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May 24, 2013: Broadway Technology eyes Asia with Westpac forex software deal; Yuan Gold Trade in Hong Kong Triples as Currency Gains Cut Risk; Myanmar’s Currency Slumps as Imports Flood in

BY Jon Matte » May 24, 2013 AT 3:14 pm

Lead Stories

Broadway Technology eyes Asia with Westpac forex software deal
Philip Stafford – FT.com
Broadway Technology, a fast-growing US trading software maker, has made major steps into the Asian market with a deal to provide technology to trade foreign exchange for Westpac, the Australian bank. The group, whose technology is used in fixed income and forex markets, is targeting the region for growth as ever-rising technology costs force banks to rethink their attitudes to spending on IT.
jlne.ws/10syzwJ

Yuan Gold Trade in Hong Kong Triples as Currency Gains Cut Risk
Bloomberg
Trading in gold using the Chinese currency has tripled in Hong Kong this year as the yuan’s rally to a 19-year high helps limit risks for jewelers.
jlne.ws/10syxVN

Myanmar’s Currency Slumps as Imports Flood in
CNBC
Myanmar’s currency has plunged more than 7 percent over the past month to the lowest since it was floated last year.
jlne.ws/1af98TM

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May 23, 2013: China Tightens Trade-Document Scrutiny After Fake-Export Reports; Grexit No Longer Likely, Says Man Who Coined Phrase; Fed Leaves Market Guessing

BY Jon Matte » May 23, 2013 AT 7:24 am

Lead Stories

China Tightens Trade-Document Scrutiny After Fake-Export Reports
Bloomberg
China’s foreign-exchange regulator told banks to improve checks of customer documents related to special trade zones amid speculation that the areas have been exploited to disguise capital inflows as exports.
jlne.ws/10VqIYz

Grexit No Longer Likely, Says Man Who Coined Phrase
CNBC
The economist who coined the term “Grexit” says the possibility of Greece exiting the euro zone has receded “markedly”, reversing predictions he made in July when he saw a 90 percent chance of an exit within the next 12-18 months.
jlne.ws/10VqIYC

Fed Leaves Market Guessing
JON HILSENRATH and VICTORIA MCGRANE – WSJ.com
In a day of conflicting messages from the Federal Reserve that roiled financial markets, Chairman Ben Bernanke left some straightforward new clues about the central bank’s plans for its $85 billion-a-month bond-buying program.
jlne.ws/10VqIaZ

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Blog

May 22, 2013: Japan Keeps Monetary Policy Steady; Swiss franc hits lowest level for two years; China Central Bank Denies Report on Capital Account Liberalization Proposal

BY Jon Matte » May 22, 2013 AT 7:22 am

Lead Stories

Japan Keeps Monetary Policy Steady
HIROKO TABUCHI – NYTimes.com
The Bank of Japan stood pat on monetary policy Wednesday amid market jitters over volatility in bond markets, which has threatened to undermine the country’s battle to end deflation and stimulate growth in the giant economy.
jlne.ws/10lGH2b

Swiss franc hits lowest level for two years
Alice Ross – FT.com
The Swiss franc hit its weakest level in two years against the euro after the head of Switzerland’s central bank said the country could impose negative interest rates and did not rule out more extreme measures to weaken its currency.
jlne.ws/10lGH2f

China Central Bank Denies Report on Capital Account Liberalization Proposal
Dow Jones
The People’s Bank of China Tuesday denied a local news report that the central bank governor and prominent economists have advised Chinese leaders on a plan to fully liberalize the country’s capital account by the end of 2015.
jlne.ws/10lGJam

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Weekly Newsletter

May 21, 2013: China Currency-Reserve Manager Sets Up N.Y. Office; Czech Leader Evokes Soros as Currency Risk to Foster Euro Entry

BY Jon Matte » May 21, 2013 AT 7:44 am

Commentary and Insight

Yuan’s puzzling rise signals imminent reforms
Business Times
BEIJING’S tolerance for the yuan’s massive rally against the US dollar over the last six weeks has mystified many market observers, but some traders in the domestic forex market believe the anomaly is a harbinger of a new wave of currency reforms.
jlne.ws/13ErKJe

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Quote of the Day

The idea that money is still flooding emerging markets misses the big picture, which is that global cross-border capital flows are down 60 per cent from their 2008 peak.

Ruchir Sharma in “Don’t expect emerging markets to be flooded in cheap money”

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Don’t expect emerging markets to be flooded in cheap money
Ruchir Sharma – FT.com
The easy money policies of the US and Japanese central banks are inspiring worried talk of “currency wars”. The fear is that newly printed dollars and yen will flood into fast-growing emerging markets, driving up their currency values, undermining their exports and creating local asset bubbles. In this analysis, emerging market leaders are fighting in vain to hold back a destructive tide.
jlne.ws/13ErJF6

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Secret liquidity and Scottish independence
Joseph Cotterill | FT Alphaville
Yes, it’s hardly a neutral document on the matter. Still, there are lots of interesting charts in the UK government’s latest report on the finance and economics of Scotland becoming a sovereign state, this time covering the dangers from banks…Although we think they missed one.
jlne.ws/13ErJF8

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Blog

May 20, 2013: New Egypt central bank ruling a blow for local money market funds; Thinking the Unthinkable: Quitting a Currency

BY Jon Matte » May 20, 2013 AT 7:43 am

Lead Stories

New Egypt central bank ruling a blow for local money market funds
Reuters via Yahoo! News
By Patrick Werr CAIRO – Egypt’s central bank, worried that banks are investing too much of their cash in local money market and fixed income funds, is imposing stricter limits on such investments, a move asset managers say could cripple their industry.
jlne.ws/16DWbqa

Thinking the Unthinkable: Quitting a Currency
THOMAS CATAN and MARCUS WALKER – WSJ.com
Unemployment in Spain is at 27%. Young people are fleeing Portugal and Ireland. One-in-four Greeks say they have difficulty paying for food. Despite the Depression-era conditions, however, Europe has no crash plan to get people back to work.
jlne.ws/16DWbGo

Goldman Sachs Chief Confident Euro will Survive – Report
Dow Jones
The chief executive of Goldman Sachs ( GS ), Lloyd Blankfein, is confident the euro will survive despite the debt crisis, he said in an interview with newspaper Welt am Sonntag.
jlne.ws/16DW91w

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Blog

May 17, 2013: Buy-side take-up of execution systems threatens ECNs; Asian Currencies Drop as Yen Weakness Spurs Intervention Concern

BY Jon Matte » May 17, 2013 AT 6:54 am

Lead Stories

Buy-side take-up of execution systems threatens ECNs
FX Week
A need to manage trades more efficiently across assets, combined with the proliferation of available platforms and exchanges, is pushing the buy side towards greater use of execution management systems (EMSs), which could lead to a shift in the position of multi-dealer platforms in foreign exchange.
jlne.ws/YOhb84

Asian Currencies Drop as Yen Weakness Spurs Intervention Concern
Bloomberg
Asian currencies declined for a second week on speculation regional central banks will allow their exchange-rates to depreciate to keep exports competitive with Japan, as the yen fell to a four-year low.
jlne.ws/YOhb86

The Euro Crisis is Calming Down. Sell Euros.
Katie Martin – MoneyBeat – WSJ
The euro is set to fall, says Deutsche Bank. The reason: the euro crisis is fading. Come again?
jlne.ws/YOhb87

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Blog

May 16, 2013: China to launch offshore renminbi fund; Rates desks knocked at global investment banks; Tokyo Stock Exchange To Begin Calculating US Dollar Hedged Index

BY Jon Matte » May 16, 2013 AT 7:01 am

Lead Stories

China to launch offshore renminbi fund
Simon Rabinovitch in Beijing – FT.com
China is set to push its currency deeper into global capital markets with the launch of the country’s first-ever privately managed fund that invests in offshore renminbi assets.
jlne.ws/15PzWgH

Rates desks knocked at global investment banks
Giles Turner – Financial News
G10 rates businesses at the largest investment banks were hit hard over the first quarter, according to a new report – and incoming regulation could spell further gloom for this business line.
jlne.ws/15PA6Vx

Tokyo Stock Exchange To Begin Calculating US Dollar Hedged Index
To satisfy market demand for TOPIX index values that hedge foreign currency risk, the Tokyo Stock Exchange has been calculating and publishing the TOPIX Total Return Euro Hedged Index since January 2011 and will now begin calculating the TOPIX Total Return Index hedged into US Dollars.
jlne.ws/15PzYoV

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Blog

May 15, 2013: Borg ‘Not Satisfied’ With Swedish Banks’ FX Financing; Investment banks’ drive into forex proves less lucrative; Central banks will keep equities afloat

BY Jon Matte » May 15, 2013 AT 7:00 am

Lead Stories

Borg ‘Not Satisfied’ With Swedish Banks’ FX Financing
Bloomberg
Swedish Finance Minister Anders Borg said banks in the largest Nordic economy are taking too long to wean themselves off foreign funding as he warns the financial industry will need to pay for the risks it’s creating.
jlne.ws/10XrzXu

[Video] Curbs Needed to Cut Banks’ Use of FX Financing
Bloomberg
Swedish Finance Minister Anders Borg talks with Bloomberg’s Rebecca Christie about efforts to stimulate European economies, banking union and measures to curb banks’ use of foreign-exchange financing. They spoke yesterday in Brussels.
jlne.ws/10XrzXv

Investment banks’ drive into forex proves less lucrative
Alice Ross – FT.com
Investment banks saw dwindling returns in their foreign exchange divisions in the first quarter amid fierce competition on prices even as the drastic fall in the Japanese yen led investors to pile into the currency market.
jlne.ws/10XrzXw

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Weekly Newsletter

May 14, 2013: INTL FCStone Inc. to Acquire Control of Cleartrade Exchange; French support for EU plummets since eurozone crisis; Yuan’s ‘too big to fail’ dilemma

BY Jon Matte » May 14, 2013 AT 7:19 am

Commentary and Insight

Yuan’s ‘too big to fail’ dilemma
Craig Stephen – MarketWatch
Too big to fail is always a hard argument to get the better of. It comes close to explaining why China struggles so much with the vexed question of opening its capital account and setting the yuan free.
jlne.ws/15IW0tj

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Argentina’s grand plan to recover US dollars is about as worthless as its own currency
Quartz via Yahoo! Finance
While hustlers in Buenos Aires secretly buy dollars on the street, the Argentine government is openly begging for greenbacks.
jlne.ws/10vMZed

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Quote of the Day
People aren’t sitting on dollars in Argentina because they make comfortable cushions; they’re hoarding them because it’s the safest investment in Argentina right now.

Roberto A. Ferdman in “Argentina’s grand plan to recover US dollars is about as worthless as its own currency”

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Blog

May 13, 2013: Marex takes axe to foreign exchange; EBS Direct begins initial trades; China to simplify foreign exchange rules on foreign direct investment

BY Jon Matte » May 13, 2013 AT 6:46 am

Lead Stories

Marex takes axe to foreign exchange
Farah Khalique – Financial News
Marex Spectron, the commodities futures brokerage, has closed its foreign exchange desk in New York and conducted an intensive shake-up of staff in London, according to sources familiar with the situation.
jlne.ws/19if9OS

EBS Direct begins initial trades with Commerzbank, Goldman Sachs, J.P. Morgan and Morgan Stanley
EBS, ICAP’s market-leading electronic FX business, announces today that EBS Direct is now live with its Beta programme and four liquidity providers, Commerzbank, Goldman Sachs, J.P. Morgan and Morgan Stanley, have all conducted initial trades on the platform.
jlne.ws/19ieQDU

China to simplify foreign exchange rules on foreign direct investment
Reuters via Yahoo! News
SHANGHAI – China’s foreign exchange regulator will this month simplify the rules governing foreign direct investment, the latest step towards deregulation and market reform under China’s new leadership.
jlne.ws/19ieRrx

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