Breaking News

Bitcoin Futures Prices Fall in CME Debut; Why the Germans are right about economics

First Read

Hits & Takes
By JLN Staff

RJO has shot a holiday video featuring Gerry Corcoran and some of their staff. They even sang “Santa Baby,” featuring employees from across the organization. ~JJL

Interesting, or a yawn? Day one futures volumes in Bitcoin at CME totalled 1,088 contracts with open interest of 233. Cboe posted volume of 4,127 contracts on its first day, a wild price day and 1179 in the January contract yesterday. ~JK

You can make a donation to your favorite charities by using Amazon Smile when you buy items from Amazon. Go to Smile.Amazon.com.~JJL

The New Yorker has a fascinating article in the latest issue called “Estonia, the Digital Republic.” The title pretty much says it all – Estonia is doing some remarkable things with technology, in particular around identification and record keeping. (Fun fact – Skype was created in Estonia.) The link to the story is HERE.
(Also see a story on Estonia’s cryptocurrency plans below under Regions.)~SR

On 7th and 8th December, close to thirty SGX employees participated in the inaugural SGX #Innovate Hackathon held at SGX Centre. Via LinkedIn ~JJL

Asia Pacific Financial News from John Lothian News – December 18, 2017 – John Lothian News (JLN)

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Giving After the bitcoin gold rush: Could blockchain change the way we give money to charity?
Ben Meyerson – Chicago Tribune
Bitcoin’s huge surge has put cryptocurrency in the spotlight. Finance giants like CME and CBOE are bringing bitcoin into mainstream trading markets, and big businesses are looking into other uses for the underlying blockchain tech.
/goo.gl/UKpMN8

***** What industry is not impacted by blockchain?~JJL

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Bitcoin futures on the world’s biggest derivatives exchange signal the boom isn’t over yet
John Detrixhe – Quartz
Bitcoin futures started trading last night on CME Group, the world’s largest futures exchange, and prices so far signal traders think the digital asset could climb higher. Last week, Cboe Holdings also launched bitcoin futures, which give traders a way to speculate on what prices will be at some later date. Both futures contracts traded at $19,400 or higher today UK time, compared with bitcoin’s actual spot price of around $18,860.
/goo.gl/c1GJUx

****** It ain’t over until it is over.~JJL

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Maverick Trading Approves Bitcoin Trading for Firm’s Traders
Maverick Trading
Maverick Trading, one of the top-ranked proprietary trading firms, recently approved Bitcoin as a trading instrument for its traders. Beginning January 2nd, 2018, traders in the firm’s Options division will be approved to trade Bitcoin options as well as Bitcoin futures.
/goo.gl/PGBvv4

***** No word on whether Goose would have approved.~JJL

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Monday’s Top Three
Our top three items on Monday were led by CME Group’s Bitcoin Futures Quotes page. Second went to City A.M.’s Bitcoin price rise makes creator Satoshi Nakamoto one of world’s richest billionaires. A tie for third went to The Wall Street Journal’s Bitcoin Futures Manipulation 101: How ‘Banging the Close’ Works and the CFTC’s CFTC Launches Virtual Currency Resource Web Page

 

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Lead Stories

Bitcoin Futures Prices Fall in CME Debut; About $100 million worth of CME bitcoin contracts changed hands, outpacing the launch a week earlier at its smaller competitor Cboe
Alexander Osipovich – WSJ
CME Group’s new bitcoin futures fell on their first day of trading, as the Chicago-based exchange giant pushed forward into the rapidly expanding market for cryptocurrency derivatives.
/goo.gl/W7uypf

Why the Germans are right about economics; Policy must be about justice as well as growth, as mainstream politics has learnt
Gideon Rachman – FT
At the height of the euro crisis, Mario Monti, the former Italian prime minister, liked to remark that part of the problem was that “for Germans, economics is still part of moral philosophy”. The suggestion was that the German instinct was to assign blame rather than to fix the problem — and was followed up with a reminder that the German words for guilt and debt are the same.
/goo.gl/yw7ov5

Blockchain Capital Sees Bitcoin on Nasdaq in 2018
Bloomberg Markets
Spencer Bogart, head of research at Blockchain Capital, examines the trade of bitcoin futures and what he expects for the cryptocurrency in 2018. He speaks on “Bloomberg Markets: European Close.”
/goo.gl/LtvwXk

**Bogart’s take on the supply/demand characteristics of the bitcoin market.

Blockchain fervour evokes memories of dotcom bubble; LongFin is latest small-cap to surge in value after flirtation with digital currencies
Nicole Bullock and Robin Wigglesworth in New York – FT
When shares in a company led by a self-styled “global techno entrepreneur” and “financial wizard” increase tenfold on news that it has acquired a digital currency business, the echoes of the dotcom bubble are too loud to ignore.
/goo.gl/Vu9EbC

Singapore central bank warns against investing in cryptocurrencies
Reuters Staff
Singapore’s central bank issued a warning against investment in cryptocurrencies on Tuesday, saying it considers their recent price surge to be driven by speculation and that there is a risk investors could lose all their capital.
/goo.gl/6tbCNP

South Korean cryptocurrency exchange to file for bankruptcy after hacking
Reuters Staff
A South Korean cryptocurrency exchange said on Tuesday it is shutting down and is filing for bankruptcy after it was hacked for the second time this year, highlighting concerns about security as trade in bitcoin and other virtual currencies boom.
/goo.gl/mmcpy4

Peterffy: Bitcoin futures’ launch on two reputable exchanges will make bitcoin ‘even more popular’
Evelyn Cheng – CNBC
Interactive Brokers Chairman Thomas Peterffy says the launch of bitcoin futures on established exchanges improves the reputation of the cryptocurrency; “I think as a result it will become even more popular than it’s been before,” Peterffy said in an interview with CNBC’s Rick Santelli; Peterffy’s comments contrast with earlier statements in which he said CME’s launch of bitcoin futures “could bring down the entire economy.”
/goo.gl/sf1oa6

FX rulebook toughens up on ‘last look’
Philip Stafford – FT
The code of conduct governing the $5.1tn-a-day global foreign exchange market has been toughened up in an effort to reassure customers over potential misuse of the controversial “last look” practice.
/goo.gl/2Tmrhe

China issues new code of conduct to tame overseas investors; New guidelines set out 36 dos and don’ts to bring order to booming sector
Frank Tang – South China Morning Post
Beijing has imposed a 36-point code of conduct for the country’s private enterprises to follow in overseas investments as the government seeks to clip the wings of China’s most aggressive global deal makers.
/goo.gl/U7sHTK

LCH becomes first to clear credit index options; LCH’s CDSClear platform has been extended to include credit index options clearing.
Hayley McDowell – The Trade
LCH has extended its CDSClear platform to include the clearing of credit index options as it looks to bring its members additional funding, capital and operational benefits.
/goo.gl/7gioy8

China Unveils an Ambitious Plan to Curb Climate Change Emissions
Keith Bradsher and Lisa Friedman – NY Times
China is the world’s No. 1 polluter. It burns more coal than the rest of the world combined. It produces more than a quarter of the world’s human-caused global warming gases, nearly as much as North America and Europe put together.
/goo.gl/Rz8mFC

Bitcoin Unifies CEOs Who Agree on Little Else: It’s `Dangerous’
Camila Russo – Bloomberg
The line of business leaders warning about a bitcoin bubble just got a lot longer. Yale University’s Chief Executive Leadership Institute surveyed 87 corporate leaders last week on aspects of the economy and politics, from the U.S. tax bill to recognizing Jerusalem as Israel’s capital. Virtually nothing on the list brought them closer to consensus than hating the cryptocurrency.
/goo.gl/Eu7tak

Bitcoin Is Challenging the Entire Concept of Venture Capital; The cryptocurrency craze is leading to some novel tactics from prominent tech investors.
Joshua Brustein – Bloomberg
In the salad days of bitcoin, venture capital firms bought into the craze in a roundabout way. Instead of simply purchasing bitcoins, they invested in companies like Coinbase, which makes a wallet for digital currencies, or 21.co, which aimed to improve the process of mining coins. Some of these bets were better than others. 21 has changed names and business plans, but Coinbase’s app hit the No. 1 spot on Apple’s App Store this month as the hyperventilation over bitcoin reached an extreme.
/goo.gl/EfYMXm

Euro Option Traders See Quietest Christmas Since Currency Began
Vassilis Karamanis – Bloomberg
Troubled that increasing illiquidity in the euro could widen its recent range versus the dollar and upset your Christmas? Option pricing seems to have a straightforward answer: don’t be.
/goo.gl/QY2S4b

Bond Underwriting in Europe Is a Story of Capitulation
Mark Gilbert – Bloomberg
Recent years have been painful for European banks. Slower than their U.S. peers to bolster balance sheets after the financial crisis, negative interest rates in the euro zone have crimped their profits. And in the international bond market, where companies and government agencies raise finance, business is being stolen by their American competitors.
/goo.gl/A7p4uJ

Exchanges, OTC and Clearing

NYSE EXTENDS GLOBAL IPO LEADERSHIP FOR SEVENTH CONSECUTIVE YEAR; 89% of Tech Proceeds Raised at the NYSE
ICE
The New York Stock Exchange (NYSE), a wholly owned subsidiary of Intercontinental Exchange (NYSE:ICE), continued to build on its leadership as the premier venue for global capital raising with $31.3 billion in proceeds from 88 transactions in 2017, almost twice the capital raised by any other exchange in the world. The NYSE also listed each of the last 32 IPOs raising $700 million or more.
/goo.gl/xH6yvP

LCH’s CDSClear Launches Credit Index Options Clearing
LCH
LCH becomes the first CCP to clear credit index options; CDSClear launches clearing of credit index options on the IHS Markit iTraxx Main 5Y and IHS Markit iTraxx Crossover 5Y indices; Expansion of CDSClear will bring members and clients additional funding, capital and operational benefits
LCH, a leading global clearing house, today announced that it has extended its CDSClear platform to include the clearing of credit index options. This addition to LCH’s credit derivatives clearing service follows the launch of CDX high-yield clearing in July 2017.
/goo.gl/ZLC6HP

Property derivatives: Delisting of IPD® UK Annual All Property, UK Annual All Retail, UK Annual All Office and UK Annual All Industrial Index Futures
Eurex
Due to the fact that trading activities in IPD® Index Futures is now undertaken solely in the IPD® UK Quarterly All Property Calendar Year Total Returns Index Futures that were initially listed 9 March 2015, the Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG resolved, effective 29 December 2017:
/goo.gl/zM8Fg2

FAQ on MiFID II/MiFIR: changes in minimum Block Trade sizes for Eurex products
Eurex
On 8 December 2017, Eurex Exchange published the revised minimum Block Trade sizes (MBTS) to ensure all Trade Entry Services (TES) trades qualify for pre-trade transparency waivers under MiFIR regulations (Circular 140/17). Please see below a list of answers to the most frequently asked questions:
/goo.gl/Zp2pH5

SGX to report 2Q FY2018 results on 19 January
SGX
Singapore Exchange (SGX) is reporting its second-quarter (2Q) results for Financial Year 2018 (FY2018) after the market closes on 19 January 2018. The announcement will be posted on www.sgx.com and the results briefing will be held as follows:
/goo.gl/CMD9uQ

MarketAxess loses top European executive on eve of Mifid II; Electronic trading venues are set to benefit from new rules coming into force in January
Samuel Agini – Financial News
MarketAxess, an electronic venue for trading bonds, has lost one of its top executives in Europe with less than two weeks until sweeping new trading rules come into force.
/goo.gl/Xo8zBF

Fintech

MTS buy-side sales manager departs for role at FlexTrade; Manuela Bauer spent more than two years with London Stock Exchange, most recently as a buy-side sales manager for MTS.
Hayley McDowell – The Trade
FlexTrade has appointed a new multi-asset sales director who has joined the firm from the London Stock Exchange Group’s (LSEG) fixed income platform MTS.
/goo.gl/JnjpAv

The Bitcoin Boom: In Code We Trust
Tim Wu – NY Times
You don’t need brilliant financial analysis skills to notice that Bitcoin is in a bubble. It has grown in value from about 39 cents to over $18,000 in just eight years and recently attracted broad media attention by doubling in just a few days. The conventional wisdom had been that illegal and illicit transactions — buying drugs or transferring money out of Argentina — accounted for much of Bitcoin’s value. Today the mainstream view sees mere greed and speculation.
/goo.gl/m6tfTz

Fintech Startups Seek to Shake Up Money Transfer Industry; Remittance startups aim to reduce time, cost required to send money internationally by using the latest technology
Corinne Abrams – WSJ
MUMBAI—The race is on to become the top global app for international money transfers.
/goo.gl/EDrs6G

Which Digital Currency Will be the Next Bitcoin?; Litecoin is benefiting from bitcoin’s surging popularity
Paul Vigna – WSJ
Investors in cryptocurrencies are hoping lightning strikes twice, as the outsize recent gains in bitcoin are encouraging migration to several digital relatives.
/goo.gl/k2pou3

SoftBank Leads $120 Million Funding in Fintech Startup Lemonade
Julie Verhage – Bloomberg
Lemonade had raised $60 million prior to this new round; Previous backers include Google Ventures and Sequoia Capital
SoftBank Group Corp. is betting that technology can overhaul the home insurance industry by leading a $120 million round in Lemonade Inc.
/goo.gl/dETVAS

Inside the Big Plan to Make Ethereum Go Mainstream; In the leaderless world of Ethereum it is one man’s job to spearhead the network’s next phase of development.
Matthew Leising and Brad Stone – Bloomberg
Cryptocurrencies have exploded in 2017. But while prices are surging, transactions are facing long delays because the networks are flooded with traffic. This is the problem facing the Ethereum network, which, along with its digital currency ether, has quickly become the world’s No. 2 cryptocurrency after Bitcoin. And one man, Vlad Zamfir, has a plan to fix it. This week, Bloomberg’s Matthew Leising and Brad Stone speak to Zamfir about his big dreams for Ethereum and how his project (codenamed Casper) could pave the way for masses of ordinary internet users to join in the craze.
/goo.gl/TNMBSk

BlackRock’s Edge: Why Technology Is Creating A $6 Trillion Amazon Of Wall Street
Antoine Gara – Forbes
On a large flat-screen monitor perched in front of a framed orange-and-blue Warhol print of Teddy Roosevelt as a Rough Rider, BlackRock’s chief operating officer, Rob Goldstein, is looking over the entirety of the financial firm’s $6 trillion in global assets–135 teams with positions in hundreds of markets in 30 countries. He is using software that he’s been perfecting for the 23 years he has spent at the company. A simple gray column on the left reveals BlackRock’s activity on this quiet pre-Thanksgiving day: There are some 25,000 trade orders in the market, 77,000 trades and thousands of collateral calls. A wider view colorfully identifies the specific portfolio managers and traders initiating the moves.
/goo.gl/SZ7Wbp

Politics

A Bold Strategy to Save Trump From Trumpism; The administration’s stated vision for restoring U.S. dominance stumbles over its inherent contradictions.
Hal Brands – Bloomberg
The officials charged with writing President Donald Trump’s first National Security Strategy, released Monday afternoon, faced a nearly impossible task. Given that Trump’s policies and rhetoric have often seemed calculated to undercut rather than advance U.S. global leadership, there were only three possible outcomes of the strategy-crafting exercise, none of them particularly good.
/goo.gl/LPY523

Farmers Sue to Reinstate Obama Lawsuit Rule Trump Killed; Chicken growers would have had more leverage in antitrust claims against big agriculture. Now they feel betrayed.
Deena Shanker – Bloomberg
Last year, rural Americans who believed Donald Trump’s promises to help small farmers played a key role in putting him in the White House. Since then, the Republican administration’s Department of Agriculture moved to block an Obama-era rule that provided those farmers with a powerful tool to fight anti-competitive conduct by big agriculture. So now some of those farmers have sued.
/goo.gl/vG2kFk

China Says Trump Risks U.S. Leadership With Security Shift
Bloomberg News
Strategy speech perpetuates ‘you win, I lose’ mentality’; President accused Beijing of challenging American influence
China accused President Donald Trump of shirking the U.S.’s global leadership role, a day after his first national security strategy branded the country a “revisionist power.”
/goo.gl/no4Ews

Ground Zero for Flooding: Washington’s Trump International Hotel
Bloomberg
The U.S. federal civilian buildings most exposed to floods are concentrated in the capital. The numbers—and the potential cost to taxpayers—are staggering.
/goo.gl/o946ZM

Trump and Putin, closer than ever
Kevin Liptak, CNN
After President Donald Trump spoke by phone on Sunday from a cabin at Camp David to his Russian counterpart, Vladimir Putin, the press release describing their call featured something unusual: an exclamation point.
/goo.gl/Wz64St

Regulation

Jailed Barclays Trader Must Pay $400,000 From Libor Profits
Suzi Ring – Bloomberg
Jay Merchant serving 5 1/2 year sentence for rigging Libor; Merchant pays more than other Barclays traders combined
A former Barclays Plc trader, who is serving a 5 1/2 year prison sentence for rigging Libor, must pay back nearly 300,000 pounds ($400,000) in profits and legal costs that were considered proceeds from the crime.
/goo.gl/pQqJ9S

ESMA provides guidance on cross-border investment services and MiFID transposition
ESMA
The European Securities and Markets Authority (ESMA) issued today guidance to national competent authorities (NCAs) and market participants on the topic of continuity of cross-border provision of investment services in the transition between MiFID I and MiFID II, including in the event that there is late transposition of the Directive by some Member States.
/goo.gl/tFwJc7

ESMA updates its MiFID II Q&As on transparency and market structures
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers regarding transparency and market structures issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
/goo.gl/by2C9M

ESMA updates its Q&As on MiFID II/MiFIR Investor Protection topics
ESMA
The European Securities and Markets Authority (ESMA) has added 10 new Q&As to its Questions and Answers (Q&A) document on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). The new Q&As cover the topics of inducements, suitability, and provision of investment services and activities by third country firms.
/goo.gl/b2G1Wd

FINRA Updates the OTCBB/OTC Equities High Price Dissemination List
FINRA
FINRA is publishing its quarterly OTCBB/OTC Equities High Price Dissemination List for the third quarter of 2017. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of December 18, 2017. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter December 15, 2017 as the “Start” date and December 18, 2017 as the “End” date.
/goo.gl/1h41dB

Holiday Reminder Regarding ORF Market Data
FINRA
In observance of Christmas, the ORF system will be closed on Monday, December 25, 2017. Furthermore, in observance of New Year’s Day, the ORF system will be closed on Monday, January 1, 2018. As stated in the data feed interface specifications, FINRA may send out unmarked test data via its data feeds on market holidays. Direct data feed subscribers, including recipients of the Trade Data Dissemination Service 2.0 (TDDS 2.0) and Bulletin Board Dissemination Service (BBDS) feed(s) should take the necessary precautions to prevent data corruption. Thank you for your attention to this matter. Please contact FINRA Operations at (866) 776-0800 if you have any questions.
/goo.gl/gcAGfV

Spread-Betting and a Bitcoin-Shaped Hole in the Rules
Lionel Laurent – Bloomberg
The regulatory backlash against risky financial spread-betting is mounting. European regulators unveiled harsher-than-expected plans to restrict the speculative financial products late on Friday, sending shares of stock derivatives brokers tumbling on Monday.
/goo.gl/AxRXw4

Here’s how the U.S. and the world are regulating bitcoin and cryptocurrency
Francine McKenna – MarketWatch
An image of Bitcoin and US currencies is displayed on a screen as delegates listen to a panel of speakers during the Interpol World Congress in Singapore on July 4, 2017.
Regulators all over the world have begun to address the challenges presented by virtual currencies that bypass regulated banks, financial firms exchanges and central clearinghouses.
/goo.gl/xCVkzK

Hong Kong’s Securities and Futures Commission proposes new rules amid rising China players in fund industry; The SFC wants new rules to reduce risks and strengthen regulation of fund industry, which is flooded with mainland newcomers
Enoch Yiu – South China Morning Post
The Securities and Futures Commission has proposed a number of rules on fund houses and their custodians to address risks posed by financial innovation and strengthen regulation in Hong Kong’s fund industry which is flooded by newcomers, according to a consultation paper issued by the regulator on Monday.
/goo.gl/Y8hcjH

Japan’s FSA may reduce maximum FX leverage to 10 times
Reuters
Japan’s financial watchdog could consider reducing the maximum leverage currency margin trading platform operators can offer to investors to 10 times from the current 25 times, a senior Financial Services Agency official said on Monday.
/goo.gl/XeevKz

FCA stops unlawful foreign exchange investment scheme
UK FCA
Following an application by the FCA, the High Court yesterday made orders against a number of persons involved in carrying on an unauthorised foreign exchange investment scheme. The scheme took in at least £1.2 million from 65 investors but none of the investors’ money was ever used in foreign exchange trading or any other type of investment.
/goo.gl/VP4nWg

EBA Guidelines on Operational and Security Risks under PSD2
UK FCA
On 12 December 2017 the European Banking Authority published final Guidelines (link is external) on security measures for operational and security risks of payments services under the revised Payment Services Directive (‘the Guidelines’).
/goo.gl/UQfc9n

Investing and Trading

Spread betters fall on talk of crackdown
Harry Wilson, City Editor – The Times
A warning from the European financial markets watchdog of a clampdown on spread betting led to sharp falls in the shares of London-listed trading businesses aimed at individual investors.
/goo.gl/ax7YmD

CalPERS invests more in fixed-income to reduce portfolio risks
Robin Respaut – Reuters
Pension fund giant CalPERS said on Monday that it would increase its allocation of fixed income to 28 percent from 20 percent in order to reduce risks in its $346 billion portfolio.
/goo.gl/4hdw4y

The Flawed Bull Case for Bitcoin; The huge amount of computing power needed for a bitcoin transaction is causing delays and leading to high transaction fees
Aaron Back – WSJ
Amid all of the bitcoin nuttiness this year, some advocates for the cryptocurrency are making a reasoned argument that it could more than double in value from here. Unfortunately for bitcoin holders, the argument is flawed in two important ways.
/goo.gl/pRAJjY

Stock-market volatility isn’t going to come roaring back: Morgan Stanley
Ryan Vlastelica – MarketWatch
One of the most notable characteristics of the U.S. stock market in 2017 was how quiet it was, with major equities hitting a record number of records on little volatility. This environment has been very good for investors, and it may not end soon.
/goo.gl/AhUpWY

LongFin stock nearly quintuples after buying a blockchain company
Anora M. Gaudiano – MarketWatch
It was a wild ride, however. By noon on Monday, the stock skyrocketed to a high of $142.82, but since retreated to close at $72.38, which still marked a gain of 229% and values the company at more than $4 billion. Last week, its market capitalization was around $265 million.
/goo.gl/BgF5Nb

Institutions

Hedge Fund Managers Expect a 39% Bonus Bump
Sonali Basak and Simone Foxman – Bloomberg
Odyssey Search Partners surveyed 500 buy-side investors; Private equity professionals looking for 14% increase
Hedge fund professionals are expecting year-end bonuses to climb 39 percent at the end of this year, according to a survey of 500 buy-side investors. That view may be too optimistic, said a partner at the firm that did the polling.
/goo.gl/edmmDn

A Bitcoin Hedge Fund’s Return: 25,004 Percent (That Wasn’t a Typo)
Nathaniel Popper – NY Times
There are hedge funds with blockbuster returns. Then there is the Pantera Bitcoin Fund. The fund — one of the first in the world to dedicate itself to virtual currencies — released its returns in a letter sent to investors on Tuesday. The figure for the life of the fund, which was set up in 2013, is eye popping: 25,004 percent.
/goo.gl/jNDNBv

This Hedge-Fund Activist Might Be Better Off Passive; Mick McGuire is doing well. But not by turning around companies.
Joe Nocera – Bloomberg
I’ll say this for Mick McGuire, Activist Investor™: The man knows how to make a buck. As 2017 winds down, his hedge fund, Marcato Capital Management LP, is up around 24 percent, five percentage points better than the S&P 500 index. To put it another way, the 41-year old Bill Ackman protege is doing what hedge-fund guys are always striving for, but so often fall to accomplish: He’s “creating alpha.”
/goo.gl/jtLL2M

Regions

Estonia’s Estcoin cryptocurrency plans are moving forward with global ICO hub ambitions
Lynsey Barber – City AM
An eastern European country which made history by introducing the first ever virtual residency has revealed that it will move forward with plans for creating its own version of bitcoin.
/goo.gl/LrvvXM

Britain’s Love for Coffee Doesn’t Show Any Sign of Going Away
Agnieszka De Sousa – Bloomberg
Nation led gains in numbers of branded coffee shops in Europe; Consumer confidence ‘relatively stable’: Allegra Strategies
The U.K. led growth in branded coffee shops in Europe for a third straight year amid an expansion of chains from Starbucks Corp. to Costa Coffee Ltd.
/goo.gl/DTyDec

Venezuela’s Bond Investors Are Wondering If They’ve Been Dumped
Katia Porzecanski – Bloomberg
Sovereign bond investors haven’t got a payment since September; Government is overdue on $700 million of sovereign coupons
Venezuela investors are worried they’re getting ghosted. That’s the concern among a growing number of sovereign bondholders six weeks after the government’s mysterious announcement that it would seek to restructure its debt while also continuing to pay what’s owed in the meantime. It’s now been a month since a creditor meeting in Caracas produced no specific proposals, and as overdue bond payments pile up without any word from officials, the relationship looks to be on rocky ground.
/goo.gl/EmoepT

China’s Scaled-Down Carbon Market Still Ranks as World’s Biggest
Bloomberg News
Initial program will be limited to the nation’s power sector; To cover 3 billion metric tons of emissions, 1,700 companies
The world’s biggest polluter is going to need the world’s biggest carbon market in its fight against smog.
/goo.gl/oCX6aW

Qatar Central Bank Starts Probe Into Possible Riyal Manipulation
Shaji Mathew and Dana El Baltaji – Bloomberg
Says manipulation is an attempt to hurt Qatar’s economy; Regulator hires Paul, Weiss, Rifkind, Wharton & Garrion
Qatar’s banking regulator started a legal investigation into the possible manipulation of its currency, securities and derivatives markets.
/goo.gl/4rAfHR

Sweden’s Central Bank Poised to Give the Krona a Boost; The rhetoric coming from the Riksbank suggests the odds of interest-rate hikes have increased.
Lars Christensen – Bloomberg
Following the global financial crisis in 2008, central banks increasingly focused on providing so-called forward guidance that would make clear where they expected monetary policy to head. To a large extent, monetary policy works through a concept known as the “expectations channel,” which is the ability of central banks to influence the outlook for growth and inflation among investors.
/goo.gl/TVM7U4

South Korea financial regulator says ‘virtual currencies’ are not currencies
Reuters Staff
South Korea’s Financial Supervisory Service said on Tuesday it does not consider bitcoin and other cryptocurrencies to be currencies of any kind and would not seek to regulate their trade beyond rules announced last week.
/goo.gl/Voc5f6

Bitcoin not yet proven as credible currency: Japan finance minister
Reuters Staff
Japanese Finance Minister Taro Aso said on Tuesday that bitcoin has not been proven to be a credible currency and that he would watch its developments in the near-term.
/goo.gl/sD7eJc

Brexit

Brussels signals tough stance on UK bank bonuses after Brexit; Commission plans to tighten scrutiny while ruling out trade deal for financial services
Jim Brunsden in Brussels – FT
Investment banks in Britain would have to stick closely to EU rules on issues such as bonus caps after Brexit, under proposals the European Commission is set to make on Wednesday.
/goo.gl/EcRvpi

Michel Barnier Doubles Down on Brexit
Robert Hutton and Svenja O’Donnell – Bloomberg
EU chief negotiator rules out special deal for U.K. banks; Key ministers support gradual move away from EU regulation
European Union Chief Negotiator Michel Barnier dug in and stressed a hardline trade position just as U.K. Prime Minister Theresa May’s key ministers were starting to unite behind a Brexit policy that may soothe rifts in her Cabinet.
/goo.gl/KvVP7B

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About Author

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