Top Headlines

Yen Gains as RBA, Riksbank Decline to Join Hawks – Reuters

An unchanged stance on Australia’s interest rates from its central bank dominated major currency markets, pushing the Australian dollar lower and helping drive a bounce for the yen from seven-week lows.

Australian Dollar Slides as RBA Declines to Give Hawkish Hints – Financial Times (subscription)

The Australian dollar was falling as trading got underway in Europe following the Reserve Bank of Australia’s decision to hold rates pat and shy away from the recent trend of increasingly hawkish comments from central bankers.

Dollar Scores Best Day in Four Months After Lousy Quarter – Reuters

The dollar recorded its best day in four months, starting the new quarter on a strong note, bolstered by higher US bond yields and data that showed manufacturing activity climbed to its strongest level in nearly three years.

Sterling Slips After Data Shows Cooler UK Construction Growth – Reuters

Sterling edged down after a survey of Britain’s construction sector showed growth cooling in June, adding to signs that the economy might be struggling to gain momentum after a slow start to the year.

‘Markets Will Be Hanging Onto Every Word’: ECB Officials Could Talk Down Tantrum Fears – Financial Times (subscription)

Bullish comments from Mario Draghi, ECB president, on the central bank’s tentative confidence in meeting its inflation target hit bonds and bumped up the euro last Wednesday, sparking what has now been dubbed a “mini-taper tantrum”.

War or Recession Might Be Needed to Break Low-Vol, Goldman Says – Bloomberg

It’ll take more than central bank tightening to shake volatility from its yearlong slumber, according to Goldman Sachs Group.

Regulatory News

Russian Central Bank Slams Ruling in €1bn Sberbank Swaps Case – Risk (subscription)

Lawyers say shock court judgement in ruble options dispute “puts hundreds of contracts at risk”.

FCA Being Shut Out of Brexit Talks with EU Counterparts – Financial Times (subscription)

Esma confirmed that the UK had been shut out of some talks, but declined to comment further.

UK Compliance Managers Predict MiFID II Exemption Post-Brexit – The Trade

Survey finds a quarter of compliance and IT managers believe Brexit will make their firm exempt from MiFID II.

South Korea Plans to Introduce Regulatory Framework for Digital Currencies – Finance Feeds

Park Yong-jin of the ruling Democratic Party of Korea is proposing legal changes that will require (inter alia) companies involved cryptocurrency transactions to obtain permissions from the Korean financial regulator.

Company News

CCP Margin Backtests Can Hide Flaws, Research Finds – Risk (subscription)

Backtesting of the models used to determine clearing house margin requirements needs to change its focus if margin is to do its job, two risk researchers at Singapore Exchange have argued.

Brexit Could Cost Banks EUR15 Billion – Fox Business

Banks in the UK could be on the hook for EUR15 billion in costs to relocate certain activities to Europe after Brexit, according to a study by a finance trade group.

Renminbi’s Share of Payments Rises Slightly in May – FX Week (subscription)

China’s currency regains position as sixth most used currency for global payments in May, with 1.61% share – Swift data.

Market Savvy

Mexico Peso Down on Strong US Factory Data – Reuters

The Mexican peso slipped after US manufacturing activity increased to its strongest level in nearly three years, driving expectations of faster rate hikes in coming months.

Argentine Peso Drops to Fresh Low over Kirchner Comeback Fears – Financial Times (subscription)

Argentina’s peso has slipped to a fresh record low over fears of a political comeback for the populist former president Cristina Fernández de Kirchner in important mid-term elections in October.

Emerging Stocks Fall, Led by Asia, on Korean Tensions – Reuters

Emerging stocks took a tumble as Pyongyang’s latest missile test heightened tensions on the Korean peninsula and added to a correction in China, while currencies were torn between lower commodity prices and a weaker dollar.