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US Elections: What Does the USD Data Suggest? TraderMade’s chief technical analyst, Steve Jarvis, has put out some interesting research looking at USD trading patterns around past presidential elections to see if there is any indication of what to expect in the upcoming one. Using a USD trade weighted index chart for his analysis rather than specific FX rates, Jarvis looked at how the USD moved during the two months leading up to the previous seven US presidential elections and the two months after. Going back to 1988, Jarvis highlights who was elected, their defeated opponent, and includes the percentage change for the USD index for the two months before and after the election, as well as the net change over the four-month period.
Edgewater Targets LatAm Growth with Matching Engine Launch Edgewater Markets is expanding its LatAm business with the launch of a local matching engine in Mexico City. The deployment of the server in the KIO-5 data centre in Mexico, which recently went live in Q3 2016, enables customers to cross connect directly to Edgewater’s local environment. It will support a range of currency pairs, with a strong focus on MXN crosses. “We are constantly looking for ways to grow our business and to penetrate into new areas of the market and we identified order management as a gap in our offering. We have clients aggressing rates on our platform very actively, but we were lacking on order capability.
Cobalt Partners with SETL for Blockchain Platform Cobalt DL (Cobalt), which plans to launch distributed ledger-based FX post-trade platform in 2017, has announced a partnership with SETL to deploy its Open CSD distributed ledger within the platform. Although a spokesperson for Cobalt declined to name a targeted go-live date for the platform next year, the firm claims that it has 15 institutional FX participants already committed to the service. Profit & Loss previously reported on Cobalt’s plans to try and reduce post-trade costs for financial services firms by creating a shared view of trade data.
Saxo Braces for US Election Saxo Bank is increasing margin requirements on certain FX pairs, equity and fixed income products ahead of next month’s US election. Saxo says that it will implement margin changes on products expected to be affected by the outcome of the election such as some single equity, index and fixed income CFDs, and certain FX pairs. This includes taking most major FX pairs up to 2-3% with RUB and MXN going to 10% and 15%, respectively, while the minimum margin requirement on CFD indices will be 4% based on market volatility and liquidity leading up to and through the election.
Visa, Chain to Launch Blockchain Payments System Visa is partnership with Chain to launch a new business-to-business (B2B) payments platform using blockchain technology. The new platform, Visa B2B Connect, will be built using Chain Core, an enterprise blockchain infrastructure that is designed to facilitate financial transactions on scalable, private blockchain networks. The plan is for Visa to use this technology to develop a near real-time transaction system designed for the exchange of high-value international payments between participating banks on behalf of their corporate clients. The platform will be managed by Visa end-to-end and the firm says it will facilitate a consistent process to manage settlement through Visa’s standard practices.
And Finally... It is often said that foreign exchange remains a people business in spite of the surge of technology and there is no doubt that without a lot of good people, who do the right thing, this industry would be in a worse place. Today I would like to pay tribute to three people who have helped make the industry a better place, one who is stepping down from a role, one who has retired and one - tragically, who recently died.
GMEX Restructures Business GMEX Group has announced a restructuring of the business by spinning off its subsidiary GMEX Technologies. Forum Trading Solutions, currently a minority stakeholder in GMEX, has acquired 100% of GMEX Technologies, including clients and the GMEX name related trademarks. The current GMEX Tech and Forum businesses, which already work closely together, will merge operations and will operate under the GMEX Group and GMEX Technologies names with associated GMEX branding. They will continue to provide multi-asset exchange and post trade business services and technology covering all the market infrastructure value chain.
US Seeks HSBC FX Dealer’s Extradition The US is to file for the extradition of HSBC’s former senior FX trader Stuart Scott from the UK to face charges under its broad wire fraud laws. According to a report first published by Reuters the US Department of Justice has filed a letter in a in Federal court in New York, stating the US’ intention to initiate formal proceedings to seek Scott's extradition after learning he did not wish to come to the United States voluntarily to face the charges.
Goodbody to Leave Bats Hotspot Bill Goodbody is set to leave his position as senior vice president, head of FX, at Bats Hotspot. A spokesperson for the company in New York, where Goodbody is based, confirms the news. There is no set date for his departure, but a transition period is planned with the broad expectation that he will officially leave the firm sometime in January 2017. Goodbody has been working at Hotspot since before it was acquired by Bats Global Markets in March 2015, having been made a managing director at the platform in 2008 when it was owned by KCG.
Shafik Calls for “Ethical Lift” Outgoing deputy governor of the Bank of England, Manouque Shafik has called for a move from what she terms “an ethical drift” to an “ethical lift”. Speaking at the New York Fed conference on conduct and behaviour, Shafik accepted that misconduct in financial markets is nothing new, but argued the wave of misconduct which has emerged in the aftermath of the financial crisis is different. She highlighted the benefits of the UK's blend of "hard law" and "soft law" when establishing a compliance framework.