Top Headlines

The Bigger Cryptocurrencies Get, the Worse They Perform: BIS – Reuters

Cryptocurrencies are not scalable and are more likely to suffer a breakdown in trust and efficiency the greater the number of people using them, the Bank of International Settlements (BIS) said in its latest warning about the rise of virtual currencies.

Sterling Falls as Traders Cut Positions Before Brexit Votes and BoE Meeting – Reuters

The pound fell as the dollar strengthened, with traders reluctant to buy sterling ahead of a Bank of England policy meeting this week and another expected parliamentary confrontation over the government’s Brexit plan.

Euro Falls and Dollar Nears Seven-Month High as Trade Tensions Weigh – Reuters

The euro fell back towards three-week lows as the escalating threat of a global trade war and a dispute in Germany’s governing coalition weighed on the single currency. 

Mark Johnson’s Attorneys Point to Isda Agreement in Appeal – FX Week (subscription)

Lawyers representing convicted former HSBC banker Mark Johnson say the US attorneys’ shifting theory of prosecution and their inability to explain how a bank can execute a fixing transaction legally has left currency traders clueless about the type of trading that can be interpreted as wire fraud. 

TrueEX Sues 11 Banks Over Swaps ‘Conspiracy’ – Risk (subscription)

TrueEX, an electronic trading platform for interest rate swaps, has filed a lawsuit in New York against 11 of the largest bank market-makers, accusing them of conspiring to block customers from trading on the platform with the aim of ultimately letting trueEX “die on the vine”.

European Corporates Hit by FX in Final Quarter of 2017 – FX Week (subscription)

European companies experienced $6.79 billion in negative currency impacts in the fourth quarter of 2017 – the highest level recorded since 2015, indicating the foreign exchange market is still creating headwinds for corporations that are under-hedged.

Citi Pays $100 Million to Settle Libor Suit – Profit & Loss

Citi has paid $100 million after reaching a settlement with 42 US states’ Attorneys General over allegations it manipulated the benchmark interest rate Libor.

Brexit Contingencies: Asset Managers Put Plans Into Action – Financial Times (subscription)

Asset managers are losing patience with politicians over the slow pace of Brexit negotiations, with several deciding it is better to assume the worst and fire the starting gun on their contingency plans.

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

Listen in to find out what is a “social experiment” and what report “is a propaganda exercise”.

Regulatory News

FCA to Launch Asset Management Mifid Probe – Financial Times (subscription)

The UK financial regulator is to begin a review of the EU rules that changed how asset managers pay for the research they use to make investment decisions.

FIA, CMC Call on CFTC to Amend Reporting Rule – FOW (subscription)

The trade associations said the CFTC could make use of information collected through LEI reporting.

Fed’s Dudley Says Better Banking Culture Is ‘Possible, But Difficult’ – Wall Street Journal (subscription)

New York Fed president’s essay comes just ahead of retirement.

Crypto News

Cryptocurrency Manipulation Study Is Underwhelming – Bloomberg

Anyone seriously interested in this new market should read the paper, not as an authoritative last word, but as a plausible account backed by some data.

Cryptocurrency Hedge Funds See Returns Plunge in Volatile Times – Financial Times (subscription)

Hedge funds investing in cryptocurrencies have seen plunging returns this year, with performance dropping by 35 per cent as digital coins suffered a volatile first half.

Mike Novogratz Just Hired a Former Wrestling Champ to Head Up His Crypto-Bank’s Trading Desk – Business Insider

Yoshi Nakamura, a former director at Citi, has joined Galaxy as head of sales for the firm’s trading division, which oversees Galaxy’s prop trading, over-the-counter trading, and market making business.

Geopolitical Analyst George Friedman Says Blockchain Will Become ‘Obsolete’ – CNBC

Some analysts have noted that if and when an emerging technology called quantum computing matures, it could easily decrypt blockchain.

Company News

Margolis Handed New Role at Citi – Profit & Loss

Adam Margolis, formerly the global head of FXLM bank sales at Citi in London, is now the head of FX advisory at Citi Private Bank in Singapore.

Xavier Rolet ‘Approached’ for Top Thomson Reuters Job – Financial News (subscription)

Former LSE boss turned down chance to lead financial and risk division, according to a person close to the matter.

HSBC Hires BoE Exec Salmon to Oversee Markets Conduct – International Financing Review

HSBC has hired senior Bank of England executive Chris Salmon as its global chief control officer for global markets in its investment bank.

Aite Group: Aggregation and Workflow Key for Buy Side – FX Week (subscription)

Buy-side foreign exchange market participants should focus on six key areas when evaluating technology vendors, as the electronification of instruments in currency markets continues, financial consultancy Aite Group says in a report.

Market Savvy 

Turkish Lira Slides Almost 6% in Worst Week in a Decade – Financial Times (subscription)

Investors anxious over domestic policy and broader emerging market retreat.

Argentina’s Peso Volatile After Central Bank Switch – Financial Times (subscription)

Argentina endured another day of wild gyrations in the peso as investors mulled the surprise resignation of the central bank governor.

The Philippine Peso Needs a More Hawkish Central Bank – Bloomberg

The peso is at a 12-year low against the dollar even after the May 10 rate increase as central bank officials appear to clash over the prospects of further tightening.