UK Wins Court Case With ECB on Euro Clearing

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Top Headlines

UK Wins Court Case With ECB on Euro Clearing – Wall Street Journal (subscription)
A European Central Bank policy requiring British companies managing trades in euros to relocate to the eurozone will be annulled, Europe’s second-highest court ruled Wednesday, marking a victory for the UK government which had argued such a move was against European law and would push business away from London’s financial centre.

ASIC to Investigate Market Activity Around RBA Decision – Profit & Loss
The Australian Securities and Investment Commission (ASIC) is to investigate price action in the AUD/USD in the lead up to yesterday’s Reserve Bank of Australia monetary policy announcement.

Barclays ‘Last Look’ at Currency Trades Faces US Review – Bloomberg
The Justice Department has begun looking into a common practice in foreign exchange markets that allows banks to back out of unfavourable trades at the last moment.

London’s Finance Role Threatened by ‘Brexit:’ Lord Mayor – Bloomberg
The City of London’s role as Europe’s financial centre is threatened by the prospect of a British departure from the European Union, Lord Mayor Alan Yarrow said.

Euro Slides Toward 2003 Low as Services Growth Misses Before QE – Bloomberg
The euro declined for a fifth day against the dollar, approaching the weakest level since 2003, as services growth in the region fell short of analysts’ estimates, highlighting economic divergence with the US.

Denmark Intervenes in Currency Market in a Big Way – Wall Street Journal (subscription)
Denmark’s central bank bought a record amount of foreign currency last month in a bid to protect the krone’s peg to the euro, underscoring the fallout from the European Central Bank’s efforts to boost economic growth.

PBOC’s Yi Sees No Need to Widen Yuan Band Amid Currency Pressure – Bloomberg
There’s no “urgent need” to widen the yuan trading band, the deputy central bank governor in charge of foreign exchange reserves management said, even as China’s currency contends with depreciation pressure.

Euro Slides Ahead of ECB; Dollar at 11-year High – Reuters
The dollar, bolstered by rises in U.S. government bond yields this week, hit its highest since September 2003 against the basket of currencies used to measure its broader strength.

Join FXPA at FIA Boca
Attending FIA Boca next week? Please join the membership of the Foreign Exchange Professionals Association (FXPA) for a Meet & Greet session at the FIA Boca conference. Representatives from the FXPA will be in the Lounge Area adjacent to Bar Luna from 5:30-6:30 on Tuesday, 10 March. Please rsvp to jros@profit-loss.com
 

 

 

Regulatory News

CFTC at Odds with Europe Over Benchmark Administration – Profit & Loss
Commodity Futures Trading Commission (CFTC) chairman, Timothy Massad, says that the European proposal of government involvement in financial benchmarks could have a negative impact on the markets.

Lawyers Wary of Mifid II as Deadline Passes – FOW Magazine
Top European lawyers have expressed ongoing concerns with the Mifid II proposals after the consultation period for the latest draft of the controversial European trading reform closed last night. Sam Tyfield, partner at international law firm Vedder Price, said there were “a number of areas in which the industry felt the comments they made in summer 2014 had not been taken on board or where detail had not been provided”.

 

 

Company News

RBS Reshuffles Heads in Major FX Restructuring – Profit & Loss
RBS is undergoing a major reorganisation of its management team, which will include global co-heads of FX, Tim Carrington and Fabian Shey, stepping down from their current responsibilities and working as part of the team leading the transition to a smaller, more focused bank.

Hundreds Exit Tullett in Cost-Cutting Year – Financial News (subscription)
Tullett Prebon let go more than 150 front-office staff last year to contain costs, according to full-year results in which the interdealer broker revealed it was close to signing off on a global strategic review under new chief executive John Phizackerley.

CME Price Limits Caught Out By Swiss Franc Surge – Risk Magazine (subscription)
A CME Group rule designed to deter sharp price movements may have contributed to the disruption in foreign exchange markets on January 15, causing prices for listed FX futures to diverge wildly from the over-the-counter spot market and prompting the group to change the policy barely a month after it came into force. CME Rule 589 sets price fluctuation limits for certain contracts traded on the exchange.

Nasdaq Hopeful on European FX Clearing – Financial News (subscription)
A senior Nasdaq executive has expressed hopes that the European Securities and Markets Authority may reverse its decision not to mandate clearing of certain types of foreign exchange derivatives, following the US exchange operator’s approval to clear such instruments.

LSE in Talks With Rival Exchanges on Margining – FOW Magazine
The London Stock Exchange Group has said it is in talks with a number of exchanges and trading venues about using a new clearing service set to be launched by LCH.Clearnet, which is LSE majority-­owned. LCH.Clearnet said it will launch in the next 12 months portfolio margining, a new service that could dramatically cut the cost of trading interest rate futures and swaps.

Barclays Will Cut Investment Bank Again if Performance Doesn’t Improve – Reuters
Barclays chief Antony Jenkins has threatened more cuts to its underperforming investment bank after a 750 million pounds charge by the British bank provided fresh evidence of the costs of past misdemeanours by its traders.

Citigroup Set for Redundancies in EMEA Markets Business – Reuters
Citigroup is set to make a round of redundancies within its markets and securities business in the Europe, Middle East and Africa region, according to an internal memo sent to staff yesterday and seen by IFR.

 

 

Market Savvy  

Eurozone’s March to QE Enters its Final Stages
Financial Times
Just with words, Mario Draghi, European Central Bank president, dazzled bond markets. What will happen when he actually acts? His announcement on January 22 of eurozone “quantitative easing” led to another big lurch down in government borrowing costs. Yields, which move inversely with prices, are now negative on German bonds with maturities of up to six years. Yields on 10-year Spanish and Italian bonds have fallen even faster than German equivalents. This week’s ECB meeting in Cyprus will set the stage for QE implementation this month.

 

 

Press Releases

SGX Sees Volume Growth Year-on-Year in February
Singapore Exchange reported year-on-year growth in trading volumes and market activities for February.  Volumes were down month-on-month.

 

 

Industry Events