Top Headlines

Yen Unnerved by Trump’s Trade Rhetoric – Financial Times (subscription)

There is a political flavour to market sentiment, with remarks from President Trump knocking Japan’s currency and crude higher after Saudi Arabia’s anti-corruption crackdown.

Dollar Pauses After Biggest Weekly Rise of 2017 – Reuters

The dollar was little changed after investors took profits on its best weekly performance this year, with wariness about the status of the US economy and tax reform plans setting the tone.

Sterling Bounce Checked as Brexit, Scandal in Focus – Reuters

The pound bounced after three consecutive weeks of losses, though signs of instability in Britain’s governing Conservative party and uncertainty around Brexit negotiations checked gains.

Will Markets Listen to Hawkish Talk from the Bank of England? – Financial Times (subscription)

The fallout from the BoE rate decision and the health of the US economy will be in focus.

Yuan’s Volatility Makes It an Outlier – Wall Street Journal (subscription)

Chinese currency’s implied volatility is rising while others fall.

ISDA to Roadmap Benchmarks Transition – Profit & Loss

The International Swaps and Derivatives Association (ISDA) has announced that it has begun a comprehensive analysis of the issues and potential solutions related to transitioning financial market contracts and practices to new alternative risk-free rates (RFRs).

Banks Prepare for Battle with Fed Over G-Sib Rules – Risk (subscription)

Proposals would kill client clearing business, FCMs claim – but postponement is a chance to fight back.

What Happens If Pre-Hedging Goes Wrong? – Profit & Loss (subscription)

There still seems a need for smoothing the impact of some orders at the Fix and it is certainly the case for orders outside of the Fix.

Pimco Calls for Urgency on Libor Transition – Risk (subscription)

The world’s largest fund managers have aired concerns about the current timeline for switching from the discredited interest rate benchmark Libor, to a new near risk-free rate.

Head of World’s Largest Exchange Embarks on Bitcoin Gambit – Wall Street Journal (subscription)

CME Group’s Terrence Duffy could notch a major achievement if bitcoin futures take off, but the move risks harming exchange’s reputation.

Regulatory News

New York Fed President Dudley to Announce Early Retirement – Wall Street Journal (subscription)

The president of the Federal Reserve Bank of New York is set to announce he will retire next year, about six months earlier than scheduled, adding to an unusual wave of turnover among the central bank’s top monetary and regulatory decision makers and ushering in new uncertainty about its policy course.

Under Powell, Wall Street Expects Steady Wins on Regulation – Bloomberg

In Jerome Powell, banks won’t get a Federal Reserve chairman who is hell-bent on ripping up financial rules. But in some ways, that’s better for Wall Street.

CFTC Official: Revamp Postcrisis Swap Rules – Wall Street Journal (subscription)

New metric needed to better measure risk, says GOP Commissioner Brian Quintenz.

US Asset Owners Warn Mifid II Creates Uneven Playing Field – Financial Times (subscription)

NYC pensions and Colorado state want EU research regulations rolled out across America.

China’s Central Bank Is Developing Its Own Digital Currency, Even as It Bans Bitcoin and Private Cryptos – South China Morning Post

China’s central bank is conducting research to issue the country’s own sovereign digital currency, a move in parallel with similar efforts ongoing in Russia, even as the government has doubled down on banning the use and exchange of bitcoin and other cryptocurrencies.

Company News

Nex Offers Clearing Connectivity for NDFs – Profit & Loss

Nex Optimisation is now providing central clearing connectivity for its FX risk mitigation service in non-deliverable forwards (NDFs).

Goldman Swaps Assets Drop $140 Billion After Margin Change – Risk (subscription)

Goldman Sachs has become the latest bank to start treating the margin on its cleared swaps as settlement of those trades, rather than as collateral – a minor change that can have a major effect on the size of a derivatives book.

Largest US Bitcoin Exchange Added 100,000 Customers in One Day After Futures Announcement – CNBC

About 100,000 new users joined Coinbase in one day, according to public data compiled by Alistair Milne, co-founder and chief investment officer of Altana Digital Currency Fund.

Regulators Look to Sync Clocks – Markets Media

Corvil, which provides data analytics for electronic trading, is launching a service to allow firms to independently verify that they are meeting the new time-stamping requirements required by both European and US regulators.

Market Savvy 

Dollar Edges Up as Asia Pacific Currencies Soften – Financial Times (subscription)

Asia Pacific currencies weakened further against the dollar after the US currency ended last week on stronger footing. 

EM Currencies Drop the Most in Five Months on US Rates Jitters – Financial Times (subscription)

Jitters over the potential fallout from Venezuela’s proposed $89bn debt restructuring combined with renewed US rate hike speculations following a spate of upbeat economic data have sent a chill across emerging markets assets.

C$ Posts Nine-Day High as Jobs Gain Boosts Case for Rate Hikes – Reuters

The Canadian dollar strengthened to a nine-day high against its US counterpart after stronger-than-expected domestic jobs data supported the case for further interest rate increases from the Bank of Canada next year.