US-China Trade Deal ‘Stalled Because of Hong Kong Legislation’: Axios – Reuters

A trade deal between United States and China was now “stalled because of Hong Kong legislation”, news website Axios reported on Sunday, citing a source close to US President Donald Trump’s negotiating team.

China Will Maintain Currency Stability, Prudent Monetary Policy: PBoC – Global Times

China won’t use the yuan’s exchange rate as an instrument, and it will refrain from a beggar-thy-neighbour policy and strengthen efforts to advance reform of a market-based mechanism of the yuan exchange rate, said Yi Gang, governor of the People’s Bank of China.

Protesters Back on Hong Kong Streets in Tens of Thousands – South China Morning Post

Peaceful march in Kowloon descends into chaos, ending the near-two-week hiatus of extreme protest violence as rounds of tear gas, rubber bullets are fired by police in Whampoa, where mobs smash up stores for their mainland connections.

SPD Leadership Choice Threatens Germany’s Ruling Coalition – Reuters

The future of Germany’s ruling coalition looked shaky after the election of new leaders of the Social Democrats who are demanding a shift in policies, and several senior conservatives ruled out talks to renegotiate a governing agreement.

EU’s Ambitious New Commission Set to Have Wings Clipped – Financial Times

Ursula von der Leyen’s plans likely to be overshadowed by festering row over budget.

Smooth Brexit to Deliver Strong Growth: CBI – The Times

The UK economy will pick up speed by 2021 if headwinds from Brexit are lifted, according to the CBI’s latest forecast.

EU Chief Issues Brexit Warning Over City of London Access – Financial Times

The EU’s financial services chief has warned that Brussels is ready to cut off the City of London’s post-Brexit market access in a sign of the pressure Britain will face to stay closely aligned with European rules after it leaves the bloc. 

Bank of Mexico Cuts Economic Growth Forecasts – Wall Street Journal

The Bank of Mexico lowered its economic growth estimates for 2019 and 2020, saying weakness had been more pronounced and prolonged than it previously expected.

Germany Pulls Back from Recent Overt Criticism of ECB – Financial Times

A recent apology to Mario Draghi by Germany’s top central banker has highlighted a pressing concern in the eurozone’s largest economy about the European Central Bank: that criticism of its monetary policies is going too far and risks creating a domestic backlash.

Does the Global FX Committee Need to Rethink its Priorities? – Profit & Loss

This week’s meeting in Sydney is likely to see the Global FX Committee unveil an unsurprising list of priorities for the impending three-year review of the FX Global Code, but should these priorities themselves be reconsidered?

Regulatory News

US Regulators Divided on Use of Derivatives in Investment Products – Financial Times

Clear divisions have emerged among top US financial regulators over proposed rules covering derivatives which are widely used by portfolio managers to run investment funds more efficiently. 

FCA Plans Senior Manager Roll-Out to Benchmarks – FOW

UK regulator said in a statement on Friday it wants benchmark administrators to be registered as one of two categories.

Banks Urged to Clean Up Government Bond Sale Practices – Financial Times

The FICC Markets Standards Board, a trade grouping of banks, investors and bond issuers, has drawn up a series of standards taking aim at the role investment banks play in auctioning government bonds as so-called primary dealers. 

Clearing House Power-Downs Raise Fears Among Members – Risk

Regulators have counted a few dozen operational outages at central counterparties over the past year – all of them brief systems interruptions that affected banks and other users in a limited and inexpensive way.

Banks Sign-up for Euribor Reform – FOW

Euribor reforms take a step in the right direction as panel banks are phased-in to the new system.

Crypto News

Institutional Crypto is Coming – Profit & Loss

Major financial institutions will move into the crypto space, despite the fact that many of them have avoided it thus far, argues David Mercer, CEO of LMAX Exchange Group, in a new video interview.

Will the China of Tomorrow Run on the Technology Behind Bitcoin? – South China Morning Post

President Xi Jinping told the Communist Party elite in October he wanted the country to be a ‘rule maker’ on blockchain technology and ever since state media has been bombarding the public with articles on the subject and one expert said it ‘could open a new chapter on the integration of governance and technology, if proved a reliable technology’.

Crypto Goes Up and Down, But Is It Getting Anywhere? – Bloomberg Businessweek

As the dust settles, investors and regulators find themselves still grappling with the question first raised when Bitcoin broke into public consciousness six years ago: Are cryptocurrencies the future of money? And a new one: If so, what kind of coin will catch on?

Crypto Custodian Expands Connections – Profit & Loss

London-based Copper, a custodian for digital assets, says it has expanded its Walled Garden infrastructure and is now connected to the top 15 crypto exchanges, thus providing its customers with access to a larger liquidity pool.

Company News

Surveillance Firm Voxsmart Buys Fonetic – Profit & Loss

Surveillance technology provider VoxSmart has announced the acquisition of Fonetic Trading to deliver what the firm says will be “a comprehensive communications surveillance offering for capital markets participants”.

Legal & General Overhauls Trading Systems at £1.2tn Investment Arm – Financial News

Legal & General’s £1.2tn investment arm is to outsource its systems for certain trading functions, as higher regulatory costs impact the returns fund managers can deliver to customers.

Tradeweb’s IPO Shows How OTC Markets are Changing – Risk

Amid a crop of disappointing tech IPOs, Tradeweb’s stock market debut in April felt like a coming-of-age party, heavy with symbolism and bursting with promise.

UK Fund Managers Warned: Your Bonus Will be Lower Next Year – Financial News

Payouts for 2019, expected in early 2020, are likely to be around 10% lower than average as fund outflows continue.

Stability has Destabilised the Macro Hedge Fund – Financial Times

Last week, Louis Bacon decided to call it quits. After three decades at the top of the hedge fund industry, Mr Bacon’s decision to close Moore Capital Management to outside money is understandable, but nonetheless symbolic of how difficult “global macro” hedge funds like Moore have found the last decade. 

Former Barclays FX Boss Madar Joins NatWest Markets – Financial News

The former global head of foreign exchange at Barclays, who left in the summer after just a year in the position, has re-emerged at NatWest Markets.

Market Savvy

Safe-Haven Yen Hits Six-Month Low After Upbeat Chinese Factory Activity – Reuters

The Japanese yen hit a six-month low on Monday as investors cheered an unexpected rebound in Chinese manufacturing, while a tightening British election race knocked the pound.

Move Over Trade Wars, a Global Debt Crisis is Approaching – South China Morning Post

Large debts at the public and private level may not matter as long as growth continues and interest rates remain low, but that could all change should a new financial crisis creep up on the global economy, as has happened before.

Five Things to Watch from This Week’s Opec Meeting – Financial Times

With Saudi Aramco IPO imminent, ministers will debate production deal, role of Russia and US shale impact.

Euro Snoozes Through Sleepiest Week Since Launch 20 Years Ago – Financial Times

Currency lodged in tight range thanks to steady monetary policy and trade uncertainty.

Why You Shouldn’t Expect Rates to Head Upward for a While – Wall Street Journal

Federal Reserve Chairman Jerome Powell recently set a high bar for raising interest rates, one that looks unlikely to be met for a long while.