French Regulator Fines Morgan Stanley for Manipulating Prices of French and Belgian Bonds

France's financial watchdog, Autorité des Marchés Financiers, levied a €20 million fine against Morgan Stanley & Co International plc yesterday for price manipulation of French and Belgian government bonds.

According to the press release, on June 16, 2015, Morgan Stanley manipulated the prices of 14 French government bonds (OAT) and 8 Belgian bonds (OLO), as well as the price of one of the futures contracts.

The scheme was executed by traders at Morgan Stanley's European Government Bonds Desk. The traders made big buys of French (FOAT) and German (FGBL) sovereign bonds futures on German derivatives exchange Eurex, but several minutes later began selling 17 different French bonds, worth €815, on France's MTSand and BrokerTec trading platforms, as well as the €340 million in Belgian bonds on the MTS Belgium exchange.

An investigation by Autorité des Marchés Financiers found that Morgan Stanley's traders had locked in prices on the September 2015 French bonds futures contract, and 14 French and 8 Belgian bond contracts, at artificial and inflated levels.

The financial watchdog said the aim of the scheme was to influence the price of French and Belgian bonds via the futures contracts.

"The Committee considered that these acts also constituted price manipulation through the use of a form of deception or contrivance, since the FOAT acquisition was inconsistent with the overall strategy of the European Government Bonds Desk and had the effect of giving other participants a distorted picture of the state of the French sovereign bond market.," said the Autorité des Marchés Financiers.

Image credit: 1

Central Bank of Argentina Imposes New Limits on Foreign Transactions and Cryptocurrencies

The Central Bank of Argentina issued a new order today which limits the maximum amount per transaction allowed by financial institutions to foreign accounts. The new limits allow a maximum of USD$50 per transaction, but there are no limits on the amount of transactions per day.

More specifically, the central bank's "Communication A 6823" requires financial entities and local card issuers to obtain prior approval from the Argentine central bank to make payments abroad for the use of credit, debit or prepaid cards issued in the country from the 1st of November.

The new restrictions will apply to transactions relating to gambling, the transfer of funds to investment accounts, forex operations, as well as cryptocurrencies.

Bitcoin traders in Argentina have been using p2p online marketplaces like LocalBitcoins this year to escape capital controls.

Last week, over 14 million Argentine pesos worth of bitcoin trades took place on LocalBitcoins in the country - one of the highest weekly volumes so far this year!

Image credit: 1

Peer-to-Peer Bitcoin Marketplace Paxful Gaining Popularity in China and Japan

Paxful, a bitcoin p2p marketplace where consumers can trade the world's most popular cryptocurrency for cash, gift cards and other online payment methods, has seen increasing trading activity originating out of the major Asian economies.

Volumes on Paxful in China, Japan and Malaysia have been rising steadily since the start of 2019.

Just last week, volume in China hit at all-time high at CNY¥10 million, with turnover in Japan also hitting a new record of JPY¥16.5 million. Malaysia trading activity on Paxful also set a new record at RM84,000.

Although majority of bitcoin p2p trading in China still takes place on LocalBitcoins, which saw close to CNY¥17 million in volume last week, the latest volume numbers coming out of Japan show that Japanese cryptocurrency traders now favor Paxful over LocalBitcoins.

LocalBitcoins saw only JPY¥2.3 million in trades last week compared to Paxful's figure of JPY¥16.5 million.

Data from indicates that Paxful began to overtake LocalBitcoins in Japan in May of this year, when weekly trading activity started to rise and maintain above the JPY¥8 million mark. LocalBitcoins' weekly volume in Japan has only surpassed the JPY¥5.5 million mark on three occasions since 2013.

Canadian Dollar Flying High Amid Contentious Election and Strong Economic Indicators

Canada's dollar traded at its highest level in four months against its U.S. counterpart on Monday. In the early Asian trading session on Tuesday, the CAD briefly traded as high as 1.30714 against the USD - a price not seen since July 22, 2019.

While some polls have indicated the Canadian liberal party may fail to get majority seats in parliament due to Prime Minister Justin Trudeau's blackface and SNC-Lavalin scandals, currency market speculators have brushed aside the political uncertainty due to strong economic indicators coming out over the past two weeks.

Today, Statistic Canada reported a 1.4% (CAD$15.5 billion) increase in building construction investment for the month of August. Additionally, investors' confidence in the Canadian economy was also boosted by strong increases in full-time jobs in September:

"Employment rose by 54,000 in September, driven by gains in full-time work. The unemployment rate declined 0.2 percentage points to 5.5%.," said Stats Canada in their last Labor Force Survey, published on October 11.

Since the release of the Labor Force Survey figures two weeks ago, the CAD has appreciated more than 1.6% vs. the USD.

Image credit: 1

Pound Dips After Boris Johnson's New Brexit Deal Delayed by Parliamentary Vote

The British pound sold off more than 0.6% in early trading on Sunday evening - falling from its Friday close of 1.29739 to 1.28765 in the space of two hours - following the historic vote in Parliament on Saturday that saw Boris Johnson's new Brexit withdrawal agreement delayed once again.

Although the pound soared more than 7% over the past two weeks against the dollar, closing at a 6-month high last Friday as traders speculated on a favorable outcome on Saturday, the sell-off on Sunday indicates that sentiment among FX market participants has shifted considerably in the aftermath of the vote.

Additional delays and added uncertainty should now weigh on the pound in the coming weeks, although analysts at Goldman Sachs maintain the pound is set to rally once more as the withdrawal agreement has only been delayed, not canceled:

"We think ‘no deal’ risks have diminished as a result of the extension request, and at this week’s open, we expect any initial fall in GBP as a result of disappointment that the deal has not passed this weekend to fade as the deal has been deferred, not denied. As a result, any fall in GBPUSD this evening will be limited to 1.27-1.28, which should be bought."

Image credit: 1

British Pound Finishes at 6-Month High vs. US Dollar Ahead of Key Brexit Deal Vote

The British pound closed on Friday just shy of the major psychological level at 1.3000, finishing off one of its best weeks against the U.S. dollar this year (3% gain against USD this week, 6.1% gain since Oct. 10). With Friday's close of the GBP/USD currency pair at 1.2979, the pound is now trading at its highest against the U.S. dollar since May 13, 2019.

Investor and speculators' confidence in the pound is very high ahead of Parliament’s key vote on the new Brexit deal agreed by U.K. Prime Minister Boris Johnson and the EU.

Comments made by Bank of England Governor Mark Carney, who said he expects investment in the UK economy to "rebound if the deal is accepted," added even more fuel to the pound's rally into the close of Friday's trading session.

"Many paths for monetary policy following Brexit," says Carney.

While investors' optimism and positive comments from Carney have lifted the pound out of its multi-month slump, some bank analysts have said the vote is too close to call.

Image credit: 1

Federal Reserve Governor Sees Stablecoins as Potential Threats to Legacy Banking Systems and Financial Stability

In a speech given at the Future of Money in the Digital Age, Lael Brainard, a member of the Board of Governors of the Federal Reserve System, outlined a few key aspects of stablecoins that may pose significant challenges to the existing business models of not only large financial institutions but also central banks and their monetary policies.

"In the extreme, widespread migration to one or more global stablecoin networks could disintermediate the role of banks in payments.," said Brainard.

Brainard also specifically mentioned the potential for widely-adopted stablecoin networks to put pressure on the central banks' balance sheets as consumers shift from physical cash to using stablecoins for day-to-day needs. Brainard didn't specifically mention which existing stablecoins could pose a threat, but he did single out Facebook's Libra as the single biggest thread due to the company's global reach:

"What sets Facebook's Libra apart is the combination of an active-user network representing more than a third of the global population with the issuance of a private digital currency opaquely tied to a basket of sovereign currencies."

Stablecoins have also attracted the attention of EU monetary authorities. EU’s financial services commissioner Valdis Dombrovskis told EU policy makers he intends to create a new rules for stablecoins, especially Libra.

Although Libra has attracted the most scrutiny from financial regulators in Europe, Asia and the United States due to Facebook's global footprint and history of privacy abuses, other stablecoins are already being accepted by companies and smaller nations.

Just yesterday, the government of Bermuda announced it would accept tax payments in USDC, a fully collateralized stablecoin pegged to the US dollar, which runs on the public Ethereum blockchain and is operated by the CENTRE Consortium, a joint venture by Circle Financial and Coinbase.

Image credit: 1

Cryptocurrency Basic Attention Token (BAT) Trades at 2-Month Highs

Basic Attention Token, the cryptocurrency of the privacy-focused Brave browser, rallied on Tuesday to its highest level since August 2019, trading as high as $0.238 on Binance.

The BAT token has seen an influx of investment over the past two months due to the rapidly growing number of advertisers, publishers and users within Brave's ecosystem. "Brave is growing on the user front, with daily active users passing the 2.8 million mark recently, and monthly active users now at 8 million.," said Brave today in a statement.

Brave also boasted of the above-average click-through rates advertisers have experienced on their campaigns, claiming an unheard of 14% click-thought rate (industry average is 2%). Semiconductor giant Intel recently conducted a Brave ad campaign to promote its Gamer Days giveaways.

Other big media brands have also warmed up to Brave: Khan Academy verified their website with Brave in September, while ArsTechnica and Wikipedia, the 7th most visited website in the world, signed up with Brave in August.

To boost transparency and investor confidence, Brave unveiled a new portal "Brave Transparency Data Feed" today to show the amount of BAT cryptocurrency advertisers have purchased.

Turkish Lira Drops to Monthly Lows on Sanctions Fears and Multibillion-Dollar Iranian Sanctions Evasion Scheme

The Turkish lira remained under pressure during the second half of Tuesday's NY currency trading session, trading as low as 5.922 lira to the U.S. dollar after news broke that one of Turkey's largest banks was charged in Manhattan Federal Court in a multibillion-dollar Iranian sanctions evasion scheme.

According to U.S. authorities, senior officials at Halkbank, the 7th biggest Turkish bank, with the help of senior Turkish officials, helped launder billions of dollars of Iranian oil revenues.

"The bank’s audacious conduct was supported and protected by high-ranking Turkish government officials, some of whom received millions of dollars in bribes to promote and protect the scheme. Halkbank will now have to answer for its conduct in an American court.,” said U.S. Attorney Geoffrey S. Berman.

The Halkbank case comes just a day after the United States levied new sanctions on Turkey for President Erdogan's brazen invasion of northern Syria.

Since the beginning of October, the lira has tumbled more than 4% against the USD.

Image credit: 1

Paxful Overtakes LocalBitcoins in P2P Bitcoin Trading in the United States and Canada

Peer-to-peer cryptocurrency trading has been mostly dominated by trading venues such as LocalBitcoins for the past several years, where traders could swap popular cryptocurrencies for U.S. dollars, Canadian dollars, as well as other major fiat currencies using legacy payment processors like PayPal, Moneygram and Western Union.

However, since the start of the year, a new challenger has emerged in the space: Paxful. The service allows consumers to purchase and sell bitcoin anonymously via Amazon, Macy’s, Wallmat and OneVanilla gift cards, in addition to many other online payment systems.

While majority of P2P bitcoin activity in the United States and Canada was conducted on LocalBitcoins in 2017, Paxful has become the leader in the space this year, according to data published by

In the first week of September, Paxful volumes in the U.S. and Canada were double those of LocalBitcoins:

Paxful’s rapid growth in popularity among American bitcoin users is not just confined to the last few weeks, but extends to the beginning of the year, while turnover on LocalBitcoins has been in decline over the same period.

Paxful volumes in the USA:

LocalBitcoins volumes in the USA:

It remains unclear if LocalBitcoins’ new KYC/AML policies, which came into effect in April, had any negative impact on its existing clientele.

Bitcoin photo credit: 1

Lira Surges After Turkish Central Bank Hikes Interest Rates in Defiance of President Erdoğan

In a surprise move on Thursday morning, the Turkish central bank raised its benchmark rate by 625 basis points. The lira surged more than 8% against the U.S dollar, rising from 6.55 to 6.02 lira per dollar - a 2-week high - in under two hours.

The lira took on significant losses in July and August as investors began to have serious concerns over President Erdoğan’s influence on Turkey’s central bank regarding monetary policy, as well as the rising diplomatic tensions between the United States and Turkey.

But today’s strong reaction in the FX markets shows investor confidence in Turkey’s monetary authorities has been restored to some degree.

The central bank also hiked the one-week repo rate from 17.75% to 24%, citing “risks to price stability” and “slowdown in domestic demand.”

President Erdoğan has claimed high interest rates and excessive inflation are a direct result of bad policies by the central bank, however, the bank’s Press Release on Monetary Policy today reiterated its commitment to adjust interest rates as it sees fit:
“The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement.,” said participating committee members.
At press time, the USD/TRY currency pair is trading around 6.09 lira per dollar - a gain of 4.07% for the lira on the day.

Lira banknotes photo: 1

Optimistic Comments From EU's Brexit Negotiator Lift British Pound

The sterling was under pressure last week as conflicting statements on Brexit negotiations were being released to the press by German and British officials.

However, the British pound jumped dramatically against the U.S. dollar today following statements from EU's top Brexit negotiator, Michel Barnier.

Speaking at conference in Slovenia, Barnier said:
"I think that if we are realistic we are able to reach an agreement on the first stage of this negotiation which is the Brexit treaty within six or eight weeks."
Forex speculators piled into the pound immediately after Barnier’s comments, pushing the GBP/USD exchange rate to its highest level since the beginning of August:

At the peak of the frenzied rally, the pound was trading at 1.3052, which translates to a daily gain of more than 1%.

But buying pressure eased up towards the end of the trading day, and the the pound finished on Monday with a gain of 0.85% against the dollar.

Sterling photo credit: 1

Russian Ruble Down Sharply After PM Medvedev Calls for Lower Rates

The Russian ruble was down as much as 2% against the dollar on Thursday, after Russian Prime Minister Dmitry Medvedev called for “lower cost of loans” to stimulate economic growth at the Moscow Financial Forum.

Prime Minister Medvedev’s comments are in stark contrast to sentiments expressed by Bank of Russia Governor Elvira Nabiullina.

Earlier this week, Nabiullina said that the key interest rate - currently at 7.25% - may be raised at the next meeting, which is scheduled to take place on September 14, 2018.

And as Reuters reports, Bank of Russia’s new monetary policy chief, Alexei Zabotkin, who also spoke at the Moscow Financial Forum today, said rates are likely to be raised due to the current economic conditions in Russia.

While today’s two-percent sell-off was mild compared to the previous crashes related to U.S. sanctions, traders were able to push the ruble down to its lowest level in two and a half years (69.6289 rubles per dollar).

At press time, the USD/RUB currency pair is floating around 69.21.

Moscow downtown photo: 1

British Pound Trading Wildly Amid Conflicting Statements on Brexit Demands from Germany and Britain

The British pound surged on Wednesday on news reports that Germany and the UK have agreed to drop key Brexit demands.

The GBP/USD currency pair rallied more than 1.1% following the reports, hitting a weekly high of 1.2983 against the dollar in early trading on Wednesday.

But the sterling lots the majority of its gains later in the day after a contradictory statement came from a spokesman for the German government, who told Reuters that “the government’s position is unchanged” on Brexit.

At press time, the pound is hovering around 1.2897, up 0.32% on the day.

Pound photo credit: 1

Argentine Peso, South African Rand Suffer More Losses as EM Currency Crisis Continues

Although the Turkish Lira has been stable above its all-time lows over the past two days, the South African rand and Argentine peso have continued to decline as the emerging market currency crisis shows no signs of abating any time soon.

The South African rand plunged 3.3% against the dollar on Tuesday, hitting a 2-year low rate of 15.38 rand to the dollar. The last time the rand traded this low against the dollar was on June 29, 2016.

Weakness in the rand was mainly driven by a newly-released Q2 GDP figure, which showed South Africa’s economy contracting by 0.7% - a big decline when compared to analysts’ estimates of 0.6% growth.

The Argentine peso took on slightly bigger losses than the rand, trading down more than 4% today to 39.36 pesos per dollar, after Argentina’s Tax Authority reported lower revenues for the month of August (down almost 0.5B from the previous month of 293.89B).

Peso photo credit: 1

Moody's Downgrades, Central Bank Liquidity Tightening Push Turkish Lira Down 3%

The Turkish lira tumbled more than 3.00% against the dollar on Wednesday after Turkey’s central bank doubled banks' borrowing limits in the interbank money market, which effectively tightens liquidity:
"In the light of recent evaluations, the CBRT has decided that, to be effective from 29 August 2018, the banks’ borrowing limits for overnight transactions at the Interbank Money Market established within the CBRT would be twice the limits applicable before 13 August 2018.", said the Turkish central bank.
Turkey’s central bank tried to halt the drop of the lira earlier this month by lowering the Turkish banks’ FX reserve requirement from 45% down to 40%, but the lira’s fall accelerated following that announcement.

On a flight from Paris, Berat Albayrak, the financial minister of Turkey, told Turkish media today that he does not see “big risk about Turkey’s economy or financial system.”

But while Turkey's finance minister sees no “big risk,” ratings agencies are already starting to downgrade Turkish banks and government bonds.

American rating agency Moody's downgraded 18 Turkish banks and two finance companies today, citing deteriorating investor sentiment, and a “substantial increase in the risk of a downside scenario.”

At the height of today’s sell-off, the lira was down approximately 3.4% against the dollar, trading at 6.4832 lira to the dollar. At press time, the USD/TRY currency pair is floating at 6.4500.

Turkish flag photo credit: 1