Top Headlines

What ‘Highly Unusual’ Markets Are Watching Into the Fed Decision – Bloomberg (subscription)

Wednesday’s Federal Reserve rate decision, set to be announced at 2pm New York time, carries more wild cards than most. While market participants don’t expect a rate cut this time around, they do see lower rates this year.

Has FX Become Divorced From Geopolitics? – Profit & Loss

Despite the geopolitical situation worldwide becoming more volatile, FX markets have stayed relatively idle.

FX Prime Brokerage Fee Jump Unlikely, Say Dealers – (subscription)

Two foreign exchange prime brokerages have agreed with Citi’s recent claims that costs for the business will rise, but they cast doubt on whether client fees would actually increase by the claimed 31 times for the business to be sustainable.

Regulatory News

Bank Negara Launches Electronic Platform Consultation – Profit & Loss

Bank Negara, Malaysia’s central bank, has launched a consultation programme aimed at delivering standards for providers of multi-dealer FX and money market electronic platforms, including inter-dealer brokers. The bank has released an Exposure Draft and invited feedback before July 15 2019.       

The Facts Don’t Support the FTT – SIFMA

Imposing a financial transaction tax, or FTT, which is effectively a sales tax on investors, runs counter to many longstanding policies on savings and promoting economic growth. Not only would such a tax negatively impact all investors, it would negatively impact the world’s most liquid equity market, to the further detriment of all investors. 

As Libor Ambles Toward Phase-Out, Regulators Press Banks to Prepare – S&P Global Market Intelligence

The benchmark rate used for trillions of dollars’ worth of loans has an expiration date, and regulators are saying some banks have not done enough to prepare for the potentially disruptive transition.

Do Not Delay Preparations for SFTR, Says ESMA Chair – Securities Lending Times

The Securities Financing Transactions Regulation (SFTR) is a reporting regime that requires important market preparations, and “if you have not started preparations, you should not delay, now is the time to get ready”, according to Steven Maijoor, chair of the European Securities and Markets Authority, speaking at the International Securities Lending Association conference in Madrid.

Crypto News

Facebook Reveals Details of its New Cryptocurrency – Profit & Loss

Facebook has issued a series of whitepapers outlining its plans regarding the new cryptocurrency that it intends to launch in the first half of 2020.

‘Phase Zero’ of a New Ethereum Blockchain Could Go Live Next January – CoinDesk

The next major iteration of the ethereum blockchain – dubbed ethereum 2.0 – may see a partial launch as early as January 2020.

The Best-Performing Crypto Coin Up 340% Isn’t Named Bitcoin – Investopedia

Despite many investor’s laser-like focus on Bitcoin’s breathtaking rally, one currency that’s far outpacing Bitcoin and other cryptocurrencies is Litecoin, up about 340% this year with a market value of $8.3 billion.

Company News

Citi Culls HFTs From FXPB Client List – (subscription)

Citi has given some of the largest electronic market-makers in currencies – including HC Technologies, Jump Trading and Virtu Financial – just 90 days to find a new prime broker. The cull is part of a wider effort to reduce risk in the bank’s foreign exchange prime brokerage business, which suffered a reported $180 million loss last year.  

Refinitiv Invests in BattleFin to Upgrade Data Offering – Finance Magnates

Refinitiv has made a strategic investment in alternative data platform and marketplace BattleFin. As part of the deal, customers will be able to leverage BattleFin’s datasets across Refinitiv’s data platforms, including quantitative data management platform QA Direct in the Cloud. Refinitiv’s flagship Eikon will also be integrated with BattleFin’s alternative data marketplace Ensemble.

Buy-side Q&A: Mike O’Brien, Eaton Vance – The Trade

Mike O’Brien, director of global trading at Eaton Vance, talks about the asset manager’s use of technology in the fixed income markets and how the role of the buy-side trader is evolving.

Buy-side Q&A: Jim Switzer, AllianceBernstein – The Trade

Jim Switzer, senior vice president and global head of fixed income trading at AllianceBernstein, talks about the firm’s approach to fixed income automation and augmenting the desk’s skill set.

Libor Leaders: LCH Brings SOFR Swaps Into the Fold – (subscription)

The CCP has adapted its risk models to start clearing new swaps and plans a quick switchover to SOFR discounting.

Mifid II Architect Kay Swinburne Joins KPMG – Financial News (subscription)

Kay Swinburne, one of the architects of the European Union’s vast new trading and clearing laws, is joining audit firm KPMG to chair its risk and regulation centre. The Welsh politician will leave the European Parliament later this month after a decade and her next move has been highly anticipated.

ASX Recruits Eurex’s European clearing Sales Head for New Derivatives Role – The Trade

The Australia Securities Exchange has hired the former head of European clearing sales from Eurex for a new role within the rates and OTC derivatives business. Fiona Tramontana joins ASX in Sydney as a general manager for rates, derivatives and OTC markets.

Market Savvy

Sterling Rises for a Second Day as Central Banks Turn Dovish – Reuters

The pound edged higher for a second day on Wednesday, breaking a six-week losing streak, as investors trimmed some large short bets against the British currency built up in recent weeks.

Dollar Near Two-Week High Before Fed as Dovish ECB Supports – Reuters

The dollar held near a two-week high on Wednesday ahead of the Federal Reserve’s closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish eurozone economic data.

Trump, Xi Stoke Trade Optimism With Plan to Resume Talks at G-20 – Bloomberg (subscription)

The US and China said their presidents will meet in Japan next week to relaunch trade talks after a month-long stalemate, triggering a rally in financial markets.