Navigating Africa’s disparate markets

Navigating Africa’s disparate markets

Simplifying the investment process

Brazil banking industry

Brazil banking industry

Bankers rueful over Rousseff

Dealers face FX front-running battle

Dealers face FX front-running battle

December 2014

Banks face a tough task proving to regulators that foreign-exchange traders are not front-running clients, as they respond to the government’s consultation on reinforcing confidence in the fairness and effectiveness of fixed-income, currency and commodities markets (FICC).


  • The year of the dollar bull

    It has been a year of two halves for FX, with an opening seven months characterized by low volatility and few attractive trading opportunities for FX managers, before a dollar bull market roared into life in August. It is arguably the first such market for 20 years, bringing with it a rise in volatility and enhanced opportunities for FX traders.


  • ‘Barrier running’ investigation alarms FX traders

    Foreign-exchange options traders are feeling the pressure as regulators shine a spotlight on the derivatives market and investigate commonplace practices, such as barrier running, which traders fear might attract criticism.


  • Electronic FX trading gathers steam in 2014

    While other leading markets are yet to follow Switzerland’s lead and mandate automated trading of currency, the industry moves inexorably towards automation. But the push creates new market risks for both the buy side and sell side.


  • Emerging markets ride 2014 FX rollercoaster

    EM currencies have taken a savage beating this year, tumbling to a decade low, thanks to falling oil prices, weaker growth, a stronger dollar and fears over reform inertia. Euromoney surveys the FX landscape for 2015.


  • Rise of RMB trading shows little sign of slowing in 2015

    Despite depreciation risk next year, amid the global currency war, market players say the battle between RMB offshore financial hubs and trading volumes will go from strength to strength.


  • FX regulations doing more harm than good, reveals survey

    New market regulations governing the FX industry have done more harm than good for FX trading desks, according to an October survey by TradeTech FX.


  • Ukrainians pray for swift bounce-back for embattled hryvnia

    The Ukrainian hryvnia has been ravaged in 2014, with the conflict with Russia exacerbating the challenges faced by this highly indebted economy.


  • Inside investment: Hobbesian option

    A war of all against all in currency markets will not be pretty. For some countries it may also be too little, too late. The International Monetary Fund has failed in its role as the arbiter of currency values.


  • Deutsche Börse plots expansion into emerging market FX

    Deutsche Börse's acquisition of a minority stake in R5FX, the London-based electronic trading venue specializing in emerging markets (EM) FX, is the latest in a series of strategic moves by the exchange to break into the FX market. Up to 20 banks have signed up for the March launch of a bank-to-bank liquidity pool for EM FX.


  • Fix fines fuel technology gold rush

    Technology companies are gearing up for a potential gold rush around FX benchmark trading, amid expectations the multi-billion dollar fines imposed on banks last week will accelerate appetite for solutions to boost transparency, oversight and pricing, analysts say.


  • Japanese portfolio flows support weaker yen but raise default risk

    Long-awaited changes announced last week to the composition of Japan's state pension fund portfolios, combined with increasing flows into foreign – predominantly US dollar – assets from retail investors and the insurance sector, should weaken the yen, but could be storing up problems in the long term.


  • Industry divided as regulators mull NDF clearing

    European proposals for mandatory clearing of non-deliverable forwards (NDFs) published in October seemed to be a decisive step toward a new framework for FX derivatives trading. However, responses to the consultation reveal deep divisions among FX market participants over the way forward.


  • Swiss franc volatility rises on gold vote

    Implied volatility on the Swiss franc has risen sharply in recent days, amid speculation that a referendum at the end of this month might force the Swiss National Bank to greatly increase its gold holdings.


  • South Korea battling for RMB spoils

    Backed by its robust trading relationship with China, the east Asian nation is the latest fledgling offshore renminbi hub. Market participants shed light on South Korea’s renminbi bid as internationalization of the Chinese currency gathers pace.


  • Big data comes to FX

    The analysis of structured, semi-structured and unstructured information from multiple sources, commonly referred to as ‘big data’, could improve FX pricing as well as reduce the potential for regulatory infringements, according to technology experts.


  • The future of the RMB: special focus

    An in-depth guide to global currency wars; how Beijing is seeking to globalize the renminbi, through currency swaps and trade-financing facilities; the rise of the offshore bond market; and how fee-hungry banks are salivating at the prospect of the RMB’s growth.


  • Brazilian real troubles far from over

    The decline of the Brazilian real to a nine-year low this week seemed to mark a nadir for a currency buffeted by economic and political concerns. Analysts say, though, that things could get worse before they get better.


  • Mexico eyes sovereign sukuk

    Latin America’s first such deal; Pemex plans to follow.


  • Slowdown in world trade savages EM FX

    Weak global trade and increasing import substitution have signalled bad news for emerging-market FX in 2014, particularly in those countries that rely on a vibrant export sector to drive their economies. 2015 should provide some respite for manufacturers, but commodity exporters will remain in the line of fire.


  • Bank FX technology spend on the rise

    Investment in FX technology is expected to mirror growth in wider financial services IT expenditure over the next few years.


  • Sepa-like revolution upends traditional payments model

    Companies are recognizing the benefits of applying the principles of Sepa to payment and collection processes beyond the single euro payments area, helping to boost liquidity and cross-border flows, consolidate treasury processes and reduce FX risks.


  • Currency hedge funds continue to disappoint

    It has been a chastising few years for currency hedge funds. Several high-profile currency managers have closed down due to poor performance while many that have survived have struggled with redemptions. But some hedge fund allocators are predicting an imminent return to form for FX strategies.


  • Bank intraday tools get mixed reception

    Corporate treasurers and asset managers are turning to innovative predictive tools that help identify FX volatility and liquidity opportunities, bankers say. However, not everybody on the buy side is convinced the new solutions are for them.


  • Market innovations restoring confidence in FX, says Tradition

    The disruption associated with the electronification of FX trading has overwhelmed some market participants, but while policymakers ponder stronger efforts to regulate market structure, especially high-frequency trading (HFT), market players say the latest generation of innovations are now revitalizing FX trading.


  • Hong Kong-Shanghai Stock Connect enables CNH funding arbitrage

    The Hong Kong-Shanghai Stock Connect, which was launched amid much fanfare on November 17, has triggered a jump in CNH-funded arbitrage opportunities. However, rising Stock Connect volumes and easing by the People’s Bank of China – triggering a convergence between onshore and offshore rates – will remove current funding advantages.


  • FX: Lessons from the fix

    It’s time to get some perspective back into the debate about global foreign exchange.


  • Riksbank under pressure for radical action amid deflation

    Despite cutting rates to a record low of 0% end-October, the Swedish Riksbank is under increasing pressure to launch more radical action – from asset purchases, QE and a dual mandate that includes employment, to a currency floor – as deflation fears grow.


  • $4.2 billion FX fines are just the beginning

    Investment banks are keen to close the chapter on the foreign-exchange rate-rigging scandal after Wednesday’s announcement of regulatory fines totalling $4.2 billion, but more banks are expected to be fined and industry participants believe other nefarious practices should now be thoroughly investigated.


  • Russia central bank attempts rouble crisis circuit-breaker

    Analysts support the Central Bank of Russia’s (CBR) response to the collapse of the rouble, arguing it will shift market expectations and could stabilize the currency in the medium-term. In an interview with Euromoney before the move, a CBR official discusses the opportunities and challenges in the regime shift.


  • Hidden FX charges total $18 million a year – study

    Asset managers are still losing millions of pounds a year in hidden foreign-exchange bank charges, research shows, despite the advancement of money-saving solutions such as independent live benchmarks and transaction cost analysis (TCA).


  • Amrolia to lead Deutsche Bank digital drive

    FX market veteran takes up new role developing digital technology and reducing business complexity across Deutsche Bank’s markets platform


  • HFT: Flash boys come to Asia

    High-frequency trading is not confined to Europe and north America. Some Asia-Pacific countries are further along in embracing the strategy than others.


  • Social trading grows amid calls for regulatory oversight

    The full-scale disruptive potential of social trading is beginning to become clear, according to proponents. But there are fears that it is encouraging inexperienced traders to load up with risk in the pursuit of large returns and there have been calls for tougher regulation.


  • Dollar-equity correlation conjures up memories of dotcom boom

    The US dollar has become highly correlated with equities in recent months, conjuring up memories of the late 1990s and the dotcom boom, the last time the two asset classes rose together for such an extended period. But the differences between the two periods are as illustrative as their similarities.


  • Yen depreciation back on track after safe-haven strengthening

    A momentary strengthening of the yen amid market panic coincided with reports the government might be having second thoughts about key planks of the reform agenda – the consumption tax and a weak yen. But analysts insist there has been no change of policy, but pension and energy reforms hold the key.


  • ECB commences covered bonds amid intrigue

    The ECB commenced its covered bonds purchasing programme last week, but no sooner had it started than rumours surfaced about a new plan to purchase corporate bonds. The fevered speculation demonstrates the lack of confidence in the ECB's existing plan, reviving questions about full-scale QE and its seniority in bond holdings.


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