Top Headlines

Why Big Data Matters: Using Smart Data and Artificial Intelligence to Enhance FX Trading – Tabb Forum

The fragmented nature of the FX market has hindered the availability of sufficient and quality data for market participants to realize the benefits of big data and sophisticated analytics. But this is changing, says CLS, with the emergence of new services offering smart data and artificial intelligence tools.

The Evolution of an Emerging Market – Profit & Loss

Greaterautomation in emerging markets is widely seen to be merely a matter of time. Darryl Hooker, former co-head of EBS Brokertec Markets and currently consultant at Capitolis, talks about his experience in helping to bring a larger ‘e’ focus to Russia and China.

Should We Be Using Benchmarks? – Profit & Loss

Is it now time to have a sustained, genuine and honest debate about the financial markets’ use of benchmarks? Is it a fair question to ask, “Should we even be using these benchmarks given their vulnerabilities?”

Clearing Houses in Asia to Overhaul Creaking Margin Models – (subscription)

Fears of Nasdaq-style failures spur a rethink of margining practices at HKEx, JSCC and SGX.

Hedge Funds Brace for Worst after a Terrible October – Bloomberg

After beleaguered hedge fund managers had their worst month in seven years, many are bracing for an industry day of reckoning: Nov. 15. That’s the deadline for investors to put managers on notice to get some – or all – of their money at year end.

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

The podcasters discuss the latest lawsuits facing banks in the FX markets, the Virtu-ITG tie up and volatility in the crypto markets.

Regulatory News

German Minister Tries to Calm Row over Post-Brexit Derivatives Trading – Financial Times (subscription)

Germany’s deputy finance minister Jörg Kukies has attempted to placate an EU-US row over Europe’s post-Brexit derivatives trading regulation.

FIA and Other Trades Urge European Leaders to Consider Third Country Access in Ongoing Investment Firm Review – FIA

FIA, Deutsches Aktieninstitut, AFME, EDMA, ICMA, Swiss Finance Council and ISDA are concerned that the proposed amendments to limit the scope of the equivalence regime could lead to less competition for investment services and trading venues within the EU and reduced provision of external capital available to the European economy. 

Brexit’s Unintended Consequences Could Include Mifid III – Sell-Side Technology (subscription)

Sweeping changes to Europe’s trading rulebook, which came into force in January 2018, may have to be revised again soon after the UK leaves the European Union, according to one key lawmaker.

Alternatives to Scandal-Ridden Libor are Slow to Catch On – Financial Times (subscription)

Alternatives to Libor underpinned less than 5 per cent of interest-rate derivatives traded last quarter, revealing the size of the challenge facing regulators trying to wean financial markets off the scandal-tainted benchmark.

Commerzbank to Pay $12 million for Swaps Dealing Violations – The Trade

The US CFTC found that Commerzbank failed to supervise its swap dealing activities and made misleading compliance statements to the regulator.

Crypto News

The Calm Crypto Market? Bitcoin Volatility Drops Despite Turmoil Elsewhere – The Wall Street Journal (subscription)

Cryptocurrencies, among the most volatile of financial assets, have fallen quiet even as turmoil has gripped stocks, bonds, commodities and traditional currencies.

The Unholiest of Holy Wars: “Satoshi” vs “Bitcoin Jesus” – Financial Times (subscription)

What is bitcoin? Bitcoin is, in theory, a peer-to-peer digital “currency” invented just over ten years ago by someone – or some group – calling themselves Satoshi Nakamoto. It’s currently trading at around $6,400, and goes by the ticker “BTC”. We can all agree on those basics, right? Nope. 

Fincross International Prepares Full Crypto Servicing and Trading Operation in Mauritius – The Trade Crypto

The firm is led by former Societe Generale CEO of the Middle East and Africa, Eddy Abramo and is targeting institutional clients.

Crypto Firms Will Close as Regulators Catch Up: Bitstamp – Global Investor (subscription)

Institutional traders are increasingly seeing the upside in crypto, the head of Bitstamp says.

Execs are Fleeing Mike Novogratz’s Galaxy Digital as the Firm Makes a Big Pivot Towards Wall Street – The Block

Galaxy Digital, the merchant bank run by famed trader Mike Novogratz, announced on Friday evening that two major executives are stepping down from their positions as the firm shifts its focus to larger institutions from small ICOs.

Company News

Jump: Inside the Secretive e-Trading Giant – (subscription)

Secretive, unassuming, huge and wildly successful. That’s how outsiders describe Jump Trading, one of the world’s biggest – and most mysterious – proprietary traders. For the two decades since its birth, Jump has remained largely hidden from public view. The company’s co-founders, Bill DiSomma and Paul Gurinas, shun media interviews. Its website is pretty much empty.

BME Targets London in Growth Plan, Regardless of Brexit – Global Investor (subscription)

The Spanish exchange group is looking to build out post-trade capabilities and expand connections in London.

Goldman Acquires Software Firm in Tech Push – Institutional Investor

As part of its drive to upgrade technology throughout the firm, Goldman Sachs is buying ClearFactr, spreadsheet software which analysts in its investment bank will use to build complex financial models.

Deutsche Bank Still Calling London Home, For Now – Handelsblatt Global

Although Deutsche has moved its short-term derivatives business to Frankfurt, longer-term trading will remain in London for the time being.

Market Savvy

Euro Pinned at Lowest Level Since June 2017 on Italy Worries – Financial Times (subscription)

The euro has another case of the Monday blues, with the political risk factors it faces darkening as the dollar’s rebound from last week’s lows also gathers pace.

Sterling Sinks on Report Brexit Cabinet Meeting Cancelled – Reuters

Sterling fell almost one percent on Monday against the dollar, as the greenback strengthened broadly and doubts grew over UK Prime Minister Theresa May’s ability to get the backing of the EU and her own party for any Brexit deal.

China Signals Tougher Yuan Management at Expense of Market Role – Bloomberg

The People’s Bank of China cut its pledge to allow “market supply and demand to play a bigger role in deciding the exchange rate” from a section on future tasks in its third-quarter monetary report. The last time that phrase wasn’t used was in the fall of 2013.

Dollar Hits 16-Month High – Reuters

The dollar rallied to a 16-month high on Monday as investors positioned for a Federal Reserve interest rate rise next month and concern about political risks in Europe put pressure on the euro and the pound.