Top Headlines

UK ‘Like an Emerging Market’, Warns Veteran Fund Manager – Financial Times

The UK increasingly resembles an “emerging market” and risks a currency crash should it leave the EU without a deal next month, according to one of the pioneers of investing in developing economies.

Investors in EM Currencies Walk a Tightrope Between Risk and Return – Financial Times

Yield-hungry investors are facing a dilemma. Are the higher returns they can earn in emerging markets worth the risk, now that the outlook for global growth is darkening? The Turkish lira, for example, which was a standout performer just a month ago, now seems a decidedly shaky bet. It is a stark reminder that buying currencies with high interest rates is a risky business.

We Need Guidelines Around Responsible Spreads (opinion) – Profit & Loss

I have written before that after the sterling event someone showed me a screen grab where a reputable firm was showing 0.70-1.30 in Cable. To give this context, the spread was wider than the entire range for that pair during the last eight or nine years – a period that included Brexit. I find this reprehensible.

Regulatory News

CFTC Staff Issues Research Report on Impact of Automated Orders in Futures Markets – US Commodity Futures Trading Commission

The Commodity Futures Trading Commission’s Market Intelligence Branch in the Division of Market Oversight has issued a report that analyzes the entering of orders manually and automatically in commodity futures markets in the US to determine how technological change is affecting futures trading. 

CFTC Approves Margin Comparability Determination for Australia – Regulation Asia

Despite some differences between its own rules and Australia’s regime for uncleared swaps margining, the CFTC has determined that the end result is the same.

Use-Cases for Mifid II Data Prove Elusive – (subscription)

Banks are running market share analysis from trade reports, but data quality is hampering other projects.

Goldman Sachs Slapped with £34m Fine for ‘Serious and Prolonged’ MiFID Reporting Failures – Investment Week

The UK’s Financial Conduct Authority has handed Goldman Sachs a £34.3m fine for failing to provide “accurate and timely” reports on more than 220 million MiFID-regulated transactions between November 2007 and March 2017.

Crypto News

Digital Asset Settlement Service Launches – Profit & Loss

Zero Hash, Seed CX’s digital asset and fiat currency custodian subsidiary, has launched a suite of OTC trade settlement services for digital assets.

Blockchain Financial Plumbing is Still Years Away, Says LSE Spinoff Exactpro – CoinDesk

If blockchain is supposed to be the new plumbing for the world’s financial markets, then think of Exactpro as the home inspector who checks the pipes for leaks.

Kraken Exchange Announces Launch of Both Spot and Futures Trading – Bitcoin Exchange Guide

Kraken Exchange has become a slow but powerful force in the crypto industry, adding to their validity with the recent acquisition of Crypto Facilities. The acquired platform has since been renamed Kraken Futures, and this addition makes it possible to offer both spot and futures trading.

Company News

New Goldman Sachs Algo Offers Basket FX Trading – Profit & Loss

Goldman Sachs has launched a Basket Algo, which gives clients the ability to take numerous FX trades and then trade them as a basket.

SGX Buys 20% Stake in BidFX – Profit & Loss

Singapore Exchange has acquired a 20% stake in BidFX, including an option for additional shares to gain a controlling interest, for a total cash consideration of $25 million.

Blockchain Specialist R3 Deploys New Strategy Focusing on Expansion – The Trade

R3, which is backed by a consortium of the big investment banks, recently created a dedicated ‘corporate development’ function, which has been tasked with supporting early-stage companies building on its flagship Corda platform, as well as exploring joint venture opportunities.

SocGen Offers Won Hedged Indexes for Korean Autocall Clients – (subscription)

Korean retail structured product dealers have always faced a currency risk problem: the products are denominated in won, but are linked to baskets of offshore indexes that settle in a range of currencies. Societe Generale believes it has found a way to sidestep this risk and possibly boost yields, in a bid to tempt back investors left jittery about recent stock market falls.

Osaka Exchange to Perform Proof of Concept Testing for Derivatives – Exchange News Direct

Osaka Exchange is performing proof of concept testing regarding the feasibility of using new data and services that are expected to contribute to the development of the securities markets.

Market Savvy

Pound Edges Lower as Brexit Stalemate Drags On – Reuters

Sterling edged lower on Thursday after British Prime Minister Theresa May’s offer to quit failed to convince hardline opponents to back her Brexit withdrawal agreement, fuelling more uncertainty for the pound in the short term.

Hong Kong Defends Dollar Peg Again in $500m Intervention – Financial Times

Hong Kong’s de facto central bank stepped in again on Thursday to defend its currency’s peg to the US dollar, bringing the cost of the latest string of interventions to nearly $2bn.

Turkey’s Lira Slides Almost 5% as Foreign Exchange Reserves Drop – Financial Times

Turkey’s lira sank on Thursday after new data showed a further drop in the country’s foreign currency reserves. The lira tumbled 5 per cent in volatile action to TL5.58 per dollar just before 9am in London, adding to more moderate losses during the Asian trading day.

Dollar Buoyed as Dovish Central Banks, Risk Aversion Hit Rivals – Reuters

The dollar rose on Thursday as rival currencies struggled following more dovish soundings from central banks, while the yen gained as investor worries grew.