Top Headlines

The FinTech Challenge: Scale or Independence? – Profit & Loss

There comes a point for most successful fintech startups when they face a decision: either join part of a larger organisation in order to scale up their business or continue to remain independent. There are trade-offs on each side of this decision, as Mike Harris, president of Campbell & Company, discusses. 

Sterling’s Fate Hangs on Brexit, UK Growth to Be Weak: Reuters Poll – Reuters

Sterling’s near-term fate hangs on whether British Prime Minister Theresa May manages to get her Brexit withdrawal deal through Parliament, according to Reuters polls that also found economic growth will be weak.

Asset Managers Hope for Common FX Tape – FX Week (subscription)

Asset managers are increasingly relying on their own data analysis to measure and gain insight into the execution of their trades, but some would welcome a standardised foreign exchange tape to improve their execution and decision making.

It’s the Worst Time to Make Money in Markets Since 1972 – Bloomberg

Market statisticians are falling over each other in 2018 to describe the pain being felt across asset classes. One venerable shop frames it this way: Things haven’t been this bad since Richard Nixon’s presidency.

Regulatory News

Special Report: CFTC Meeting Focuses on Clearinghouse Risks – FIA

The US Commodity Futures Trading Commission held a public meeting of its Market Risk Advisory Committee on Dec. 4 in Washington, D.C. The MRAC discussed, among other issues, clearinghouse risk management, governance and clearing incentives, and explored the challenges of balancing the interests of clearinghouses, their members and end-users.

Enhanced Brexit Equivalence Possible By Year End: Legal Expert – Global Investor(subscription)

It is possible to gain enhanced equivalence for UK financial markets infrastructure by the end of the year, a legal expert says.

US Swap Rollback Is a Gift to Banks, Citadel Securities Says – Bloomberg

A US regulator’s plan to walk back rules for swap-trading platforms will give big banks a leg up and hurt asset managers looking for better prices and more transparency, according to Citadel Securities, one of the world’s biggest trading firms.

As Research Industry Adapts to MiFID II, Regulators Mull Changes – Tabb Forum

Sell-side analysts and portfolio managers alike should expect changes to MiFID II’s research-commission restrictions as the rule matures, markets adapt, and regulators review the measures. But UK asset managers are unlikely to face more relaxed research-commission rules after Brexit.

Libor Fallbacks Set to Split Cash and Swaps –

Rates market participants face the prospect of a split in how various instruments respond to Libor’s death, after a consultation of swaps users endorsed one approach to establishing a fallback rate, while US bond and loan markets appear to be heading in a different direction.

More FCA Investigations Mean More Careers Damaged Unfairly – Financial News (subscription)

The UK regulator’s policy of opening more probes, many of which are unsuccessful, is forcing people out of jobs regardless of the outcome.

Ripple and Three Others Form Blockchain for Europe Lobby – Finextra

Blockchain for Europe is the first credible attempt to create a unified voice for the blockchain industry at European level. The policy debate in Europe has been fragmented – with inconsistent information from those outside the blockchain sector challenging consensus within it.

Crypto News 

Bitcoin Derivatives That Cost $1 Million Will Soon Be Worthless – Bloomberg

The biggest-ever bet on Bitcoin options is about to expire worthless. Purchased for almost $1 million on LedgerX’s trading platform just days after Bitcoin peaked a year ago, the call options have a strike price of $50,000 and an expiry date of Dec. 28, 2018. For the contracts to retain any value at expiry, Bitcoin would need to rally more than 1,200 percent.

Nasdaq Bitcoin Futures Could “Rewrite Digital Asset Markets” – Global Investor (subscription)

VanEck/MVIS claims its partnership on a bitcoin futures contract with Nasdaq has the potential to rewrite digital asset markets.

G20 Nations Commit to Regulating Cryptocurrencies – Regulation Asia

G20 nations have signed a joint declaration calling for regulation of crypto assets to combat money laundering and terrorist financing.

Crypto Fund Manager Bitwise Has Launched Two New Funds to Address Client Demand – The Block

California-based Bitwise Asset Management announced the launch of two new crypto funds, a move that could put the firm up against one of the largest investors in the market for digital currencies. 

BSO and Kaiko Team Up for Low-Latency Crypto Market Data – WatersTechnology (subscription)

Investors of Gemini, a cryptocurrency exchange, are now connected to Kaiko’s crypto marketdata via BSO, a network, cloud and hosting provider. 

Company News 

Barclays: On the Front Foot Again? – Profit & Loss

In the Profit & Loss 2018 Digital FX Awards, Barclays was the winner of the “One to Watch in 2018” category and, looking back now at the end of the year, it seems that the bank might be on its way to justifying this decision. After a couple of years during which there was a clear slowdown in terms of product development within Barclays’ e-FX franchise, the bank appears to be shifting onto the front foot again.

Wall Street Giant Bloomberg Could Be Put Up for Sale if Owner Michael Decides to Run for President – Business Insider

Michael Bloomberg, the founder of the eponymous financial-data and news operation, said he is likely to sell his company if he runs for president, according to an interview he gave to a local radio station. 

LSE to Close Equity Derivs Business – Global Investor (subscription)

The London Stock Exchange is closing its equity derivatives business next year.

Eurex Clearing Gains Ground with Profit Scheme for Repo – The Trade

Major investment banks including Citigroup and JP Morgan sign up to use the Eurex clearing profit scheme for repo as Brexit looms.

Mark Mobius’ Emerging Market Fund Selects Northern Trust for Asset Servicing and OutsourcedTrading – The Trade

Northern Trust will provide custody, depository, fund accounting and FX services to the investment trust, and fund administration to Mobius Emerging Markets Fund vehicle.

Market Savvy 

Dollar, Yen Lifted as Huawei CFO Arrest Triggers Trade Concerns – Reuters

The US dollar and the yen gained on Thursday after the arrest in Canada of a top executive of Chinese tech giant Huawei prompted fears of a flare-up in US-China trade tensions.

EM Currencies Markets in Risk-Off Mode as Oil Prices Drop – Financial Times (subscription)

Emerging market currencies felt the burn on Thursday morning as oil prices dropped and amid increasing concern over trade tensions between the US and China and general geopolitical uncertainty.

Christmas ‘Ghosts’ are Gifts for Investors – FinancialTimes (subscription)

My favourite part of this autumn’s stock market volatility is the flurry of bull market ghost stories accompanying it. Like the ghost tales of past, present and future in Dickens’ A Christmas Carol, these ghoulish stock market stories are told time and again during a bull market. 

Carry Trade Regains Oomph With Emerging Markets Dodging Fed Squeeze – Bloomberg

The hunt for higher yields is all set to return to emerging markets in 2019 as central banks zealously guard their interest-rate advantage over the Federal Reserve.