Hits and Takes
By JLN Staff
Today is day two of the Chicago version of MarketsWiki Education World of Opportunity at the Stuart School of Business at Illinois Tech. We have the largest audience scheduled today for two sessions, one at 1 PM and another at 3 PM. We still have room for last minute additions as well.
Our speakers include Richard Sandor, Bryan Durkin, Terry Savage, Joe Guinan, Amy Shelly and Jennifer Wilson at the first session. At session two we have Mehmet Yanilmaz, Julie Armstrong Menacho, Keith Petersen, Patrick Kenny, David Kelbaugh and Jay Feuerstein
We are grateful for our sponsors of the event, including global premiere sponsor CME Group and event sponsors CBOE, OCC, Barchart.com, Inc., The IFM, Stuart School of Business at Illinois Tech and Trading Technologies.~JJL
The FIA is looking for fintech innovators for their Innovators Pavilion at EXPO 2017.
“FIA invites all fintech startups to apply to be featured in the Innovators Pavilion at Expo 2017! We are looking for leading edge companies that are creating innovative products and services for any aspect of the global securities and derivatives industry. These innovations can include blockchain, machine learning, big data, cloud computing and social trading.”
Yesterday, John Lothian News shot a new video series with Trading Technologies and industry executives. The discussion, led by Jim Kharouf, will feature Brian Mehta, chief marketing officer at TT and Doug Monieson of Hyde Park Angels speaking about where the next generation of talent is going to come from and how this industry can attract them. Our second interview features Drew Shields, TT chief technology officer and Julie Menacho, executive director, global head of market technology services at CME Group, talking about data, new technology and what’s next in that space. A third video is also in the works. Stay tuned for the show, due out this fall.~JK
Lastly, Katherine Lothian left last night to head to the Boy Scout National Jamboree in West Virginia. She will now have more Jamboree experience than John Lothian’s two sons. Next week John is away at summer camp with the Boy Scout troop at Camp Freeland Leslie in Oxford, Wisconsin and will have limited access to electronic communications.~JJL
Upcoming Central Bank Meetings: When & What to Watch
Prepare for the next round of central bank meetings and learn how you can manage your exposure through ICE’s deeply liquid interest rate product portfolio.
Banks May Face Kodak-Style Obsolescence in 5 Years, Jenkins Says
Francine Lacqua and Jon Menon – Bloomberg
Banks could face a “Kodak moment” where they approach obsolescence in five to 15 years at the hands of new financial-technology companies, according to former Barclays Plc Chief Executive Officer Antony Jenkins.
***** I can’t wait for the bank exhibit at the Museum of Natural History.
Tuesday’s Top Three
Only one click separated each of our top three stories yesterday. The photo finish started with Bloomberg’s running tally of Brexit banking fallout, Frankfurt Is the Big Winner in Battle for Brexit Bankers. Nipping at the heels of that story was a NY Times op-ed,
Wall Street Profits by Putting Investors in the Slow Lane. And coming in at third was How Nasdaq is Using Machine Learning and AI in the Post Trade World
Correction: New Report: SME Financing & Equity Markets
WFE & Milken Institute
In this joint report, we address the following questions: · Why do SMEs list, and where? · Does listing help SMEs access finance? If so, how? · Would listed firms list again? · What keeps unlisted firms away? · How could listing be made more accessible?
**JK: The report listed yesterday was correctly linked, but the comment stemmed from a prior WFE report. It was our mistake. Some mornings can be a bit crappy.
104,677,004 pages viewed; 22,609 pages; 207,112 edits
The Return of the Russell 2000
FTSE Russell Indexes have brought the Russell index futures and options back to CME Group. See what both have to say about the contracts and what it means for traders.
Watch the video above and visit us at www.cmegroup.com.
Ethereum Co-Founder Says Crypto Coin Market Is a Time-Bomb
Camila Russo – Bloomberg
Startups have raised $1.3 billion through digital coin sales; Regulation is biggest threat to digital tokens, Hoskinson says
Initial coin offerings, a means of crowdfunding for blockchain-technology companies, have caught so much attention that even the co-founder of the ethereum network, where many of these digital coins are built, says it’s time for things to cool down in a big way.
Prosecutor offers to drop Deutsche Börse CEO insider trading probe; Share purchase probe to be dropped if exchange agrees to fines of more than EUR10m
Philip Stafford in London – FT
Frankfurt’s public prosecutor is ready to drop its investigation into Carsten Kengeter, Deutsche Börse chief executive, over allegations of insider trading if the exchange agrees to fines totalling more than EUR10m.
Singapore traders regain appetite for lunch; Brokers welcome chance to schmooze clients and boost investor interest
Philip Stafford and Jennifer Hughes – FT
Lunch is not for wimps for traders in Singapore and it will be back on the menu as of November.
Brokers’ Call on Wall Street: Bye; More ‘wirehouse’ advisers are going independent, as industry model loses luster for some
Michael Wursthorn – Bloomberg
Wall Street’s brokerage model is under assault—from within. A growing number of brokers, disillusioned with pay hurdles and strict corporate cultures at the so-called wirehouses, are taking their billions of dollars under management and going independent. In doing so, many also say they are pursuing more control over their practices and a higher standard of care for clients that focuses more on service and less on pitching proprietary products.
LSEG collaborating with IBM to develop securities data blockchain solution for European SMEs
London Stock Exchange Group
Borsa Italiana, part of London Stock Exchange Group (LSEG) and IBM (NYSE: IBM) today announced they are building a blockchain solution to digitize the issuance of securities for small and medium enterprises (SMEs) in Europe. Designed to simplify the tracking and management of shareholding information, the new system intends to create a distributed shared registry containing a record of all shareholder transactions, helping to open up new opportunities for trading and investing.
Deutsche Boerse cultivates local ties after LSE deal setback
Tom Sims – Reuters
Deutsche Boerse is planning to spruce up the Frankfurt stock exchange, a familiar backdrop for TV broadcasts on the German economy, as part of a push to try to attract more retail investors.
Barchart Names Michael Browne as Head of AgriCharts
Today, Barchart, a leading provider of financial market data and technology, announced Michael Browne has been named head of Barchart’s agricultural division, AgriCharts. AgriCharts provides agricultural information and technology solutions to the agriculture industry. Browne will be responsible for driving innovation, sales and revenue growth while delivering value added services for clients throughout the agricultural supply chain.
Proposed gold exchange to have its own good delivery norms; Good delivery draft based on global norms, Indian elements to deal with finance and production numbe
Rajesh Bhayani – Business Standard
In a move that will set the stage for setting up a spot exchange for gold trading, help make gold trade transparent and eveolve an India-based gold price, the government is considering formulating good delivery standards and responsible gold practices for trading in the precious metal.
Overcrowded aggregators harm everyone, DB research finds; Paper finds increasing number of liquidity providers in aggregated environment can harm execution quality
Eva Szalay – Risk.net
Increasing the number of liquidity providers in an aggregated pricing environment can harm the overall quality of client execution, according to a hypothetical research paper published by Deutsche Bank. It finds that competing liquidity providers (LPs) are pushed to quote such competitive spreads that becoming the top-of-the book price becomes a disadvantage.
Wall Street lays out its wish list for SEC reforms for public companies
Sarah N. Lynch – Reuters
Executives that represent Wall Street interests pitched ideas on Tuesday about ways to scale back securities regulations that they blamed for stifling the market for initial public offerings.
June 2017 Swaps Review in 15 Charts
Amir Khwaja – Clarus Financial Technology
Continuing with our monthly Swaps review series, let’s look at volumes in June 2017.
Exchanges, OTC and Clearing
Deutsche Boerse faces fines as prosecutor considers dropping CEO investigation; Accusation against CEO could be dropped, but exchange faces fines instead.
John Bakie – The Trade
A probe into Deutsche Boerse’s CEO purchase of shares could be dropped if the exchange operator agrees to pay fines of up to EUR10 million.
SIX simplifies regulatory data and document exchange with new industry platform
The platform developed by SIX, in close consultation with the industry, enables the electronic and efficient exchange of regulatory data and documentation between wealth managers, assets managers, banks and other market participants.
Pioneering CCP transparency to maintain safer markets (part 2)
The Public Quantitative Disclosure (PQD) is an internationally agreed format defined by CPMI-IOSCO with the intention of enhancing CCP market transparency. Eurex Clearing has published its PQD since 2015 and continuous strongly to support transparency, both for market stability reasons as well as enabling the challenge and support of centralized risk management.
Commodity Markets Council to Ring The Nasdaq Stock Market Closing Bell
GlobeNewswire – NY Times
Commodity Markets Council, the leading trade association for commodity futures exchanges and their industry counterparts, will visit the Nasdaq MarketSite in Times Square.
***** Greg Doud just spoke at our MarketsWiki Education event at Nasdaq last week.
Nadex Plans To End Free Trading Incentive Program Effective July 21, 2017
On August 31, 2015 Nadex submitted a self-certification submission to the Commodity Futures Trading Commission regarding its plans to implement a Free Trading Incentive Program (“Program”), whereby a Nadex Member could earn up to five fee-free trading days (amended to 15 days in January 2016, and to 10 days in August 2016), based on the amount of the Member’s initial deposit.
EEX Group Grows Significantly In Emissions, Agriculturals And Freight In First Half Of 2017 – Uncertainty About Split Of The German-Austrian Price Zone Leads To Volume Decrease On Power Derivatives Market
Following a record result in the business year 2016, EEX Group has published its half year volumes for 2017, achieving notable increases in the markets for emission rights, agricultural products and global commodities (i.e. freight) alongside decreases on the power derivatives market. Double digit growth was also achieved on the natural gas spot business. A challenging regulatory environment, in particular the price zone debate and possible split of the German/Austria bidding zone has had an impact on the trading volumes in EEX’s power markets which was in line with the performance in the European power market as a whole.
Bats Europe rolls out penultimate MiFID II software release
Latest software release includes all major changes needed for MiFID II compliance, as Bats Europe nears full operational readiness for MiFID II.
Bats Welcomes New Issuer OppenheimerFunds to the Bats ETF Marketplace
Bats, a CBOE Holdings, Inc. company, and a leading market for exchange-traded product (ETP) trading globally, today welcomed new issuer OppenheimerFunds to the Bats ETF Marketplace, with the listing of three revenue-weighted funds.
OSE Newsletter (July 19, 2017)
Osaka Exchange, Inc. (OSE) renewed its derivatives trading system J-GATE on July 19, 2016. In tandem with this replacement, trading hours were extended and new products made available.
NBC News to launch twice-daily show on Snapchat
Jessica Toonkel – Reuters
Comcast Corp’s (CMCSA.O) NBC News is launching a twice-per-day news show on Snapchat, the company said on Wednesday, part of its push to attract younger viewers who tend to watch TV on mobile devices.
Wall Street Horizon Expands Global Dataset with Addition of Full Coverage of Major European and Asian Index Constituents Addition sees clients get Enchilada’s full 40+ corporate event datasets for FTSE 100, CAC 40, DAX 30, Hang Seng 50, Nikkei 225, EAFE and Dow Jones STOXX 1000 constituent companies
Wall Street Horizon, an alternative data provider specializing in corporate event intelligence, today announced the expansion of its global dataset to include nearly 1,000 new companies. The increased offering, which includes data for all 40+ event types Wall Street Horizon tracks, includes the full roster of constituents for all major European and Asian indexes.
GTT Announces Earnings Call for Second Quarter 2017
GTT Communications, Inc. (NYSE: GTT), the leading global cloud networking provider to multinational clients, announced today its plans to release results for the second quarter ended June 30, 2017, on Thursday, August 3, 2017. In conjunction with the release, GTT has scheduled a conference call, which will also be broadcast live over the Internet that day, at 10:00 a.m. Eastern Time.
Google to launch automated feed based on users’ interests; Stream will contain news and information linked to search history
Richard Waters in San Francisco – FT
Google took a step closer to competing with Facebook’s core news feed service on Wednesday as it announced a new automated “feed” of its own to deepen its connection with users on mobile devices.
IG Group shares surge on regulatory hopes; Spread-betting group stock in demand as FTSE 100 edges lower
Dan McCrum – FT
IG was buoyed on Tuesday by hopes that a regulatory crackdown won’t apply to the most valuable customers of the spread betting group, after managment provided fresh data on its business alongside a more routine trading update.
For Republican Party, Governing Is a Long-Term Problem
Jeremy W. Peters – NY Times
It was supposed to be a straightforward undertaking for a Republican-led government: Start passing conservative, Republican priorities.
ESMA recommends improvements in financial information enforcement
The European Securities and Markets Authority (ESMA) has published the results of a peer review conducted into how national competent authorities (NCAs) supervise financial information (IFRS) according to the Guidelines on Enforcement of Financial Information (Guidelines). The report identifies areas where NCAs can improve their enforcement and makes recommendations to support these improvements.
Nasdaq says SIs have unfair advantages; Exchange group identifies fresh loopholes in MiFID II’s systematic internaliser rules.
John Bakie – The Trade
Nasdaq has urged the European Commission to re-examine systematic internaliser (SI) rules in MiFID II, saying they will have a significant advantage over other trading venues.
Senator Warner Turns Up The Heat On The SEC
Themis Trading Blog
There is not much market structure talk coming out of the U.S. Senate these days. The two senators who did focus on market structure (Sen. Ted Kaufman and Sen. Carl Levin) are now both retired. However, there is one senator, Senator Mark Warner (D-VA), who has occasionally focused on market structure issues. During SEC Chairman Jay Clayton’s confirmation hearing in March, Sen. Warner pressed him on the issue of rebates and the maker/taker model. Sen. Warner has said that he believes the current exchange rebate fee schedule is a way to “game the system”.
Update: FINRA Board of Governors Meeting
The FINRA Board of Governors met this week, and I am writing to share with you several updates from our discussions.
July 2017 Board Update
FINRA President and CEO Robert Cook and Chairman of the Board Jack Brennan review rulemaking and other matters discussed at FINRA’s July Board of Governors meeting. In addition to the video, a summary of the board rulemaking actions is also available.
SIFMA Submits Tax Reform Recommendations to Senate Finance Committee
SIFMA submitted recommendations for tax reform to the Senate Finance Committee in response to Chairman Orrin Hatch’s (R-UT) request for comments issued on June 16, 2017.
Non-bank payment service providers to gain access to settlement accounts at the Bank of England
The Bank of England is extending access to settlement accounts in its real-time gross settlement (RTGS) system to non-bank payment service providers, enabling direct access to the UK’s sterling payment systems. In doing so, the Bank of England aims to promote innovation and competition in the payments sector.
The use of the interbank rate in online currency converter tools
The FCA is concerned that payment institutions and e-money institutions may have used currency converter tools in relation to their currency transfer services in a misleading way. Tools which convert currency at the interbank rate may be used in such a way as to give consumers the misleading impression that the rates shown are available to them, rather than the materially inferior rate that they are likely to achieve. Furthermore, consumers may not become fully aware of the inferior rate they are likely to achieve until an advanced stage in the customer journey, commonly after a customer registration process has been undertaken. At that stage, consumers may be unlikely to shop around.
ASIC bans former Magnitude Group adviser
The Australian Securities and Investment Commission (ASIC) has banned Perth financial adviser Jason Sean Atkins from providing financial services for a period of three years.
Court orders winding up of 18 companies associated with Macro Group
The Federal Court of Australia has ordered the winding up of 18 companies associated with the Macro Group, all of which have Desiree Veronica Macpherson as a director.
Investing and Trading
Where Are the Dips? The Weird, Unsettling Rise of Global Stocks This Year; Global equity markets have already risen in 2017 at their steadiest pace in nearly a quarter century. Can they continue to defy the odds?
Steven Russolillo – WSJ
Stock markets go up and down: It is a fact of life. Except in 2017.
America’s Farmers Turn to Bank of John Deere; With banks more tentative, machinery maker raises financing to growers, keeping them as customers but feeding menacing debt
Jesse Newman and Bob Tita – WSJ
For nearly two centuries, Deere & Co. has built equipment to help farmers plant and harvest their crops. Now, the company’s financial muscle is doing more of the work.
Half of fund managers think monetary policy is too loose ahead of European Central Bank meeting
Jasper Jolly – City AM
Almost half of fund managers think central banks are pumping too much money into the economy, according to a new survey ahead of the latest monetary policy decision by the European Central Bank (ECB) tomorrow.
Bond crash fear ascendant
David Keohane – FT
This month’s competition to see who tops the table of definitionally problematic ‘tail risks’ in Bank of America’s fund manager survey has been won by “fear of a crash in bond markets”.
Morgan Stanley’s Earnings, Revenue Beat Expectations; The Wall Street firm wraps up earnings season for large U.S. banks.
Liz Hoffman – WSJ
Morgan Stanley said its second-quarter profit rose to $1.76 billion as the Wall Street firm wrapped up the earnings season for large U.S. banks.
Goldman Sachs trading woes expose bank weakness; Private equity gains help bolster profits after collapse in market-making
Laura Noonan in New York – FT
Goldman Sachs has suffered its worst ever quarter in commodities, leaving the bank’s overall fixed-income division with a 40 per cent collapse in revenue and putting it on course to dramatically underperform its Wall Street rivals for the second quarter in a row.
Goldman Sachs Delivers Profit Surprise Despite Trading Slump; Investing revenue surges, while fixed income continues to struggle, falling 40%
Liz Hoffman – WSJ
Goldman Sachs Group Inc.’s GS -2.60% once-vaunted bond-trading unit posted a poor performance for the second straight quarter, fueling a selloff in the firm’s shares and deepening questions about the bank’s strategy.
US banks eye Europe’s non-performing loans; Funds have raised $300bn to target the sector, says Deloitte
Thomas Hale – FT
High-yield bonds and non-performing loans are not the most obvious of combinations. So when private equity group AnaCap launched a EUR325m high-yield bond this month to help buy bad debt, it caught the attention of investors.
First class delivery: Barclays brings in Royal Mail finance boss Matthew Lester as non-executive director
William Turvill – City AM
Barclays has signed up Royal Mail’s outgoing finance chief to join its board as a non-executive director.
China Disrupts WhatsApp Service in Online Clampdown
Paul Mozur – NY Times
The last of Facebook’s major products that still worked in China was disrupted by the government on Tuesday, as Beijing broadly tightened its controls over the internet.
Spanish banker Miguel Blesa found dead on country estate
A Spanish banker whose brushes with the law and extravagant hunting trips came to symbolize the excesses of the country’s economic boom has been found dead on a country estate, a family member said on Wednesday.
German MEP accuses Barnier of trying to mess up Brexit negotiations
Helen Cahill – City AM
The UK and the EU enter into negotiations this week (Source: Getty)
A German MEP has slammed the EU’s Brexit negotiators, saying they want to “make a mess out of this whole unhappy situation”.
Financial watchdog: Businesses poised to leave London without Brexit grace period in place
Catherine Neilan – City AM
City firms will kick off their Brexit contingency plans by the end of the year unless the government agrees a transitional deal with the EU, the head of the UK’s top financial watchdog warned yesterday.
FCA hires extra staff to cope with Brexit workload; ‘Deadlines are obviously tight’
The Financial Conduct Authority (FCA) has hired additional general and legal staff ahead of what chief executive Andrew Bailey called a ‘tight’ Brexit deadline.
The Mad Cheese Scientists Fighting to Save the Dairy Industry; Amid an historic glut, a secretive, government-sponsored entity is putting cheese anywhere it can stuff it.
Clint Rainey – Bloomberg
In a usual year, Taco Bell juggles about 4,000 new menu ideas. A dozen, maybe, will ever see the light of day.
Mustard at a Price That Makes Your Eyes Water
Chris Hughes – Bloomberg
Mustard. It’s the new hot thing. McCormick & Company Inc. has just agreed to pay a scorching $4.2 billion for Reckitt Benckiser Group Plc’s food business, home to brands including French’s mustard and Frank’s RedHot sauce.