CME FX volumes averaged 833,000 contracts per day in July, with average daily volumes of $104 billion. This is a big drop from June which saw 981,000 contracts per day and average daily volumes of $118 billion.

We can confirm that our old friend David Woo, formerly global head of FX strategy at Barclays Capital (FX people moves: Barclays Capital departures continue), has joined Bank of America Merrill Lynch as head of global rates and currencies research. Woo is responsible for forecasting the G10 currencies, as well as managing BAML’s regional interest rate research teams. He reports to Candace Browning, head of global research.

The Parker FX Index covering June was released this week. The index has been going since 1986 and “is a performance-based benchmark that measures both the reported and risk-adjusted returns of global currency managers”. The last time we reported on the index was back in March when the report was released for January (FX news: Parker index down in January). We said that alpha generation had been difficult over the preceding year (the index was down 0.44% over that period) and it is clear that things haven’t got much easier: the index is up only 0.75% in the year to the end of June. On the other hand perhaps that’s not too bad; after all it’s two-and-a-half times the yield on the one-year T-bill.

On Monday it was the turn of HSBC and BNP Paribas to report their interim results; as usual one had to dig a little to uncover a hint of FX performance.

Johnson steps in to take global FX role at HSBC

Gain Capital’s Forex.com has increased its equity index contracts-for-difference offering to more points east and west, after launching in Europe, the Middle East and Asia in June.

4Cast, providers of macro-economic, FX and fixed income analysis, has been wholly acquired by Fin-Ex asset management.

New regulations in the US have created a surge in demand for seven-day instruments, and sovereign risk problems in Europe have created a pool of issuers willing to issue them. But is this really the win-win situation that it appears to be? Louise Bowman reports.

Gary Nettleingham, HSBC’s global head of spot and forward FX, resigned last Friday. He’d been at the bank since 1989.

Analysis by the CitiFX quantitative investor solutions (QIS) group “suggests that investors will be on balance net sellers of USD to bring their hedges in line with the increased value of their US assets.”

Although UBS has had a tough time, it seems the Swiss bank is still a more attractive place than Barclays, which has seen a staggering number of FX departures over the last year (Exodus from Barclays).

Alex MacKinnon, global trading director at ODL securities, resigned this week. Mackinnon’s departure follows the acquisition of ODL by Forex Capital Markets (FXCM) in May.

Deutsche and UBS reported their second quarter results the final week of July. Both banks tucked away FX profitability within larger categories: Deutsche puts its within ‘Sales and trading (debt and other products)’, while UBS slips it into ‘Fixed income, currencies and commodities’, or FICC. The salient point is that while they both saw declines in these broader groups, the notes reveal FX stood out for performing well.

The central bank figures released earlier this week pointed to a continued increase in FX volumes. But the numbers were for April.

Currency debasement and inflation have ultimately been bad news for men of modest means. Lincoln Rathnam learns lessons from the history of Emperor Diocletian on why our present penchant for McMansions might point to an Appalachian future.

Russian bank IIB’s default on a Eurobond pinpoints the Russian state’s power to make or break businesses.

Hopewell, Citic Bank issue in Hong Kong; Interbank market, investment products launched

Jo Narita joined Citi Tokyo as head of FX trading at the beginning of the week.

The last week few days have been confusing for JPY players. Last Thursday USD/JPY was again knocking on the low of 86.30, with a pre-month-end JPY appreciation, due to a decrease in retail leverage, expected to take the move further. But the further JPY strength hasn’t materialised: implied volatility, usually bid when USD/JPY is getting sold, continues to be suppressed at close to 11% in the threes while spot USD/JPY is back to around 87.50.

The Bank of England, the Federal Reserve and the authorities in Singapore, Japan, Australia and Canada all published their FX volume data for April. The data is published twice each year (apart from the data from Tokyo which is annual) in January and July and shows FX volumes for the preceding October and April respectively. The data for April 2009 year slumped, reflecting the crisis taking hold, but last October’s data showed volumes recovering. This newest set of data, for April 2010, shows volumes approaching, and in some cases exceeding the pre-crisis highs.

Algos and fat fingers are getting the blame this week for some strange moves. While both blips were unsettling, they were also rapidly retraced.

Those jolly people in European supervision must have a great sense of humour. With all eyes on the results of its stress tests, the Committee of European Banking Supervisors (CEBS) has decided to release the report on Friday at 5pm London time. How we laugh. Still, it will give some purpose to the New York afternoon for once. If you haven’t got anything better to do, the report will be published on the CEBS website.

Since the beginning of July, torrential rains and severe flooding in 10 provinces mostly along the Yangtze River have left more than 1,000 people dead and forced the evacuation of millions. The last major flood was in 1998, when 4,000 people died and 18 million were displaced.

All the major US banks have now released second-quarter revenue figures. As usual, pure FX income is mostly subsumed within FICC revenue, but here and there something can be seen.

There’s no stopping the flood of above-consensus European data: just this morning IFO business sentiment is up to 106.2 from 101.8 when a small fall was expected; and UK GDP is reported up 1.1% on the quarter. The leaks about Committee of European Banking Supervisors (CEBS) stress tests – that Greece’s Ate bank and a few of Spanish cajas haven’t made the 6% tier 1 capital target – can also, perversely, be seen as positive, in that the tests get credibility (even if the banks that failed were ones that were expected to anyway). So it is a little surprising that research has arrived this morning calling for an end to the euro rally.

Karl Wildi will be joining CIBC as head of capital markets in Europe. He will be relocating to London from Toronto for the role and will report regionally to Scott Wilson, head of wholesale banking in Europe, and globally to Harry Culham, head of capital markets trading. Wildi was previously at Bank of America Merrill Lynch in Toronto, where he was in charge of Canadian fixed income, currency and commodity trading.

Industry veteran Andrew Kidd has joined State Street’s eExchange Solutions Group. The group encompasses FXConnect and Currenex; Kidd’s role will be to focus on bank relationships for FXConnect. He reports to Russell Sears.

As the USA follows one path and Europe another, time will tell which is the better route to renewed prosperity. This is an experiment of historic import.

Since when did financial authorities spring into action on the back of media speculation?