Breaking News

Fangs futures arrive as exchange operator tries to cash in on tech rally; Bond trading desks seek data scientists to work alongside traders

First Read

Hits & Takes

Our friends at the Chicago Federal Reserve have published a primer on Blockchain. “Blockchain and Financial Market Innovation” by Rebecca Lewis, John W. McPartland, and Rajeev Ranjan is available HERE.~JJL

Bob Pisani of CNBC likes the ICE’s new NYSE Fang Plus Index, the futures of which launch today.~JJL

MarketsMedia has announced their 2017 Women in Finance Award Winners, with many of our favorite people listed as winners.~JJL

Hamish Purdey, Chief Executive of Intelliflotaking, is taking part in Centrepoint’s Sleep Out to give homeless young people a future. You can help support his efforts HERE.~JJL

The CME Group’s bitcoin futures contract specifications are available and the contract size is 5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR).~JJL

Twitter is officially doubling the character limit to 280.~JJL

For good reason, CME Group’s plans for a Bitcoin futures contract received a lot of attention, but did you know Argentina’s Mercado de Termino de Rosario (Rofex) has some ideas of its own? Rofex plans to offer Bitcoin custody services and allow it as trading collateral.~SD

For a quick visualization of oil volatility in the wake of the Saudi shakeup, check out Bantix Technologies’ most recent blog. (Bantix makes QuikStrike, software for futures options analytics.) ~SD

UPS has joined top alliance to create blockchain standards for logistics.~JJL

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CME Group Announces Jack Bogle and Mac McQuown as the 2017 Melamed-Arditti Innovation Award Recipients
CME Group
CME Group’s Center for Innovation today announced that John C. “Jack” Bogle, Founder of The Vanguard Group, Inc., and John “Mac” McQuown, Co-founder/Director and Principal of Diversified Credit Investments, are the 13th recipients of the CME Group Melamed-Arditti Innovation Award. CME Group will present the award at the 10th annual Global Financial Leadership Conference in Naples, Fla., on Tuesday, Nov. 14.
/goo.gl/q5wNRr

***** If you are looking for key CME Group players next week, they will be at the GFLC in Naples, FL.~JJL

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Word of the Day: vertiginous
“Vertiginous” can mean “characterized by vertigo or dizziness” or “inclined to frequent and often pointless change.” In an op-ed in the New York Times yesterday, Michelle Goldberg wrote of “the terror-struck and vertiginous days after Donald Trump’s election a year ago.” In this case, she could mean either definition, or both. The days since the election have certainly left a lot of people feeling like their head is spinning…and they have also been filled with frequent and often seemingly pointless change. It is an incisive essay – and it has received 909 comments so far! You can read it here.~SR

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A small band of trading specialists are taking calls about $50 million bitcoin deals
Frank Chaparro – Business Insider
The explosion and maturation of the cryptocurrency market has institutions pouring money into the space.; Firms such as DRW, a Chicago-based trader, and B2C2, a UK-based over-the-counter broker, are now regularly executing multi-million dollar trades.
“We got a call for a $50 million trade last week.” Kevin Beardsley isn’t talking about an equities deal, or a bond trade, or a currency bet. Beardsley is the managing director at B2C2, a cryptocurrency brokerage, and he’s talking about bitcoin.
/goo.gl/YQA6PE

***** Nice scoop by Frank Chaparro.~JJL

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Brexit Should Be Prevented, German Government Advisers Say
Rainer Buergin – Bloomberg
Possibility of U.K. staying in the EU ‘can’t be excluded’; Advisers urge earlier end to ECB’s bond-purchase program
The U.K.’s exit from the European Union should be prevented due to the “far-reaching impact” Brexit would have, Germany’s Council of Economic Experts, which advises Chancellor Angela Merkel, said Wednesday.
/goo.gl/vE3JNv

***** Far reaching impact is correct.~JJL

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The environmental costs of bitcoin are not worth the candle; To make the cryptocurrency more sustainable, vested interests would have to be confronted
Izabella Kaminska – FT
The recent spike in the price of bitcoin to more than $7,600 has delighted cryptocurrency speculators and early investors the world over. Many consider the windfalls as vindication of their belief that bitcoin is not just an experimental currency but a viable asset class in its own right.
/goo.gl/oZW2Xb

***** “Kaminska: When I recently asked a room of approximately 50 students how many had heard of bitcoin, almost all raised their hands. Asked how many had bought bitcoin, about a third of them raised their hands. But when I asked how many had used bitcoin actually to buy something, only one raised a hand.”

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Tuesday’s Top Three
Tuesday’s top three stories were led by Reuters CME’s Melamed sees bitcoin becoming new asset class. Second went to John Lothian’s intrepid column, ABN AMRO Loves Fidessa. Third went to Bloomberg’s Humans Are Becoming Less Important in the World’s Biggest Market

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Lead Stories

Fangs futures arrive as exchange operator tries to cash in on tech rally
Gregory Meyer – FT
A leading exchange operator is getting in on investor enthusiasm for Fangs, a small basket of highly valuable technology stocks, with the launch of a futures contract branded with the catchy acronym.
/goo.gl/FnYtnv

Bond trading desks seek data scientists to work alongside traders
Hayley McDowell – The Trade
Asset managers trading fixed income are seeking data scientists to sit alongside traders as data in the asset class is set to surge under MiFID II.
/goo.gl/qQBhaZ

North American carbon trading markets flex anti-Trump muscle
Gregory Meyer – FT
Election victories in the US on Tuesday were also wins for carbon trading. Ralph Northam and Phil Murphy’s successful bids for governor of Virginia and New Jersey, respectively, put the two eastern states on track to join cap-and-trade systems built to curtail emissions of heat-trapping carbon dioxide.
/goo.gl/ivMDVB

Centuries of Data Forewarn of Rapid Reversal From Low Interest Rates; BOE study of 700 years of global lending indicates current drop is part of historic trend
Lucy Meakin – WSJ
Forget secular stagnation. One historian says the world is actually in its ninth “real rate depression” and 700 years of data show that – when it comes – the turnaround could be sudden.
/goo.gl/zAvQ9h

RenTech Founder Urged Bob Mercer to Step Down to Improve Company Morale
Amanda L Gordon and Katherine Burton – Bloomberg
Jim Simons, the founder of Renaissance Technologies, urged Robert Mercer to step down from his role as co-chief executive officer over concerns that his backing of Breitbart News was hurting morale at the world’s most profitable hedge fund, according to people familiar with the matter.
jlne.ws/2AqZYsr

Credit Trades Du Jour: Exotic, ‘Nonlinear’ and Private; Investor thirst for yield fueling market in private, structured, bondlike deals
Paul J. Davies – WSJ
The hunt for yield is taking Wall Street and investors into exotic territory, and that means an appetite for credit assets that are private, not easily tradable and often complex.
/goo.gl/7EpmJ6

Euronext details plans to meet new transparency rules in commodities
Reuters Staff
Euronext gave details on Wednesday of weekly commodities reports it will publish from next year to meet new European rules aimed at improving transparency in financial markets.
/goo.gl/ZDSdt1

Clamor for Tech IPOs Reaches Fever Pitch in Asia; E-book business of Chinese tech titan Tencent soars to nearly $12 billion market value in Hong Kong debut
Saumya Vaishampayan and Steven Russolillo – WSJ
The latest sign of investor mania for Chinese internet stocks has emerged from a company that charges people small fees to read books online.
/goo.gl/sxUdFE

TCI calls for LSE to waive Rolet ‘confidentiality agreement’; Top investor wants more information on CEO’s departure
Miles Johnson and Philip Stafford – FT
The activist shareholder demanding the removal of the chairman of the London Stock Exchange Group has raised the pressure by insisting the company lifts what the investor alleges is a “confidentiality agreement” placed on the exchange’s departing chief executive.
/goo.gl/3Knw7f

LSE chair under pressure as investors consider call for him to quit; Exchange’s biggest shareholders must decide if they back the board or TCI
Philip Stafford – FT
Shareholders in the London Stock Exchange Group are weighing up a choice most would rather avoid.
/goo.gl/CYHS34

Wall Street warns Trump team of Brexit ‘point of no return’; High-level meetings hear lack of clarity threatens thousands of UK financial jobs
Caroline Binham and Patrick Jenkins – FT
A group of large financial institutions with big London operations, led by Wall Street’s pre-eminent banks, have told the US commerce secretary that Britain’s unstable government and slow progress in Brexit planning may force them to start moving thousands of jobs out of the City in the near future.
/goo.gl/gCKA1p

Buy-side heads predict ‘price deciding’ role post MiFID II; Fixed income trading heads expect to take on a new role as price-deciders once MiFID II has come into effect on 3 January next year.
Hayley McDowell – The Trade
MiFID II could prompt buy-side firms to form a new role as price-deciders for trades, according to the heads of fixed income trading at some of Europe’s largest asset managers.
/goo.gl/Bgy7xa

Fed’s Powell: Libor death is ‘big stability risk’
Robert Mackenzie Smith – Risk.net
The possible death of Libor presents a “big financial stability risk” if adequate back-ups are not put in place beforehand, Federal Reserve governor Jerome Powell has warned in an interview with Risk.net.
/goo.gl/1p8CWB

Financial markets not taking rising North Korea risks into account; Stand-off fails to curb buoyant offshore yuan and Hang Seng Index
Karen Yeung – South China Morning Post
The US continues to explore diplomatic solutions to persuade North Korea to give up on its nuclear weapons ambitions but time is running out, said Kevin Lai, the chief economist at Daiwa Capital Markets.
/goo.gl/Lx9Vj6

Exchanges, OTC and Clearing

NYSE AMERICAN ANNOUNCES TRADING DAY FOR VETERANS
ICE
In recognition of Veterans Day, on November 10, NYSE American, the New York Stock Exchange’s market for small to mid-cap growth companies, will donate 100% of its trading proceeds to Headstrong, a charity dedicated to providing valuable mental health services to U.S. veterans.
/goo.gl/mQPJsH

Corporate Bond Index Futures – efficient access to European corporate bond market beta and generating alpha
Eurex Group
Eurex’s EURO STOXX 50 Corporate Bond Index Futures is the world’s first exchange-traded corporate bond index derivative. It gives the buy side and the sell side a very capital-efficient tool as well as leveraged access to European corporate bond market beta in terms of portfolio overlay and allows them to quickly add and subtract European corporate bond exposure to a multi-asset/GTAA portfolio.
jlne.ws/2As9BqS

Ag Economy Barometer: Producers more optimistic in October
CME Group
Producer sentiment toward the agricultural economy improved slightly in October, according to a monthly survey of 400 agricultural producers from across the United States.
/goo.gl/cPi9pW

Want More Volatility? Introducing FANG+ Futures
RCM Alternatives Blog
Sick of waiting for volatility to return to the markets? Seems that the folks at ICE are too and they’re doing something about it. [Today], futures on FANG stocks – you know – Facebook, Amazon, Apple, Netflix, and Google – will be traded on the Intercontinental Exchange as a FANG+ futures contract, merging the built-in leverage and liquidity of futures contracts with the seemingly endless promise of today’s five horsemen of techno-wonder.
jlne.ws/2Artqia

APPOINTMENT OF CLEARING CONSULTATIVE PANEL MEMBER
HKEX
The Board of Directors of Hong Kong Exchanges and Clearing Limited (HKEX) today (Wednesday) approved the appointment of Julien Kasparian as a member of the Clearing Consultative Panel to fill the vacancy arising from Stephanie Marelle’s resignation. HKEX wishes to take this opportunity to thank Ms Marelle for her dedicated service to the panel.
/goo.gl/FdEcyX

HKEX 2017 Third Quarter Results
HKEX
The Board is pleased to present the unaudited consolidated results of the Group for the nine months ended 30 September 2017.
/goo.gl/m1UrX3

HKFE ANNOUNCES MARGIN RATES FOR IRON ORE FUTURES
HKEX
Hong Kong Futures Exchange Limited (HKFE), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), has announced margin rates for the TSI Iron Ore Fines 62% Fe CFR China Futures (Iron Ore Futures) that will begin trading on HKEX on Monday, 13 November 2017.
/goo.gl/ScjoCU

Avelacom expands ultrafast connectivity services to access Australia’s capital markets
ASX
Avelacom, a global provider of connectivity and IT infrastructure solutions, has launched a new point of presence (PoP) in the Australian Security Exchange’s (ASX) Australian Liquidity Centre (ALC), Australia’s only data centre dedicated to the financial markets community. The initiative is designed to meet the rising needs of proprietary trading desks and brokerage firms to access Australian capital markets over a single, low-latency network that also connects trading venues in Asia Pacific, Middle East, Europe and North America.
/goo.gl/EEswPF

Euronext publishes third quarter 2017 results; Results driven by volume growth and the contribution from new acquisitions
Euronext
Today Euronext announced its results for the third quarter of 2017.
Strong revenue growth in Q3 2017, up +14.1%[1] compared to Q3 2016, to EUR128.7m, mainly due to:
Improvement of volumes in a stabilised macro environment:
/goo.gl/MLmn9n

ICEX completes first diamond futures contract of ?173 cr
The Hindu BusinessLine
Indian Commodity Exchange (ICEX), the world’s first diamond derivatives exchange, on Wednesday said it has successfully completed its first diamond futures contracts settlement with the total traded quantity in November expiry for 5,382.08 carats valued at ?173.32 crore.
/goo.gl/6oMm6p

Fintech

He’s ‘the ultimate support’ at YCharts — and the company supported him when he needed it
Erin Chan Ding, Blue Sky – Chicago Tribune
What’s it really like to work at Chicago startups and tech companies? Blue Sky’s Inside Job lets people on the ground tell us in their own words.
James Han, 33, Director of Customer Success at YCharts – We’re a financial data provider. Our biggest clients, percentage-wise, would be registered investment advisers. We provide the data so you can make your own recommendations to your clients. A big stakeholder in our company is Morningstar. On top of the data they provide us, we also create our own formulas.
jlne.ws/2ApLCIO

Goldman Sachs leads $10 million investment round in data startup Crux
Anna Irrera – Reuters
Goldman Sachs Group Inc led a $10 million investment in Crux Informatics Inc, a U.S.-based technology startup that enables financial institutions to outsource the processing of data to gain business insights.
/goo.gl/3aziEo

Code mistake freezes up to $280 million in digital currency
Jon Fingas – Engadget
Imagine if one person’s code error deprived you of a pile of money, and there was no guarantee you’d get your funds back. Wouldn’t you be hopping mad? That’s how many cryptocurrency owners are feeling right now. The digital wallet company Parity is warning users that a large volume of Ethereum funds have effectively been frozen after code contributor devops199 claims to have accidentally deleted the library needed to use multi-signature wallets (those that require more than one signature to move funds) created after July 20th. Devops triggered a long-unpatched bug that turned Parity’s wallet contract into a standard multi-signature wallet, making every wallet “suicide” and erase the guiding library code.
/goo.gl/Fj1yot

Politics

Tightening Carried-Interest Loophole May Not Choke Private-Equity Firms After All; New proposal would extend period over which firms must hold an asset before it is eligible for long-term capital gains rate
Miriam Gottfried – WSJ
An amendment late Monday to the tax bill winding its way through the U.S. House of Representatives appears to fulfill President Donald Trump’s promise to close the so-called carried-interest loophole private-equity firms enjoy while also preserving many of the benefits they derive from it.
/goo.gl/chcRuR

Republican Tax Plan Would Slam California Housing Market; Limits on mortgage-interest deduction would affect many buyers in coastal regions around the U.S.
Laura Kusisto – WSJ
California’s biggest housing markets figure to be among the losers if a Republican-sponsored tax overhaul becomes law, according to two analyses of local market data.
/goo.gl/3tcnF3

Democrat Ralph Northam Elected Governor of Virginia; Party officials, who had grown anxious as race tightened, hope victory points to success in 2018
Janet Hook and Joshua Jamerson – WSJ
Democrat Ralph Northam captured the Virginia governorship on Tuesday, beating Republican Ed Gillespie in the first major test of how the Donald Trump presidency has affected swing-state politics.
/goo.gl/nKZTPx

Forbes says Wilbur Ross lied about being a billionaire; Business magazine drops commerce secretary from rich list over disputed net worth
Lindsay Fortado and Shawn Donnan – FT
Forbes business magazine has booted US secretary of commerce Wilbur Ross off its list of the richest people in America for the first time in 13 years, alleging he lied to them about his net worth by more than $2bn.
/goo.gl/RiQ1d9

Regulation

Enforcement Director James McDonald expounds on self-reporting/cooperation guidelines at Chicago-Kent conference
Brad Rosen – Jim Hamilton’s World of Securities Regulation
CFTC Division of Enforcement Director James McDonald provided some additional insights, details, and color regarding the division’s recent efforts to encourage self-reporting and cooperation among industry participants at the 9th Annual Chicago-Kent College of Law Conference on Futures and Derivatives held during the first week of November. In his remarks to an audience consisting primarily of the legal and compliance professionals serving the futures and derivatives industry, McDonald echoed many of the themes he articulated in a speech made before the NYU Institute for Corporate Governance and Finance in September of this year.
/goo.gl/EbAVwC

The Whistleblowers
When employees reveal wrongdoing, instead of being rewarded they are often punished
Ben McLannahan – FT
Nvèr Hasratyan knew within a few hours of joining Wells Fargo in 2013 that he had made a big mistake.
/goo.gl/vUegdC

Randal Quarles seeks more collaboration as Fed regulatory chief; Contrast to predecessor as he says bank will take ‘fresh look’ at stress test methods
Ben McLannahan – FT
Randal Quarles, recently ordained as the most powerful bank regulator in the US, has held out the prospect of a simpler, more transparent and more “collaborative” regime, in his first public remarks since joining the board of the Federal Reserve.
/goo.gl/Hv1ZnG

Wall Street Is Fighting a CFPB Deal Over Billions in Defaulted Student Loans; Faulty practices by debt collectors spur calls for a massive audit. But America’s securitization industry warns there may be consequences for future borrowers.
Shahien Nasiripour – Bloomberg
It seemed like the kind of case regulators had resolved countless times before: Debt collectors are accused of using flawed documentation and lawsuits to collect unpaid loans. A fine is levied, a promise to reform is made, and everyone moves on.
/goo.gl/Z1fLXa

Bond Traders See MiFID’s Silver Lining as Rules Crack Open Data
Katie Linsell – Bloomberg
New EU regime will boost transparency in opaque bond market; Dealers and investors seek trading edge from exploiting data
European bond traders are looking on the bright side of tougher transparency rules — unprecedented market data that can help them make sure they’re not getting ripped off.
/goo.gl/HTsyuD

2018 FINRA Small Firm Conference
FINRA
The Small Firm Conference focuses on small firms’ practices and tips for complying with FINRA rules. Throughout the event, attendees have the opportunity to discuss small firm issues with FINRA senior staff.
/goo.gl/5LMD5f

Watch Out for These 5 Unexpected Costs of Raising a Child
Kaitlyn Kiernan – FINRA
Soon-to-be parents suspect what parents already know—kids are expensive. From diapers to childcare, the big and little expenses add up. But there are a number of other, unexpected expenses that can take new parents by surprise.
/goo.gl/jjQxSe

SEC Warns Investors About Paid-to-Click Scams; Agency Obtains Court Order to Stop “Ad Packs” Ponzi Scheme
SEC
The Securities and Exchange Commission is warning investors to beware online “paid-to-click” scams that promise an easy payday by merely purchasing a membership or an advertising product up front and then clicking on a certain number of online ads each day.
/goo.gl/qS6Rmp

CFTC’s Division of Clearing and Risk Provides No-Action Relief for Three International Financial Institutions from the Swap Clearing Requirement
CFTC
The Commodity Futures Trading Commission’s (Commission) Division of Clearing and Risk (DCR) today provided no-action relief for three international financial institutions from the swap clearing requirement.
/goo.gl/jvH5cs

FCA challenges asset managers to join regulatory sandbox; Few investment firms have answered the regulator’s call to experiment in its safe space
Tabby Kinder – Financial News
The Financial Conduct Authority has urged technology-driven asset managers to join its regulatory sandbox, after admitting it has had limited success attracting investment firms to its campaign to drive innovation.
/goo.gl/GyGV6H

Liquidnet Study Finds Dark Trading Adjusting Ahead Of MiFID II – Report Finds Buy Side Favouring Large-In-Scale Venues Over Broker Dark Pools
Mondovisione
Liquidnet, the global institutional trading network, today published Shape Shifting: Accessing the Dark Post MiFID II research on how buy-side traders plan to trade in the dark once broker dark pools are no longer admissible. Today, 65% of respondents see buy-side crossing networks as their most effective venue for accessing the dark versus 20% who still prefer broker dark pools.
/goo.gl/SU8mgy

Investing and Trading

How Richard Thaler’s theories can help investors
Kevin Murphy – City AM
The thinking of professor Richard Thaler, an expert in behavioural finance, can help you become a better investor, so we were delighted to see him awarded a Nobel Prize in economic sciences.
/goo.gl/x3M3eH

Four reasons why maybe, just maybe, this isn’t a bitcoin bubble
James Titcomb – Telegraph
OK, we can all see it: bitcoin looks a lot like a bubble. It stinks of irrational exuberance: it is incredibly volatile, and not only does its price continue to increase, but it is doing so at ever accelerating rates.
/goo.gl/KMfQaZ

How Wealth Shaped Mitzi Perdue and Blaine Vess
Paul Sullivan – NY Times
Great wealth in America primarily comes from two sources: entrepreneurship and inheritance. In any age, how people work and create great wealth and how others put to use money they inherited, sometimes many generations removed, speak to the complicated feelings people have around wealth.
/goo.gl/SMvfm9

Credit Markets Ripe for Correction, $40 Billion Bond Chief Says
Jonas Cho Walsgard – Bloomberg
Fixed-income head at Norway’s biggest bank girds for repricing; DNB says credit still looks better than government bonds
Corporate bonds are starting to look uncomfortably expensive, according to the head of fixed income at Norway’s biggest bank.
/goo.gl/SXZ9e7

Climate Change Costs a Lot More Than We Recognize; Most estimates ignore the sociopolitical repercussions.
Mark Buchanan – Bloomberg
The latest U.S. government report on climate change illustrates how expensive the phenomenon can be: It estimates that more frequent flooding, more violent hurricanes and more intense wildfires, among other things, have cost the country $1.1 trillion since 1980.
/goo.gl/8Jwg3P

Institutions

IHS Markit automates post-trade lifecycle for cross-currency swaps; IHS Markit has partnered with LCH SwapAgent and CLS to automate settlement and margin payments.
Joe Parsons – The Trade
IHS Markit has launched a new technology solution enabling FX traders to fully automate settlement and margin payments in the cross-currency swaps market.
/goo.gl/566RvW

Goldman Sachs shakes up management in bond trading unit; US bank appoints Jim Esposito and Justin Gmelich as co-chief operating officers in FICC
Martin Arnold, Banking Editor – FT
Goldman Sachs has followed in the footsteps of its main European rivals by overhauling the top management of its stuttering bond trading business that was once the growth engine of the US investment bank.
/goo.gl/2Lgvi9

Deutsche Bank chief hints at thousands of job losses; Cryan sees tech bringing lender into line with peers at ‘half’ its 97,000 headcount
Laura Noonan, Patrick Jenkins and Olaf Storbeck – FT
The chief executive of Deutsche Bank has given his clearest hint yet that his bank could cut tens of thousands more jobs as it turns to technology to bring costs into line with sharply lower revenues.
/goo.gl/w2UF23

Yet Another Bank Stinker Is Holding Back European Stock Bulls
Sofia Horta E Costa – Bloomberg
When European equities aren’t faring as well as expected, blame the usual suspects — banks. Lenders, which as recently as August were outpacing the broader European stock market by the most in 19 months, are turning out to be the biggest laggards of the fourth quarter. Losses on Wednesday spurred by Credit Agricole SA’s less-than-stellar quarterly revenue only worsened the heavyweight sector’s drag on the Stoxx Europe 600 Index, which has underperformed global peers this year.
/goo.gl/aNGdyc

Credit Agricole’s Third-Quarter Trading Slump Mirrors SocGen
Fabio Benedetti Valentini – Bloomberg
Revenue from advising on deals and from asset-gathering rose; Societe Generale also reported decline in trading revenue
Credit Agricole SA’s slump in third-quarter trading revenue rivaled that of Societe Generale SA as the French lender paid for its focus on bond markets.
/goo.gl/gnZUDz

Steven A. Cohen, Andreessen-Backed DIY Quant Fund Struggles; Quantopian investors have lost about 3% since beginning of trading in June; investment chief Jonathan Larkin has left firm
Gregory Zuckerman – WSJ
A quant-trading firm backed by hedge-fund investor Steven A. Cohen and venture-capital firm Andreessen Horowitz has run into early problems.
/goo.gl/RdxLoL

Hedge Funds Are Having Their Best Year Since 2013
Cecile Gutscher – Bloomberg
Hedge funds are headed for their best year since 2013 thanks to a gravity-defying stock market.
/goo.gl/GojfD3

Regions

How to understand the palm oil industry’s inner workings by using big data
Dr. Kalev Hannes Leetaru and Gabriel Thoumi – City AM
Palm oil is an inexpensive and highly versatile vegetable oil derived from the fruit of the oil palm tree. It can be found in half of all consumer goods in Western grocery stores, from chocolate, ice cream, and baked goods to soaps, lotions, and detergents.
/goo.gl/BQxA68

China’s Technology Ambitions Could Upset the Global Trade Order
Jane Perlez, Paul Mozur and Jonathan Ansfield – NY Times
When President Trump arrives in Beijing on Wednesday, he will most likely complain about traditional areas of dispute like steel and cars. But Washington officials and major global companies increasingly worry about a new generation of deals that could give China a firmer grip on the technology of tomorrow.
/goo.gl/qB2rGW

China’s ‘Herd Mentality’ Undermines Beijing’s Interest-Rate Swap Market
Shen Hong – WSJ
The abnormal performance of China’s 11-year-old interest-rate swap market during a recent bond rout offers fresh evidence of how hard it has been for Beijing to foster a culture of risk hedging in the world’s third-largest bond market.
/goo.gl/Hi3dgh

Purge awakens investors to Saudi Arabia risks; Worries centre on whether arrests point to turmoil ahead or a determination to reform
Miles Johnson, Kate Allen and Roger Blitz – FT
Until recently, investors took for granted that whatever damage a lower oil price has inflicted on Saudi Arabia’s once rock-solid finances, they did not need to worry about political stability.
/goo.gl/3znWoc

Beijing Beaten as Pollution in Indian Capital Goes Off the Chart
Iain Marlow and Anindya Upadhyay – Bloomberg
Schools shutdown as experts declare a public health emergency; Political solution to problem hard to find amid blame game
Thick toxic smog enveloped New Delhi for a second straight day on Wednesday forcing schools to shut down, halting traffic on highways and sending residents scurrying to buy air purifiers and filtration masks.
/goo.gl/9Fq48o

Saudi Crackdown Targets Up to $800 Billion in Assets; Authorities detain more prominent businessmen, freeze bank accounts
Margherita Stancati in Beirut and Summer Said – WSJ
The Saudi government is aiming to confiscate cash and other assets worth as much as $800 billion in its broadening crackdown on alleged corruption among the kingdom’s elite, according to people familiar with the matter.
/goo.gl/5QfjpN

Hong Kong Traders Get Vertigo as Stocks Whipsaw to Decade-High
Richard Frost – Bloomberg
Hong Kong’s Hang Seng Index is back on top, but jitters are building. The city’s stock traders may be forgiven for feeling a little nauseous after the benchmark equity gauge swung more than 3 percent in two sessions. Concern China will step up deleveraging sent the index tumbling 1.6 percent early in Monday trading before investor hunger for technology shares helped erase the loss by the close.
/goo.gl/48Fvd5

It’s Harder for Trump to Use China’s Yuan as a Punching Bag Now
Bloomberg News
Currency has gone from loser to gainer during Trump’s term; As candidate, Trump claimed it was kept weak to boost trade
China’s yuan was a regular target for Donald Trump, the candidate. But when he touches down in Beijing this week for his first visit to the nation as U.S. president, he’ll find a lot has changed.
/goo.gl/pogvMx

Brexit

EU citizens to face tougher deportation laws after Brexit
Peter Foster – Telegraph
EU citizens will face much tougher new deportation laws if they commit crimes in the UK after Brexit, the British government has warned.
/goo.gl/MPpRdi

Britain’s post-Brexit bind on trade; The UK is likely to find itself squeezed by both the EU and US on regulation
Alan Beattie – FT
The Legatum Institute proposes; the US disposes. This week began with the UK government’s favourite think-tank arguing a typically optimistic case. Britain, its latest report said, having bounded free from the heavy shackles of the EU single market, could become a global leader in spreading a more balanced, risk-based approach to regulation while still having its rules recognised in Europe.
/goo.gl/yt4atw

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