices slipped from recent highs and investors returned from a long holiday weekend to strong Chinese growth data and softer US data.