Top Headlines

Will Currency Traders’ Brexit Bets Reflect Pessimistic Europe? – Financial Times

Sterling markets and Europe’s policymakers clearly do not see eye to eye. Analysts say that the positive risks to the currency now outweigh the negatives, while continental European officials say preparations for the UK crashing out of the single market without a deal are under way.

Singapore Hits Critical Mass in Offshore Renminbi Futures – Euromoney

Volatility in China and increased onshore access means a greater need for hedging; Singapore is also building offshore rupee traction.

Risk-Taking in FX Revisited (opinion) – Profit & Loss

The communications channels have been buzzing following Thursday’s column about banks taking more risk in their FICC businesses. But while there was general agreement that more risk-takers would benefit the broader industry, my correspondents and I diverged on a key point. To me this is not about spreads or the advantage of man over machine (or vice versa), it is about the risk taking role adding something different.

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

The podcasters discuss the FX market’s handling of last week’s UK Parliament vote on Brexit and wonder if the real lesson of the past few weeks is that the modern FX market copes with known-unknowns better than it’s ancestors, but struggles more in unknown-unknown conditions? The podcast closes out with a report on a visit to a media day at Cboe and the mysterious disappearance of two asset classes from their promotional literature with a theory why. 

Cross-Currency Swaps Could Hasten RFR Shift in Australia – (subscription)

The use of a new reference rate for cross-currency swaps in Australia is set to influence debt issuance rates from the country’s banks as well as rates used in derivatives markets, participants suggest.

Why Europeans Won’t Catch Wall Street’s Bandwagon – The Wall Street Journal (subscription)

Investors in European banks shouldn’t get too excited about eye-catching results on Wall Street. Most big European lenders are more exposed to areas in which US peers did badly and less to those that shone. Only Barclays could enjoy a US-style bounce.

Regulatory News

White House, Democrats Float Proposals to End Shutdown, But Wide Gaps Remain – The Wall Street Journal

the White House and congressional Democrats are each putting new proposals on the table in a bid to show flexibility in the impasse over the partial government shutdown, but they remain far apart on key issues regarding the funding for a southern border wall and related immigration overhauls.

Brexit Threatens to Reopen Asian Bail-In Clauses for EU Banks – (subscription)

A fix designed to make it easier for Asian subsidiaries of European Union banks to comply with resolution rules in their home jurisdiction is coming back to haunt dealers, amid the UK’s impending exit from the EU.

EU Parliament OKs No-Action Powers But Leaked Doc Signals Delay – (subscription)

The European Parliament has voted to grant pan-European financial watchdogs the power to postpone incoming rules in some cases. But a leaked document from another legislative body suggests the regulators may not be able to exercise their new powers until at least November.

Basel Regulators Consider 2020 Initial Margin Relief – Regulation Asia

Although it is still unclear which of the proposals will be adopted, the industry sees the data as so compelling that regulators will recognise the need for some form of relief.

Crypto News

$5 Billion Wiped Out of Crypto: Bitcoin Below $3,500 Could Spell Trouble – CCN

In the past 24 hours, the crypto market has experienced a slight decline in valuation from $224 billion to $219 billion as the Bitcoin price dropped to $3,500.

Dutch Regulators Call for International Crypto Rules – Global Investor (subscription)

AFM and DNB have called for crypto regulation at an international level.

Cboe’s CEO Says There’s One Pain Point That’s Keeping Out Wall Street’s Billions from the Growth of Bitcoin – Business Insider (subscription)

Ed Tilly, CEO at Cboe Global Markets, said that for bitcoin futures to truly grow, an exchange-traded note needs to be launched.

Bitcoin Futures Vols Drop Back after November Spike – Global Investor (subscription)

The volume of bitcoin futures traded on CME, Cboe dropped in December after November spike.

B2C2 Looks Towards Traditional FX with New Launch – Profit & Loss

B2C2, a cryptocurrency liquidity provider, has launched streaming pricing with point-and-click execution on its OTC platform.

Company News

Refinitiv Appoints Global Head of Industry and Government Affairs – Profit & Loss

Refinitiv, formerly the Financial and Risk business of Thomson Reuters, has appointed Sherry Madera as global head of industry and government affairs.  

How to Save Yourself When You Work in Fixed ncome Trading at Goldman Sachs – eFinancialCareers

If you’re a fixed income currencies and commodities (FICC) trader, 2019 has not started well.

Four Foreign Banks Face Fine of 693 Million Won for Price-Fixing of FX Derivatives – Korea IT Times

Four foreign banks – Deutsche Bank, JP Morgan Chase Bank, SC Bank Korea and HSBC – will be fined 693 million won for colluding in foreign currency derivatives transactions.

LMAX Exchange Appoints Group Treasurer – Profit & Loss

LMAX Exchange has appointed Himanshu Kher as group treasurer, a newly-created role he began at the start of 2019.

Capitolis Makes Three Senior Hires – Profit & Loss

Paul Perdoni and Sam Grant joined Capitolis in December, with the former focusing on EMEA strategic accounts and the latter on EMEA buy side sales. In addition, Ralitza Fortunova will join Capitolis in February 2019, taking on the role of managing US strategic accounts. 

SocGen Sells SA Custody, Derivatives Clearing Arm to Absa – Global Investor (subscription)

Sec lending services not part of the South African deal and will be terminated by end of March 2019, SocGen said in a statement.

Market Savvy

China Data Met with Relief By Stock Markets, Brexit Plan B in Focus – Reuters

World markets appeared to experience some relief thanks to data showing that the Chinese economy, the world’s second biggest, grew 6.4 percent in the fourth quarter from a year earlier, matching levels last seen in early 2009 during the global financial crisis.

Currency Ghosts Fade as Emerging Market Central Banks Stand Pat – Bloomberg

South Korea and Malaysia may provide further evidence this week that emerging market central banks have successfully vanquished the currency crises of 2018, with policy makers in both countries forecast to hold interest rates steady.

It’s Election Year in South Africa But Traders Aren’t Panicking – Bloomberg

With about four months to go before South Africa’s election, traders are holding their nerve.