Top Headlines
Will Crunch Brexit Vote Spark Sterling Rally or Sell-Off? – Financial Times
How will sterling fare in (yet another) big week for Brexit? As always with Brexit and the pound, the sensible answer here is “nobody knows”. But some lively moves in the pound on Friday provided some clues.
- The Pound’s Most-Accurate Forecaster Says It Will Slip Another 3% – Bloomberg
- Theresa May to Warn no Brexit More Likely Than No-Deal EU Divorce – Financial Times
- Leading Brexit Donors Say Britain Will Reverse Decision to Leave EU – Reuters
What Can Be Done to Avert More Flash Events? (opinion) – Profit & Loss
What can be done to avert more flash events, especially in the Australasian window before the mainland Asia open? I actually think the question should be, ‘What, if anything, should be done?’ because I remain unconvinced that what happened last week requires a radical rethink of how the FX market operates.
In the FICC of It (podcast) – Profit & Loss
The January 3 flash event in FX markets continues to fuel the news cycle and this week’s podcast looks at the real impact of algos – widely cited as a major factor in the event – in markets. Our podcasters also turn their attention to what for many was the surprise move of Chris Concannon from Cboe to MarketAxess, and the latest moves in global attempts to establish a regulatory framework for crypto markets.
Wall Street Struggles With the Bad Kind of Volatility – The Wall Street Journal (subscription)
Fourth-quarter trading revenue is expected to be roughly flat, collectively, with a year ago at Bank of America, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley, according to data from market-data firm Autonomous Research.
The Euromoney 25: Class of 2018 – Euromoney
Which bank chief executives are raising a glass to a successful 12 months? How are the newcomers to the party settling in? Who’s hiding in the corner, drowning their sorrows? And will 2019 be a year of feast or famine?
Regulatory News
City’s 10 Biggest Banks Spend £1bn on Brexit Plans – Financial News (subscription)
Goldman Sachs, JP Morgan and Morgan Stanley are among those that have spent an average of £100m each trying to make their operations Brexit-ready.
Survey Highlights Need for Users to Rewrite Libor-Based Contracts – Profit & Loss
A survey conducted by JCRA, an independent financial risk management consultancy, and law firm Travers Smith, has found that a large majority of firms with exposure to Libor are yet to start making preparations for its discontinuation.
Esma: Some Digital Assets May Qualify as Mifid Instruments – FX Week (subscription)
Some digital assets may qualify as transferable securities or other types of financial instrument under the Markets in Financial Instruments Directive (Mifid), says the European Securities and Markets Authority in an advice paper on initial coin offerings and crypto assets.
FCA
to Publish Mifid II Review Findings – Euromoney
The UK’s Financial Conduct Authority (FCA) is hoping to publish the
long-awaited conclusions of its review into the implementation of the EU’s
Markets in Financial Instruments Directive (Mifid II) requirements within the
next two weeks, Euromoney understands.
Carney
Tackles Crypto, Brexit in Marathon Online Q&A Session – Bloomberg
Bank of England Governor Mark Carney experimented with a new form of outreach as he spent more than a hour answering questions on the Internet on Wednesday.
Crypto News
Bitcoin Whales Resurfacing May Mean Rough Seas Are Ahead for Traders – Bloomberg
Overlooked amid a resumptionn of digital-asset market volatility is a resurgence of activity by anonymous owners of long-dormant Bitcoin accounts that suggests more dramatic price swings lie ahead.
US Congressman: CFTC, Not SEC, Should Regulate Crypto – Finance Magnates
Soto introduced a bipartisan bill last month to exclude crypto from standard securities law.
Winklevoss Twins: Bitcoin Can Overtake Gold With the Right Rules – Fortune
The crypto markets are in a slump but Tyler and Cameron Winklevoss aren’t discouraged. The twin brothers, who are longtime fixtures in the Bitcoin world, believe digital currency has a bright future – so long as we have banking-style regulations that will help people trust it.
Company News
Spotex Hires Miesner – Profit & Loss
Spotex, a developer of technology systems for the FX markets and ECN operator, has hired John Miesner as executive managing director, global head of sales and distribution.
Schulz Exits Cboe – Profit & Loss
Profit & Loss understands that David Schulz has left exchange group Cboe, where he was a director in the firm’s global markets group most latterly focused on its bitcoin futures offering.
Majority of Buy Side Firms Anticipate Increased Spend on AI Technology – The Trade
Research suggests the buy-side is slightly ahead in terms of AI technology adoption compared to sell-side firms and exchanges.
Treasuries Hit by One-Hour Outage on Biggest Electronic Platform – Bloomberg
BrokerTec, the biggest electronic trading platform for Treasury securities, shut down for more than an hour on Friday because of a technical malfunction, an outage that several traders said caused a market-wide slowdown in one of the world’s biggest assets.
An industry initiative to start a new US exchange promises much, but it may struggle to deliver without a clearer purpose.
BNP Faces New Front in $188 Million ‘Fat-Finger’ Suit by Trader – Bloomberg
A trader who wants BNP Paribas SA to pay him 163 million euros ($188 million) over a “fat-finger” mistake is betting that Paris judges will help him avoid having to give up most of the claim.
Watchdog Steps Up Probe of RBC’s UK ‘Working Culture’ – Financial Times
The UK’s City watchdog has begun a full-blown investigation into the working culture at Royal Bank of Canada in London after dozens of former employees complained over their treatment.
Market Savvy
Sterling Just Off Seven-Wk High vs Dollar as May Woos MPs for Brexit Deal – Reuters
The pound stalled near seven-week highs on Monday as Prime Minister Theresa May made last-ditch efforts to garner MPs’ support for her Brexit divorce deal, which looks almost certain to fail when it is put to vote on Tuesday.
Traders Suddenly Dare to Believe in an Emerging Market Rally – Bloomberg
It’s a measure of how the climate has changed so quickly for emerging markets that this week’s interest rate decision in Turkey, an event that would have had traders on tenterhooks six months ago, is being anticipated with a virtual shrug.
Yen Strengthens After China Exports Disappoint – Financial Times
The Japanese yen strengthened and the Australian dollar and oil prices fell after Chinese exports came in weaker than expected in December.
UBS Sees Two Fed Hikes, Asian Central Banks to Pause in 2019 – Bloomberg
UBS Global Wealth Management predicts the Federal Reserve will raise interest rates twice this year despite markets pricing in little chance of that happening.