Breaking News

FCA chair Griffith-Jones to depart March 2018; Market Volatility Has Vanished Around the World; The City should not overpay for a euro-clearing deal

First Read

For The Trader Among Us: Trading Chicago
If you haven’t registered for the Trading Chicago event on June 29 at the Swissotel in the Windy City, now is the time to do it. We’ve got a great lineup of panels and speakers with a strong emphasis on the impact of regulation, technology and key markets on end-users such as CTAs, hedge funds, proprietary trading firms and asset managers.

For full conference information, click HERE

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Jim Kharouf on Twitter Live Video for FOW-JLN Trading Chicago Event on June 28
Twitter
/www.pscp.tv/w/1MnGnavrXjdKO

***** In case you missed the 11 AM broadcast on Friday, here is our Twitter Live video of Jim Kharouf talking about FOW-JLN Trading Chicago.

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LME Working To Get Exchange Structure Right

JohnLothianNews.com

“I think we have to be honest that no market structure is going to be the optimal solution for all of its customers. No exchange is in a position where it doesn’t have these open questions. But we probably have more open questions than most at the moment.”

The London Metal Exchange and its newly minted CEO Matt Chamberlain spent the first part of 2017 implementing all sorts of admittedly stressful updates and revamps to its trading technology. Now, Chamberlain’s task is to adapt the exchange’s structure for the 21st century. The exchange released a discussion paper earlier in the year. Once all of the responses to that document have been considered, the exchange will make a decision about its structure and focus on getting the buy-in of its customers.

While all of this is going on, Chamberlain and the exchange are making the final preparations for the July 10 launch of LMEprecious, the LME’s attempt to tap into London’s thriving OTC precious market with daily and monthly gold and silver futures contracts.

Read the rest and watch the video »

****SD: In case you missed it, thus far we have released ICE’s Hutcheson Talks Benchmarks and Assuming the Helm of ICE Clear Europe; Eurex CEO Sees Plenty of Structural Growth Potential; CME’s Knottenbelt Discusses International Plans and CME Europe Closure and FIA Europe’s Simon Puleston Jones Talks Brexit and MiFID II Readiness.

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Doud nominated as chief agricultural negotiator
Agri-Pulse
President Trump is nominating Gregg Doud, the president of the Commodity Markets Council and a farm policy veteran, to be the administration’s chief agricultural negotiator under the U.S. Trade Representative.
/goo.gl/WRHFrj

***** CMC’s Greg Doud is scheduled to be one of our speakers in New York at the MarketsWiki Education World of Opportunity series. We hope to have an answer shortly on whether he can still participate.

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Protectionism; CCPs; Volcker; TAS; FinTech
Gary DeWaal – Bridging the Week
The European Commission proposed a protectionist regime for the oversight of third-country clearinghouses, while the US Department of Treasury recommended mostly keeping the Volcker Rule “as is,” but simplifying the definition of proprietary trading and adding increased flexibility for authorized market-making activity. Moreover, in New York City, employers must soon stop requesting information on prior compensation history from job applicants or risk fines and payment of compensatory damages.
bit.ly/15ZyR7H

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Britannia No Longer Rules for Investors; U.K.’s allure fades as economy, Brexit fuel concerns
By Jon Sindreu – WSj
In Britain, a round of disappointing economic data and an inconclusive election have stoked investors’ concerns about the country and its divorce from the European Union.
/goo.gl/LkFtBU

****** The fickle finger of fate from Brexit foibles.

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Friday’s Top Three
Our top story on Friday went deep into the mechanics of spoofing, in Traders Magazine’s NASDAQ CASE STUDY: Identifying the Signature of Spoofing
Second was a story exploring the sorry state of agricultural knowledge, The Chicago Tribune’s A surprising number of American adults think chocolate milk comes from brown cows. In third was a profile piece, The Financial Times’ Stacey Cunningham: feeling the heat on the trading floor and in the kitchen

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MarketsWiki Stats
102,841,211 pages viewed; 22,554 pages; 206,502 edits
MarketsWiki Statistics

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Lead Stories

FCA chair Griffith-Jones to depart March 2018; HM Treasury will now begin the search for a new chair of the FCA.
By Hayley McDowell – The Trade
The chairman of the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) has confirmed plans to depart both watchdogs in March next year.
/goo.gl/egU1Lg

Market Volatility Has Vanished Around the World; As Wall Street’s ‘fear gauge’ nears all-time lows, one commonly used measure shows Asian equities near their least volatile this century
By Steven Russolillo – WSJ
The calm that has descended on U.S. financial markets is stretching around the world.
/goo.gl/V4EDBZ

The City should not overpay for a euro-clearing deal; A deal on joint oversight ought to be possible and remains in both sides’ interests
Jonathan Ford – FT
So in the end, the EU went for compromise not confrontation. Brussels chose not to use Brexit as a pretext to make a land grab for London’s EUR1tn a day business of clearing euro-denominated securities.
/goo.gl/T9C2bP

More women join financial industry but salaries are not equal; Find out which schools are in the FT Global Masters in Finance ranking of 2017
Laurent Ortmans – FT
Gender diversity is increasing among graduates working in the financial industry, according to data collected for the 2017 edition of the Financial Times ranking of masters in finance programmes.
/goo.gl/DaiVun

London Currency Trader Is Taking On World’s Biggest Stock Market
by Annie Massa – Bloomberg
XTX says its ‘smart, not fast’ algorithms give an edge in U.S.; European rival has struggled in vast, fragmented U.S. market
A tiny London firm with no human traders made its name last year beating banks to climb up the currency trading ranks. Now, it wants a bite of something new: the $27 trillion U.S. stock market.
/goo.gl/rqatuU

As the U.S. Monetary Policy Debate Heats Up, It’s Not Just the Fed Funds Rate in Play…
Christopher Rodriguez, Eris Exchange – Trade Talk Blog, Trading Technologies
The last 30 years of monetary policy have been dominated by control of short rates. But with an unprecedented buildup of central bank balance sheets since the global financial crisis, central banks now have another lever, and their impact on long rates cannot be ignored.
/goo.gl/LnL1xv

Hedge-Fund Revival Quickens as Event-Driven Trades Prosper
by Nishant Kumar – Bloomberg
Europe leads fight-back of funds betting on corporate actions; Globally, outflows from the strategy are starting to slow
Hedge funds betting on takeovers and company re-organizations are once again attracting investment in Europe amid the continent’s best start to a year for deal-making since 2014.
/goo.gl/aHrBmM

Less Stressful Tests Seen Boosting U.S. Bank Payouts $30 Billion
by Yalman Onaran – Bloomberg
Analysts estimate BofA could return 63% more to shareholders; Fed to release 2017 results in two stages this week and next
The stress of stress tests may be over. At least for now. After seven annual exercises in which at least one U.S. bank failed, all of the nation’s 34 largest lenders will probably pass this year’s Federal Reserve exam when results are revealed this week and next. That’s because the toughest component of the analysis of how firms would fare during a hypothetical crisis, the so-called qualitative review, no longer applies to the majority of those being tested.
/goo.gl/c1DtuR

Europe’s Smart Compromise on London Clearing; The European Commission has lifted the threat of immediate relocation to the euro zone.
By The Editors – Bloomberg
The City of London has been anxiously awaiting the European Commission’s review of clearinghouses that handle euro-denominated transactions. It’s a nice line of business — one the European Central Bank, even before Brexit, had wanted to bring more firmly under its supervision. The question was, would euro clearing have to migrate from London?
/goo.gl/H2i4GA

China to promote wealth management investment in commodities – regulator
Reuters
China’s securities regulator said it will encourage wealth management firms to invest in commodity futures in a bid to promote its domestic derivatives industry and raise the amount of commodities in the nation’s assets under management.
/goo.gl/q5xWKw

LSE says splitting euro clearing would create rump EU market (LSE, DB1)
By Huw Jones – Reuters
Shifting clearing of euro-denominated derivatives from London to the European continent would create an “illiquid rump” market that costs customers more, the London Stock Exchange Group’s Chief Executive Xavier Rolet said on Monday.
/goo.gl/fL9ZP5

IEX struggles to maintain pace with copycat ‘speed bumps’
By Kevin Dugan – NY Post
A once-hot startup that disrupted its industry is now facing an existential crisis, as bigger competitors copy its most novel features.
/goo.gl/7pt92d

Exchanges, OTC and Clearing

SGX and A*STAR’s ETPL work together to help companies better access research and development capabilities and capital markets
SGX
Singapore Exchange (SGX) and ETPL, the commercialisation arm of the Agency for Science, Technology and Research (A*STAR), are signing a memorandum of understanding (MOU) today to help start-ups and small and medium-sized enterprises (SMEs) tap on innovative technologies and capital more efficiently. Through strengthening the financial positions and innovative capacities of high-growth enterprises, the partnership is expected to drive business growth and capture greater value for Singapore’s economy.
/goo.gl/14LD8Z

DTCC’s $74 billion liquidity charge riles members; Some firms may stop clearing US Treasury trades if the CCLF is implemented
Robert Mackenzie Smith – Risk.net
A proposal from the Depository Trust & Clearing Corporation (DTCC) that would require its members to contribute to a $74 billion liquidity facility could force several US Treasury market par
/goo.gl/CikAGp

UnaVista’s growing RegTech Partner Programme welcomes 20th member | London Stock Exchange Group
LSE
Wendy Collins, Global Head of Partnerships, UnaVista; UnaVista Partner Programme launched in February 2017; Over 20 partners from wide range of sectors and geographies; Reinforces LSEG’s Open Access approach to capital markets
London Stock Exchange Group’s UnaVista today announces it has welcomed more than 20 firms to its Partner Programme in the first half of 2017. The Partner Programme was launched to bring together the world’s leading financial services and regulatory technology firms to increase efficiency and reduce operational and regulatory risk for clients.
/goo.gl/FZLFmF

Intercontinental Exchange Sets New Volume Records in Short Sterling Futures and FTSE 100 Index Futures
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced a new daily volume record of 3.35 million contracts for the Three Month Sterling (Short Sterling) futures contract set on June 15, 2017. The previous record was 2.89 million contracts set in June 2014.
/goo.gl/wkXecZ

HKEX Announces Appointee for New Clearing Positions
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) has appointed Roland Chai as Managing Director, Chief Operating Officer (COO) of its Clearing Division and Head of Clearing Risk Solutions, effective today. He reports to Calvin Tai, HKEX’s Joint Chief Operating Officer and Head of Clearing.
/goo.gl/m15hz8

Reshaping the Market, One Trade at a Time
Eric Stockland, IEX via TABB Forum
One year ago, the SEC approved IEX to become a national securities exchange. While some of IEX’s peers and market observers dismiss it as a ‘non-event,’ the changes that IEX already has brought to investors and the broader market tell another story, says chief strategy officer Eric Stockland. Rather than prioritizing market share at any cost, he adds, IEX is laser-focused on what investors want the exchange to be good at: trading in size without moving the price.
/goo.gl/cRhF9k

Discussion Paper 2017
LME
The London Metal Exchange (LME) and LME Clear have published a “Discussion Paper on Market Structure” which comprehensively sets out the LME’s vision and invites feedback from market participants.
/goo.gl/ewS4vr

Clearstream and ColleX™ collaborate to offer simplified buy-side access to tri-party collateral management
Clearstream
Clearstream, the international central securities depository (ICSD), and ColleX the collateral exchange platform, announced today a collaboration that brings together ColleX’s visible pricing and liquidity for secured lending transactions with Clearstream’s simplified collateral management services.
/goo.gl/uRyd2C

Fintech

Bitcoin Is Digital Gold. But Will You Buy a Sandwich With It?
by Justina Lee – Bloomberg
Coinbase, BitPay report jump in payments amid price surge; Wider adoption hampered by rising transaction times and costs
For digital-marketing agency Cooperatize.com, taking bitcoin for payment was easy enough, all co-founder Roger Wu had to do was obtain a digital wallet. To promote the move in 2014, he even penned a blog post for Forbes explaining the decision.
/goo.gl/gtCJTu

Meet Anna Haotanto, The Fintech Queen of Singapore
BY LEIGH CUEN – NY Times
Singapore is one of the leading hotspots for financial tech thanks to flexible regulation plus national initiatives to fund startups and integrate blockchain innovation into the local economy. American venture capitalists at the Ethereal Summit in New York praised Singapore as a ripe market, teeming with collaboration between entrepreneurs, regulators, banks and investors. The small island nation wants more than a high-tech economy: Singapore aims to become a global fintech hub.
/goo.gl/U6msvW

Ninni Pramdell is new Group CFO for Cinnober
Cinnober
Cinnober has recruited Ninni Pramdell as Group CFO. She will start this newly created position on September 1 of this year.
/goo.gl/rnQThR

IBM’s Watson supercomputer is getting into Wall Street stock-picking;IBM’s Watson artificial intelligence platform has been hired to help pick stocks for a new ETF.; Algorithm-driven investing has beaten many human stock pickers in recent years.; The world’s largest money manager, BlackRock, recently decided to supplement, if not supplant, its human portfolio managers with AI software for many funds.
Eric Rosenbaum – CNBC
As the robot war on Wall Street stock pickers heats up, there’s a new line of attack from the algorithmic set: IBM’s Watson supercomputer has been hired to help run an ETF and pick stocks than can achieve better performance than the broad U.S. stock market index.
/goo.gl/qQJhFf

Redline’s Support for New Binary Multicast Feed Enhances Best Execution in FX Trading
Redline
Redline Trading Solutions, the premier provider of high-performance market data and order execution systems for automated trading, today announced a new InRush™ feed handler for the next-generation binary multicast feed now being rolled out for foreign exchange trading on the Thomson Reuters FX Matching™ platform.
/goo.gl/aa4XeZ

Politics

CEOs Have Access to Trump, but Do They Have Clout?; Monday’s meeting with the president could be a gauge of the value of these sessions for some business leaders
By Vanessa Fuhrmans and Peter Nicholas – WSJ
When tech industry executives gather at the White House Monday, brainstorming ways to modernize government will be on the agenda. But on display will be President Donald Trump’s evolving relationship with America’s corporate chieftains.
/goo.gl/UbqM3a

Patagonia’s CEO Is Ready To Lead The Corporate Resistance To Donald Trump; The private, California-based outdoor retailer is preparing to sue the White House to protect public lands.
By Alexander C. Kaufman – Huffington Post
Patagonia CEO Rose Marcario is seen onstage with then-President Barack Obama as he speaks during an event highlighting important middle-class issues on April 16, 2015.
NEW YORK ? On a cloudy May morning, Rose Marcario, the chief executive of outdoor retailer Patagonia, stared out a second-story window of a Manhattan restaurant, watching construction workers jackhammer the street below. The workers made her think of her grandfather, an Italian immigrant who, after making it through Ellis Island in the 1920s, got his first job digging the streets of this city. He earned 10 cents a day and had to bring his own shovel. People regularly spat at him and sneered at his broken English.
/goo.gl/rBrSca

Regulation

Two charged with insider dealing
UK FCA
The Financial Conduct Authority (FCA) has instituted criminal proceedings against Fabiana Abdel-Malek (date of birth 17/09/1982), a former compliance officer employed by UBS AG’s London Branch and Walid Anis Choucair (date of birth 04/03/1979) following a joint investigation with the National Crime Agency.
/goo.gl/u6t5Lr

ESMA consults on draft standards for trading obligation for derivatives under MiFIR
ESMA
The European Securities and Markets Authority (ESMA) has published today a consultation paper regarding its draft technical standards specifying the trading obligation for derivatives under the Markets in Financial Instruments Regulation (MiFIR).
/goo.gl/qF39jz

Ex-UBS compliance boss to appear in court for insider dealing; Former compliance officer at UBS worked at the investment bank for more than a decade.
By Hayley McDowell – The Trade
A former compliance officer at UBS will appear in court having been charged with five counts of insider dealing.
/goo.gl/4i9CHr

Sebi eases restrictions on 19 entities in illegal gains case; Sebi gives certain relaxations to 19 entities in a case of alleged misuse of the stock market platform for tax evasion and suspected money-laundering activities
Livemint
New Delhi: Capital markets regulator, the Securities and Exchange Board of India (Sebi), has relaxed restrictions on 19 entities against whom it had taken action in a case of alleged misuse of the stock market platform for tax evasion and suspected money-laundering activities.
/goo.gl/6aaTt3

FCA chairman Griffith-Jones to leave next year; Former KPMG boss John Griffith-Jones will not seek a second term at the helm of the FCA
By Mark Kleinman, City Editor – SKY
The chairman of the City watchdog has decided to step down next year, adding a search for new oversight of the financial services industry to a Treasury workload already stretched by Brexit.
/goo.gl/75SVW8

Justice Department’s Madoff Fund Inches Closer to First Payout
by Erik Larson – Bloomberg
The $4 billion fund was set up in 2012 with settlement cash; A separate fund run by a trustee has paid out $9 billion
Bernard Madoff is escorted into federal court, in 2009. Photographer: Jin Lee/Bloomberg
The U.S. Justice Department’s $4 billion fund for victims of Bernard Madoff’s epic Ponzi scheme is getting closer to making its first payout, more than four years after it was set up.
/goo.gl/LNosrM

Canada Proposes New Bail-in Regulations for Country’s Banks
by Doug Alexander – Bloomberg
Canada’s department of finance proposed new rules Friday limiting government support for potential bailouts of the nation’s banks, extending a so-called “bail-in regime” promised last year.
/goo.gl/fx3RJM

Drabinsky Hit With Markets Ban 16 Years After Case Began
by David Scanlan – Bloomberg
Former Livent head prohibited from serving as director; Took part in one of Canada’s most ‘significant’ frauds
Garth Drabinsky has been banned from capital markets some 16 years after a Canadian regulator first began its probe of the former theater executive who was convicted of carrying out one of the biggest frauds in Canadian history.
/goo.gl/4U4EbL

China securities regulator quickens pace of fines
TheStar
China’s securities regulator has doled out more fines, totalling almost $1 billion, in the first five months of this year than during the whole of 2016, the official Xinhua news agency said on Saturday.
/goo.gl/qhGZZQ

SEC Charges Poster Boy Of Pot Penny Stock Bubble With Fraud
Nathan Vardi – Forbes
With states starting to permit the use of marijuana for personal use, a group of pot stocks soared high on the penny stock market in 2013 and 2014 before their inevitable hangover. No stock flew higher than CannaVest, which briefly hit a market valuation of $3 billion.
/goo.gl/fsw2Hk

Wall Street’s Regulatory Rollback Yawn
By Stephen Gandel – Bloomberg
Wall Street’s excitement about the Trump administration’s proposed changes to financial regulation is clear everywhere except on Wall Street.
/goo.gl/xwn8Yb

Investing and Trading

Hermes bolsters client relationship team with new hires; Hermes expands sales and client relationship team after a ‘successful’ 2016.
By Hayley McDowell – The Trade
Hermes Investment Management has expanded its sales and client relationship team with several new hires.
/goo.gl/WQkdNp

Robo Advisers’ Latest Foray: Socially Responsible Investing; Digital investment services focus on niches to stand out from crowd
By Anne Tergesen – WSJ
As the millennial investor comes of age, two youthful trends are converging: socially responsible investing and robo-advisory services.
/goo.gl/SbJahw

Endowments Hope Another June Black Swan Won’t Spoil Strong Year
by Janet Lorin – Bloomberg
College funds seek to lock in gains without last-minute jolts; Greek debt crisis, Brexit were culprits in previous two years
In 2015, it was the Greek debt crisis. Last year, Brexit. No news will be good news for many endowments — at least for the next two weeks — as they seek to avoid a seismic geopolitical event that wipes out their better-than-average returns before the end of the fiscal year on June 30. The S&P 500 Index is up 8.7 percent so far in 2017 and, other than raising cash or paring stocks, endowments are mostly waiting and hoping it stays that way.
/goo.gl/kX4pCK

Before You Pay for Financial Advice, Read This Guide
By TARA SIEGEL BERNARD – NY Times
Many people turn to a professional for financial advice when they have a big problem to solve: How much do I need to save for my children’s college? Can I afford the bigger house? Will I run out of money in retirement?
/goo.gl/He6Nah

Credit Hedge Funds Miss Resurgence
By Lisa Abramowicz – Bloomberg
The hedge fund industry is starting to recover from a bruising stretch.
/goo.gl/yGdg56

Institutions

Big banks poised to step up payouts to shareholders; Lenders to seek approval for payments after clearing US stress tests
Ben McLannahan in New York and Barney Jopson in Washington – FT
Big banks in the US are forecast to step up payouts to shareholders, as they clear the latest round of tests designed to ensure they could withstand a catastrophic shock to the system.
/goo.gl/yqtRQB

Goldman Sachs raises $7 billion to buy secondhand stakes in private equity: sources
By Olivia Oran – Reuters
Goldman Sachs Group Inc (GS.N) has collected more than $7 billion for a fund which purchases secondhand stakes in private equity funds, far exceeding its initial target, according to two people familiar with the matter.
/goo.gl/3us1vu

Deutsche Bank’s Wonderful Two-Headed World
By Lionel Laurent – Bloomberg
Deutsche Bank CEO John Cryan wants Germany’s No. 1 investment bank to be simpler and more efficient but also to win more business from corporate clients. To grow and to shrink, in other words.
/goo.gl/JhktC5

Swiss banks lobby for get-out clause as end of bank secrecy nears
By Joshua Franklin and John O’Donnell – Reuters
Switzerland’s private banks, used for decades by the world’s wealthy to hide money and avoid tax, are pushing for extra legal protection of client information that could halt a much-heralded exchange of data with dozens of countries.
/goo.gl/2eWyKm

BAML’S electronic loan trading platform celebrates one-year anniversary
By Kristen Haunss – Reuters
Electronic trading in the US$900bn leveraged loan market celebrates its one-year anniversary Friday. Bank of America Merrill Lynch’s Instinct Loans, the bank’s electronic loan trading platform that kicked off June 16, 2016, touts increased liquidity and has won over many initial skeptics in the private loan market where trades typically take place over the phone.
/goo.gl/R362e5

Banks to be forced to reveal all cyber security breaches to the European Central Bank
Jasper Jolly – City AM
All banks regulated by the European Central Bank (ECB) will be forced to reveal all major cyber security breaches, according to one of the supervisor’s bosses.
/goo.gl/nujAKi

Regions

US corn ethanol producers to tap into overseas demand; Two new refineries planned even as domestic fuel sales reach a plateau
Gregory Meyer in New York – FT
The US corn ethanol industry is increasing production capacity even as domestic fuel sales and government support reach a plateau.
/goo.gl/JkQXXD

MSCI set to rule on China A-shares and Brexit talks begin; Markets primed for big week as investors rotate after central bank meetings
Market Questions
FT Reporters
Will MSCI include China A-shares in its globally tracked EM index?
/goo.gl/MGJZ66

Chinese bankers flock to Hong Kong as expats retreat
Jess Macy Yu and Julie Zhu – Reuters
A flood of Chinese bankers is changing the social fabric of Hong Kong, as they rapidly expand their footprint in one of the world’s premier financial centers, even as Beijing struggles to tame the former British colony politically. Twenty years after Hong Kong’s handover to Chinese rule, scores of mainland professionals are filling the elite financial ranks of Hong Kong, while a series of lay-offs at Western banks has led to an exodus of expatriates.
/goo.gl/L8mBds

Investors hunt for hidden frontier market gems; Risk improves as financial infrastructure matures and a middle class emerges
Jennifer Thompson – FT
As the world’s biggest asset manager, BlackRock has the resources to send its employees to all corners of the globe.
/goo.gl/H7rAi9

Turkey Said to Plan Hedging Rule to Limit Corporate FX Risk
by Asli Kandemir , Onur Ant , and Constantine Courcoulas – Bloomberg
Measure to apply to about 2,000 companies, people familiar say; Govt also weighing higher requirements for banks’ FX lending
Turkey is planning new measures to tackle the potential risk from the $300 billion in foreign-currency debt held by private companies, according to two people familiar with the discussions.
/goo.gl/6MTjPB

Emerging Market Investors Think The BRICs Are Back
by Ben Bartenstein and Aline Oyamada – Bloomberg
Former Goldman Sachs economist coined the term in 2001; Fund flows into BRIC nations at highest in almost two years
Resurgent growth is reviving one of the past decade’s hottest trades. Emerging-market investors are again piling into the so-called BRIC nations — Brazil, Russia, India and China — pushing monthly inflows and stock prices to nearly two-year highs. The bet is that a pickup in the global economy will fuel demand for the countries’ commodity exports, drive an expansion of middle-class consumption and help them shore up fiscal accounts.
/goo.gl/es3gZL

Venezuela’s Humanitarian Crisis Tests Wall Street Ethics; ‘Wall Street does not function like a moral place. It’s a sad truth.’
By Matt Wirz and Carolyn Cui – WSJ
Richard House invested in Venezuelan bonds for decades, but the head of emerging markets debt at Standard Life Investments had a change of heart last year.
/goo.gl/71MQnh

Why Investors in This China ETF Are Betting Big
by Viren Vaghela – Bloomberg
KraneShares ETF saw record $49.5 million added in May; Entry could trigger $12 billion of inflows to A shares: Hirn
Some ETF investors believe it could be fourth time lucky for Chinese equities as they seek entry into MSCI Inc.’s benchmark indexes next week. The KraneShares Bosera MSCI China A ETF, ticker KBA, saw $49.5 million of inflows in May, its best month ever, according to data compiled by Bloomberg. So far in June, $67.5 million has poured into China equity funds listed in the U.S., compared with $100 million of outflows during the first five months of the year, the data show.
/goo.gl/TdcCkF

Chinese Giants Are Taking Over Hong Kong; Banks, real estate, telecoms show biggest Chinese influence
by Prudence Ho – Bloomberg
What a difference 20 years makes. Back when Hong Kong reverted to Chinese sovereignty in 1997, the British colony’s economy was dominated by homegrown tycoons such as Li Ka-shing and colonial-era conglomerates such as Jardine Matheson Holdings Ltd., whose influence dates back to the Opium Wars.
/goo.gl/oWq863

Brexit

EU’s Barnier Hopes to Remove Brexit Uncertainties as Talks Begin; Negotiations get underway almost a year after the U.K. voted to leave the EU
By Laurence Norman and Valentina Pop – WSJ
The U.K. and the European Union started talks on Britain’s exit from the bloc Monday morning, almost a year after the U.K. voted to leave, with EU chief negotiator saying he hoped the two sides can start removing the uncertainties created by that decision.
/goo.gl/NKSPLH

Goldman to Double Frankfurt Staff on Brexit, Europe Head Says
by Tino Andresen – Bloomberg
City has advantage over rivals, Gnodde tells Germany’s FAS; Bank scouting for new office space as Brexit talks start
Goldman Sachs Group Inc. is shifting personnel away from London as formal negotiations on the U.K.’s exit from the European Union are scheduled to begin Monday, according to the bank’s regional head, Richard Gnodde.
/goo.gl/ekpXZG

Brexit Talks Kick Off in Brussels as May Urged to Soften Stance
Ian Wishart, Tim Ross and Simon Kennedy – Bloomberg
Election defeat raised questions over ‘hard’ Brexit plan; Davis, Barnier meet for formal talks in Brussels On Monday
Brexit talks finally began on Monday, almost a year since Britons voted to leave the European Union and amid confusion over what exactly the U.K. government wants from the divorce.
/goo.gl/mm2fei

A Plan for Brexit; How to avoid a chaotic exit before the time for talks runs out.
By The Editors – Bloomberg
With the start of Brexit negotiations looming, the British government has only the most tenuous grip on power. Amid paralyzing uncertainty, how can the main actors — Prime Minister Theresa May, opposition leader Jeremy Corbyn, and government leaders across the European Union — make their way forward?
/goo.gl/Y4yT41

U.K. to Extend Parliament, Build ‘Broadest Consensus’ for Brexit
by Andrew Reierson – Bloomberg
Lawmakers to sit for two-year session instead of usual one; Time needed to consider transfer of thousands of EU laws
Britain’s Parliament will sit for two years instead of the typical one to prepare for the nation’s departure from the European Union in early 2019, indicating the government may be ready to moderate its position in order to get the legislation through.
/goo.gl/7qWLmh

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About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.