This week's In the FICC of it Colin Lambert and Galen Stops discuss the implications of an FX market where intermediaries are sometimes more profitable than the risk-taking firms that are using their services, and the former - for once - is unsure who to blame for this state of affairs.
Elsewhere, a new report claims that the FX Global Code is already leading to greater transparency and improved behaviour in the FX market, but Lambert isn't buying this explanation, and Stops recounts comments from a recent interview with the FinTech firm, Cobalt, and asks: is the #blockchain fad over in FX?
The pair also explain that while, yes, hedge fund fees are in general still coming under downwards pressure, if you scratch beneath the surface there is evidence that investors are still willing to pay for alpha, they've just become savvier about analysing exactly what this constitutes.
In this week’s podcast Galen Stops explains the devil in the detail behind the SEC rejecting bitcoin ETFs, the changing market structure in crypto generally, and how market participants are going about institutionalising the new asset class.
Colin Lambert meanwhile, is in a punchy mood and wants to take everything and everybody to task.
They observe how crypto-strategists are just the same as fiat strategists; discuss the barriers to entry for currency managers; the pricing of credit and liquidity in FX; and Lambert in particular has a problem with investors’ approach to allocating to hedge funds.
In this week’s In the FICC of It, your podcasters are taken to task by a listener over some points they may have missed when discussing the State Street/BestX deal last week and Galen Stops asks Colin Lambert the question (on behalf of a listener), ‘can you be too client focused?’
They also look at the impact of political events on FX markets and Lambert appeals to listeners of a ‘certain generation’ (i.e. as old as he is!) to come up with times when global politics was potentially such an influence on FX markets?
The evolving market structure of crypto markets also attracts their attention, and they ask the question; ‘Can innovation really thrive in banks today?’
In this week’s podcast episode, Colin Lambert and Galen Stops share their views on the takeover of BestX by State Street. What does it mean for BestX’ USP of independence? What drove the deal? Will it be a success?
They also touch upon the latest lawsuit in FX circles, served by former Fastmatch CEO and founder Dmitri Galinov against the firm and its owner, Euronext US, and ask whether this highlights yet another barrier to success for the swathe of fintech firms targeting the FICC sector?
In this week’s podcast Colin Lambert attempts to sound informative on all things crypto, while Galen Stops is informative on all things crypto. They also discuss the shift in FX trading from anonymous to disclosed channels and its impact on last look as well as the latest on pre-hedging from the Global FX Committee. There is also time for one to bang on about a correct prediction (to date) made at the start of the year and they also touch on "de-centralised" crypto trading platforms and realise it's just like the FX options market in the 1980s.
In this week's In the FICC of it podcast, Colin Lambert and Galen Stops discuss the Mark Johnson trial, pointing out that if the current verdict is upheld despite the ongoing appeal against it and ACIFMA's decision to file an amicus brief in support of the appeal, it could have a very significant impact on both the Global FX Code and how the FX industry operates more broadly. They also look at why crypto regulation is unlikely to move as fast as some people in the industry would like, and why this might not be such a bad thing.
In this week’s In the FICC of It from Profit & Loss Colin Lambert lifts the veil of secrecy around how this podcast is created and Galen Stops talks about democratising financial markets. They also engage on the latest FX volume surveys and ask ‘are they accurate?’ as well as talk about the impact of regulation on non-bank market makers. They also seek to explode the myth that people are leaving the banking industry in droves and briefly touch upon what Colin Lambert calls ‘the madness of regulation’.
In this week’s In the FICC of It podcast, Galen Stops breaks ranks to say he found one of Colin Lambert’s columns interesting, while the latter makes an appeal for expert knowledge on risk-free rates – if only so he doesn't have to blag another podcast feature.
They also discuss the latest unfair dismissal outcome in the UK in which yet another FX dealer was found to have been wrongly sacked, as well as the potential implications for the fintech industry from a legal case in the US. In a busy podcast they also dispel some myths about AI – while at the same time making a big statement (is there any other kind?) on what will make AI trading successful; and they pick out their early selections for must-not-miss sessions from Forex Network Chicago in September.
One of the key benefits of the use of artificial intelligence (AI) tools for trading is that it can massively enhance human capabilities, explains Andrej Rusakov, CEO of Data Capital Management.
“The way I see it is that AI can really put human ingenuity on steroids,” he says. “What I mean by that is that it really allows you to take way more data points into account and find structures in data sources that are impossible for the human eye to spot.”
Rather than displacing humans, Rusakov explains that this technology is most effective when it is deployed in tandem with a human understanding of how markets work. When building strategies, his firm uses this understanding of markets and then codifies and enhances them by using AI, and in particular machine learning, tools to find new patterns in different data sets.
In this week’s In the FICC of It podcast, Colin Lambert apologises to the English nation and Galen Stops talks about the needs of a millennial.
They also discuss the week’s news from the FX world including SGX launching futurised OTC products and LCH going live with deliverable FX options clearing, as well as deliberate upon how hedge fund performance is measured; US regulators’ attitudes to cryptocurrencies; and the latest blow to the desktop terminal industry. They close out with a quote from their favourite profession – the legal industry – which rather aptly reinforces something Colin Lambert has been saying for some years – and let’s face it, if he says enough at some stage a lawyer somewhere will have to agree, it’s the law of averages!
In case you missed some of the original coverage this week, you can catch up here:
SGX Launches “Futurised” OTC FX Product
LCH Goes Live with Deliverable FX Options Clearing
US Regulators Shift Attitudes Regarding Cryptocurrencies
Hedge Funds Suffer in June: BarclayHedge
And Finally…(subscription required)