Top Headlines

US Lawmakers Called EU Derivatives Markets Plans ‘Retribution’ – Financial Times (subscription)

US lawmakers have hit out at new plans from Brussels to toughen supervision of the global derivatives markets in the wake of Brexit, labelling the EU’s proposals as “retribution”.


UK Regulator Recognises FX Global Code – Profit & Loss

The UK’s Financial Conduct Authority has formally recognised two financial market codes of conduct, the FX Global Code and the UK Money Markets Code, following a consultation process.

FX Operations and Credit: Hampering Liquidity, Raising Costs (opinion) – Tabb Forum

The FX market currently looks like the ultimate mismatch. Front-office processes have been transformed to accommodate the realities of electronic trading – operations and credit haven’t. This is acting as a drag on FX liquidity, as well as imposing an enormous cost burden. Fortunately, there is a simple and readily achievable remedy: centralized standardization.

Regulatory News

FIA Recommends Changes to Exchange Traded Derivatives Reporting Under European Regulation – FIA

FIA has published a new position paper that highlights the concerns of market participants with the current reporting framework for exchange traded derivatives (ETDs). Further, and more importantly, FIA suggests alternative solutions which will assist regulators to monitor systemic risks in the ETD market, improve data quality and reduce existing inconsistencies with European Market Infrastructure Regulation (EMIR) reporting obligations.

Mifid II Tightens Wall Street’s Grip on European Trading – Financial Times (subscription)

New EU market regulations have tightened the grip of Wall Street firms on trading across Europe, as fund managers have turned to specialist trading outfits to execute their deals — at the expense of big European banks such as Deutsche Bank and BNP Paribas.

Kulkin to Leave CFTC – Profit & Loss

Matthew Kulkin is leaving the Commodity Futures Trading Commission where he is director of its Division of Swap Dealer & Intermediary Oversight.

Woodford Woes Devolve Into London-Brussels Blame Game – Bloomberg (subscription)

The City of London’s top watchdog tried to blame Neil Woodford’s fund woes on shortcomings in European Union regulations, suggesting oversight would be easier after Brexit. Brussels is having none of it. 

Crypto News 

A $1,800 Drop in Minutes: Bitcoin Volatility Is on Full Display – Bloomberg (subscription)

This week’s jump in Bitcoin prices revived themes well known to the digital currency that inflated then burst less than two years ago. Among them: enormous volatility, and exchange overloads. 

PwC Now Audits Crypto Companies – Bloomberg (subscription)

Accountancy giant PricewaterhouseCoopers has added cryptocurrency auditing to its list of services as the firm expands into an asset class that is steadily adopting the accoutrements of traditional finance. Teams across PwC spent the past year designing tools that could match the private keys and public addresses assigned to crypto asset accounts. 

Broker-Dealers Prep for Institutional Crypto – MarketsMedia

Many on Wall Street plan to forgo first mover advantage so that they can prepare for the long game when it comes to cryptocurrencies and digital assets.

Winklevoss Twins’ Fortune Doubles as Bitcoin Rallies – Bloomberg (subscription)

The Winklevoss twins have seen their wealth more than double since January, thanks to the frenzied rally of Bitcoin, which surged as much as 22% Wednesday. 

Facebook’s Libra Could Give Dollar, Banks Some Welcome Competition – The Wall Street Journal (subscription)

By creating a de facto central bank, Libra could succeed where other cryptocurrencies fall short. 

France’s de Galhau Unveils G7 Task Force on ‘Stablecoins’ – FX Week (subscription)

Banque de France governor says the group will weigh up the impact of Libra and other “stable” crypto assets. 

Company News

SGX Creates New Structure, Names FICC Head – Profit & Loss

Four business and client units have been created to report to SGX CEO Loh Boon Chye – fixed income, currencies and commodities; equities (cash & derivatives); data, connectivity and indices; and global sales and origination. The FICC business will be headed by Lee Beng Hong, who will join SGX on August 1 from Deutsche Bank, where he was head of global markets, China.

Banks in Britain Revive Preparations for No-Deal Brexit: EY – Reuters

Banks in Britain are showing signs of restarting preparations for a no-deal Brexit after a lull in the shift of financial services jobs and capital from Britain to the European Union in the past few months, consultants EY said on Wednesday.

Hedge Fund Citadel Executes Cleared Cash and Repo Trades Through DTCC – The Trade

Hedge fund giant Citadel has executed and cleared both cash Treasury and repo trades through DTCC’s fixed income clearing house in the latest milestone for US buy-side activity moving to central clearing.

LCH and Eurex Create Fix for Floating Repo’s Eonia Problem – Risk.net (subscription)

Clearing houses LCH and Eurex will settle floating rate repos in two stages come October, as the industry adjusts to the next-day calculation of the European Central Bank’s new euro short-term rate (€STR).

CME Eyes Opportunities in Cloud Computing – FOW (subscription)

CME Group is examining opportunities in cloud distribution for its market data business.

Market Savvy 

Pound Gains Before G20 Meeting, Large Option Bets – Reuters

The pound edged higher on Thursday as traders unwound some of their short bets against the British currency before a Group of 20 meeting this weekend, where US President Donald Trump and Chinese President Xi Jinping might agree to a trade truce.

Dollar Builds on Rebound as Hopes Rise for US-China Trade Truce – Reuters

The dollar extended its recovery on Thursday, gaining versus the yen and euro, on hopes the United States and China will agree a trade truce before a G20 summit in Japan this weekend.

One by One, Yen Is Breaking Down Barriers Toward 100 Threshold – Bloomberg

The barriers preventing the yen from reaching 100 per dollar, a target that has proved elusive for the past two years, are dropping one by one.