Top Headlines 

US Regulator to Unveil Plans to Rein in Swaps Trading Rules – Financial Times (subscription)

The leading regulator of the US derivatives market will today unveil plans to reform swaps regulations in a move he hopes will ease a stand-off with fellow regulators in Europe.

European Banks Weigh Leaving UK Derivatives Market – Financial Times (subscription)

European banks are considering whether to begin closing out their trillions of pounds’ worth of derivatives positions in London in the coming months as the UK struggles to finalise an agreement on leaving the EU.

FX Market Behaviour Examined in ‘Spoofing and Pinging’ Paper – Profit & Loss

The aim of the research is to investigate the susceptibility of OTC spot FX markets to spoofing and pinging (sometimes referred to as “flashing”) and uses high frequency data over five days in September 2010 from EBS across its main currency pairs, EUR/USD and USD/JPY, and three pairs where EBS was a secondary platform: EUR/SEK. USD/TRY and USD/RUB. 

In the FICC of It (podcast) – Profit & Loss

The podcast covers crypto regulation and the potential limits to the market’s growth. It also discusses a real life use-case of the FX Global Code and looks (and fails) for other uses, before moving onto data and a good slap down of the hype around AI. 

Sale of Brexit Night Poll Data to Hedge Funds Questioned – Financial Times (subscription)

Several hedge funds bought exit poll data from pollsters that helped them to trade assets including sterling on the day of the EU referendum in 2016. The pound swung wildly against the dollar, amid changing expectations of the referendum outcome.

Ten Years On, Fresh Trading Risks Seem to Be Emerging – Financial Times (subscription)

Trading is increasingly performed by machines using automated systems that fire off trades in fractions of a second without human intervention. Artificial intelligence is also beginning to creep into markets, as some participants explore whether computers can “learn” from the huge amounts of markets data. 

Regulatory News

French Watchdog Says EU Market Rules Need Overhaul after Brexit – Reuters

Britain’s departure from the European Union next March will force a full review of the bloc’s sweeping new rules for markets, including tougher market-access conditions for foreign trading platforms, a top French regulator said on Monday.

ECB Working Group to Ask Brussels for Year Delay to EU Benchmark Reforms – Financial Times (subscription)

A working group based at the European Central Bank is asking Brussels to delay the introduction of Europe’s new flagship benchmark rules by a year, to give hard-pressed banks more time to prepare and avoid potentially destabilising markets.

Time Running Short on Reprieve for EU Derivatives Clearing – Pensions & Investments

Pension funds across Europe are yet again facing an obligation to clear derivatives themselves because of the upcoming revision to the European Markets Infrastructure Regulation. 

Esma Preps Stricter Stress-Testing Rules for EU Funds –

European investment funds will be required to conduct standardised stress tests to gauge their resilience in extreme market conditions under new guidance being finalised by European Union authorities. 

Crypto News

Congress Members Ask SEC Chairman for Clarity on Cryptocurrency Regulation – CNBC

More than a dozen members of the House of Representatives sent a letter to Securities and Exchange Chairman Jay Clayton Friday urging his agency to tell investors, in plain English, how it plans to regulate cryptocurrency.

Cryptocurrencies and Blockchains: How Are They Doing After 10 Years? – The Wall Street Journal (subscription)

It wasn’t supposed to have worked out like this. Bitcoin began life, not surprisingly, around the time of the 2008 global financial crisis, as a kind of techno-anarchist project to empower and protect individuals who shared a deep distrust of governments and large companies. 

Chicago’s Sharp Traders are Natural Hunters in Wild Crypto Markets – Financial Times (subscription)

The prices of digital currencies have collapsed this year. But Chicago’s proprietary trading industry is deepening its exposure to the wild crypto market nonetheless.

Crypto Exchanges Must Face up to Responsibilities as They Mature – Financial Times (subscription)

Cryptocurrency exchanges are developing to look more like their traditional peers as the market matures, but some warn the pace of change is more baby steps than giant leaps.

Crypto Bank To-Be Talks Custody Game Plan – FOW (subscription)

Guido Bühler, CEO of Seba, said the firm will offer three levels of security and liquidity to investors.

How Dirty Money Disappears Into the Black Hole of Cryptocurrency – The Wall Street Journal (subscription)

A North Korean agent, a stolen-credit-card peddler and the mastermind of an $80 million Ponzi scheme had a common problem. They needed to launder their dirty money. They found a common solution in ShapeShift, an online exchange backed by established American venture-capital firms that lets people anonymously trade bitcoin, which police can track, for other digital currencies that can’t be followed. 

Company News 

P&L Talk Series with Edward Woodford – Profit & Loss

Edward Woodford, the co-founder of the trading venue Seed CX, talks about what it really means to offer an institutional grade platform in the rapidly evolving crypto market. 

CFTC Charges TFS-Icap Over FX Options Broking Practices – Profit & Loss

The CFTC alleges that, from approximately 2008 through 2015, brokers at TFS-Icap offices in the US and the UK routinely attempted to deceive – and did deceive – their clients by engaging in the practices of communicating to them fake bids and offers and fake trades in the FX options market.  

Prime Broker to Fight £400,000 FCA Fine for Market Abuse – The Trade

London-based prime broker Linear Investments is disputing a £409,300 fine imposed by the UK financial watchdog for alleged failures in its oversight of potential market abuse activity. 

Market Savvy 

Fed Chief Powell Signals Central Bank is Done with Signaling – Reuters

Federal Reserve Chairman Jerome Powell has a new message for financial markets: watch the data on jobs, wages and inflation for signals on monetary policy – not the US central bank’s words or forecasts.

Canadian Dollar Jumps after Trade Deal; Euro Struggles – Reuters

The Canadian dollar rallied half a percent against the U.S. dollar on Monday as investors rushed to buy riskier assets after the United States and Canada agreed to update the North American Free Trade Agreement.

Sterling Rises Despite Fears of Tory Brexit Conflict – Reuters

The pound rose after the Chancellor of the Exchequer said on Monday the European Union was willing to do a Brexit deal, but investors said uncertainty surrounding the ruling Conservative Party conference could quickly reverse the currency’s fortunes.

JP Morgan Sees All-Out US-China Tariffs, Lowers Yuan Call – Bloomberg

With little prospect of a restart for US-China trade talks, JP Morgan now expects an escalation in tensions that will see higher American tariffs on all Chinese imports, sending the yuan sliding to its weakest against the dollar in more than a decade.