Top Headlines 

UBS to Start Currency Pricing, Trading Engine in Singapore – Bloomberg

UBS Group will introduce a new electronic currency pricing and trading engine in Singapore next year in a bid to boost liquidity in Asia’s largest foreign exchange center. 

Time Running Out for EU Brexit Temporary Permissions Regime – (subscription)

Fears are growing that UK central counterparties may force their European Union clearing members to remove more than £38 trillion notional of existing positions if the European Commission does not provide guarantees within the next four months on temporary recognition for UK clearing houses after Brexit. 

A Look Back on 10 Years of And FinallyProfit & Loss

During the first year of columns, I discussed rogue traders, huge losses, bailouts, Bear Stearns, Lehman Brothers and much more. What I find interesting about those early missives is how I also discussed the need for better TCA; the challenge of monitoring behaviour on anonymous platforms; trader behaviour around benchmark fixings, the creep of regulation and its negative impact on FX market liquidity; stop losses, and customers suing banks. Roll forward 10 years and we’re pretty much discussing the same issues.

European Corporate FX Losses Triple – FX Week (subscription)

Currency losses at corporates rose to their highest level in two years, with businesses in Europe reporting the largest increase in the first quarter of 2018, according to a report from risk management solutions provider FiREapps.

UK Derivatives Values Grow on Forex Activity – Risk Quantum (subscription)

The gross mark-to-market value of all derivatives contracts held by UK banks rebounded in the second quarter, ticking up for the first time since the first quarter of 2016. The growth was driven by higher values for foreign exchange derivatives, which rose 33% quarter to quarter to £1.5 trillion. 

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

This week’s edition discusses the devil in the detail behind the SEC rejecting bitcoin ETFs, the changing market structure in crypto, and how market participants are going about institutionalising the new asset class. It also includes feedback from last week’s podcast – specifically why and how bank dealers are hamstrung by the structure of the FX business, especially around customer orders. 

Regulatory News 

Clearing Houses: The New Too-Big-to-Fail Firms – Financial News (subscription)

Since the financial crisis, regulators have aimed to make the system safer by making some derivatives less risky. Their efforts on that front, however, may have undermined their work on another – tackling the threat of institutions that are too big to fail. 

ISDA Responds to ESMA Consultation on Clearing Obligation – ISDA

ISDA has published a response to the European Securities and Markets Authority’s consultation on extending the temporary derogation from the clearing obligation for intragroup transactions concerning third-country entities.

Optimisation Services Edge Closer to EU Clearing Exemption – (subscription)

European Union legislators have laid down proposals that could result in non-cleared trades executed through optimisation services being exempt from mandatory clearing.

Banks Are Global – So Why Aren’t Regulators? – Financial News (subscription)

The huge diversity of financial regulatory structures around the world makes it hard to apply global standards consistently.

Highest Penalty Amount Issued By FX Regulator This Year – Asia Times

China’s foreign currency regulator is maintaining high-pressure control over all foreign exchange violations, issuing millions in stiff penalties to individuals and companies.

Industry Shows Mixed Views about Impact of ISDA’s Ibor Fallback – Global Investor (subscription)

Bank of England working group members have expressed mixed opinions on the fallback rate options put forward by ISDA.

Investment Association Appoints European Affairs Head for Brussels Move – The Trade

The Investment Association has promoted one its senior regulatory specialists to head of European affairs as the body prepares to establish a new office in Brussels.

The EU is Taking Another Look at Regulating Crypto – Bloomberg

Finance ministers from the European Union’s 28 member states will discuss a host of challenges posed by the growing popularity of digital assets and whether rules should be tightened, according to a draft note prepared for a Sept. 7 meeting in Vienna. 

Crypto News 

A Leap of Faith: The Former Point72 PM Who Left to Set Up His Own Crypto Fund – The Trade Crypto

Travis Kling, chief investment officer at Ikigai Asset Management, talks about leaving Point72 to set up his own crypto fund.

Isn’t It Time Banks And Crypto-Exchanges Made Friends? – Forbes

By 2022, the UK will be a global hub for blockchain technologies and the crypto economy. That is the claim of a new report from the Big Innovation Centre, DAG Global and Deep Knowledge Analytics, released last month. It’s good news, but why the four-year wait? 

Bitcoin Survey Suggests Bright Future For Cryptocurrency – Forbes

Bitcoin could be in for a boost with US students twice as likely as the country’s average to own cryptocurrency, a survey by Coinbase has revealed.

How Venezuela Came to Be One of the Biggest Markets for Crypto in the World – CoinTelegraph

The meteoric rise of crypto in Venezuela doesn’t simply result from the desire to avoid the worst effects of hyperinflation. It also stems from the proactive attempts certain cryptocurrencies have made to establish themselves within Venezuela, as well as from a desire among the population to resist and circumvent an authoritarian government. 

Company News 

Japanese Yen and Thai Baht Crosses Added to Thomson Reuters Matching – Thomson Reuters

Thomson Reuters has launched real-time electronic trading of spot Japanese yen and Thai baht cross currency pairs on the Thomson Reuters Matching platform.

P&L Talk Series with Bill Lipschutz – Profit & Loss

Bill Lipschutz talks about how the FX market has changed since he founded Hathersage Capital Management, and why the barriers to entry for currency-focused hedge funds are going up, not down.

BNP Paribas Fined $90 Million for USD ISDAFIX Manipulation – The Trade

BNP Paribas has been handed a $90 million fine to settle charges for attempted manipulation and false reporting related to the US Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX) benchmark swap rates.

Kyte Follows Broker Herd to Europe as Brexit Looms – (subscription)

The OTF provider has lined up a contingency plan to transfer its London business to its Paris entity.

Enhanced Benchmark Transparency to Boost Trading Activity: NEX Markets – Global Investor (subscription)

NEX BrokerTec is distributing its US Treasury data to a larger audience via the Bloomberg Capital Markets Package.

Deutsche Börse Cools Post-Brexit Euro Clearing Ambitions – Financial Times

Deutsche Börse chief executive Theo Weimer has toned down his previously bullish ambition to quickly win a large chunk of the clearing market for euro-denominated derivatives.

Market Savvy 

Sterling Falls as Brexit Headlines Sap Demand – Reuters

Sterling fell on Monday as the latest Brexit headlines sapped investor sentiment after the British currency gained to its highest in nearly a month last week.

Turkey to Set Tone Again for Emerging Markets This Week – Bloomberg

Events are likely to unfold quickly for emerging markets this week following the battering some currencies suffered in August. Data released Monday showed Turkish inflation accelerated more than expected in August to the fastest pace since 2003. 

Trade Worries Help Dollar Settle at One-Week Highs – Reuters

The dollar consolidated near a one-week high against a basket of rivals on Monday as tensions around global trade negotiations fuelled demand for the greenback, though concerns about capital flows checked gains. 

Goldman Sees Yuan Gaining in Reserves at Cost to Dollar, Yen – Bloomberg

China’s currency is set to take an increasing share of world foreign exchange reserves, with the dollar and yen having to make the most room proportionally for the newcomer on the block, according to Goldman Sachs.

Trade War Could Force Heavier Hand from China on Yuan – Reuters

China’s central bank may have to decide soon whether to intervene more forcefully to support the wobbling yuan currency as the United States readies more sweeping tariffs on Chinese goods.

Indonesia’s Rupiah Falls to its Weakest Level in More Than 20 Years – CNBC

The Indonesian rupiah fell to its weakest level against the dollar in more than 20 years on Monday, prompting the country’s central bank to say that it will intervene.