Breaking News

Big Banks Accused of Stifling Competition in Stock Lending; Rise of Bitcoin Futures Prompts Regulator to Revisit Hands-Off Approach; EU rejects Brexit trade deal for UK financial services sector

First Read

Hits & Takes
JLN Staff

CFTC Commissioner Rostin Behnam said in a speech before the Market RIsk Advisory Committee that in the 18 years since the introduction of the self-certification process for new futures products, 15 exchanges have self-certified 10,628 new products.~SD

There were some Citadel personnel moves recently. Seetharam Gorre, formerly the chief investment officer for Steve Cohen’s Point72, joined Citadel as a managing director and in April, Will Evans, global franchise manager for commodities at Goldman, will join Citadel, too. (Back in August, Point72 snagged Jerrell Watts from Citadel where he was head of algorithmic execution and order routing.)~SD

According to a Global Risk Insights special report on the Belt and Road Initiative, China imports 65-66 percent of its oil and that is set to rise to 80 percent by 2030. That factoid is in the section on energy security. How about those yuan-denominated oil futures, eh? Natural gas, rail lines, regional outlooks, shipping routes – plenty of insight in the roughly 10 pages of content.~SD

Rumi Morales, former head of CME Ventures, was named a Futurist and a “Woman to Watch” by The Helm. The Helm is “a community and a venture fund that rethinks how people invest in female entrepreneurs — a segment of the financial sector that received only 2.5% of all venture capital in 2016 despite consistently outperforming all-male teams.”~JJL

The CME Group will be at E-World 2018~JJL

It is not next week I will be in Washington, DC, for the CFTC TAC meeting, but the week after. Oops!~JJL

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Sponsored Content

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Tax Law Change Means All Cash Grain Traders Are Not Equal, Better Bids or No
John Lothian – JLN

Grain market players who are not part of farmer-owned cooperatives are alarmed over the potential impact on grain market origination of the recent changes to the U.S. tax code. In what appears to be an unintended consequence of bad tax bill writing, cooperatives have been favored over other market players in the form of a tax benefit to farmers for selling their grain to cooperatives rather than to private grain companies.

This change in the way physical grain moves through the system could make it more expensive for consumers, as cooperatives exercise what appears to be newly granted monopoly powers over the cash grain market.

The benefit to the farmer is “a 20 percent deduction on payments for sales of crops to farmer-owned cooperatives,” according to a recent Reuters story.

For the rest of the commentary CLICK HERE.

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Slippery Slope: Let’s Let Markets Decide On New Contracts
Jim Kharouf – JLN

Do exchanges need further regulation on the contracts they launch? That is the question the Commodity Futures Trading Commission is addressing now with the so-called self-certification process for new contracts.

Exchanges have not faced this type of scrutiny over the launch of a new product in recent history until Bitcoin. Several new contract ideas have been squashed by legislation or regulation, including movie futures and onion futures way back when. But for the most part, exchanges are allowed to introduce new contracts as they wish and ultimately let the markets decide on whether or not they offer enough value to trade them, offer them to clients or clear them.

For the rest of the story, CLICK HERE

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The global trading system works when we all play by the rules; As China opens up to the world, its economy is already helping British businesses
Theresa May – FT
In 2018, the global economy is more interconnected and interdependent than ever before. The nature of international trade means that decisions made by governments and businesses in one country can have a deep and lasting impact on workers and high streets half a world away.
/goo.gl/NxYpfq

**A very different tone from May than from Trump. ~JK

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Gary Katz to Receive Joseph W. Sullivan Award at 2018 Options Industry Conference
OCC
The Options Industry Council (OIC), an industry resource funded by OCC, the world’s largest equity derivatives clearing organization, today announced that Gary Katz, former President and Chief Executive Officer of the International Securities Exchange (ISE), will receive the 2018 Joseph W. Sullivan Options Industry Achievement Award.
/goo.gl/Ui6zqt

**First David Krell and now Gary Katz, two people who reshaped the options markets. Well deserved.~JK

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QB Launches Trade Simulation & Ticketing Tools On The Bloomberg App Portal
Quantitative Brokers
Quantitative Brokers (QB), an independent provider of advanced algorithms and data-driven analytics for futures and U.S. cash treasury markets, enhanced its premium execution algorithms and introduced a new trade simulation tool on the Bloomberg App Portal. The two complementary apps (“QB” and “SIMQB”) enable traders to use QB’s electronic trading technology with data and functionality on the Bloomberg Terminal.
/goo.gl/oKR7Ya

***** The new leadership of QB starts to make their mark.~JJL

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Wednesday’s Top Three
Yesterday’s top read items were led by the Chicago Tribune’s piece on Jitesh Thakkar and others charged with spoofing in this week’s major crackdown on the practice by the CFTC, DOJ and FBI. The Tribune’s piece Founder of Chicago firm charged in crackdown on futures ‘spoofing’ took the top spot. Second went to Advantage Trading’s newsletter Inside Advantage which featured pieces on Don Wilson and Blair Hull. Third went to Bloomberg’s Why Crypto Traders Are So Worried About Tether

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Lead Stories

Big Banks Accused of Stifling Competition in Stock Lending; Six firms conspired to boycott upstart trading platform and ‘starve it of liquidity,’ according to suit
Gretchen Morgenson – WSJ
A newly filed lawsuit against six major investment banks contends they worked together to prevent a startup company from competing in the vast and lucrative stock-lending market.
/goo.gl/ZTqY66

Rise of Bitcoin Futures Prompts Regulator to Revisit Hands-Off Approach
Gabriel T. Rubin – WSJ
The top U.S. derivatives regulator is reviewing its process for approving new products, after the launch of bitcoin futures raised questions about whether its hands-off approach should be changed.
on.wsj.com/2GyzMPF

EU rejects Brexit trade deal for UK financial services sector; Brussels negotiators say Europe would benefit from a smaller City of London
Jim Brunsden in Brussels – FT
EU Brexit negotiators have set out a tough line on financial services, ruling out an ambitious trade deal for the lucrative sector and arguing that Europe would benefit from a smaller City of London, according to confidential discussions among the other 27 EU member states.
/goo.gl/GMz1wK

Irish Stock Exchange sale offers ‘pivot towards Europe’; Dublin bourse presents scale as best response to Brexit and technological change
Arthur Beesley in Dublin – FT
The Irish Stock Exchange (ISE) is pivoting to Europe after its sale to Euronext, as the bourse looks to ride out — and even benefit from — the UK’s exit from the EU. The EUR137m deal, excluding cash and regulatory capital, will establish Dublin as the capital markets group’s hub for the listing of debt securities, funds and exchange traded funds.
/goo.gl/LVeptf

Meet the physicists selling time to traders; The UK’s national lab has invented a unified measurement system for high-speed transactions
Philip Stafford – FT
Twenty-first century trading is conducted across continents at speeds incomprehensible to humans.
/goo.gl/WxFEHS

US derivatives regulator looks to calm cryptocurrency fears; Chairman of CFTC eyes measures to protect futures markets from volatile price swings
Gregory Meyer in New York – FT
The main US derivatives regulator has moved to assuage brokers worried that explosive swings in cryptocurrency prices could destabilise conventional futures markets.
/goo.gl/bX1rnn

Nex Group shares jump 8% on expected boost from US tax cuts; Bright spot after earlier profit warning
Philip Stafford – FT
Nex Group, the UK financial technology company headed by Michael Spencer, said on Thursday that it is set to receive a boost to forthcoming earnings from the reforms to the US tax code by president Donald Trump, sending its shares up by over 8 per cent.
/goo.gl/83PjZW

DealBook Briefing: Is Someone Manipulating the Price of Bitcoin?; New questions about Bitcoin’s price
NY Times
Regulators are increasingly worried that Bitfinex, a widely used (and famously opaque) exchange, has been propping it up. The Commodity Futures Trading Commission has subpoenaed the company, whose Tether digital token is often used to buy other virtual currencies.
/goo.gl/fz5rCW

PanXchange Opens Houston Office
PanXchange – Medium
We have hired Mike Hall as director of PXEnergy and manager of the new office. Mike brings with him deep industry expertise in supply chain management with the U.S. Marine Corps, Halliburton and Schlumberger, and, more recently, he has used his previous experience to run a highly successful consulting business in proppants.
/goo.gl/g1e3hQ

Overstock.com And tZERO Advisors Launch Robo-Advisor Digital Investment Platform
Mondovisione
Overstock.com announces the launch of a digitally driven investment platform, powered by tZERO Advisors, within the online retailer’s FinanceHub.
/goo.gl/KgUWfr

Exchanges, OTC and Clearing

CME Group’s Q4 profit soars on $2.6 bln tax gain
Reuters Staff
CME Group Inc, the world’s largest futures exchange, said on Thursday its fourth-quarter profit surged due to a $2.6 billion benefit related to the U.S. tax overhaul.
/goo.gl/VKcPNv

CME Group Inc. Reports Fourth-Quarter and Full-Year 2017 Financial Results
CME Group
CME Group Inc. (NASDAQ: CME) today reported revenue of $900 million and operating income of $537 million for the fourth quarter of 2017. Fourth-quarter 2017 net income included a $2.6 billion net income tax benefit due to recognition of a reduction in deferred tax liabilities as a result of the Tax Cut and Jobs Act of 2017. Resulting net income was $2.9 billion and diluted earnings per share were $8.63. On an adjusted basis, net income was $383 million and diluted earnings per share were $1.12. Financial results presented on an adjusted basis for the fourth quarters of 2017 and 2016 exclude the net income tax benefit noted above and certain other items, which are detailed in the reconciliation of non-GAAP results.
/goo.gl/jTPrHN

CEO CHAT: Craig Donohue, OCC
John D’Antona – MarketsMedia
Technology. Cybersecurity.
Two buzzwords that are firmly entrenched in the financial lexicon – certainly in equities and options markets, among others.
bit.ly/2GAnmXA

2017 CCP Market Share Statistics
Amir Khwaja – Clarus Financial Technology
In this article I look at 2017 CCP market share for OTC Derivatives in Credit, FX and Interest Rates.
bit.ly/2Fwbepc

London Metal Exchange appoints James Cressy as COO
Reuters Staff
The London Metal Exchange has appointed James Cressy as chief operating officer for the LME Group effective immediately, the exchange said on Tuesday.
/goo.gl/zW5X1D

Thomson Reuters FXall appoints new head from NEX Traiana; NEX Traiana veteran Jill Sigelbaum leaves firm after 15 years to oversee FXall business.
Hayley McDowell – The Trade
Thomson Reuters’ foreign exchange electronic trading platform business has appointed a new leader from NEX Traiana.
/goo.gl/6kwNVV

Euronext launches Trade & Leverage programme to increase investor access for European Tech SMEs; German, Italian, Spanish and Swiss newly listed Tech SMEs to benefit from investor access initiative in partnership with experienced European providers
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announces the launch of its new sponsored investor access initiative called “Trade & Leverage”. This programme is designed as part of Euronext’s European Tech SME initiative, which was launched in September 2017 to assist tech companies in developing their business on a greater scale through capital markets.
/goo.gl/R4pcwm

Fixed Income Highlights – January 2018 edition
Eurex
First of all, I’d like to take the opportunity to say a huge thank you to our members and clients who continued to show Eurex strong support throughout 2017, despite grappling with the implementation of MiFID II.
/goo.gl/8zmBYm

Withdrawal of admission of nine Single Stock Futures and two equity options
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG decided to withdraw admission to trading of nine Single Stock Futures and two equity options according to the attachment.
/goo.gl/M3BQAR

EurexOTC Clear: Introduction of EurexOTC Clear Release 8.1
Eurex
With this circular Eurex Clearing announces the introduction of
EurexOTC Clear Release 8.1 on 18 June 2018.
/goo.gl/oe5Q1M

ICE Endex announces results of European gas storage auction for GasTerra
ICE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced the results of the ICE Endex gas storage auction held on January 31 2018, on behalf of GasTerra.
/goo.gl/DuJghC

SGX welcomes Macquarie Futures as Derivatives Trading and Clearing Member
SGX
Singapore Exchange (SGX) today welcomed Macquarie Futures (Singapore) Pte Limited as a Trading and Clearing Member of its derivatives market.
/goo.gl/Mi27jV

ICGN-IIRC Tokyo Conference 2018
JPX
We are pleased to announce that International Corporate Governance Network (ICGN) and International Integrated Reporting Council (IIRC) will hold the “ICGN-IIRC Tokyo Conference 2018” on Wednesday, February 28 and Thursday, March 1, 2018, which is jointly hosted by JPX and TSE as well as Japanese Institute of Certified Public Accountants.
/goo.gl/9obVUG

Trading Overview in January 2018
JPX
Japan Exchange Group released Trading Overview in January 2018.
Cash Equity Market- In January 2018, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 3.3503 trillion; In the ETF market, monthly trading value was JPY 4.4236 trillion.
Derivatives Market – In January 2018, total derivatives trading volume was 27,793,260 contracts.
/goo.gl/2CE2fJ

25th Anniversary Event Held for U.S.-listed SPDR® S&P 500® ETF’
JPX
The Tokyo Stock Exchange, Inc. commemorated the 25th anniversary of the U.S. listing of the world’s largest ETF, the SPDR S&P 500 ETF (TSE: 1557, NYSE Arca: SPY), which is managed by State Street Global Advisors, at a ceremony held at the TSE Arrows Open Platform on Tuesday, January 30th, 2018.
/goo.gl/PLQjeE

Fintech

Davos Elites Still Don’t Get Blockchain
Michael J. Casey – CoinDesk
Every year at the World Economic Forum, a handful of timely, hot-button issues overshadow the myriad other topics consuming the chatter of the attending businessmen, government officials, development professionals, celebrities, journalists and multiple other breeds of wannabe “Davos men.” This year, as with last, a guy called Trump was on everyone’s mind. But that was hardly unexpected. What was truly remarkable, at least for anyone who has been interested in blockchain technology since its relative obscurity only a few years ago, was the degree to which it became one of the uber-themes of #WEF2018.
/goo.gl/g596Cy

BMO Capital Markets Enhances Trading Performance
Mondovisione
BMO Capital Markets (BMO), the investment and corporate banking arm of BMO Financial Group, today announced that it has partnered with Trade Informatics (TI), a leading provider of quantitative analytics and systematic trading solutions to institutional asset managers. TI will provide BMO with transaction cost analysis (TCA) tools to help execute algorithmic trades with improved execution quality.
/goo.gl/ZFpCso

Options Expands Market Data Connectivity With NYSE Integrated Feed
Hedgeweek
Options, the leading provider of global market data and colocation services for trading firms, has today announced direct access to the NYSE Integrated Feed. The new service will be available to clients leveraging Option’s ultra-low latent connectivity and managed colocation platform in Mahwah, Carteret, NY4 and NJ2.
/goo.gl/V96cA6

Singapore’s QQQ Capital Taps Eze Investment Suite for Growth; Eze Investment Suite to Power Operations for USD100M Start-Up
Business Wire
Eze Software, a global provider of investment technology, has signed on QQQ Capital Pte Ltd., Singapore’s new long-term value hedge fund manager, to use Eze Investment Suite to automate its operations. QQQ Capital will be launching the QQQ Capital Feeder Fund, a USD100 million fund focused on technology, education and tourism, in early 2018, and will use Eze Investment Suite to help streamline its front-to-back investment workflows.
/goo.gl/rmrnFA

EBay to Ditch PayPal for Dutch Processor Adyen
Spencer Soper and Julie Verhage – Bloomberg
PayPal will remain as an EBay checkout option until July 2023; Most EBay payments will be processed by Adyen in 2021
EBay Inc. will shift its payments business from long-time partner PayPal Holdings Inc. to Adyen BV, a global payments company based in the Netherlands, further distancing the companies that split in 2015 but remained intertwined through an agreement that fully expires in 2020.
/goo.gl/xC31pV

The $2.5 Billion Plan to Turn Brooklyn’s Navy Yard Into a Tech Hub
David M Levitt – Bloomberg
With old buildings transformed, developer sketches the future; Aim is 5.1 million more square feet at site of warship maker
America may never recover its glory as a manufacturing powerhouse, but the Brooklyn Navy Yard is doing what it can, transforming itself from a 20th-century warship builder to a 21st-century high-tech hub.
/goo.gl/wkvzfy

Square Cash expands bitcoin buying and selling to all users
Fitz Tepper – TechCrunch
A few months ago we wrote that Square’s peer-to-peer payment app called Square Cash was running a bitcoin trial for select users. These users had the ability to buy and sell bitcoin using whatever payment method they had attached to the app.
/goo.gl/RR1Quv

Crédit Agricole bets on blockchain with SETL investment; Crédit Agricole takes minority equity stake in financial blockchain specialist SETL.
Hayley McDowell – The Trade
Crédit Agricole CIB has acquired an equity stake in blockchain specialist SETL in the bank’s first investment in a FinTech company.
/goo.gl/ABtDN8

Politics

Trump’s top health official traded tobacco stock while leading anti-smoking efforts
Sarah Karlin-Smith and Brianna Ehley – Politico
The Trump administration’s top public health official bought shares in a tobacco company one month into her leadership of the agency charged with reducing tobacco use — the leading cause of preventable disease and death and an issue she had long championed.
politi.co/2FyHBDs

****According to the linked filings of her financial records, she did sell her Domino’s Pizza stock at the end of October 2017. At least she didn’t have a large position in one of the “sin stock” funds…~SD

Cubs co-owner Todd Ricketts to be named RNC finance chair
Crain’s Staff
The Republican National Committee is set to select billionaire Todd Ricketts as its next finance chair, replacing casino magnate Steve Wynn, who resigned over the weekend over sexual misconduct allegations.
/goo.gl/echwYB

Trump Powers GOP to Raise Twice as Much as Democrats in 2017
John McCormick and Bill Allison – Bloomberg
Republicans raised $132.5 million, a non-election year record; Cubs co-owner Ricketts succeeds Wynn as party finance chair
The Republican National Committee raised twice as much as its Democratic counterpart last year, boosted by the fundraising power of having President Donald Trump in the White House.
/goo.gl/qFGARu

Trump’s words are disconnected from his actions; State of the Union call for unity comes as president attacks at home and abroad
Edward Luce – FT
Twenty four hours from now, most Americans will have forgotten what Donald Trump said. In his first address to Congress a year ago, the president gave hope to adults around the world. People were encouraged he might be maturing into the job. On Tuesday night, he used his State of the Union address to make it an annual reassurance. By Mr Trump’s standards, it was a balanced speech. If you were hoping to be calmed, Mr Trump delivered. Where there was discord, he brought harmony. And so on.
/goo.gl/MHnpLG

Democrats Say Republicans Secretly Altered FBI-Russia Memo
By Billy House – Bloomberg
Schumer accuses Nunes of interfering with Mueller inquiry
Only two members of committee have seen classified sources
Democrats charged Wednesday night that House Republicans secretly altered a controversial memo drawn from classified information on how the FBI handled an investigation into Russian election meddling before sending it to the White House for review.
/goo.gl/tVFNx6

Trump Jr.’s emails setting up Russian Trump Tower meeting “will never get out,” Hope Hicks allegedly pledged
Graham Lanktree – Newsweek
In an upcoming interview with special counsel Robert Mueller, a former spokesman for President Donald Trump’s legal team is expected to allege that White House Communications Director Hope Hicks wanted to prevent the release of emails in which the president’s son sought dirt on Hillary Clinton.
/goo.gl/k1us3T

Trump is on a Nixonian collision course with the FBI
Michael D’Antonio
Michael D’Antonio – CNN
FBI Director Christopher Wray is forcing the Trump White House to choose between the national interest and President Donald Trump’s political hide.
/goo.gl/bbuUHd

Brexit Politics Goes From Bad to Worse; The split in Britain’s Conservative Party is doing enormous damage.
The Editors – Bloomberg
Political dysfunction is unquestionably aggravating the U.K.’s Brexit nightmare. But the resignation of Prime Minister Theresa May, as some in her own party are calling for, would only make matters worse.
/goo.gl/D8yVwM

Koch Industries’s New Ads Aim to Distinguish Company From Owners’ Politics; Ads during the Olympics and Super Bowl will focus on the industrial conglomerate’s principles of integrity and entrepreneurship
By Alexandra Bruell – WSJ
Koch Industries is launching a new series of ads during the Olympics and Super Bowl to boost the reputation of its corporate brand, as well as quash “misperceptions” by people who only associate the company with its owners’ political views.
/goo.gl/j8468L

Regulation

Two ex-Morgan Stanley advisers to plead guilty to U.S. fraud charges
Nate Raymond – Reuters
Two former Morgan Stanley advisers have agreed to plead guilty to U.S. charges that they misused client funds to invest in a wind farm project they were involved with, federal prosecutors said on Wednesday.
reut.rs/2E5Q1Fm

CFTC Chairman Giancarlo to Testify before the U.S. Senate Committee on Agriculture, Nutrition & Forestry
CFTC
/goo.gl/eJN6G5

Remarks Of CFTC Chairman J. Christopher Giancarlo Before The Market Risk Advisory Committee Meeting
CFTC
This is the first time my new fellow Commissioners and I are appearing together in an official capacity at the agency. It is very good to be with Commissioners (Brian) Quintenz and (Rostin) Behnam. Hopefully, the three of us will have additional company this year.
/goo.gl/EzA5Ws

Opening Statement Of CFTC Commissioner Brian Quintenz Before The CFTC Market Risk Advisory Committee
CFTC
I agree with Chairman Giancarlo’s long held perspective on regulation’s ability to foster financial market innovation. I believe that the self-certification of new financial products can play an important role in realizing that philosophy. Specifically, the self-certification process ensures that the market’s introduction of new products is not delayed by regulators’ political considerations. It reflects the government providing the market with the freedom and space to innovate outside of Washington bureaucracy. I think we all benefit from that free market approach.
/goo.gl/26eV2x

Opening Statement Of CFTC Commissioner Rostin Behnam Before The Market Risk Advisory Committee
CFTC
Ground-breaking new ideas have gone from theory to application in just the past few months. I am especially mindful and appreciative of the Commission’s ongoing efforts to affirmatively exercise its regulatory authority and expertise while remaining ever vigilant of the risks associated with the adoption of nascent technologies.
/goo.gl/QVMZrT

Two ex-Morgan Stanley advisers to plead guilty to U.S. fraud charges
Nate Raymond – Reuters
Two former Morgan Stanley advisers have agreed to plead guilty to U.S. charges that they misused client funds to invest in a wind farm project they were involved with, federal prosecutors said on Wednesday.
/goo.gl/1XgUs4

Carney says no to cryptocurrency anonymity
The Star
Bank of England governor Mark Carney said cryptocurrency payments are often used for money laundering or other illicit activity and he’s against users having their identities kept secret from authorities.
/goo.gl/BAXUHf

Nausicaa Delfas appointed Executive Director of International
UK FCA
The Financial Conduct Authority has today announced the appointment of Nausicaa Delfas as the Executive Director of International.
/goo.gl/zt4bmJ

ESMA appoints new members to its Management Board
ESMA
The European Securities and Markets Authority has appointed two new members to its Management Board to replace two outgoing members who stepped down from their positions in December 2017.
/goo.gl/yuW3rs

Investing and Trading

Shale powers US oil output to heights of 1970; Surge to flows of 10m b/d a day means shake-up for global crude market
Ed Crooks in New York – FT
US oil production has returned to its record high point, 47 years after the previous peak during the final days of the last Texas oil boom, as the shale revolution that was temporarily set back by low crude prices has reignited.
/goo.gl/XucYEF

Shell Makes as Much Money at $60 a Barrel as When It Was $100
Kelly Gilblom – Bloomberg
Earns as much at $60 a barrel as it did when crude was $100; Cash-flow disappointment tempers hope of share buybacks: RBC
The oil-price rally worked both ways for Royal Dutch Shell Plc as improved exploration and production lifted profit to a three-year high while refining and trading fell short of expectations as margins shrank.
/goo.gl/LjsuDa

Shell Confronts the Murky Future for Oil; Van Beurden has kept investors sweet, now he needs to pump up returns.
Chris Hughes – Bloomberg
Ben van Beurden must feel he’s come to the end of a painful journey. Royal Dutch Shell Plc’s CEO has cut the oil major’s debt and secured its dividend. But if that has appeased income investors, he must now turn Shell into a business that actually adds value.
/goo.gl/1vgTq5

Bitcoin’s January Wipeout Made Cryptocurrency Owners $44 Billion Poorer
Fortune
Bitcoin is proving that cryptocurrencies can erase wealth as fast as they create it. Its January slide knocked $44.2 billion off the $200 billion in market value generated in all of last year, the biggest one-month loss in dollar terms in the short history of digital assets.
/goo.gl/47c7Vy

Big Oil Finds Going Green Is Hard to Do; Shell has made the clearest bet on a lower-carbon future but that may cause headaches in the near term
Nathaniel Taplin – WSJ
Thanks to better global growth and OPEC’s grit, oil is testing $70 a barrel again. Oil titans like Royal Dutch Shell RDS.B -0.18% are reveling in the unexpected bounty: the firm posted strong fourth-quarter results Thursday showing earnings up a cool 147% compared with a year earlier.
/goo.gl/Xs5ctU

Insurers gingerly test bitcoin business with heist policies
Suzanne Barlyn – Reuters
Major global insurers are starting to offer protection against cryptocurrency theft, willing to tackle daunting challenges it brings rather than miss out on this volatile and loosely regulated, but rapidly growing business.
/goo.gl/3w7HCB

Some Trades Are Shady, Not All Are Illegal; Using information that no one else has to make money is sort of the point.
Matt Levine – Bloomberg
If you bought short-dated out-of-the-money call options on Bioverativ, Inc. stock, just before its January 22 announcement that it will be acquired for $105 per share (a 63.8 percent premium) by Sanofi, then you did pretty well.
/goo.gl/3nupMV

Short sellers eye better days after Steinhoff and Carillion wins; Accounting sleuths believe a downturn in credit markets will produce opportunities
Miles Johnson and Robert Smith – FT
A rising tide, as the saying goes, lifts all boats. This effect, which has been played out across financial markets for several years, has inflicted pain and frustration on specialist short sellers of stocks and bonds who try and profit by betting against companies they believe harbour accounting irregularities.
/goo.gl/36iYDH

Institutions

Goldman loses more commodities traders in broader overhaul
Catherine Ngai, Devika Krishna Kumar – Reuters
Several key commodities traders are leaving Goldman Sachs Group Inc, sources said on Wednesday, the latest wrinkle as the Wall Street firm seeks to turn around its struggling commodities unit.
/goo.gl/cXJJNa

Wells Fargo’s Quants Pick the Patriots to Win the Super Bowl
Dani Burger – Bloomberg
Formula says New England will cover point spread over Philly; Firm has called 10 of the last 14 winners against the spread
The New England Patriots on Jan. 21. Photographer: Jim Rogash/Getty Images
Picking a winner in the Super Bowl can feel like a crap shoot, but if you ask Wall Street’s rocket scientists they’ll tell you the smart money’s on the New England Patriots.
/goo.gl/f8Dp4f

Jamie Dimon and the dangers of staying too long at the helm; However impressive the individual, long tenures can create big headaches
Patrick Jenkins – FT
If Jamie Dimon fulfils the plan he announced this week, and remains chairman and chief executive of JPMorgan Chase until 2023, he will have been at the helm for 17 years. That is still some way short of the near-half century racked up by John Pierpont Morgan, who founded the eponymous bank in 1871. But in this day and age, it is more than a fair innings.
/goo.gl/qLaaqq

Nomura’s Tricky Translation; Japan’s largest investment bank should take it easy overseas.
Nisha Gopalan – Bloomberg
Can a bank that’s a giant at home flourish as a mid-tier lender overseas? That’s the question Nomura Holdings Inc. needs to ask itself as a booming Japanese equity market offsets a weaker performance from its more internationally focused fixed-income-trading business. The answer is probably yes, but only so long as Nomura can get its domestic clients to stick around.
/goo.gl/LF4VtY

Maitland Further Establishes Position As Prominent Administrator For Uk Listed Funds With Two Guernsey Funds Listing
Financial IT
Today Maitland, one of the leading global advisory and fund administrators for listed funds, announced that it has been chosen as the fund administrator for two Guernsey domiciled funds: Tufton Oceanic Assets and CIP Merchant Capital.
/goo.gl/ChWTWj

BlackRock’s Rick Rieder Is ‘Maniacal’ About Risk in His $33 Billion Fund; The manager of the firm’s Strategic Income Opportunities bond fund is trying to shape a steady winner without taking any big bets.
Brian Chappatta – Bloomberg
Rick Rieder frequently describes himself as “maniacal.” And he’s not alone. BlackRock Inc.’s chief executive officer, Larry Fink, agrees.
/goo.gl/RkuVwF

BMO Capital Markets adds TCA in bid to maximise alpha; BMO Capital Markets will integrate Trade Informatics TCA to maximise alpha, improve workflow and execution quality.
Hayley McDowell – The Trade
BMO Capital Markets has teamed up with Trade Informatics and will use its transaction cost analysis (TCA) to maximise alpha across its trading business.
/goo.gl/51hJFr

Regions

China’s $11 Trillion Bond Market Is Luring Foreign Investors
Emma Dai – Bloomberg
Inflows will rise to $110 billion this year: Deutsche Bank; Winning inclusion in global indexes could spur next wave
China’s efforts to open up its domestic bond market, the world’s third largest, are starting to pay off, by pulling in foreign investors drawn to relatively high yields in a newly stable currency.
/goo.gl/amZmzK

Argentina companies list on U.S. exchanges ahead of expected rate hikes
Walter Bianchi – Reuters
Argentine companies are rushing to list shares on U.S. exchanges beginning this week to beat an expected hike in interest rates by the U.S. Federal Reserve, analysts said, while taking advantage of an improved investor climate under President Mauricio Macri after years of populist rule.
reut.rs/2GBtM8X

Nigeria’s lawmakers think bitcoin is one big financial scam
Yomi Kazeem – Quartz Africa
The bitcoin boom in Nigeria is drawing opposition from its lawmakers. The senate has asked Nigeria’s central bank and other regulators to “investigate the proliferation of bitcoin” and do more to educate citizens about “the dangers” of the cryptocurrency.
/goo.gl/FWku1t

Nigeria’s Corn Output Expected to Fall 7% on Pests, Rising Imports
Ruth Olurounbi – Bloomberg
Production may decline by as much as 750,000 tons in 2017-18; Continent’s most-populous nation is major African corn grower
Nigeria’s corn output for the 2017-18 season will probably decline by as much as 750,000 metric tons due to the impact of pests and increased imports, the producers’ association said.
/goo.gl/SXnQVj

Bitcoin ads disappear from social media in China after central bank bans cryptocurrency fundraising; Growing popularity of ICOs raised concerns that organisers may prey on unwitting investors, with China and South Korea banning such fundraising
Amanda Lee – South China Morning Post
China’s major social media networks and search engines don’t appear to return paid searches or advertisements on bitcoin and cryptocurrencies following a fundraising ban implemented last year by the country’s central bank.
/goo.gl/y2uYpJ

Germany opens anti-trust probe into online advertising
Reuters Staff
Germany’s anti-trust regulator is opening an investigation into online advertising, responding to concerns expressed by advertisers and publishers over the “significant” market position of U.S. platforms Google and Facebook.
/goo.gl/1xCXUk

Arun Jaitley has just killed India’s cryptocurrency party
Nupur Anand – Quartz India
It appears to be the end of the road for cryptocurrencies in India. Finance minster Arun Jaitley, in his budget speech today (Feb. 01), stated that the government will do everything to discontinue the use of bitcoin and other virtual currencies in India. He reiterated that India does not recognise them as legal tender and will instead encourage blockchain technology in payment systems.
/goo.gl/tf2XSU

India Turns Against Bitcoin But Embraces Blockchain
Anto Antony and Archana Chaudhary – Bloomberg
Govt doesn’t consider cryptocurrencies legal tender: minister; ‘People are getting scared’: cryptocurrency exchange official
India’s government said it doesn’t consider cryptocurrencies as legal tender and will take all measures to eliminate payments using them.
/goo.gl/8x7q3j

Australia to tighten foreign investment rules amid China concerns; Fears over Chinese influence prompt curbs on electricity assets and agricultural land
Jamie Smyth in Sydney – FT
Australia is to tighten rules on foreign investment in electricity infrastructure and agricultural land, amid concerns about growing Chinese influence in business, politics and society.
/goo.gl/yWt2Mc

Indian finance minister vows cryptocurrency crackdown; Arun Jaitley to stop use of digital coin for illicit deals as domestic interest in currency surges
Simon Mundy in Mumbai – FT
Indian finance minister Arun Jaitley has promised a crackdown on the use of cryptocurrencies such as bitcoin for illicit purposes, stressing the government does not consider them to be legal tender.
/goo.gl/A2kPBi

How J.D. Power Was Acquired by a Chinese Company Shrouded in Mystery; Hong Kong’s XIO Group, which acquired the U.S. auto-rating firm in 2016, is now embroiled in a dispute about the source of XIO’s funding
Simon Clark – WSJ
A plan for the sale of the car-rating business J.D. Power was a month old when the seller, New York-based information giant S&P Global Inc., SPGI 0.42% grew uneasy. It wasn’t quite sure to whom it had agreed to sell the company.
/goo.gl/m1BMcH

Brexit

EU banking authority to test banks for 8.3% post-Brexit slump; Regulator plans to see how lenders would cope in doomsday scenario
Caroline Binham in London – FT
Banks across the EU are to be tested to make sure they can withstand potential doomsday Brexit consequences, including a severe recession that would leave the bloc’s economy 8.3 per cent smaller than it otherwise would have been.
/goo.gl/yAG1uM

Europe Won’t Need London Finance, France Says
Mark Deen and Heather Harris – Bloomberg
London financial markets not critical for Europe, France says; France is maintaining its tough stance on Brexit negotiations
European companies will do just fine with reduced access to London’s financial markets after the U.K. leaves the European Union, France says, dismissing suggestions they may suffer.
/goo.gl/8E8zME

EU seeks powers to stop post-Brexit bonfire of regulation; UK could face tax blacklists and sanctions to prevent it undercutting continent’s economy
Alex Barker and Jim Brunsden in Brussels – FT
The EU is threatening sanctions to stop Britain undercutting the continent’s economy after Brexit, including “tax blacklists” and penalties against state-subsidised companies, according to a leaked strategy paper.
/goo.gl/yRNeYu

Miscellaneous

California mulls state-owned bank for cannabis industry
Jennifer Bissell-Linsk – Financial Times
California is considering setting up a state-owned bank for its newly legalised cannabis industry, which it says has to operate mainly in cash due to federal regulations blocking access to traditional banking.
on.ft.com/2Fw3B1U

Ex-HSBC Trader Scouts Financiers to Become Born-Again Coders
Marie Mawad – Bloomberg
Le Wagon sells a 9-week curriculum to students in 27 cities; Candidates are changing careers and starting companies
An ex-HSBC Holdings Plc trader who quit his job to learn code is persuading his former colleagues to follow in his footsteps.
/goo.gl/LtUkWo

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