Breaking News

How a volatility virus infected Wall Street

virus

First Read

Hits & Takes
JLN Staff

At yesterday’s IFM Smart Financial Regulation Roundtable: Implications of Cryptocurrencies in Washington DC, Rostin Behnam, commissioner, Commodity Futures Trading Commission, was asked if he could change one thing about the crypto markets what would it be? He said it would be regulation of the cash crypto markets, although not necessarily by the CFTC.~JK

Also, Angela Walch, associate professor, St. Mary’s University School of Law made one of the more stunning comments about the crypto markets, which she said feature several powerful so-called miners, dispelling the notion that these markets are decentralized and uncontrolled by any one or by a few entities.~JK

@distledger brings their Distributed: Markets event to Navy Pier on Monday, April 23. Speakers include Julie Winkler from the @CMEGroup, https://twitter.com/coinlist?lang=en@Coinlist‘s @Andy_Bromberg, @MatthewRoszak from @Bloqinc, and @jgarzik from @MTNToken. Visit the site markets.distribtued.com for more information and to register.~JJL

Please join the Chicago Bar Association Futures and Derivatives Law Committee on Wednesday, April 18th at 12:00 pm at the CBA (321 S. Plymouth Ct.) to hear Simon Puleston Jones, Head of Europe at FIA, discuss the impact of a “no deal” Brexit on the cleared derivatives industry.~JJL

Yesterday was another chock full JLN Options newsletter.~SD

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Light at the End of the Tunnel – Pat Kenny and Ryan Moroney, CQG

JohnLothianNews.com

With MiFID II preparations in the rearview, CQG can now focus on expansion – its biggest push being into mainland China.

In this special two-for-one video from JLN’s annual series with industry leaders, CQG SVP of Client Relations Pat Kenny and President of CQG Europe and the Americas Ryan Moroney discuss CQG’s international plan, getting into the algo space and adapting to the needs of traders.

Watch the video and read the rest here »

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The share of American young adults living with their parents is the highest in 75 years
Dan Kopf – Quartz
Parents in the US cannot get rid of their kids. The share of young adults in their late 20s living with their parents is the highest it’s been in 75 years.
/goo.gl/Lw92Cu

*****Think affordable housing shortage.~JJL

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The Periodic Table
Steve Grob – Fidessa
I read with interest, and some dismay, Sam Agini’s great piece in Financial News yesterday about Marcus Ferber writing to ESMA be-moaning periodic auctions. Perhaps the most asinine comment attributed to Mr Ferber is that some such mechanisms are a “blatant attempt to undermine the Mifid II provisions aiming at having a larger share of trading in the light”. It is hard to know where to start in deconstructing this statement, but let me have a go anyway.
/goo.gl/MhQmw3

***** Steve Grob being Steve Grob.~JJL

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Financial Services and Cryptocurrency Experts To Meet in Chicago For Distributed: Markets 2018; Leaders from The State of Illinois, CME Group, CBOE, Bloq, Ripple, CoinList, FINRA and Chamber of Digital Commerce to speak on emerging trends of blockchain technology in financial markets.
BTC Media
Navy Pier’s iconic Grand Ballroom will soon host premier financial markets executives as well as cryptocurrency insiders to explore how the next generation of financial institutions will be established. Distributed: Markets will cover a wide range of hot topics facing legacy institutions, as well as explore dilemmas facing blockchain technology enthusiasts who aim to innovate and disrupt.
/goo.gl/xYVeQr

***** Chuck Mackie will be moderating a panel at the event.~JJL

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Wednesday’s Top Three
Our top read piece yesterday was one of a new chapter, RCG’s announcement Rosenthal Collins Group Appoints Steve Ivey Chief Risk Officer. Second and third again were the appeals to two families in need: the Gofundme appeal from former Nymex and Comex staff member Anthony Di Benedetto for medical and foreclosure expenses and a separate Gofundme appeal for the wife and family of James Burns, who died suddenly of a heart attack at the age of 49. Thanks to all who have contributed in their time of need. It’s what makes this industry great.

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MarketsWiki Stats
123,321,605 pages viewed; 23,068 pages; 212,682 edits
MarketsWiki Statistics

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Lead Stories

How a volatility virus infected Wall Street; The collapse of a few small funds in February helped fuel a terrifying stock-market slide. Why?
Robin Wigglesworth – FT
Music teacher Chris Pomrink was driving between two lessons outside Philadelphia, when a friend called with some distressing news: “Hey Chris, XIV is in trouble.”
/goo.gl/5X5aCb

China Considers Looser Curbs on Stock-Index Futures
Bloomberg News
Proposal would increase daily trading limit by five-fold; Companies that own futures brokerages rise in Thursday trading
China is considering a relaxation of stock-index futures trading curbs that were introduced during the nation’s 2015 market crash, people familiar with the matter said.
/goo.gl/Yx1NGb

Traders gamed financial system to manipulate Euribor, court told; Serious Fraud Office opens case against five ex-traders alleging they tried to rig key rate
Barney Thompson in London – FT
Five former traders gamed the financial system with the aim of swindling people by conspiring to manipulate a key interbank interest rate, prosecutors for the UK’s Serious Fraud Office told a London court.
/goo.gl/SNDi23

JPMorgan sued over fees for cryptocurrency purchases
Dena Aubin – Reuters
JPMorgan Chase & Co has been hit with a lawsuit in Manhattan federal court accusing it of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards in late January and began treating the purchases as cash advances.
/goo.gl/iZYyY2

TOCOM to sign MoU with Net Energy Group
TOCOM
The Tokyo Commodity Exchange (TOCOM) and Net Energy announced today the April 10th signing of an MoU. Net Energy provides an oil trading platform and brokerage services in North America. The MoU will strengthen the linkage of crude oil trading between the North American and Asian markets.
/goo.gl/MQ4dhd

Another Giant Crypto Exchange Is Moving to Tiny Malta
Andrea Tan – Bloomberg
Malta, the tiny island nation in the middle of the Mediterranean, is fast becoming a hub for some of the world’s biggest cryptocurrency exchanges. OKEX Technology Co., whose virtual currency venue is ranked No. 4 by traded value on Coinmarketcap.com, has “decided to make Malta a foundation” for its growth, the Hong Kong-based company said on its website Thursday. It’s at least the second major crypto exchange to embrace the country after Binance, the world’s largest, announced plans to open an office there last month.
/goo.gl/xCejH7

Esma urged to fight ‘blatant attempt’ to dodge Mifid II share rules; German MEP Markus Ferber urges the regulator to look into the trading of shares in ‘periodic auctions’
Samuel Agini – Financial News
One of the authors of Europe’s vast new trading rulebook has called on regulators to investigate “blatant” attempts to undermine the goal of moving more share trades onto traditional stock exchanges.
/goo.gl/BEvsid

Segregated Funds, Market Crashes & Under-Seg
Tod Skarecky – Clarus Financial Technology
Today I want to look briefly at the reported solvency of FCM’s during the most recent market panic.
Back on February 5th of this year, the US equities market suffered a volatile day and significant losses. The Dow Jones index had its worst ever one-day loss in terms of points (down 1,175), and other indices were similarly hit. The story of the day was that volatility was back in the equities market, with the volatility “index” (the VIX) more than doubling during the day. Further, crowded trades betting against volatility, such as in the inverse VIX (the XIV), saw losses of 90%, as prescribed hedging/selling had to take place. Interest rates were also volatile with the 10-year rate off 6 basis points, and just about every asset class saw some sort of panic.
/jlne.ws/2IO9Aky

****Tod’s last post with Clarus before he takes some time off!!

China suspends OTC options market to curb risks: sources
Reuters Staff
China has halted its loosely-regulated and fast-growing over-the-counter (OTC) options market in the government’s latest effort to reduce risk in the financial system, according to sources at brokerage firms.
/jlne.ws/2IJAlX6

Digital Asset names JP Morgan veteran to spearhead ASX project; Stewart Cowan will join ASX as a senior product manager in Digital Asset’s Sydney office.
Jon Watkins – The Trade
Digital Asset has hired Stewart Cowan a 17-year JP Morgan veteran to play an integral role in the transformational blockchain project with the Australian Stock Exchange (ASX).
/goo.gl/X2qKNx

Amid Trade Feud, Recycling Is in Danger of Landing on Trash Pile; China’s planned tariffs on scrap aluminum, tougher quality standards squeeze market; ‘nobody has the capacity that China has’
Bob Tita – WSJ
Add scrap paper, plastic and metal to the growing list of U.S. products facing new barriers in China.
/goo.gl/u2EBRg

The Yield Curve Is Flattening Relentlessly
Brian Chappatta – Bloomberg
The spread between 5- and 30-year Treasury yields, as well as the gap for 2- and 10-year maturities, tumbled Wednesday to the lowest levels since 2007, at 37.2 basis points and 45.7 basis points, respectively. The flattening accelerated after consumer price index data came in largely as expected, perhaps bringing other market-moving events, like President Trump’s threat of a missile attack on Syria, into focus. “CPI, or any other economic data release, is a back-burner item when you have so much geopolitical risk on the forefront,” Tom di Galoma, managing director of government trading and strategy at Seaport Global Holdings, said in an email.
/goo.gl/AFdiqt

Exchanges, OTC and Clearing

Euronext raises EUR500m in return to bond market
Philip Stafford in London – FT
Euronext, the pan-European exchange, has issued its first bond since regaining its independence in 2014, raising EUR500m to finance its purchase of the Irish stock exchange.
/goo.gl/XRrX7y

Global Collateral partners NEX to streamline margin calls
Finextra
DTCC-Euroclear Global Collateral Ltd (GlobalCollateral), a joint venture of Euroclear and The Depository Trust & Clearing Corporation (DTCC), and NEX, a financial technology company at the centre of the global markets, today announced a new partnership to streamline and improve OTC derivatives margin call processes.
/jlne.ws/2IId1cs

Moscow Exchange To Expand Commodity Derivatives Offering
Press Release
Moscow Exchange will facilitate investments in popular financial commodity instruments, and open up new opportunities for precious metals producers and consumers to trade on the Derivatives Market.
-Light Sweet Crude Oil futures and option contracts will be launched in April 2018.
-Deliverable Gold futures contracts will be introduced in September 2018.
/jlne.ws/2IHfpA3

Jump in LME aluminium stocks stokes worries over Russian supply
Henry Sanderson – FT
Inventories of aluminium on the London Metal Exchange rose by 9 per cent on Thursday, raising fears that Russian metal is being offloaded following US sanctions against producer Rusal.
/goo.gl/P8o8ER

SGX welcomes Rifa Futures Limited as Derivatives Trading Member
SGX
Singapore Exchange (SGX) welcomes Hong Kong-based Rifa Futures Limited (Rifa Futures) to its derivatives market as a Trading Member.
/goo.gl/UQhMj1

SGX to continue to offer trading in Indian derivatives despite NSE ban; The exchange said it would introduce proprietary Indian equity derivatives products in June 2018
Samie Modak – Business Standard
The Singapore Exchange (SGX) will continue to offer trading in Indian derivatives even as its partner National Stock Exchange (NSE) has decided to terminate licensing agreements for providing indices and securities-related data feed services to the foreign counterpart.
/goo.gl/oRucpb

Rusal brands and US sanctions – Notice (PDF)
LME
/goo.gl/NcuGch

Admission withdrawal of twelve Single Stock Futures and two equity options
Eurex
Due to previous corporate actions, the Management Board of Eurex Deutschland decided the admission withdrawal of twelve Single Stock Futures and two equity options, as outlined in the attachment.
/goo.gl/884z5H

Extension of trading hours for selected benchmark futures and MSCI futures to 21 hours
Eurex
Eurex Deutschland plans to extend its trading hours for selected equity index, fixed income, volatility and MSCI futures into the Asian time zone in December 2018.
/goo.gl/mMVTPB

Fintech

Ex-Goldman Trader Teams Up With Millennials to Make AI Dark Pool
Will Hadfield and Annie Massa – Bloomberg
Mathematical formulas, scrawled in red and black, cover a glass wall. The office is small, but the three men who work there, dressed in jeans and sneakers, hovering around an array of computers, have big plans. They want to run a stock market, and they say they and their algorithms can do what even their leanest competitors would need 80 human beings to achieve.
/jlne.ws/2JEcF7J

JP Morgan trading team develops machine learning model for equity desk; Asia Pacific equity trading desk at JP Morgan Asset Management is seeking to have 50% of trading flow driven by machine learning by the end of the year.
Hayley McDowell – The Trade
JP Morgan Asset Management’s equity trading team has developed a new model using machine learning to make the execution of orders more efficient and less expensive.
/goo.gl/DFm9Xf

JPMorgan takes stake in analytics platform start-up; Start-up developing platform to deal with faulty trades entered into a bank’s system
Laura Noonan in London – FT
JPMorgan is expecting big advantages in the way it prevents and resolves faulty trades after taking a significant minority stake in a start-up developing an industry-wide platform to deal with the trading problem of “exceptions”.
/goo.gl/XAxK42

AlgoTrader appoints new operating chief amid US expansion; Richard Chmiel will lead AlgoTrader’s growth in the US with a focus on cryptocurrencies.
Hayley McDowell – The Trade
Swiss algorithmic trading services provider AlgoTrader has appointed a new chief operating officer in New York as it looks to expand its business in the US.
/goo.gl/TvofKo

Bloomberg reinstates market data on Russian groups hit by sanctions
Philip Stafford in London – FT
Bloomberg, the data and information provider, has reinstated pricing data for listed companies hit by last week’s US sanctions on Russian high-profile billionaires and government officials.
/goo.gl/64aHny

Why Facebook’s data scandal has not become a wider crisis; Zuckerberg grilling shows it is hard to spell out specific harms of data collection
Richard Waters – FT
It is nearly four weeks since the Cambridge Analytica scandal erupted, and something surprising has happened.
/goo.gl/7yZ31B

Facebook Can’t Remain a Benevolent Dictatorship; Tech companies’ top-down approach to corporate governance is not responsive enough.
Conor Sen – Bloomberg
As lawmakers grill Facebook CEO Mark Zuckerberg this week, it’s clear many are wrestling with whether and how the government should regulate tech companies. A recurring question is whether they have any inherent ideological biases.
/goo.gl/vwi9vA

Lloyds to Boost Algos at FX Desk in London by 2019
Stefania Spezzati – Bloomberg
Machine trading will be used for currency-desk operations; Demand comes from largest corporates, financial institutions
Lloyds Banking Group Plc plans to modernize parts of its trading room in London by increasing the use of machine-trading to meet the demands of clients, according to people with the knowledge of the project.
/goo.gl/8tfPzY

Cryptocurrencies

The Number of Cryptocurrency Exchanges Has Exploded
Kai Sedgwick – Bitcoin.com
In bitcoin’s earliest days, you could count the number of cryptocurrency exchanges on two hands: Mt Gox, Bitstamp, Btc-e, Vircurex and a handful of others, as well as P2P exchange Localbitcoins. Today, the landscape has changed dramatically. There are now over 500 exchanges to choose from – and that number is growing with every passing week.
/goo.gl/6oPGrm

Sequoia Capital’s Raanan launches cyber-focused fund
Reuters Staff
Gili Raanan, general partner at Sequoia Capital Israel, has raised $50 million for a new venture capital fund called Cyberstarts.
/goo.gl/KvedqE

Bittrex shuts down new user signups few hours after opening it
Vignesh S – Crypto-News.in
Bittrex is one of the world’s largest Cryptocurrency exchange. It is the 7th largest exchange in terms of trade volume and had a 24 hour trade volume of $238 Million. At its peak, Bittrex was one of the top three exchanges. But with the demand for cryptocurrencies exploding last year, they could no longer keep up with the demand. So they shut down new user sign ups and eventually lost business to newer exchanges like Binance.
/goo.gl/cbBURj

Gamers And Investors Bet Big On Cryptocurrency And Blockchain In The Gaming Industry
Rachel Wolfson – Forbes
While Bitcoin struggles to make it above $7000, the value cryptocurrency can provide outside of the trading realm is becoming evident within the billion-dollar gaming industry.
Cryptocurrency and blockchain technology were hot topics during the Game Developers Conference (GDC) that took place in San Francisco last month. As I made my way through the record-breaking crowd of 28,000 industry professionals, I constantly heard “cryptocurrency” and “blockchain” being mentioned.
/jlne.ws/2Hjm7z4

How Can I Get Free Cryptocurrency From an Airdrop?
Nathan Reiff – Investopedia
In the cryptocurrency space, already prone to extreme levels of interest by digital money enthusiasts, some of the most-hyped events are airdrops. An airdrop is an event in which a cryptocurrency developer issues free coins or tokens to a user base, sometimes as a result of a hard fork and sometimes as part of a promotion or other change in network design. The key for most investors is becoming aware of the airdrop phenomenon before it takes place. If you find out too late, you’ve missed out on your chance for free tokens or coins. Fortunately, a report by decentralpost.com provides cryptocurrency investors with tools to gain more advanced notice about these special promotions and giveaways.
/jlne.ws/2He2E2Z

Cryptocurrency service launched to UK wealth managers; Enables clients to buy and sell some of the largest cryptocurrencies
Mike Sheen – Investment Week
Global specialist cryptocurrency brokerage BCB Group has launched a bespoke service enabling wealth managers and other investors to integrate cryptocurrency trading services for retail or institutional clients onto their platforms.
/goo.gl/NHPbR2

Bitcoin Purists Appear to Saying Goodbye to ‘HODL’ Life
Janine Wolf – Bloomberg
With Bitcoin settling in a narrower trading range following its dramatic price collapse, it seems the “HODL” life is no more. At least that’s suggested by data collected by one Reddit.com user who noted the relationship between the number of times the term “HODL” was used in postings on the site and the changes in cryptocurrency market capitalization.
/goo.gl/dyzTK3

SEC preparing cryptocurrency fraud crackdown, Jay Clayton’s biggest enforcement move yet
Charles Gasparino – FOX News
SEC could bring dozens of bitcoin fraud cases over next year: Gasparino

FBN’s Charlie Gasparino on why the SEC could bring dozens of bitcoin fraud cases over the next year.
/goo.gl/AzFkk3

Townhouse Listed for $30 Million—or $45 Million in Bitcoin; A hedge-fund founder and tech investor is listing his Manhattan townhouse for almost $30 million—or $45 million in digital currency
Katherine Clarke – WSJ
A longtime proponent of digital currencies is listing his brick-and-mortar home for almost $30 million.
/goo.gl/G9pQsn

Once-Surging Crypto Stocks Face Delisting and the End of an Era
Lily Katz – Bloomberg
Long Blockchain, Longfin are set to be removed from Nasdaq; Both firms pivoted to blockchain amid digital currency craze
That didn’t take, uh, long. Long Blockchain Corp. and Longfin Corp., two firms whose shares skyrocketed last year after they rebranded as blockchain businesses, are set to be ousted from the Nasdaq Stock Market. Their removal signals the end of a brief era when everyone from soft-drink companies to cigar makers was cashing in on investors’ mania for cryptocurrencies and their underlying technology.
/goo.gl/XAkM7Y

$658 Million Cryptocurrency Fraud Allegation Spurs Vietnam Probe
John Boudreau, Rai Ngoc Chau – Bloomberg
Vietnam’s deputy prime minister ordered an investigation into allegations of a cryptocurrency scam involving $658 million, the latest report of fraud to hit the lightly regulated market for initial coin offerings.
/goo.gl/9w9hAF

Bitcoin Buyers Now Have to Figure Out Their Taxes
Lily Katz, Lynnley Browning – Bloomberg
Even accountants unclear on how to treat complex transactions; Many investors are declaring their holdings for the first time
If you thought trading Bitcoin was wild, try figuring out how to pay taxes on it. Cryptocurrency investors are wrestling with spotty records, tangled blockchain addresses and rudimentary guidelines issued back in the ancient days of 2014. After last year’s boom in values, many people are likely disclosing transactions for the first time, adding to confusion.
/goo.gl/BKGDa8

Politics

Goldman’s Blankfein decries ugly US politics; Upbeat economy failing to filter through to politics, he says
Laura Noonan in London – FT
Goldman Sachs chief executive Lloyd Blankfein has described politics in the US as being “as bitter and as negative” as he has known in his lifetime, and says the traditional link between the tone of politics and the economy has broken.
/goo.gl/SD7n7B

How Trump Could Imperil His Presidency by Firing Mueller
Justin Sink, Steven T. Dennis
Republican lawmakers warn the move would be political suicide; President is said to have discussed dismissing Mueller’s boss
President Donald Trump risks plunging his administration into political calamity ahead of a crucial midterm election and deepening his legal jeopardy if he takes the drastic step of firing Special Counsel Robert Mueller.
/goo.gl/SMR83T

Ex-Speaker John Boehner Joins Marijuana Firm’s Advisory Board
Jennifer Kaplan – Bloomberg
Former Massachusetts Governor William Weld also added; Watershed moment for cannabis as drug goes mainstream
The U.S. marijuana industry has a new spokesman: John Boehner.
/goo.gl/UVEkAB

Trump’s Tweets Make Russia’s Top Export More Valuable Than Ever
Alexander Nicholson – Bloomberg
They might just be rolling in the aisles over at the Russian Finance Ministry. A budget windfall could be on the way. Donald Trump’s gleeful warning that Russia should “get ready” for a missile barrage in Syria sent the ruble to its lowest level in 16 months. At the same time, it unnerved oil traders, who pushed the price of Brent to a more than three-year high on fears of supply disruptions.
/goo.gl/vR4t3E

Regulation

Bari Havlik Joins FINRA as Executive Vice President, Member Supervision
FINRA
The Financial Industry Regulatory Authority (FINRA) announced today that it has named Bari Havlik as Executive Vice President for Member Supervision. In that capacity, Havlik will be responsible principally for leading FINRA’s Member Regulation program, which includes surveillance and examination programs for member firms. She will replace Susan Axelrod, who is leaving FINRA after 28 years of service, and will report directly to FINRA CEO Robert Cook. Havlik will start on April 30.
/goo.gl/WV93sL

Octani Capital’s AFS licence cancelled
ASIC
The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services (AFS) licence of WA-based Octani Capital Pty Limited (Octani Capital).
/goo.gl/VAfqfK

Investing and Trading

ISDA Board Statement on Narrowly Tailored Credit Events
ISDA
The International Swaps and Derivatives Association, Inc. (ISDA) today published a statement from its Board of Directors on reported instances of narrowly tailored credit events and a process to consider improvements to the efficiency of the credit derivatives market.
/goo.gl/vd1EUZ

Volatility looks set to stay with many big swings in 2018; S&P 500 index touched a record late January but has since fallen more than 7%
Joe Rennison in New York YESTERDAY – FT
If you are an equity investor trying to pick the dominant theme of 2018, there is plenty of choice.
/goo.gl/KKAcr7

The Family Office World Grapples With How to Confront Big Corporations; Should private wealth embrace shareholder engagement and even shareholder activism?
Simone Foxman, Emily Chasan – Bloomberg
John D. Rockefeller founded Standard Oil Co. and as a result was the richest person on the planet when he died in 1937. Yet some of his 200-plus living descendants have embarked on a mission to challenge Standard Oil offspring Exxon Mobil Corp. on climate change.
/goo.gl/ChoSrx

It’s Tough to Trade With These Violent Mood Swings: Taking Stock
Arie Shapira – Bloomberg
The leg up in stock futures at ~5am is tough to attribute to much, though Trump did release a flurry of tweets after 6am that could be helping the market’s cause. One was throwing shade on the NY Times report that said he wanted to fire Mueller in December, while another said an attack on Syria may be “not so soon at all,” which is a bit less draconian than his “Get ready Russia” tweet from yesterday morning.
/goo.gl/1Smiz6

‘Go to Zero’ Isn’t Great for Short Sellers; It’s hard to bet on disaster, because that’s when bets tend not to get paid off.
Matt Levine – Bloomberg
he way short selling works is that, if you want to bet against a stock, you borrow it from someone who owns it, and then you sell it to someone else.
/goo.gl/PJzDK1

Winners All Around in Europe’s Corporate Bond Market; Redemptions, falling yields, widening spreads are good news for issuers and investors.
Marcus Ashworth – Bloomberg
Europe is awash in corporate bond mandates and syndicated deals from sovereigns, blotting away memories of the tricky time the market had in March. This could wind up being one of the biggest weeks of the year. And the outlook is good — there’s still some way to go before indigestion strikes.
/goo.gl/ozmvc5

Institutions

Flush With Cash, Canadian Banks Poised for Expansion and Takeovers
Doug Alexander – Bloomberg
The ‘Big 6’ banks approach highest capital strength in 5 years; Nation’s lenders have $11 billion excess capital, analyst says
Canadian banks have amassed their biggest war chest in five years — and they’re ready to use it.
/goo.gl/ZBS7rV

Man Group reports strong net inflows, tough environment in Q1
Jennifer Thompson – FT
Man Group reported strong net inflows for the first quarter but the world’s largest publicly traded hedge fund group said a tougher environment in early 2018 had hurt performance in some strategies.
/goo.gl/AVWKXq

Worried About Your Tax Bill? Hedge-Fund Star John Paulson Owes $1 Billion; The investor’s once-in-a-lifetime bet before the financial crisis made him $4 billion. Now the IRS wants its cut.
Gregory Zuckerman – WSJ
John Paulson won fame after he made one of the greatest financial bets of all time. What comes next? One of the largest-ever personal tax bills.
/goo.gl/sLF1pM

BlackRock Reports $55 Billion in Long-Term Net Inflows; iShares ETFs hauled in the majority of the firm’s new investor cash
Allison Prang – WSJ
BlackRock brought in just under $55 billion in long-term net inflows for the first quarter of this year, with its massive exchange-traded fund business pulling in the bulk of that new investor cash.
/goo.gl/Y9buo4

Surging Libor, Once a Red Flag, Is Now a Cash Machine for Banks
Yalman Onaran – Bloomberg
JPMorgan, Citi poised for billion-dollar bump to revenue; Deposit rates barely budge while loans get more profitable
A surge in one key short-term interest rate 10 years ago was a harbinger of a crisis that nearly broke the U.S. banking system. A similar jump this year will probably add billions to the industry’s bottom line.
/goo.gl/XnGQqj

BlackRock ETF Flows Fall 46% as Volatility Hits Global Markets
Sabrina Wilmer – Bloomberg
Assets under management rose to $6.3 trillion in first quarter; Asset manager beats estimates driven in part by lower tax rate
Even as BlackRock Inc.’s growth appears unstoppable, there are signs the firm isn’t invincible.
/goo.gl/Ysa1cX

Barclays Ex-Security Head Asked to Leave After Expense Probe
Stephen Morris – Bloomberg
Troels Oerting, now at WEF, charged meals to bank, sources say; Former executive also embroiled in Staley whistle-blower probe
Troels Oerting, Barclays Plc’s former head of information security, was asked to leave the bank after he was found to have billed personal expenses to the company, according to people familiar with his departure.
/goo.gl/BbDKCF

Deutsche’s investment bank chief rules out radical changes; Garth Ritchie’s comments come as some investors and analysts urge deeper cuts
Laura Noonan in London and Olaf Storbeck in Frankfurt – FT
Deutsche Bank’s new investment bank boss has ruled out radical surgery to his division and said there will be no new strategy unveiled, while also telling colleagues there will be some cuts to underperforming areas.
/goo.gl/vSMCns

Wall Street Lending Could Rise by Billions in U.S. Proposal
Jesse Hamilton – Bloomberg
Revised leverage ratio might free up $121 billion in capital; Banks have been eagerly anticipating proposal from Fed and OCC
U.S. regulators are poised to ease leverage limits for Wall Street banks, potentially freeing up tens of billions of dollars for lending and other business activities in the latest move to relax post-crisis financial rules that the Trump administration blames for stifling growth.
/goo.gl/yGNRLd

Regions

Shocked commodity traders ask who might follow Rusal; US decision to target aluminium producer has put market on edge
David Sheppard and Neil Hume – FT
Commodity traders who have watched US sanctions effectively remove Russian aluminium giant Rusal from the market are asking one simple question: who might be next?
/goo.gl/ByLhau

Russia ready to prop up Deripaska’s Rusal as US sanctions bite; Moscow pledges temporary liquidity for casualties of Washington move
Henry Foy and Kathrin Hille in Moscow – FT
The Russian state stands ready to provide short-term liquidity to Rusal, the aluminium producer led by Oleg Deripaska that has been savaged by US sanctions, in Moscow’s first concrete move to support the biggest casualties of Washington’s most painful economic measures against the country.
/goo.gl/Mkg9jM

Beijing’s tariffs threaten 65% cut in US soyabean sales to China; Data analysis from Purdue suggests impact could be bigger than some analysts expect
Emiko Terazono in London – FT
US soyabean exports into China could plunge by almost two-thirds if Beijing proceeds with its proposed 25 per cent tariff, according to a study by academics at Purdue University in Indiana.
/goo.gl/4EtmEF

Brexit

EU financial regulators warn against risks for EU financial markets, Brexit, asset repricing and cyber-attacks key risks
ESMA
The securities, banking and insurance sectors in the European Union (EU) face multiple risks, the latest report on risks and vulnerabilities by the Joint Committee of the European Supervisory Authorities (ESAs) shows.
/goo.gl/L7yXrH

U.K. Won’t Pay Brexit Bill Until Trade Deal Is Clear, Davis Says
Tim Ross – Bloomberg
Parliament wants detail before agreeing divorce terms: Davis; Says future trade framework won’t be legal text by October
The British Parliament could block the Brexit deal if the European Union fails to offer a detailed blueprint for the future terms of trade with the U.K., Brexit Secretary David Davis said.
/goo.gl/sSChjq

Brexit fragmentation
Christian Voigt – Fidessa
MiFID brought market fragmentation to Europe back in 2007. In broad strokes incumbent exchanges lost market share to newcomer MTFs predominantly located in the UK. For UK stocks this meant that the fragmentation occurred within their home country, whereas EU27 stocks moved partly to London.
/goo.gl/rTaQuY

Miscellaneous

Reuters Names Recipients Of New Thomson Reuters/White House Correspondents’ Association Trust In Reporting Scholarships
Mondovisione
Reuters, the world’s largest international multimedia news provider, today announced the recipients of two new Thomson Reuters/White House Correspondents’ Association Trust in Reporting Scholarships. The annual one-year scholarships were designed to increase diversity among professional journalists reporting on politics and are available to students of Grambling State University and Arizona State University graduate journalism programs. Recipients will also have access to training and workshops with the Reuters news organization.
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