Top Headlines

Wall Street Banks Reckon the Dollar Must Fall. Traders Don’t Agree – Bloomberg

As a growing chorus of analysts from the likes of Morgan Stanleyy and Nomura predict dark days for the dollar, the market is telling a different story.

Why Have So Many Bad Decisions Been Made in Banks’ FX Businesses? (opinion) – Profit & Loss

What is it that infected so many of the banks’ FX businesses at the end of 2013 that led to so many bad decisions being made? Was it a lack of focus, courage, or even sheer panic that underpinned the decision to roll over on legal actions brought by customers, but at the same time stand firm and fight unfair dismissal cases brought about by their own staff? 

FX Volumes on SEFs Up In January – Profit & Loss

The average daily volume of FX traded on swap execution facilities (SEFs) in January was $61.2 billion, up month-on-month from $49.8 billion and up 5.5% from $58 billion in January 2018, according to data from FIA SEF Tracker.

Refinitiv, CLS Volume Increase Driven by FX Swaps – Profit & Loss

The total average daily volume of FX trading across Refinitiv platforms in January 2019 totalled $446 billion. In January, CLS handled $1.784 trillion in notional value, 14.6% up from December 2018, but down slightly (1.1%) from January 2018.

Regulatory News

EIB on Why it’s the First Supranational Bank to Sign Up to Global Code – FX Week (subscription)

Almost two years on from the launch of the FX Global Code of Conduct, the effort to promote a fair and transparent foreign exchange market has enlisted its first supranational banking institution. The European Investment Bank – the lending arm of the European Union – has signed a statement of commitment to the Code’s 55 principles.

Non-Cleared Initial Margin Requirements: Phase 4 and 5 Firms Are on the Clock – Tabb Group

The deadline for Phase 4 firms to come into compliance with uncleared margin requirements is September 2019, and Phase 5 is set for September 2020. But the smaller firms that fall under the remaining phases could face additional challenges.

The US and China are Committed to Reaching a Trade Deal by March 1 Deadline, Vows US Treasury Secretary – South China Morning Post

Both sides in the US-China trade negotiations are making a “big commitment” to reach an agreement by the March 1 deadline, US Treasury Secretary Steven Mnuchin said.

EU Prepares for Looming No-Deal Brexit and Ensuing Blame Game – Financial Times

Diplomats in Brussels say there is one telling measure of the low reached in the Brexit saga: the political blame game has started over responsibility for a chaotic no-deal exit.

Crypto News

A Crypto-Mystery: Is $136 Million Stuck or Missing? – The Wall Street Journal (subscription)

Exchange shareholders say customer holdings are trapped in an electronic vault after founder’s reported death, but researchers aren’t so sure.

Analyst Who Was Behind a Bearish Bitcoin Note Now Predicts a Comeback – CNBC

Bitcoin fever could return to Wall Street. The JP Morgan analyst behind a report that found major firms are losing interest in cryptocurrencies isn’t ruling out renewed interest.

Binance Brought in $446 Million in Profits in 2018 Despite the Bear Market – The Block

To be sure, Binance doesn’t disclose its financials, but the profits can actually be deduced fairly easily with some back-of-the-envelope math. 

Company News

FX trading Co-Head Retires from Goldman Sachs Two Years after Making Partner – eFinancial Careers

A Goldman Sachs veteran who helped head up emerging markets FX trading in New York is moving on from the firm just two years after making partner.

Goldman Sachs Bond Trading Cuts Go Against the Grain – Financial Times

Goldman Sachs is the only big US bank planning major changes to its bond-trading division this year, as fixed income bosses in other corners of Wall Street bet that a tough fourth quarter was an anomaly and that the post-crisis decline in their businesses is coming to an end.

Are the Wheels Coming off BNP Paribas’ Grand Plan? – Euromoney
It is no surprise that FICC was a tough year at BNPP – it was for almost everyone – but the bank did worse than those that have reported so far.

Avelacom Expands Presence in Tokyo – Profit & Loss

Avelacom, a provider of global connectivity and IT infrastructure for financial services, has opened its third point of presence in Tokyo.

Barclays Expands Client Clearing in Asia with Japan Deal – The Trade

The Japan Securities Clearing Corporation granted Barclays clearing authorisation in November as it looks to expand its clearing business and presence in Asia. 

Market Savvy

Sterling Drops Below $1.29 on Dollar Strength; BOE Eyed – Reuters

The British pound fell below $1.29 for the first time in more than two weeks on Thursday as broad dollar strength prompted traders to move to the sidelines before a central bank meeting and growing Brexit uncertainty.

Euro Falls after Weak German Data Revives Recession Fears – Reuters

The euro weakened on Thursday after data showed Germany’s economy slowed in December, underscoring fears about a broader slump in Europe.

Lebanese Pound Finds Support in Newfound Political Unity – FX Week (subscription)

As new government forms, investors are more willing to sell dollars and buy Lebanon’s currency.