Top Headlines

US Investigating Foreign-Exchange Trading at Wells Fargo – Wall Street Journal (subscription)

Federal prosecutors are investigating foreign-exchange trading at Wells Fargo and have subpoenaed information from the firm, which recently fired bankers in that business, according to people familiar with the matter.

Christmas Didn’t Turn Out So Well for Ex-HSBC Trader – Bloomberg

The Mark Johnson case gave us some memorable quotes, but there’s still a serious question about the difference between pre-hedging and front-running.

ECU and HSBC Clash Over Data – FX Week (subscription)

Lawyers for ECU Group and HSBC clashed in court on October 26, over access to data the currency investment firm says will enable it to decide whether to go ahead with a potential lawsuit, alleging fraudulent behaviour on the bank’s part.

Anatomy of an FX Flash Crash – Profit & Loss

A new Staff Working Paper published by the Bank of England supports the assertion made in the original investigation by the Bank for International Settlements’ (BIS) that the October 2016 sterling flash crash may have been exacerbated by the temporary suspension of trading on CME’s sterling FX futures.

Flash Crashes and the Liquidity Landscape – Profit & Loss (subscription)

Customers might want to be even more inquisitive about how FX LPs handle their order flow.

Dollar Pauses After Posting Biggest Weekly Rise for 2017; Fed Eyed – Reuters

The dollar slipped after its biggest weekly rise this year as investors took profits before a central bank decision this week where markets are waiting to see if strong economic data will spur a more hawkish stance.

Sterling Strengthens as Traders Bet on First BoE Hike in a Decade – Reuters

Britain’s pound strengthened against the dollar, as traders geared up for a Bank of England policy meeting later in the week that they expect will produce the first increase in interest rates in more than a decade.

BOE Rate Increase May Not Be Enough to Revive Brexit-Vexed Pound – Bloomberg

The Bank of England may increase interest rates this week for the first time in more than a decade, but that won’t be enough to buoy the pound, according to strategists.

Euro Holds Losses as Catalan Parliament Declares Independence – Reuters

The euro held near three-month lows versus the dollar after the Catalan parliament declared its independence from Spain after a secret ballot, which is now likely to be ruled illegal by Spain’s constitutional court.

Investors Exit Emerging-Market Carry Trades as US Yields Rise – Bloomberg

Bets on higher-yielding currencies from Brazil to Poland are unwinding at the fastest pace in almost a year as soaring US Treasury yields undermine the attraction of riskier government debt.

UBS Will Trigger Its Brexit Contingency Plans ‘Early’ Next Year – Bloomberg

UBS Group will start the process of moving London-based employees to expanded offices inside the European Union early next year.

Singapore Unveils Plan to Create 4,000 Finance Sector Jobs – Bloomberg

Singapore wants to bolster its status as a wealth management and foreign-exchange center as part of plans to create more financial-sector jobs and mitigate the effect of rapid changes in technology.

Capitolis: The Airbnb of Credit? – Profit & Loss (subscription)

Capitolis is the latest venture headed by Gil Mandelzis, the former EBS BrokerTec and Traiana CEO.

There Are Now More Than 120 Hedge Funds Focused Solely on Bitcoin, Digital Currencies – CNBC

Data shared exclusively with CNBC from financial research firm Autonomous Next shows the number of funds investing in digital assets like bitcoin has grown rapidly to 124.

Will the Cautious Swiss Embrace an e-Franc? – Financial Times (subscription)

The SNB is not (yet) rushing to offer an official crypto version of the currency.

Regulatory News

Trump Likely to Name Jerome Powell Next Fed Chairman – Wall Street Journal (subscription)

President Donald Trump is likely to announce Federal Reserve governor Jerome Powell as his nominee to be the next chairman of the US central bank next week, according to a person familiar with the matter.

Giancarlo Urges EU to Protect CCP Equivalence Deal – Risk (subscription)

The chair of the Commodities Futures Trading Commission (CFTC), Christopher Giancarlo, has called on the European Union to ensure the February 2016 equivalence deal on clearing houses is not undermined by policy responses to Brexit that leave the US facing “collateral damage”.

US Treasury Aims to End SEC and CFTC Dual Registration – HFM Week (subscription)

Volcker rule, SEC derivatives rule and dual registrations in the crosshairs.

MiFID II Among Regulations Forcing New Looks at Old Post-Trade Systems – Traders Magazine

New regulations in the North American and European markets are changing the requirements for firms’ middle- and back-office operations.

Crisis Alert: New Model Aims to Give Early Warning of Downturn – Risk (subscription)

A new early warning model for predicting financial crises could give authorities more notice of an impending disaster, simply by using publicly available information, its creators claim.

Company News

Horkan New COO at LCH – Profit & Loss

John Horkan has been appointed as LCH Group chief operating officer (COO), effective immediately.

BestX Rolls Out Regulatory Reporting Module – Profit & Loss

BestX has expanded its suite of best execution analytics with the launch of a new regulatory reporting module.

Hamilton Exchanges FastMatch for BNP? – Profit & Loss

Confirmation was not available at press time but market sources tell Profit & Loss that Nick Hamilton has left FastMatch and will join BNP Paribas in London next week in a senior e-FX sales role.

Oliver Running InTouch FX; Hires Hoodless – Profit & Loss

Former global head of FX Wire at Citi, Lee Oliver, who assumed responsibility for InTouch FX, a news and market intelligence analysis service which is part of InTouch Capital Markets, has hired Robert Hoodless as senior analyst, with a focus on emerging markets FX.

Exchange Battle Under Way for Libor Successor Contracts – International Finance Review (subscription)

Derivatives exchanges have begun their battle for a slice of a new market linked to alternative risk-free rates to Libor, as regulators aim to wean more than $350T of derivatives and other financial contracts off the tarnished benchmark.

Market Savvy

New Zealand Dollar Resumes Decline in Asia Trade – Financial Times (subscription)

The New Zealand dollar resumed its decline as the country’s new centre-left government started its first full week in office.

South African Rand, Government Debt Suffer Worst Week Since March – Financial Times (subscription)

The rand and South African government bonds have endured their worst week since the ousting of its well-respected finance minister in March, as a combination of economic malaise and political tension leaves many investors convinced the country is heading for another round of credit-rating downgrades.