Top Headlines

US Launches Criminal Probe into Bitcoin Price Manipulation – Bloomberg

The Justice Department has opened a criminal probe into whether traders are manipulating the price of bitcoin and other digital currencies, dramatically ratcheting up US scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter.

Euro Up on China Support as Dollar Surge Loses Momentum – Reuters

The euro rose off a six-month low as China signaled its confidence in the single currency but concerns over an economic slowdown in Europe and political risks in Italy continued to act as a brake.

Currency Derivative Markets Signal Further Weakness for Euro – Reuters

Currency derivative markets are signalling further weakness for the euro with one-year risk reversals on the single currency – a gauge of demand for options on a currency rising or falling – dropping to a seven-month low.

Dovish Feel to Fed Minutes Keeps Dollar Off Highs – Financial Times (subscription)

The dollar is drifting lower after the lack of a signal on faster rate rises from the US central bank continues to look dovish, with a cautious feel to wider trade leaving haven assets in demand.

Sterling Strengthens, Stocks Slip on Upbeat Retail Sales – Reuters

Sterling strengthened and stocks edged lower after data showed British retail sales jumped by its most in one-and-a half years in April.

Yen Firms as Tension Builds Over Trade and US-North Korea Summit – Financial Times (subscription)

The Japanese currency was firmer as investors continued to showed signs of favouring haven assets amid building geopolitical uncertainty.

Emerging-Market Stress Just Begun as Record Debt Wall Looms – Bloomberg

Rising borrowing costs seen hitting both dollar and local debt.

Ex-Barclays Trader Says Fixing Rates Didn’t Feel Like ‘Cheating’ – Bloomberg

Changes to rate no more than ‘rounding error,’ ex-trader says.

Goldman Sachs Says Computerized Trading May Make Next ‘Flash Crash’ Worse – CNBC

Goldman Sachs is cautioning its clients that computerized trading may exacerbate the volatility of the next big market sell-off.

Trade War of Words Risks Collateral Damage for Currencies – Bloomberg

Fragile market sentiment means even a trade war of words will mean collateral damage for economies with safe-haven currencies.

Liquidity Resources Vary Across CCPs – Risk (subscription)

Central counterparties’ (CCPs’) liquidity portfolios differ from firm to firm, with some relying on central bank deposits and others on cash held at commercial banks to meet their funding needs.

Could the Shift to Clearing Alter FX Market Structure? – Profit & Loss (video)

Although there are clear drivers pushing more FX products into central clearing, this is unlikely to have a significant impact on market structure, says Paddy Boyle, the head of ForexClear, LCH.

Regulatory News

JPMorgan, Citi Lobby GOP Lawmakers to Relax Swap Rules – Wall Street Journal (subscription)

On the heels of a legislative victory this week for small and midsize banks, bigger banks including JPMorgan and Citigroup are lobbying congressional Republicans in an effort to ensure a victory of their own.

Fed Sets May 30 Vote on Proposed Volcker Rule Changes – Wall Street Journal (subscription)

The Federal Reserve set a May 30 vote on proposed changes to the Volcker rule, the first public step in an expected rewrite of the restrictions that have held back bank trading desks for years.

After US Dodd-Frank Law Changes, Lobbyists Fight for More – Reuters

Buoyed by the US Congress passing legislation easing rules on banks, some business groups hope lawmakers will move quickly to change other financial rules they say are hurting Main Street businesses.

Company News

Deutsche Bank Considers Plans for 10,000 Job Cuts – Wall Street Journal (subscription)

Deutsche Bank executives have considered plans in recent weeks to eliminate close to 10,000 jobs, or about one in 10 employees, as part of moves to accelerate cost-cutting, according to people familiar with internal bank discussions.

XTX Establishes e-Trading Facility in Singapore – Profit & Loss

Trading firm XTX Markets’ Singapore entity is building a new FX pricing and trading engine which will go live in Equinix’s Singapore SG1 data centre in June 2018.

MarketFactory Releases Pre-Trade Risk Solution – Profit & Loss

MarketFactory has released its new software product, Reflector, a pre-trade risk management service for banks, prime brokers and funds to help ensure trading limits are never broken.

Spencer Quits Frontline City Role, Or Will It Be Back To the Futures? – The Times

After more than four decades in the City and nearly 20 years as the chief executive of a public company, Michael Spencer took a step back from the front line of finance as he presented the final annual results of his electronic trading business as a standalone company.

Crypto News

European Banks Call for Urgent Action on Cryptocurrencies – Financial News (subscription)

The bosses of Europe’s largest financial institutions today called on central banks and prudential regulators to take “urgent” action on the rise of cryptocurrencies, like bitcoin and ethereum.

Washington Inc. Embraces Cryptocurrencies – Politico

Bitcoin may end up being a bubble, but cryptocurrencies are fueling real revenue for Washington lobbyists.

Will the Crypto Bubble Burst? – Profit & Loss (subscription)

Too much of what we read and hear when it comes to crypto is all or nothing.

Market Savvy

Turkish Lira Resumes Slide Despite Rate Hike – Financial Times (subscription)

The Turkish currency resumed its slide, hours after an urgent rate hike dragged the lira up from a record low. 

Argentina Shows Turkey How to Stem a Currency Rout – Financial Times (subscription)

In recent days the peso has stabilised while the lira continues to plumb new depths.