Hits & Takes
By JLN Staff
Rumi Morales has left the CME as head of CME Ventures. Additionally, Sandra Ro left the CME in July. She was head of digitization at the CME Group. Both were speakers at previous MarketsWiki Education events.~JJL
Of notable financial hubs mentioned in Z/Yen’s annual Global Financial Centres Index 22 report, Chicago ranked 24th, down 17 spots from 7th last year, behind cities such as: Toronto, Sydney, Beijing, Montreal, Geneva, Vancouver and Osaka.~JK
Friday’s Asia Pacific Financial News from John Lothian News can be found HERE.~JJL]]
Fox News and former NYMEX trader Eric Bolling have gone their separate ways, it was reported on Friday. Shortly after this news, another story broke that Eric Bolling’s 19-year old son was found dead in Colorado. Condolences to the Bolling family on this tragic loss.~JJL
Cantor Fitzgerald will hold Charity Day on 9/11
On 9/11, Cantor Fitzgerald CEO and Chairman Howard Lutnick will be spending the day with the firm’s families who, like himself, lost loved ones in the attacks.
Bridging the Weeks: August 28 to September 8 and September 11, 2017 – Retail Precious Metals Transactions; Spoofing and Market Manipulation; ICOs; Supervision
The Commodity Futures Trading Commission sued a large precious metals dealer catering to retail clients for engaging in illegal precious metals transactions and fraud. However, the firm claimed its activities were outside the CFTC’s jurisdiction. Separately, a US federal court ruled that the Securities and Exchange Commission could charge that spoofing-type conduct constituted market manipulation, while seven regulators in China banned new initial digital coin offerings.
Breaking Down Managed Futures – Jay Feuerstein
“It’s a strategy that makes money over time, but actually makes a lot of money when the world blows up.”
In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Jay Feuerstein, managing director at Budo Group, talks about managed futures and their role within finance. Feuerstein says the best time for managed futures was during the ’87 and ’08 market crashes. Managed futures can be volatile when interest rates fluctuate, and since the Fed is slowly starting to raise rates, it could be a good sign for an industry segment which has struggled so far in 2017.
Friday’s Top Three
Friday’s top three stories were led by the FT’s ICE to ‘Go West’ with Chicago-to-Tokyo network. Second went to the Washington Post piece I criticized Google. It got me fired. That’s how corporate power works. Third went to Bloomberg’s Tulip Fever: There’s a Digital Token for That, And So Much More
MarketsWiki Page of the Day: Rumi Morales
Rumi Morales has left the CME as head of CME Ventures, the CME subsidiary that invests in early stage technologies affecting the financial markets.
107,414,310 pages viewed; 22,765 pages; 209,064 edits
London Retains Its Crown as World’s Top Financial Center
Gavin Finch – Bloomberg
No. 2 New York loses ground on trade fear; Hong Kong is No. 3; Index by Z/Yen, China’s CDI considers wide range of criteria
London retained its crown as the world’s top financial center in a ranking that surveys industry professionals, extending its lead over New York and Hong Kong despite ongoing uncertainty about the implications of Brexit.
**The full report is HERE
China Is Said to Ban Bitcoin Exchanges While Allowing OTC
Order comes amid a broader clampdown on financial risk; China is home to nearly a quarter of world’s bitcoin trades
China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, dealing another blow to the $150 billion cryptocurrency market after the country outlawed initial coin offerings last week.
Miami’s Brickell Financial Center Submerges as Irma Descends
Nathan Crooks and Jonathan Levin – Bloomberg
Cranes fall, a roof rips off near ‘Wall Street of the South’; Area is home to wealth managers, banks, law firms and hotels
Brickell Avenue, South Florida’s version of Wall Street, turned into a fast-moving river Sunday as Hurricane Irma flooded a district lined with wealth managers, banks and luxury hotels.
Brexit Fallout Is Driving U.K. Firms to Nasdaq’s Nordic Market
Niklas Magnusson and Hanna Hoikkala – Bloomberg
Expects 10-15% of 2018 listings to be made by non-Nordic firms; Uncertainty related to Brexit main driver behind development
The head of European listings at Nasdaq Inc. says Britain’s decision to leave the European Union is driving more U.K. companies to its Nordic market.
Brexit could be reversed if EU agrees to immigration deal, Tony Blair says; ‘We can curtail the things that people feel are damaging about European immigration, both by domestic policy change and by agreeing change within Europe,’ Mr Blair says
Arj Singh – Independent
Tony Blair has called for tough new immigration rules which would allow Britain to exercise more control over who comes into the country without leaving the European Union.
What’s a Bank Research Report Worth? $50,000 or $50?; Tug of war playing out between banks, asset managers over the value of research
Max Colchester and Christopher Whittall – WSJ
How much are investment research reports actually worth? The answer: less than the banks that produce them think.
U.S. blockchain startups R3 and Ripple in legal battle
Anna Irrera – Reuters
U.S. blockchain startups R3 Holdco LLC and Ripple Labs Inc are suing each other over an options contract to purchase Ripple’s digital currency XRP, according to lawsuits filed on Friday.
Europe’s bank regulators on expensive hiring spree before Brexit
John O’Donnell – Reuters
Europe’s regulators are competing to hire risk specialists to prepare for an influx of banks escaping Brexit, nudging up salaries and stretching staff budgets.
Teva hires new CEO Schultz after seeking to land Astra’s Soriot
John Murray Brown – Financial Test
Teva has appointed KÂre Schultz as chief executive, ending a seven-month search that led the Israeli drugs company to approach two industry heavyweights, including AstraZeneca’s Pascal Soriot, without success.
Short Sellers Take Fight Against Chinese Companies to the Big Screen; ‘The China Hustle’ documentary profiles U.S. investors trying to expose and profit from irregularities and alleged fraud at many Chinese companies
Steven Russolillo in Hong Kong and Vipal Monga in Toronto – WSJ
Deep-pocketed U.S. investors trying to expose fraud they allege among companies in mainland China have found a new way to promote their cause: a feature film.
Exchanges, OTC and Clearing
Clearstream and HedgePole merge with new fund data service
Deutsche Bˆrse Group
Clearstream, a provider of post-trading services, which is part of the Deutsche Bˆrse Group, and HedgePole, a well-known provider of price and reference data on hedge funds, have entered into a cooperation agreement to supply the market with price and reference data on alternative funds.
NYSE Issues Proposed Amendment to Limit Issuance of Material News After Market Close
Mark D. Wood and Mark J. Reyes – CorporateFinancialWeeklyDigest.com
On August 18, the New York Stock Exchange (NYSE) issued a proposed amendment to Section 202.06 of the NYSE Listed Company Manual, which would prohibit the issuance of material news by a listed company between the official closing time of the NYSE’s trading session until the earlier of the publication of such company’s official closing price or five minutes after the NYSE’s official closing time. In explaining the purpose of the proposed amendment, the NYSE noted that, because trading can occur after 4:00 p.m. ET (the NYSE’s official closing time) on other markets “if a listed company released material news immediately after 4:00 p.m., but before the closing auction on the NYSE is completed, there can be a significant price difference in nearly contemporaneous trades on other markets and the closing price on the [NYSE].”
Spot currency trading on Thomson Reuters platforms dips in August
Jemima Kelly – Reuters
Average daily spot volumes on currency trading platforms run by Thomson Reuters dipped to an eight-month low of $82 billion in August, though that was partially offset by strong trading volumes in derivatives.
SGX RegCo announces board members; operational start on 15 September
Singapore Exchange Regulation (SGX RegCo) has appointed Mr Alan Shaw, Ms Jane Diplock AO and Mr Ronny Tan to its board. The company will begin operations on 15 September 2017.
QuantHouse launches API initiative; Firm hopes to widen use of APIs as way of efficiently accessing markets and technology.
John Bakie – The Trade
Trading systems provider QuantHouse has launched an initiative to improve industry uptake of open API systems to add value to the trading process.
Employees of Fintech Firm SoFi Allege Women Are Treated Improperly; Company’s board separately discloses that in 2012 it paid money to settle a dispute between an employee and the CEO
Peter Rudegeair – WSJ
Social Finance Inc., a fintech company whose hard-charging ethos propelled it to success, is ensnared in the controversy over workplace culture and the treatment of women at Silicon Valley technology startups.
Accenture launches analytics service for asset managers
Tom Eckett – Investment Week
Accenture has joined forces with UK benchmarking firm Investit to launch a business analytics service for asset management firms to help with benchmarking, analysing and improving the performance of their business. The service will provide research on the industry addressing issues such as client and product management, big data, cyber security, portfolio management analysis and distribution and operations.
PA Consulting partners with Stockholm Fintech Hub for innovation
UK-based PA Consulting Group (PA) and Stockholm Fintech Hub have joined forces to support FinTechs, banks, regulators and investors in the Swedish Financial Services sector with innovation and collaboration.
The Wall Street Journal’s Trump problem; Dozens have left the paper in the past year and interviews with current and ex-staffers show outrage over pressure from management to normalize Trump
Lucia Graves in Washington – The Guardian
On Monday 13 February, just over three weeks after Donald Trump’s inauguration, the Wall Street Journal’s editor-in-chief Gerry Baker held a town-hall style meeting in the paper’s midtown Manhattan newsroom amid mounting concern about the WSJ’s coverage of the new president, which many staffers felt was too soft and too quick to downplay controversies.
Clinton Says Giving Paid Speeches to Wall Street Firms a Mistake
Jennifer Epstein – Bloomberg
Democrat says she’s ‘done with being a candidate’ after 2016; Clinton angered by Trump’s embrace of bankers as advisers
Former Democratic presidential nominee Hillary Clinton pointed to her willingness to speak to Wall Street firms and the poor “optics” of those highly-paid appearances as a contributing factor for her loss to Donald Trump in the 2016 election.
Gary Cohn can be easily replaced if he leaves Washington
Jonathon Trugman – NY Post
Let me start by acknowledging the outstanding job National Economic Council Director Gary Cohn’s team has done swaying the media into thinking Armageddon would occur if he left the White House.
Giancarlo in Paris’ Les …chos: Deference is the Path Forward in Cross-Border Supervision of CCPs
CFTC Chairman Chris Giancarlo wrote an op-ed in Paris’ financial daily newspaper, Les …chos, titled “Reconnaissance Mutuelle est la Meilleure MÈthode pour la Supervision TransfrontiËre des CCPs,” translated in English as “Deference is the Path Forward in Cross-Border Supervision of CCPs.” In the op-ed, written in French, Giancarlo discusses the post-financial crisis swaps reform efforts, asserting, “It is notable that the G-20 leaders pledged their efforts to the consistent implementation of global standards rather than identical implementation. It follows that the best route to “consistent implementation” is the through mutual deference to comparable foreign regulatory frameworks.”
Russia Makes U-Turn on Cryptocurrencies After Backing From Putin
Jake Rudnitsky, Anna Andrianova and Andrey Biryukov – Bloomberg
Russia is drawing up rules about how to conduct initial coin offerings, breaking ranks with China after President Vladimir Putin signaled his approval for digital currencies.
SEC-NYU Dialogue On Exchange-Traded Products, Commissioner Kara M. Stein
The panels today focused on three topics: how ETPs affect financial markets; how ETPs affect investors; and the future of ETPs. I would like to focus my very brief remarks on a fourth topic that is closely related to these: what role should the SEC play in 2017 and beyond?
SEC-NYU Dialogue On Exchange-Traded Products, Commissioner Michael S. Piwowar, Washington D.C., Sept. 8, 2017
Today’s SEC-NYU Dialogue brings together practitioners, academics, and regulators to discuss and exchange ideas on an issue that has received considerable attention over the last few years ó the current state of, and outlook for, exchange-traded products (“ETPs”).
MiFID II: ESMA publishes transitional transparency calculations for bonds and updates calculations for two other asset classes
The European Securities and Markets Authority (ESMA) has updated its transitional transparency calculations (TTC) for non-equity instruments in relation to the implementation of the Markets in Financial Instruments Directive/ Markets in Financial Instruments Regulation (MiFID II/ MiFIR).
Regulators descend on booming ETF market; Providers agree it is time to modernise rules governing the $4tn exchange traded funds industry
Jennifer Thompson – FT
The phenomenal growth of exchange traded funds over the past quarter of a century has not escaped the attention of regulators, who fear there is a lack of clarity over the products and how they are overseen.
Europe Needs German-Style Supervision of Small Banks; The country’s small banks are in trouble, but its regulator is exemplary.
Ferdinando Giugliano – Bloomberg
The German banking system is hardly a model for the rest of Europe. During the financial crisis, Berlin spent or set aside hundreds of billions of euros to rescue its lenders. From its banking giant, Deutsche Bank, to many smaller savings banks, there is still no shortage of lenders that are struggling with low profitability.
Investment banks to clash over Mifid II rules on free research; EU legislation requires fund managers to pay directly for analyst research from 2018
Laura Noonan, Hannah Murphy and Katie Martin – FT
Some of the world’s biggest investment banks are on a collision course about how to distribute their economic and fixed income research after new rules come into force next year.
Sebi panel to mull stock market trading hours extension; The stock market in India currently opens at 9 am and closes at 3.30 pm
An advisory committee of market regulator Securities and Exchange Board of India (Sebi) is likely to discuss a proposal for extending stock market trading hours, even as several brokers feel any such move would increase cost and logistics burden for them.
ASIC releases market integrity report
ASIC has today released its latest report on market integrity for the period 1 January to 30 June 2017.
Investing and Trading
Bitcoin ETF idea still a little funky, experts say
John McCrank – Reuters
Demand for exchange-traded funds that would provide exposure to cryptocurrencies like bitcoin is strong, but regulators will likely wait until the underlying market matures more before approving such products, a panel of securities industry experts said on Friday.
Wall Street’s 3% Yield Call Foiled Again as Bond Traders Eye 2%
Brian Chappatta – Bloomberg
Forecasts for 10-year yield drop again in Bloomberg survey; Subdued inflation shows structural forces keeping rates low
Wall Street is falling further and further behind in assessing the direction of the $14.1 trillion Treasuries market.
Bridgewater to Launch Big Investment Fund in China, Three Decades in the Making; Founder Ray Dalio’s fascination with China evolves into plans to raise billions of dollars, amass clout that has largely eluded outside hedge funds and banks
Rob Copeland, Bradley Hope and James T. Areddy – WSJ
Bridgewater Associates LP is poised to amass a huge investment fund in China, giving its founder, Ray Dalio, the kind of clout that has largely eluded Western financial firms in the world’s second-largest economy.
BoE to step up warnings against underestimating rate rises; Central bank to challenge market complacency that cheap money cannot last
Chris Giles, Economics Editor – FT
The Bank of England will this week step up its warnings that households, businesses and investors are underestimating how soon interest rates will rise.
Robinhood co-founders want everyone in the stock market
by Ahiza Garcia – CNN
Robin Hood stole from the rich to give to the poor. Or so the folk tale goes. Baiju Bhatt and Vlad Tenev had that idea in mind when they decided to launch their investing app, Robinhood. The app allows anyone to buy and sell stocks without fees. No more paying a broker or being charged for each trade.
China to Shut Bitcoin Exchanges; Authorities to ban commercial trading of all virtual currencies
By Chao Deng – WSJ
Chinese authorities plan to shut down domestic bitcoin exchanges, delivering a final blow to a once-thriving industry of commercial trading for virtual currencies, which took off inside the mainland four years ago.
Investors plan safeguards on sexual harassment at Valley VC firms; Limited partners body to help investors avoid funds where harassment has taken place
Leslie Hook in San Francisco – FT
An industry body for private equity investors is drafting new guidelines to protect its members from any recurrences of the sexual harassment scandals that have hit Silicon Valley this year.
Bears target ways to bet on cryptocurrency mania imploding; Short sellers await arrival of bitcoin futures that will introduce two-way trading
Robin Wigglesworth – FT
At the peak of the South Sea Bubble three centuries ago, a wag famously poked fun at the craze by issuing a prospectus for “a company for carrying out an undertaking of great advantage, but nobody to know what it is”. Cryptocurrency mania has now arguably reached the same stage.
Equifax Customer Complaints Continue to Pile Up; Credit-reporting company struggling with its response to a major data breach
AnnaMaria Andriotis – WSJ
Equifax Inc. struggled over the weekend with its response to its massive data breach as consumers continued to criticize the credit-reporting company’s efforts and cited ongoing problems with a website set up to help them.
RBC and Markit join forces for unbundling services; Markit’s RPA management service will be underpinned by RBC segregated account structure.
John Bakie – The Trade
RBC has teamed up with IHS Markit to integrate their research payment account (RPA) services together.
The Plastic Fantasy That’s Propping Up the Oil Market
Julian Lee – Bloomberg
Kenya’s mountains of plastic bags might not seem central to oil’s grand narrative, but they are. Last week, the East African country banned almost everything about them: making them, importing them, selling them, using them, with penalties of up to four years in jail or fines up to $38,000.
Big bank trade sours as rate hikes stall, but some still believe
Julien Ponthus – Reuters
Buying European bank shares — one of the biggest stock market plays of the year — has turned sour as interest rate “normalization” in the United States and Europe is deferred yet again, but dogged advocates of the sector are not selling yet.
Jamie Dimon ventures beyond Wall Street to have a say in Washington
Pete Schroeder, David Henry – Reuters
JPMorgan Chase & Co Chief Executive Jamie Dimon is starting to look like Corporate America’s shadow president. The 61-year-old banker has made more than a dozen trips to Washington so far this year to press a broad agenda with a range of influential policymakers, people who attended the meetings or are familiar with his schedule said. Dimon has already visited the nation’s capital four times as much as he does in a typical year.
Barclays’ email raises questions on banks’ ‘no-poach agreement’; US regulators examining whether UK bank promised JPMorgan it would not hire its staff
Caroline Binham and Martin Arnold in London – Financial Times
An email sent by a senior Barclays executive to colleagues around the world last year detailed a one-year ban on hiring rivals from JPMorgan Chase, undermining denials from the banks that they had come to a no-poach agreement after a string of high-level moves.
JP Morgan Asset Management names new Europe chief market strategist
J.P. Morgan Asset Management, the asset management arm of JPMorgan Chase & Co, named Karen Ward as chief market strategist for Europe and UK based in London.
TradeStation Expands “TradeStation Salutes” Program to Include First Responders Program Now Offers Commission-Free Trading for U.S. Active-Duty Military Personnel, Military Veterans and First Responders
TradeStation, a Monex Group company and award-winning* online broker-dealer and futures commission merchant, announced today that it will extend the TradeStation Salutes program to first responders, including police offers, firefighters, paramedics and EMTs.
Barclays Stockbrokers row: where to switch?
Richard Dyson – Telegraph
Complaints by angry customers of Barclays Stockbrokers about the enforced switch of their accounts to the new “Smart Investor” service continue, with clients citing the complex log-in, higher costs and lack of basic functions.
China’s trillions remain out of reach of foreign funds; FX regulator, concerned about capital exodus, keeps offshore asset managers out
Don Weinland in Hong Kong – Financial Times
Some of the world’s biggest asset managers are still waiting for permission to sell international funds to domestic Chinese investors, two and a half years after winning coveted licences to do so.
Groups such as BlackRock, Aberdeen Asset Management, Och-Ziff and Allianz were awarded licences in 2015 to market offshore investment products directly to Chinese customers, creating a new channel to move capital offshore.
Will Saudi Aramco deliver world record profit for next year’s IPO?
Dmitry Zhdannikov, Ron Bousso – Reuters
When oil giant Saudi Aramco discloses its financials for the first time next year, it must either surprise investors with world record profits or reduce its aspirations for a $2 trillion valuation in its initial public offering (IPO).
Sovereign wealth funds boost private investments in emerging markets
Olzhas Auyezov – Reuters
Private market investments have become a crucial part of sovereign wealth funds’ (SWF) portfolios, helping them better tap the potential of key emerging markets such as China and India, a Goldman Sachs Asset Management (GS.N) executive said.
Saudi assures investors that reforms, Aramco IPO on track
Andrew Torchia – Reuters
Saudi Arabia’s government assured investors on Saturday that its Vision 2030 economic reform program, including the sale of a stake in national oil giant Saudi Aramco, was on track despite plans to adjust part of it.
African Farmers Brace for Life Without Their Sugar Daddy; EU’s deregulation of market for sweetener could crowd out Swaziland, the continent’s largest exporter
Alexandra Wexler – WSJ
When the European Union deregulates its sugar market at the end of September, some of the biggest losers will be in the lush hills of this tiny, landlocked nation.
China Is Striving to Contain Its Once-Diving, Now-Thriving Yuan; The currency’s recent surge has prompted Beijing to shift course after two-year effort to keep it from weakening too quickly
Lingling Wei – WSJ
China is reversing a range of measures it had put in place to support its currency, a response to a recent surge in the value of the yuan that has hurt Chinese exporters and added to the country’s economic headwinds.
Beijing’s Latest Yuan Move Is All About Optics
Anjani Trivedi – WSJ
The more Beijing tinkers with the yuan, the clearer it becomes just how tightly controlled Chinese currency remainsóand that whatever investors think about where the yuan should be headed, there’s only one voice that really matters.
The Big Hong Kong Dollar Short Is Bruised, But Not Broken
Justina Lee – Bloomberg
U.S. rates’ premium over Hong Kong widens to most since 2008; Hong Kong dollar has seen sharp rebounds twice this quarter
Hong Kong dollar bears are down, not out. So say Credit Agricole CIB and DBS Hong Kong Ltd. after the biggest jump by the pegged currency in 19 months.
Goldman Sachs Says These Ten Brexit Events Moved U.K. Assets the Most
Cecile Gutscher – Bloomberg
10 Brexit-related events account for 50 percent of pound moves; ‘Difficult’ talks to keep BOE cautious, on hold through 2018
When it comes to trading sterling and U.K. assets, Brexit matters more than the Bank of England, according to Goldman Sachs Group Inc.
Hurricane Irma will hammer insurance industry ó up to $65 billion in damage is projected
Christina Farr – CNBC
Hurricane Irma will create combined insured losses of $20 billion to $65 billion, according to a projection from risk modeling software company AIR Worldwide. The company includes in its estimate the United States and selected islands in the Caribbean. For the U.S. alone, insured losses are expected to reach between $15 billion to $50 billion, AIR said.
How Kirkland Signature Became One of Costco’s Biggest Success Stories; Retailer’s private-label products, ranging from mixed nuts to men’s dress shirts, generate about a quarter of company sales
Sarah Nassauer – WSj
ISSAQUAH, Wash.óCostco Wholesale Corp.’s chocolate-dipped, slightly salty Kirkland Signature Nut Bars became a hit at its stores earlier this year.
Unfortunately for Kind LLC, that meant its own best-selling, chocolate-dipped, slightly salty Kind Bars now faced cheaper competition on Costco’s shelves.
The growth of Chicago’s Super Loop: So much building, so little architecture
Blair Kamin – Chicago Tribune
A flock of construction cranes fills the sky. Downtown’s population is soaring. The skyline is changing and so is the texture of city life. A generation ago, West Madison Street was Chicago’s Skid Row home to winos and flophouses. It is now a chic strip of sushi joints, cycle studios, preschools and a gourmet ice cream shop. But the architectural fare consists of bland apartment high rises that have drawn complaints of monotony.