Top Headlines

UK Forex Inquiry Comes Under US Pressure – Financial Times (subscription)
The integrity of a Bank of England inquiry is in question as prosecutors in the US probe what the central bank knew about traders’ behaviour in the foreign exchange market.

Forex Probes Caused by Isolated Traders’ Misbehaviour, Task Force Chief Says – Wall Street Journal (subscription)
A few traders are responsible for the foreign exchange scandal that is costing banks billions in fines, said the central banker assigned to help restore confidence in the market.

Five Big Banks Expected to Plead Guilty to Felony Charges, but Punishments May Be Tempered – New York Times
For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote. But when five of the world’s biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.

Hotspot Heats Up Price War – Profit & Loss (free story)
Following through on a promise given by BATS CEO Chris Concannon at Forex Network London last month, Hotspot FX has eliminated its liquidity removal prices in a range of currency pairs, it has termed the “hot list”.

Timing Key to Size of UBS Forex Penalties – Financial Times (subscription)
Timing, as the adage has it, is everything. For UBS, one of five banks trying to settle with US prosecutors over alleged manipulation of foreign exchange benchmarks, a criminal conviction and hundreds of millions of dollars in extra penalties could rest on exactly when its traders attempted to rig one of the world’s biggest financial markets.

The Problem With Benchmarks – Profit & Loss (subscription)
I am quite often asked why I detest benchmarks so much and now, thanks to the recent UK election, I have the perfect example to illustrate my distaste.

Buy Side Supports Move to Single Code of Conduct in FX Markets – Profit & Loss (free story)
Two associations representing buy-side participants active in the FX markets have welcomed the Bank for International Settlements’ (BIS) new working group set up to establish a single global code of conduct in the FX industry, announced earlier this week.

RBA ‘Must be Crying into Their Cornflakes’ Over Australian Dollar Surge –Sydney Morning Herald
The Reserve Bank of Australia and its governor Glenn Stevens face more frustration with the Australian dollar surging almost 2% as weak US economic data spurred expectations the Federal Reserve may push back its plans to raise rates.

Cyber Security the Number One Risk Concern, Says DTCC Survey – Profit & Loss (free story)
Cyber risk is the top risk concern of the financial services industry, according to a new survey conducted by the Depository Trust and Clearing Corporation (DTCC).

Russia Buys Currency First Time Since June to Boost Reserves – Bloomberg
The Bank of Russia resumed buying foreign currency in the market, making its first net purchases since June to replenish international reserves decimated by its defence of the ruble last year.

Regulatory News

Banks Would Get Boost for Overseas Swaps in House CFTC Bill – Bloomberg
The world’s biggest banks would win curbs on US regulators’ power to restrict overseas derivatives trades under legislation proposed by US lawmakers.

CFTC’s Global Markets Advisory Committee Releases Agenda for Upcoming Public Meeting
The US Commodity Futures Trading Commission (CFTC) released the agenda for the upcoming Global Markets Advisory Committee (GMAC) public meeting that will be held on 14 May at CFTC’s headquarters in Washington, DC.

China Regulators Block CNY Futures Trading in Shanghai FTZ –
Authorities fear that multiple onshore renminbi futures curves could emerge.

FSB Widens Review of Risks Posed by Asset Managers – Financial News(subscription)
The Financial Stability Board has broadened its study of the risks posed by the asset management sector to include products and activities, a move seen by the industry as a positive development in a contentious process of determining whether the sector poses systemic risks.

ASIC Blocks Forex Broker’s IPO – Financial Review
The corporate watchdog has blocked the potential float of an online foreign exchange broker, FX Primus, as concerns mount about the prevalence of brokers setting up shop in Australia to target forex punters in the region.

Company News

Icap Unveils CNH Hub – Profit & Loss (free story)
Inter-dealer broker Icap has launched CNH Hub, which pools offshore Chinese renminbi (CNH) data from across the Icap Group to offer a consolidated view of the market.

Forex Algos Revive US Rates Trading at UBS – (subscription)
Rejigged algo behind doubling in volumes – Swiss bank aims to repeat trick in swaps.

Market Savvy  

Dollar Slides After Weak US Retail Sales Suggest Dovish Fed
The US dollar hit a more than three-month low against a basket of major currencies on Wednesday after weaker-than-expected US retail sales data for April supported expectations that the Federal Reserve would wait longer before hiking rates.

Yen and the Art of Currency Maintenance
Financial Times
Poor retail sales in the US came as a shock to investors pinning their hopes for a rebound on the American consumer. The dollar duly tumbled more than 1% against the euro, helped by a further rise in European bond yields.

Currency Orders Signal Euro Downside Limited, Commerzbank Says
Even if the euro resumes falling against the US dollar, the common currency probably won’t reach another 12-year low anytime soon, according to Commerzbank.

The Morning Track – Big Daze
There is a rebellion in markets – tired of the central bank manipulation of prices and sick of the weaker growth – trading more on momentum and mood than reality. The real economy is a bit like the life of a graffiti artist – vandalism to some, art to others – homeless and looking for a big canvas instead of a metal gate.

Press Releases

CME Group’s Terry Duffy to Appear Before the US Senate Committee on Agriculture, Nutrition & Forestry
CME Group executive chairman and president Terry Duffy will appear before the US Senate Committee on Agriculture, Nutrition & Forestry on Thursday, 14 May, to discuss Commodity Futures Trading Commission (CFTC) regulatory issues impacting end users and market liquidity.

Swift Business Forum London Delegates Say Regulation Remains a Top Strategic Priority
Swift held its annual Business Forum London on 23 April, where more than 1,100 industry leaders gathered to discuss the latest trends and innovations in financial services. The theme of this year’s forum was “Harnessing Change in Financial Services”, and the programme explored how the industry can channel innovation to address challenges such as regulation, the technology revolution, new entrants and changing customer behaviour.

Industry Events