Top Headlines

US Dollar Comes Under Pressure After Fed Holds Rate Forecast Steady – Financial Times (subscription)

The US dollar skidded after the Federal Reserve raised rates, but left unchanged its expectations for further increases this year.

What You Need to Know After FOMC Meeting – Financial Times (subscription)

Dollar falls as Fed signals just two further increases likely in 2017.

Euro Reaches One-Month High as Dutch Vote Shows Liberal Win – Bloomberg

The euro traded just off the highest level in more than a month after an exit poll showed Dutch Prime Minister Mark Rutte’s Liberals easily beat the anti-Islam Freedom Party of Geert Wilders in Wednesday’s election, allaying concerns about the spread of populism in the currency bloc.

Sterling Dips Before Bank of England Decision – Reuters

Sterling retreated against the dollar and euro, with signs the economy is finally slowing after last year’s Brexit vote expected to weigh on the Bank of England’s message on interest rates later in the day.

Pound Goes from Slumber to Excitement at London Dawn on Fixing – Bloomberg

The dramatic moves without any accompanying news headlines have left commentators attributing the swings in the currency to events that happened much earlier in the day.

Mexico Peso Forecast to Go from First to Worst Amid Trump Threat – Bloomberg

Mexico’s peso, which has surged this year on wagers the selloff that followed Donald Trump’s election victory was overdone, is projected to weaken 5.4 percent by the end of June.

China, Following Fed, Lifts Short-Term Rates to Steady Yuan, Battle Debt – Reuters

China’s central bank raised short-term interest rates in what economists said was a bid to stave off capital outflows and keep the yuan currency stable after the Federal Reserve raised US rates overnight.

Fed Rate Moves Could Spell End to Asian Easing – Reuters

The long cycle of falling interest rates in Asia could be over after the US Federal Reserve’s third rate rise in 15 months was followed quickly by monetary tightening in the world’s second-biggest economy, China.

Four Gulf Central Banks Hike Rates After Fed, Others May Follow – Reuters

Four Gulf central banks raised interest rates within hours of the US Federal Reserve’s rate hike, pressured by the need to protect their currencies even though an economic slowdown in the region calls for loose monetary policy.

UK Lawmaker Urges Regulator to Look Into Possible Data Leaks – Reuters

The head of a British parliamentary committee has asked a regulator to look into media reports, including one by Reuters, about movements in financial markets ahead of economic data releases that raised the possibility of leaks.

Barclays’ Bagguley Says Traders Had No Right to Influence Libor – Bloomberg

The chief operating officer of Barclays investment bank told a London court he never instructed swaps traders to speak to Libor submitters and didn’t know about any contact between them.

Last Look and the Need for a Balanced Debate – Profit & Loss (subscription)

The market should read the Global Code properly and understand that market making is not a charity.

Swiss Central Bank Holds Rates, Pledges to ‘Remain Active’ on Currency – Financial Times (subscription)

No change on interest rates or currency policy from the Swiss National Bank, but it has delivered a rare rise to its inflation forecast for this year.

Brazil Central Bank to Resume FX Swap Rollover with $500 Million Auction – Reuters

The Brazilian central bank will sell as much as $500 million worth of currency swaps, resuming foreign exchange intervention following a three-week pause.

Regulatory News

Giancarlo Lays Out New Regulatory Agenda – Profit & Loss

Following the news that he had been nominated by the Trump administration to be the new chairman of the Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, has laid out a new agenda for the Commission.

CFTC Chief Eyes Manhattan Prosecutor for Top Enforcement Role – Wall Street Journal (subscription)

James McDonald is set to be picked as the next enforcement chief at the top derivatives regulator.

Mark Carney Has to Set the Highest Standards for Britain’s Banks – Financial Times (subscription)

Protecting Charlotte Hogg looks like a lapse in judgment.

Reintroduction of Financial Choice Act Coming in ‘Weeks’: Hensarling – Think Advisor

House Financial Services chairman tells Hispanic Chamber that Choice Act will throw Dodd-Frank ‘on the ash heap of history’.

Exchange Chiefs Play Down Regulatory Divergence – FOW (subscription)

The heads of the CME and Nasdaq said they were not overly concerned about the possibility of regulatory divergence across regions.

Silent Running: On the Trail of the SEC’s Missing CDS Rules – Risk (subscription)

The mysterious fate of the apocryphal 2013 clearing proposal, and what comes next.

Company News

Virtu Bids for KCG – Profit & Loss

Broker dealer KCG Holdings has confirmed it has received an “unsolicited” offer from rival Virtu Financial to take over the company.

Konnichiwa Amsterdam: Japan Banks Seek New Home After Brexit – Bloomberg

As Frankfurt, Paris and Dublin vie for financial jobs that may move from London after Brexit, two of Japan’s biggest banks have been quietly building their presence elsewhere: Amsterdam.

Asset Managers Turn to Derivatives – FOW (subscription)

Asset managers have chosen to increasingly invest in their derivatives capabilities amidst regulatory shifts, according to a new report by Sapient Global Markets.

‘A Choreographed Ballet’: Academics Attack CVA – Risk (subscription)

Two well-known finance professors called into question the legitimacy of derivatives prices that incorporate a credit valuation adjustment (CVA) – a widely used add-on that reflects counterparty risk.

Market Savvy

Emerging Markets Currencies Build on Post-Fed Fillip – Financial Times (subscription)

Emerging markets currencies gained broadly against a softer greenback in early Asia trading following the Federal Reserve’s decision to raise interest rates.

LatAm Currencies, Stocks Gain After Fed Rate Hike – Reuters

Latin American currencies and stocks gained after the US Federal Reserve hiked interest rates for the second time in three months, pointing to a benign economic outlook and a steady path of rate rises.

Fed Reaction: Early Asia FX – Financial Times (subscription)

The Korean won was the biggest gainer, jumping a full one per cent to a four-month high at 1,130 won to the dollar as trading in the region picked up pace.