Top Headlines

Wave of Contagion Expected After Dramatic Weekend Raises ‘Grexit’ Chances – Reuters
Global financial markets are braced for a wave of contagion from Greece on Monday, with expected heavy losses for southern European government bonds and regional stock markets as investors scramble to discount a possible “Grexit” that most had still assumed was unlikely as late as Friday afternoon.

Swiss Step Into Currency Market as Greece Adds to SNB’s Woes – Bloomberg
Greece’s decision to effectively call a public vote on its euro-area membership is one more blow for Switzerland, the country where overwhelming demand for its currency is pushing it toward a recession.

Retail Brokers on Alert Over Grexit – Profit & Loss (free story)
Retail FX brokerage firms are warning their clients of “changed trading conditions” in euro crosses as the Greek crisis worsens.

EU Goes Bananas With Currency Rigging Case Against Big Banks –Bloomberg
The European Union is going bananas as it pursues a probe into currency-rigging. Literally. Antitrust regulators are seeking to bolster their case against some of the world’s biggest banks using a March ruling at the EU’s top court in a banana cartel involving Dole Food Co.

FX Traders’ Plans to Avoid Conviction When Facing the SFO – Profit & Loss(subscription)
I received an insight into the likely defence of those FX traders facing interview by the UK’s Serious Fraud Office at the end of last week – and I don’t think it’s going to be pretty.

Bank for International Settlements Warns of Emerging Market Risks – Financial Times (subscription)
Economists and foreign investors may have overestimated the potential economic output of a quintet of Latin American countries by 2 percentage points, leading to the possibility of sharp financial outflows when reality sinks in.

Renminbi Trade Volumes in London More than Double in 2014 – Profit & Loss(free story)
Chinese renminbi trade volumes in London more than doubled last year, according to a new report from the City of London Corporation, as competition to become the leading offshore RMB hub in Europe heats up.

Banks Need Greater FXPB Differentiation – FX Week (subscription)
Prime brokerage (PB) services in the foreign exchange space will become more focused on niche areas in the future, increasing the differences between banks’ prime offerings as dealers tighten up their approach to credit provision, says the global head of FXPB services at RBS.

Regulatory News

Carney Says Many Financiers Unaware of Ethics – Reuters
Bank of England Governor Mark Carney said on Friday that many people working in finance are still unaware of the standards of conduct expected and the need for them to exceed that required by the letter of the law.

Bank of Canada Calls for US to Recognise Equivalent Rules – Profit & Loss(free story)
The Bank of Canada has urged US regulators to recognise non-US financial services rules as equivalent to their own and wants to explore the possibility of a bilateral agreement to help ensure the potential resolution of banks with cross-border operations.

Korea to Ease FX Regulations – The Korea Times
The government will ease regulations involving foreign exchange transactions in an initial step to help the financial industry, the finance ministry said Monday.

Deutsche Bank Under Fresh Fire Over Libor – Financial Times (subscription)
Deutsche Bank’s senior management allegedly acted “negligently” over the fixing of Libor rates and Anshu Jain, its outgoing joint leader, may have lied to the German central bank, the country’s financial regulator concluded in a recent report that leaves Deutsche vulnerable to further action by authorities.

Forex Broker Regulation Law in Russia in Dire Straits – Finance Magnates
Representatives of the central bank, brokers and self-regulatory organisations have shared that the industry is not prepared for regulation.

Company News

Commerzbank Receives China FX Options Licence – Profit & Loss (free story)
Commerzbank Corporates & Markets has received a licence from the State Administration of Foreign Exchange to trade onshore foreign exchange FX options in China.

Why Mizuho is Expanding in FICC – eFinancial Careers
Most banks are paring bank their fixed income currencies and commodities businesses. Deutsche Bank is expected to make cuts under John Cryan. Credit Suisse is expected to make cuts under Tidjane Thiam. One bank, however, is swimming against the tide. That bank is…Mizuho.

Saxo Bank Closes Cyprus MT4 Offering – Profit & Loss (free story)
Saxo Bank has shut down Saxo Capital Markets CT, a Cyprus-based provider of the retail MetaTrader 4 platform.

Digital Assets Acquires Two Other Blockchain Technology Firms – Profit & Loss (free story)
Digital Asset Holdings, the blockchain technology vendor led by former JP Morgan executive, Blythe Masters, and DRW founder and CEO, Donald Wilson, has announced the acquisition of two other blockchain technology firms.

Market Savvy  

Greek Government Raises the Stakes
BNP Paribas
The Greek government effectively walked out of negotiations with its creditors on Saturday and has called a referendum on 5 July on the conditions its international creditors want to attach to its bailout funding. Our economists estimate a 75% probability that the referendum will result in bailout conditions being accepted. However, much uncertainty will prevail over the week ahead of the referendum.

Euro Slumps, Looming Greek Default Prompts Risk Selling
Euro exchange rates fell in Asia early on Monday after Greece failed to strike a deal with its international lenders to secure more emergency funding at the weekend, forcing it to introduce capital controls and keep its banks shut.

Mind the Gaps
Monday’s early price action has been all about reaction to the escalation in the Greece crisis since the Friday close. The Greek PM’s announcement of a 5 July referendum has sent shockwaves through the market, and investors have been forced to pick up the pieces in the new week.

FX Update: Crunch Time for the Euro, Downside Risk to Dominate?
Saxo Bank
Euro traders face extreme uncertainty this week depending on the direction the situation in Greece takes after the country was forced to implement capital controls over the weekend on the European Central Bank’s failure to increase the emergency liquidity facility (ELA) from Friday’s levels, a step that would have been necessary to cover accelerating runs on Greek banks. So Greek banks and possibly Greek markets will be closed all week, with severe limits on cash withdrawals.

Press Releases

TradAir TLA for Real-Time Surveillance and Regulatory Compliance Sync
TradAir’s now live market surveillance and compliance tool uses the latest in big data technology for its TLA or Total Liquidity Analysis product.  Available as a freestanding product or as an integrated part of TradAir’s overall FX trading solution, TLA enables clients to meet current and upcoming regulatory and reporting mandates.

Industry Events