BNP Paribas Forex Traders Got Busted For Having Too Much Fun

 

BNP Paribas SA is incorporated in France with Limited Liability and is authorised by the Autorité de Contrôle Prudentiel et de Résolution and regulated by the Autorité des Marchés Financiers in France.

Executive Editor Bess Levin. Our economics team continues to expect a rate hike in September, implying an adjustment higher in Fed pricing is likely in the weeks ahead. However, our position metrics suggest that, despite rate markets pricing additional BOJ action, currency market participants have actually been positioned long yen, apparently sceptical that further BOJ easing would succeed in weakening the currency.

So Far, Major Banks Have Suspended or Fired More Than 20 Traders

BNP and BofA suspend forex traders. BNP Paribas became the latest bank to become embroiled in the rapidly evolving scandal an industry committee chaired by the Bank’s own forex trader.

First, markets believe the Fed will be unwilling and unable to proceed with rate hikes over the next few months. Second, a perception exists that most other G10 central banks have exhausted most of their ammunition with respect to conventional policy easing, and thus are not likely to cut rates much further.

We agree primarily with market pricing for limited policy action from G10 central banks in the final months of the year. The table below compares our views with the current market pricing. Indeed, we think the rates markets may even be overpricing scope for the Bank of Japan to push cash rates lower, with the Bank of Japan more likely to focus on adjustments to its asset purchase program than rates policy at the September meeting.

Our main disagreements with market pricing as we head into the final months of the year relate to pricing for the Fed and Bank of England, with the former still likely to hike rates, in our view, and the latter expected to cut rates further.

Rates markets have been persistently unwilling to increase pricing for Fed hikes since June, despite a fairly steady stream of hawkish comments from officials and strong labour market data.

Our economics team continues to expect a rate hike in September, implying an adjustment higher in Fed pricing is likely in the weeks ahead. The Bank of England has had a run of upside surprises on key releases for August, and, as a result, the markets have scaled back expectations for further easing. Our economists expect data to be less robust going forward and still believes as its base-case scenario that the Bank is likely to deliver a further 15bp of rate cuts in November.

Market positioning has adjusted to reflect the shift in rate hike expectations for the BOE and the Fed, with cable short positioning recovering sharply from an extreme short position in July to only a modestly short position now. The short covering process could have further to run in the near term, but the lightening of positions should ultimately create opportunities for shorts.

Our view that Bank of Japan BOJ policy easing will likely fall short of expectations might suggest opportunities to go long yen in the months ahead. However, our position metrics suggest that, despite rate markets pricing additional BOJ action, currency market participants have actually been positioned long yen, apparently sceptical that further BOJ easing would succeed in weakening the currency.

You can get BNP Paribas Forex Weekly Strategy research reports as well as many other analytics from tier 1 institutions via our subscription. Our economists still expect a Federal Reserve hike in September. We remain broadly bullish on the USD. The market has interpreted recent Bank of Japan comments as reducing the likelihood of 21 September easing. G10 central banks at rest? Couple times a week for it to pay off.

They put real effort into their hijinks. They periodically updated the codebook with new market participants and retired unused codes. To maximize its effectiveness, when the group circulated a revision of the codebook in March , it employed a one-week training period to learn the new codes and agreed to use old codes to permit a ramp-up to the updated version. Also to evade surveillance, the group buried code words or symbols within other words, effectively creating rules of grammar. This fostered the impression that coded communications were actually stray keystrokes, as one group member explained: They trained for a week!

They designed a novel grammatical structure! Elsewhere, BNP traders demonstrated a relative lack of discretion. One unseemly practice involved obscuring trade markups, the extra cash BNP traders kept for the bank in addition to the spread between bid and ask prices. You get the sense that there was subconscious purpose to archly adopting the language of criminal conspiracies: It's not the first time that this happened and it's definitely not the last time, but this time somebody recorded that.

As long as there is profit to be made this situations will happen. I suppose such cartels aren't so widely spread in Europe. By choosing a good CFD's broker, an average trader can decrease the risks of fraud. If you want to know the truth about brokers, you need to read reviews. I suggest checking such websites as https: An internal actor is still far more likely to be behind a damaging fraud upon the company than a shadowy hacker.

Executive Editor Thornton McEnery. Senior Editor Jon Shazar. Send Tips tips dealbreaker.