Top Headlines

US Swaps Cop Plans to Dial Back Global Reach of Its Rules – Bloomberg

The US’s top swaps regulator is planning sweeping changes to how it applies its rules abroad. Calling the Commodity Futures Trading Commission’s international approach “flawed and over-expansive,” Chairman J. Christopher Giancarlo said in a speech that his agency should give more deference to other countries’ regulations.

Banks to Flee London Even if Brexit is Cancelled – Financial News

At least eight of the largest investment banks in London, including Bank of America Merrill Lynch, Citigroup, Goldman Sachs and JPMorgan, have said they will shift a significant proportion of their operations to Europe irrespective of the outcome of Brexit.

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

In this edition, the podcasters traverse the US legal system and the Mark Johnson case, discuss why some CTA sectors are doing well and some aren’t, debate whether crypto markets will evolve to an OTC model, and take a look at China’s change in approach to its programme of liberalising the yuan.

Dabbling in Data Science Won’t Cut It –

Data science may have a razzle-dazzle kind of aura, but the terms used to describe the work make it sound like hard, back-breaking, painstaking labour. Data has to be harvested and cleaned; it is processed in factories, and analysed in labs. Banks are trying to hitch their research units up to this trendy, buzzy bandwagon – but already, some cynics believe they lack the stomach for the hard labour that’s involved.

A Brief History of Some of the Market’s Worst Fat Fingers – Bloomberg

An 83 percent plunge in storied Singapore-listed stock Jardine Matheson Holdings on Thursday has traders pointing to the most likely culprit: a fat finger.

On-Exchange Derivatives Trading Grew 20.2% in 2018 – Profit & Loss

Data from the Futures Industry Association shows a 20.2% increase in the number of futures and options contracts traded globally on exchanges in 2018.

Regulatory News

Trump Signs Bill to End US Government Shutdown – Financial Times

Donald Trump has signed into law a funding package temporarily reopening the federal government without securing money for his proposed border wall, in a defeat for the president following a 35-day stand-off. 

Standards Body Publishes Trader Error Compensation Recommendations – Finextra

The FICC Markets Standards Board has published the final version of its Standard on Secondary Market Trading Error Compensation under its remit to improve conduct and raise standards in the wholesale fixed income, currencies and commodities markets.

China Names ICBC’s Yi as Head of Securities Regulator – Bloomberg

Yi Huiman, a banking veteran who most recently chaired China’s largest lender, was named head of the country’s securities regulator, a role that puts him at the forefront of opening up the financial system to overseas firms.

The Commitment to EU Integration Must Not Be Underestimated – Financial Times

The Aachen treaty signed by France and Germany to deepen ties sets a significant agenda.

New Challenges for the Next Decade of Regulatory Reform: Thomson Reuters Special Report – Tabb Forum

The evolution of computing technology will further challenge global regulators and compliance professionals, to bolster privacy, fight cybercrime, govern digital currencies and manage online communications.

Crypto News

Bitcoin Is Worth Less Than the Cost to Mine It, JPMorgan Says – Bloomberg

The production-weighted cash cost to create one Bitcoin averaged around $4,060 globally in the fourth quarter, according to analysts with JP Morgan. With Bitcoin itself currently trading below $3,600, that doesn’t look like such a good deal. However, there’s a big spread around the average, meaning that there are clear winners and losers.

Carney Says Cryptocurrencies Unlikely to Revolutionise Financial Sector – Reuters

Bank of England Governor Mark Carney said that cryptocurrencies were unlikely to revolutionise the financial sector because they were more like assets than currencies.

NYSE Arca Files Paperwork for Bitwise Bitcoin ETF Approval – CoinDesk

Bitwise Asset Management announced its intention to launch the ETF earlier this month. If approved, it would be the first bitcoin ETF to make it to market in the US.

Bitcoin Investors are Running from the Crypto to Invest in Gold – CNBC

The cryptocurrency has not been able to crack above $4,000 in three weeks just 12 months after trading at more than $12,000. Signs show that bitcoin investors are moving toward a more traditional commodity, says Jan Van Eck, CEO of Van Eck Associates.

Company News

US Banks’ FICC Revenues Nosedive in Q4 2018 – FX Week (subscription)

US banks’ revenues from the sale and trading of fixed income, commodities and currency (FICC) products fell sharply in the fourth quarter of 2018, as challenging market conditions instigated drops of nearly 40% between Q3 and Q4, and nearly 20% between Q4 2017 and Q4 2018.

Virtu to Maintain ITG Broker-Dealer Entities as Tie-Up Nears Completion – The Trade

High-speed trading firm Virtu Financial has said it will preserve the broker-dealer businesses at ITG following its $1 billion takeover of the agency broker, as closure of the deal approaches. 

Deutsche Shareholders Say Commerzbank Deal Would Be ‘Suicide’ – Financial News

Investors have voiced deep concerns about the German lender’s mooted tie-up with its domestic rival.

The Best Hedge Fund Manager of All Time Is… – Institutional Investor

LCH Investments’ annual survey highlights the 20 hedge funds firms that have made the most money for investors since inception – and how they fared last year.

US Bank Trade Group, Accenture and Others Back Fintech Startup Finxact – Reuters

Accenture, SunTrust Banks and the American Bankers Association, a trade group for US banks, said on Friday that they had joined a $30 million investment round in Finxact, a startup that develops the back-end technology used by banks to process some transactions.

Spotex Announces Two Further Hires – Profit & Loss

Spotex has hired Tom Reichel and Paul Beatty as managing director and director, respectively.

Market Savvy

Sterling Slips Before Key Brexit Votes in Parliament This Week – Reuters

The pound drifted lower on Monday after posting its biggest weekly rise in more than 15 months last week as investors consolidated positions before crucial votes in the British parliament that will aim to break a Brexit deadlock.

Dollar Up as Investors Brace for Volatile Markets; Fed Meeting – Reuters

The euro edged down on Monday as investors bought the dollar and prepared for volatile markets ahead of US-China trade talks and a Federal Reserve policy decision.

Will the Fed Stick to its New Script? – Financial Times

The US Federal Reserve will meet this week for the first time since stocks tumbled in December, as investors grew increasingly worried over the outlook for the US economy.

Emerging Asia Market Rebound in Sight With China, Trade Caveats – Bloomberg

This year is looking a little brighter for Asia’s emerging-market assets amid prospects of a less aggressive Federal Reserve. But the US-China trade war saga and its impact on growth will keep traders on their toes.