First Impressions

Exchange CEO Series – Singaporean shift: SGX’s Magnus Böcker says region is primed for growth

SGX CEO Magnus Böcker has seen tremendous growth at his exchange over the past year and the Singapore market is poised to expand further in the coming year.

Bocker, who sat down with JLN editor-in-chief Jim Kharouf at the FIA Boca Conference this month, said SGX has increased its derivatives volume 40 percent in 2013 and is exploring a host of new partnerships and initiating new product launches.

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Quote of the Day

“In light of our findings, we suggest that credit rating agencies should be stripped of their regulatory powers and these transferred to an international body. Failing that, the ratings agencies should be forced to substantially increase transparency, including publishing a separate breakdown of the objective and subjective components of ratings, the minutes of the rating committees, and the voting records.”

UniCredit, on credit rating bias by ratings agencies in the FT’s piece “Sovereign rating bias, a clanging gauntlet lands.”

Lead Stories

Prepared for Greater RMB Volatility
Charles Li – FOW
The Renminbi (RMB) has been making headlines in recent days because of its decline relative to the US dollar.  In fact, the RMB has fallen the most since new foreign exchange rate policies were introduced in 2005, plummeting 1.4 per cent in only three weeks.

***JK – Interesting stuff from the head of Hong Kong Exchanges & Clearing.

Fed Officials Moving Slowly on Managing Rate-Increase Mechanics
Federal Reserve officials are moving slowly in discussions about how to manage the mechanics of interest rate increases once they decide to start tightening credit.

***JK – Imagine building a giant castle, out of Q-tips.

Fed’s Evans: Interest Rates to Stay Near Zero ‘Well Into 2015’
Federal Reserve Bank of Chicago President Charles Evans said Friday he supports keeping interest rates near zero until some time next year in a bid to lift inflation from unacceptably low levels.

***JK – And why bother thinking about what to do about raising rates when there’s ths?

Sovereign rating bias, a clanging gauntlet lands
Dan McCrum | FT Alphaville
We’ve featured one study that claimed to find bias in sovereign ratings, written in the measured tones of academia, which was enough to set off some tit-for-tatting between S&P and the authors.

EU unveils infrastructure push in new pensions directive
Mark Cobley – Financial News
The European Union published the long-awaited overhaul of its main pensions regulation this morning, putting a revamp of investment rules–which it says will facilitate investment into long-term assets such as public infrastructure–at its heart.

U.S. high-frequency trading ban unlikely: Nasdaq
U.S. regulators are unlikely to put rules in place that would harm high-frequency trading (HFT) as doing so would make trading more difficult and expensive for all investors, Robert Greifeld, chief executive officer of Nasdaq OMX Group said on Thursday.

Fed feels backlash over stress tests
Tom Braithwaite and Camilla Hall in New York, Martin Arnold in London and Gina Chon in Washington –
Bank executives and investors lashed out at the Federal Reserve on Thursday, attacking its stress tests as “opaque” after the results battered Citigroup’s share price and rattled banks around the world.

***JK – Unhappy with your job? Try working at Citi.

Atlas ATS First to Announce Options On Bitcoin
The Only FIX Protocol Digital Currency Exchange Sophisticates With ATLAS 2.0 On The Perseus Network

***JK – First Tera and how this. Ok, who’s next?

MTS Completes First European Bond Trade For US Clients
Timothy Bourgaize Murray – WatersTechnology
The dealer-to-client electronic bond trading venue, a property of London Stock Exchange Group (LSEG) that specializes in European government debt, says trading has begun for stateside users.

Osborne was forced to favour spenders over savers
Martin Wolf –
In presenting his Budget, George Osborne, the chancellor of the exchequer, argued that “one of the biggest weaknesses of the British economy is that it borrows too much and saves too little … So today we put in place policies for savers that stand alongside deficit reduction as a centrepiece of our long term economic plan.”

Central Banks

Is The Bank of England Getting Nervous?
Alen Mattich – MoneyBeat – WSJ
The Bank of England’s policymakers may be keen, on balance, to reassure Britons that interest rates aren’t going to rise anytime soon. But the evidence before them keeps telling a different story. Signs that the economy is experiencing a sudden and surprisingly strong boom could yet see them tapping the brakes in other ways.

5 Takeaways From The U.S. Bank Stress Test Results
Five Things – WSJ
The Federal Reserve’s annual “stress tests” Wednesday echoed in board rooms from New York to Europe, with a number of surprises and noteworthy points for investors. The results reflected the ability of the 30 largest banks to keep lending during a hypothetical severe recession, and the tests looked at how much money they might lose and how well they can predict the risks they face. Here are five things you need to know about the results.

Fed’s Tarullo defends tough rules for foreign banks
A top U.S. regulator gave a spirited defense on Thursday of new rules forcing foreign banks to hold more capital in their U.S. units, after overseas firms and regulators criticized the requirements.

Brazil central bank raises inflation forecast, signals rate hikes
Brazil’s central bank raised its 2014 inflation forecast sharply on Thursday and said it sees the economy growing at a moderate pace, signaling it may prolong its cycle of interest-rate hikes to battle naggingly high inflation in an election year.

South Africa Central Bank Keeps Rates on Hold, Signals Future Rises
South Africa’s central bank stood by its key interest rate on Thursday amid a break from inflationary pressures, but signaled that it will raise rates at further meetings.


The FX Probe: Where Are We Now?
Katie Martin – MoneyBeat – WSJ
*Crickets*. Yes, that is the sound of foreign-exchange trading floors at the moment. The roll call of traders fired, suspended, or generally spending more time with their money as a year-old probe into the inner workings of the FX market rumbles on just keeps on rising.

BitBeat: Another China Rumor Bites Bitcoin, But This One May Have Teeth
MoneyBeat – WSJ
Once again, bitcoin’s price got suckered by vague stories of a regulatory crackdown in China. It dropped 10% in dollar terms Thursday after news spread that the country’s central bank was going to stop banks from providing accounts to digital currency businesses. Trading as low as $512 on Thursday, bitcoin hit its lowest level since November.

Yuan Set to Gain This Week, Ignores Central Bank’s Signal
MoneyBeat – WSJ
China’s central bank set the daily reference rate for the yuan at the weakest in six months, but traders ignored the signal with the currency trading little changed and set for a weekly gain after two months of losses.

Australian Dollar Breaks Chinese Shackles
One of the closest correlations in foreign-exchange markets is breaking down. The Australian dollar, typically reactive to hiccups in China’s economy, marched to a fresh four-month high Friday, brushing off mounting worries in its largest trading partner.

Tokyo court extends Mt. Gox bankruptcy investigation to May 9
A deadline for a court-mandated investigation into why bitcoin exchange Mt. Gox failed, and whether it should be revived under bankruptcy protection laws, has been extended to May 9, the company said in a brief statement on Friday.


ETFs to tap Edhec multi-strategy smart factor index
Yakob Peterseil –
Products that fuse smart beta strategies with factor tilts to provide multi-beta, multi-strategy exposure to global stocks are coming to European exchanges

Euro Area Sentiment Indexes Beat Estimates; Economic, Industrial And Consumer Sentiment Indexes All Show Improvement Over Previous Reading
Arjun Kashyap – International Business Times
Economic sentiment in the euro area saw an improvement across categories, data from the European Commission showed Friday.
The Economic Sentiment Indicator, or ESI, for the euro area rose to 102.4 in March, up from 101.2 in the previous month while in the European Union, or EU, it remained broadly flat with an increase of 0.3 points to 105.3.


As Broader Fears Fade, Gold Is Tarnished
Ira Iosebashvili – The Wall Street Journal
Some investors are backing away from gold, as the prospect of higher U.S. interest rates and an easing of tension in Ukraine sends them in search of riskier assets.
Gold for March delivery ended Thursday at $1,294.70 a troy ounce, down 6.1% since hitting a six-month high on March 14. Prices have fallen on seven of the last nine trading days.

Gold logs first close below $1,300 in six weeks
Myra P. Saefong and Barbara Kollmeyer – MarketWatch
Gold futures lost their hold on the $1,300-an-ounce mark on Thursday to settle at their lowest level in more than six weeks as the dollar edged higher in the wake of better-than-expected economic data, prompting the metal to lose some of its investment appeal.

California Drought Spurs Mini Gold Rush In Sierra
CBS Sacramento
There’s gold in them dry hills!
Or gold seekers anyway. And they see a historic opportunity in California’s historic drought.
Low water levels have led to a mini gold rush in the same Sierra Nevada foothills that drew legions of fortune seekers from around the world in the mid-1800s, as amateur prospectors dig for riverbed riches in spots that have been out of reach for decades.


This is How Much the World Needs the IMF
Alen Mattich – MoneyBeat – WSJ
Just as it looked like International Monetary Fund rescues might be slowing down following the financial crisis, the international body struck a deal to provide as much as $18 billion in loans to Ukraine.

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