Top Headlines

Top FX Banks Brace for Disruption Wave – Euromoney

Demand for single-dealer platforms continues to drive adoption of platform-as-a-service (PaaS) in the FX space, allowing smaller players to compete with the top-tier firms in pre- and post-trade services.

How to Fix the Broken MAT Process – aka: What I Learned at the CFTC Roundtable  – TabbForum

While there have been many issues with the introduction of SEFs, the process largely has been a success. But one conceptual problem persists.

ISDA: Compression in Interest Rate Derivatives Growing – Profit & Loss

A new research note from the International Swaps and Derivatives Association (ISDA) says that compression activity in interest rate derivative markets has increased “significantly” over the past year driven by new regulations and developments in clearing technology.

Rabo Libor Trader Banned by FCA – Profit & Loss

The UK’s Financial Conduct Authority has formally banned Lee Stewart, a former trader at Coöperatieve Centrale Raiffeisen-Boerenleenbank (Rabobank) from the UK financial services industry for “lacking honesty and integrity” following a criminal conviction for fraud in the US.

Credit Suisse Pulls Out of FXPB – FX Week (subscription)

Swiss Dealer the latest to exit prime brokerage business.

SNB’s Record $52 Billion Loss Gives Critics More Ammunition – Bloomberg

The Swiss National Bank suffered a record loss for the first half of the year and warned a customary government payout was in jeopardy, giving politicians keen to raise their profile in an election year more fodder for criticism.

One in Four Fund Managers Expect Competition from New Entrants in Next Five Years – HedgeWeek

One in four (25 per cent) senior asset management executives believe it’s “highly likely” they will face direct competition from a non-traditional new entrant such as a technology or non-financial services company within the next five years.

Parker Index Falls in June – Profit & Loss

Currency managers had a tough June according to the Parker FX Index, which fell 1.52% on the month, with just five of the 30 funds to report results showing a positive return.

Fed Concern Drives Emerging Stocks, Currencies to Monthly Losses –Bloomberg

Emerging-market currencies headed for the steepest monthly loss this year amid concern that an increase in U.S. interest rates will drive capital toward dollar assets. Stocks pared the biggest monthly drop since 2012.

US, Euro Clearing Deal by October – FOW (subscription)

Terry Duffy, executive chairman of CME Group, expects European and US regulators to settle their long running clearing equivalence row by October,

Regulatory News

Deutsche Bank Didn’t Archive Chats Used by Some Employees Tied to Libor Probe – Wall Street Journal (subscription)

Bank says data loss was due to software glitch; New York regulator probing whether loss affects Libor settlement.

FCA Appoints New Director of Supervision – Profit & Loss

The UK’s Financial Conduct Authority has appointed a new director of supervision – investment, wholesale and specialists, the division responsible for oversight of markets

Next Steps on the NBNI G-SIFI Assessment Methodologies – FSB

The Financial Stability Board (FSB) is announcing today that it has decided to wait to finalise the assessment methodologies for non-bank non-insurer global systemically important financial institutions (NBNI G-SIFIs) until the current FSB work on financial stability risks from asset management activities is completed

China makes FX rules ready for foreigners to trade its commodity futures –Reuters

Foreign investors will be allowed to transfer either foreign currency or yuan funds into China to trade in the country’s commodity futures markets, the foreign exchange regulator said on Friday.

Sell Side Steels for MiFID II –

As the de facto gatekeepers of financial markets, Wall Street broker-dealers are fully enmeshed in Markets in Financial Instruments Directive II, the European rule set that aims to shore up transparency and end-user investor protection in various non-equity asset classes.

Company News

EBS BrokerTec Announces New Management Structure –  Profit & Loss

EBS BrokerTec has announced a new management structure, naming Dan Cleaves and Darryl Hooker co-heads of EBS BrokerTec Markets, and the addition of Phil Harris, who joins EBS BrokerTec as head of EBS Market.

Maiuri to Head State Street Global Exchange – Profit & Loss

Lou Maiuri has been appointed to head State Street’s Global Exchange business, which includes trading platforms Currenex and Global Link.

Fortress Reveals Second Quarter Struggles at Macro Fund – Profit & Loss

Hedge fund group Fortress Investment has announced its second quarter results, showing continued struggles for its macro fund which was managed by former Citi global head of FX Jeff Feig before he exited the fund last month.

Market Savvy  

Think US Trend Growth Lower, Buy Dollar – Credit Agricole

The US Q2 GDP print was noteworthy for two reasons. The good news was that the release allayed fears of weaker growth especially at the start of the year. Adding to that was the PCE deflator that signalled growing inflation pressure in Q2. The not so good news was the downward revision of the US growth data going back till 2011.

Bets Rise That China’s Yuan Will Fall – Wall Street Journal (subscription)

Investors take positions to protect against yuan weakening, a signal of waning confidence in Beijing.

Euro Outlook in August: on the Way to Parity with the Dollar? – Kantox

Capital controls in Greece; maintenance of interest rates at 0%; and poor Eurozone growth figures have all contributed to a severe deterioration in investor confidence in the euro. This will continue into August and most likely beyond.

Press Releases

BATS Seeks to Expedite Action Against Malpractice

BATS Global Markets (BATS) today filed with the Securities and Exchange Commission the BATS Client Suspension Rule, which would enable the company to take swifter action to prohibit manipulative behavior, such as spoofing and layering, on the BATS Exchanges.

AIMA Urges Progress on Passport for Third Country Jurisdictions

The Alternative Investment Management Association (AIMA), the global hedge fund industry association, welcomed the recommendation to extend a pan-European marketing ‘passport’ to alternative investment fund managers (AIFMs) and alternative investment funds (AIFs) in several non-EU jurisdictions – but urged faster progress on making the passport available to AIFMs and AIFs in other non-EU countries.

Industry Events