Hits & Takes
ICE posted another record volume year in 2018, with fourth quarter volumes up 20 percent and open interest increasing 10 percent from a year earlier. Average daily volume records for the year included: gasoil up 10 percent; Title Transfer Facility gas up 23 percent, West Texas Intermediate crude up 5 percent and interest rates up 14 percent. Emissions posted a record year and record Q4, up 72 percent and 72 percent, respectively~SR
Eurex volumes rose 23 percent in December, largely on equity index trading, which jumped 38 percent to 96 million contracts for the month, up from 142.4 million a year earlier.~JK
STAC is hosting a women’s breakfast and speaker event during its annual conference. The event takes place on Thursday January 17th from 9-10:30 am at the Chicago Hilton and Towers, 720 S. Michigan Ave. at the Williford Room, 3rd floor. The featured speaker is Wendie Lloyd and the topic is Living Fearless. For more information and to register, go here. ~SR
Donnie Roberts is president and CEO of the new retail futures exchange that is pending regulatory approval, the Small Exchange, founded by tastytrade’s Tom Sosnoff and Peak6 founders Matt Hulsizer and Jenny Just.~JK
CNBC reports U.S. mortgage applications have collapsed at a 94 percent annual rate to the lowest level since 2000, just ahead of that recession.~JJL
The U.S. Treasury Department says that the national debt has increased by $2 trillion ($2,000,000,000,000) since President Trump took office on Jan. 20, 2017.~JJL
Another thought about the IRS not issuing tax refunds because of the ongoing government shutdown in the US. This will be a drag on economic growth in the first part of the year and take some investment funds away from the market, which is used to a infusion after the April 15 tax deadline. Add that to the tariffs, which act like a tax, and you have the makings of slower economic growth.~JJL
New York Governor Andrew Cuomo said that not fully closing the L train subway line between Manhattan and Brooklyn for repairs would be a “phenomenal benefit to the people of New York City.” Is something not being as awful as it could be a “phenomenal benefit”?~SD
In the middle of widespread risk-off sentiment yesterday, Brazil’s Ibovespa index hit a record high of 91,564. ~SD
Happy 10th birthday to the Bitcoin network.~JJL
Radio and TV agricultural reporter Max Armstrong posted on Twitter: A UNFORGETTABLE DAY…January 4, 1980. It was a Friday. Then President Carter embargoed grain sales to the Soviet Union to punish them….38 years before President Trump slapped punitive tariffs on China. Both events sent shockwaves through the U-S agriculture community.~JJL
US warns citizens about travel to China; Advisory comes amid heightened tensions after Huawei executive’s arrest
Aime Williams – The Financial Times
Americans visiting China could be prevented from leaving the country by “coercive” exit bans, the US State Department has warned, advising citizens to exercise increased caution in a sign of rising tensions between Beijing and Washington.
***** Think again about that China trip.~JJL
People News – December 2018; Appointments, promotions and other people news in the derivatives industry
Robert T. Cox, a vice president at the Federal Reserve Bank of Chicago and a longtime industry leader who was a member of FIA’s board, passed away Dec. 7 at age 65.
***** FIA catches up with all the people news in MarketVoice.~JJL
Financial advice books make money only for their authors; For 300 years they’ve been peddling the same old lines ó but still we buy them
Merryn Somerset Webb – FT
New year, new financial you. If you have spent the past few days determined to improve yourself with a good book on financial advice, you are clearly not alone. You also wouldn’t have been alone at almost any point in the past 300 years.
***** We know this, but we ignore this.~JJL
Yale’s beloved happiness class is now on the internet for free
Amy X. Wang – Quartz
Happiness, they say, is infectious. Perhaps that is why the most popular course ever to be taught at Yale Universityóthis semester enrolling 1,200 students, or a quarter of the undergraduate student bodyóis one titled “Psychology and the Good Life.”
***** I had to take this class three times before I received “mildly satisfied” grade.~JJL
Thursday’s Top Three
Our top stories of the day on Thursday had us livin’ in the 80s. CNBC’s Chicago traders in their ’80s heyday had a crazy move called the ‘O’Hare Play’ was the top read story of the day. Trading can be what you want it to be. Not sure if there were any Narita International Airport trades yesterday in Japan, but Bloomberg captured the second spot with Yen Surge, Algos Set Off `Flash-Crash’ Moves in Currency Market. Third was the interview with Deutsche Boerse’s CEO Theodore Weimer in Handelsblatt’s Deutsche Bˆrse’s straight-talking boss
138,826,700 pages viewed; 23,363 pages; 216,064 edits
The Bad Stuff That the Stock Market Worried About Is Starting to Happen
Sarah Ponczek and Vildana Hajric – Bloomberg
From Apple’s sales warnings to an ISM miss, it’s piling up; ‘Fundamentals are strong’ has been rallying cry against rout
All of a sudden, the fundamentals aren’t looking as strong. First it was Apple Inc.’s $5 billion revenue miss, hints of which lopped 30 percent from its stock over three months. Now it’s a closely watched gauge of U.S. factory activity, which dropped to a two-year low and missed every estimate in a Bloomberg survey.
Tastytrade, Peak6 invest $10 million in new exchange
Lynne Marek – Crain’s Chicago Business
Tastytrade and Peak6 are investing $10 million in a new Chicago enterprise called the Small Exchange, which aspires to be a futures and foreign exchange trading platform for retail traders.
The Twilight Trading Hour Strikes Currency Markets Again; When U.S. traders are heading home but Asia hubs aren’t fully up and running, normally stable currencies can suddenly go haywire
Saumya Vaishampayan and Mike Bird – WSJ
There is a fragile spot in the $5.1 trillion currency market: early morning in Asia. This one- to two-hour period when U.S. traders are heading homeóbut market hubs in Singapore and Hong Kong aren’t yet fully up and runningóhas become known to traders as the twilight hour, a time when normally stable currencies can suddenly go haywire.
Oslo Bors invites bids to rival Euronext’s EUR625m offer
Philip Stafford – FT
Oslo Bors has invited rival bidders to compete with an offer from Euronext, which says it has secured majority ownership of Norway’s largest markets operator.
Democrats Take a Big Step Toward Protecting the Markets from Trump; The House is resurrecting a rule that would prevent a debt-ceiling breach.
Joshua Green – Bloomberg
With a new session of Congress comes a new set of congressional rules. One in particular, on its way to being implemented in the House, should cheer investors exhausted by market chaos and leery of President Trump’s unpredictability: Democrats are reimposing an arcane measure called the “Gephardt Rule,” which reduces the likelihood that debt-ceiling brinkmanship will tank markets, as it did in 2011 and 2013, when Republican threatened to force a default to extract policy concessions.
AQR founder says blaming quants for market turmoil is ‘insane’
Robin Wigglesworth – Financial Times
AQR, one of the world’s biggest hedge fund groups, has suffered its worst year since the financial crisis, but its founder Clifford Asness says investors who blame the recent market turmoil on quantitative strategies are “insane”.
The Greenwich-based investment group, which manages $226bn, has climbed to the top of the hedge fund industry thanks to its systematic “quant” approach, which uses financial research and algorithms to systematically exploit durable market signals.
Investors pile into money market funds amid market turmoil; Nine straight weeks of inflows is longest streak since depths of financial crisis
Joe Rennison – FT
Investors fled into money market funds in an attempt to shelter from the turmoil that has sent prices on bonds, loans and equities plummeting in recent weeks.
Window-dressing on Wall Street shines spotlight on repo; Distress signals emerge from little-watched corner of the US money markets
Robin Wigglesworth – FT
House buyers always carefully study the kitchen fittings and measure up the airy living room, but often neglect to check whether the pipes are up to scratch. Investors act similarly, often forgetting that dodgy market plumbing can lead to a smelly catastrophe.
What Happens When Bond Markets Get Weird; Bondholders think the Fed is about to make a mistake on rates, but history shows the bond market is prone to error
James Mackintosh – WSJ
Strange things are afoot in the bond market. Traders are placing bets on whether the Federal Reserve will soon be forced into reverse by a slowing economy and swooning stock market. That has led to a lot of weirdness.
FDIC chair says no concerns about U.S. bank health amid market turmoil
Pete Schroeder – Reuters
A top U.S. bank regulator said on Thursday she had no concerns that volatility in the equities and futures markets posed a threat to the banking system, telling Reuters the country’s lenders have plenty of capital to weather further market swings.
Yen’s surge is a red flag for world markets
Saikat Chatterjee, Karin Strohecker – Reuters
A gradual rise by the Japanese yen in recent weeks culminated in a dramatic overnight surge ó firing a warning shot for world markets and the global economy in 2019.
Historically, outsized yen gains in short periods, such as the Russian default in 1998 and the global market meltdown in 2008, are a harbinger of stress for global markets. Market watchers say the yen’s latest ascent is a sign that the global economy is set for a rocky ride ahead.
Next ECB boss will matter less than his sidekick
Swaha Pattanaik – Reuters Breakingviews
Mario Draghi’s successor may not be the most important appointment at the European Central Bank in the year ahead. Most of those in the running to replace the Italian as president lack his creativity in tackling existential problems, such as a breakup of the euro. Others will have more scope to sway the debate. Ireland’s Philip Lane, who is in pole position to take over as chief economist from Peter Praet, is the sort of freethinker who would have outsized influence, especially in the next economic downturn.
The Bank Merger Germany Really Needs; The consolidation of the Landesbanken is as pressing as a Deutsche Bank-Commerzbank tie-up.
Elisa Martinuzzi – Bloomberg
For all the chatter about a tie-up between Deutsche Bank AG and its ailing rival Commerzbank AG, there’s another banking merger Germany needs just as much. Trouble is, it isn’t happening either.
Opinion: Why the ‘mania’ for index funds won’t derail the stock market
Michael Edesess – MarketWatch
In a recent exchange on CNBC with Halftime Report’s host Scott Wapner, mutual-fund manager Jeffrey Gundlach of DoubleLine ó famed as the “Bond King,” as well as for many accurate predictions ó said that “passive investing … has reached mania status.”
Why there is no need to panic about fake news; The phrase has long since ceased to be useful but is deployed as a political cudgel
Tim Harford – FT
A new year’s resolution for us all: stop talking about fake news. Perhaps we should have stopped talking about it at the same time as we started. That, according to Google Trends, was the week after Donald Trump won the US presidential election in 2016, which suggests the interest was driven by astonished people looking for an explanation. Fake news was not the only scapegoat but it was, and still is, a popular one. It was even named the Word of the Year in 2017 by Collins Dictionary. Yet the phrase has long since ceased to be useful, and here are five reasons why.
Exchanges, OTC and Clearing
Intercontinental Exchange – Intercontinental Exchange Reports Record Futures & Options Volumes in 2018; 4Q’18 ADV +20% y/y
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported December, fourth quarter and full year 2018 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Oslo Bors lures rival bids amid Euronext’s EUR625m offer for acquisition; Oslo Bors has invited bids for its acquisition with a new offer process due to take place this month.
Hayley McDowell – The Trade
Norwegian exchange operator Oslo Bors VPS has invited rival bids following news of Euronext’s plans to offer EUR625 million to acquire the company.
Satisfying development in December: Eurex Exchange up 23 percent
December has been a successful month for Eurex, Europe’s largest derivatives exchange and part of Deutsche Bˆrse Group. The number of traded contracts reached 174.6 million traded contracts compared to 142.4 million in 2017. This is an increase of 23 percent in total.
End of Consultation on amendments to the Clearing Conditions and related documents
As announced in Eurex Clearing circular 102/18, Eurex Clearing proposed a revision of its rulebook and related documents to further reduce the complexity of the legal framework and to serve Clearing Members and their clients with an increased flexibility in functional set-ups accompanied with a facilitated onboarding process.
The NYSE Welcomes 2019 as the Global Leader in Listings
The New York Stock Exchange (NYSE), a wholly owned subsidiary of Intercontinental Exchange (NYSE:ICE), extended its leadership as the premier venue for capital raising, finishing the year with $125 billion in proceeds raised from 356 transactions. In a year marked by elevated volatility in U.S. equity markets, NYSE issuers raised $30 billion in proceeds from 73 IPOs. The New York Stock Exchange was also the listing partner of choice for issuers seeking innovative ways to access the public markets without an IPO capital raise, including Spotify (NYSE:SPOT) and Dell Technologies (NYSE:DELL).
OCC Continues to Fulfill its Role as a SIFMU
John Davidson, OCC
Throughout 2018, OCC operated in a robust and resilient manner, clearing over 20 million contracts a day for our highest ever annual cleared volume, while providing the U.S. equity options and futures markets with unparalleled financial integrity.
SIX Trading Key Figures: Year 2018
The 2018 financial year on the Swiss stock exchange was characterized by numerous listings. Twelve companies completed this step in total, the highest number reached since 2001. The good global environment for IPOs and the high level of listing activity by companies in the past year was therefore also reflected on the Swiss stock exchange. SIX carried out Europe’s third-largest IPO in 2018, the IPO of SIG Combibloc with a transaction volume of CHF 1.7 billion. In the previous year SIX recorded a total IPO transaction volume of CHF 3.9 billion, ranking it fourth in Europe behind Deutsche Bˆrse, London Stock Exchange and Euronext. The latter was just slightly ahead of SIX in third place.
EEX hires former Nasdaq commodities sales director
Global Investor Group
The European Energy Exchange has hired Claudia Gerotto from Nasdaq to grow its freight business
Exchange Data Offers Clue to Solve ‘Flash Crash’ Mystery
Masaki Kondo – Bloomberg
Japanese retail accounts sold most lira contracts since August; They boosted net dollar long positions, exchange data show
Retail investors in Japan cut their net long positions in the Turkish lira on Thursday, according to data from a trading platform, offering a clue to the mystery behind the flash crash that sent the yen soaring against every currency in the world.
SGX welcomes Yuanta Futures (HK) as Derivatives Trading Member
Press Release via Mondovisione
Singapore Exchange (SGX) today welcomed Yuanta Futures (HK) Co. Limited as a Trading Member of its derivatives market. Yuanta Futures (HK), established in 2012, is a wholly owned subsidiary of Taiwan’s Yuanta Financial Holdings Co. Limited.
ASX Monthly Activity Report – December 2018
SGX welcomes Yuanta Futures (HK) as Derivatives Trading Member
Singapore Exchange (SGX) today welcomed Yuanta Futures (HK) Co. Limited as a Trading Member of its derivatives market.
New year’s Message from Group CEO Kiyota
Here’s wishing you a happy new year. As JPX Group CEO, I would like to wish everyone health and success in 2019.
Will Machine Learning Transform Finance?
The virtual assistant on your smart speaker and smartphone draws on artificial intelligence; so do every Google search and every Netflix recommendation. And while the bulk of the investment in AI and machine learningóthe subset of AI in which computers look for patterns in large data setsóis coming from the tech sector, it is spilling into other areas. Deloitte points to growing use in manufacturing quality control, cybersecurity, customer service, risk management, and sales optimization.
Former Cinnober deputy CEO sets up consultancy
Louisa Chender – Global Investor Group
Per-Anders Bedman establishes Stockholm-based consultancy after 17 years at Cinnober
Design “blindspot” hampering innovation, says ex-Citi head of design
Financial services are struggling with a customer blind spot that’s hampering innovation, says Steven Gates, head of design transformation at InVision, the company behind the design function of airbnb, Uber and Netflix.
“Innovation has become very happenstance and bogged down, because there’s not a real connection back to what your consumer wants,” says Gates, who was previously the global design lead at Citi, the first position of its kind in the bank’s 206 year history.
AWS News – December Round Up
Rhythmic Technologies Blog
With the endless flood of new products, features and changes from AWS and its surrounding ecosystem, it can be easy to miss an update. Our monthly round up highlights major announcements, product updates and behind the scenes changes we think are most relevant.
PwC crypto lead expects “many more” big banks to enter market in 2019; PwC Hong Kong crypto lead expects more participants in the cryptocurrency space this year despite ongoing bear market and widespread regulatory concerns.
Jonathan Watkins – The Trade
The FinTech and crypto lead at PwC Hong Kong believes many more ‘big banks’ will enter the digital asset space in 2019, despite the continuing bear market and widespread regulatory concerns.
Nearly 4 in 5 individual investors are still bullish on bitcoin
Aaron Hankin – Marketwatch
Battered and bruised, bitcoin investors aren’t throwing in the towel just yet.
That is according to data from DailyFX that shows nearly 80% of individual investors remain net invested, or long, in bitcoin ó the highest level since November 2018. All this despite the best-known cryptocurrency trading near its 16-month low below $4,000.
Paying Taxes in Bitcoin: Retailer Overstock Says It Will Pay Ohio Using Digital Money
Jeff John Roberts – Fortune
Once upon a time, people used livestock or bushels of wheat to pay their taxes. Today, we use checks, credit cards, online money andóstarting this year in OhioóBitcoin.
Binance will have ‘at least one new token launch every month’ on its redesigned token platform
Larry Cermak – The Block Crypto
Binance, the largest cryptocurrency exchange, is relaunching its token sale platform Launchpad, the firm announced Thursday.
The First Cryptocurrency to Use Mimblewimble Privacy Tech Is Now Live
Christine Kim – Coindesk
Today marks the debut of a new cryptocurrency, called Beam – one of two highly-anticipated privacy coins implemented with the so-called “mimblewimble” protocol.
Falling Crypto Prices Aren’t Stopping Real Blockchain Progress
Paul Brody – Coindesk
Plunging cryptocurrency values in 2018 and the collapse of the money-for-nothing white paper market in initial coin offerings (ICOs) took much of the focus last year for many people when it came to blockchain mindshare.
US national debt reaches a new high under Trump
Lydia DePillis – CNN Business
The US national debt stood at $21.974 trillion at the end of 2018, more than $2 trillion higher than when President Donald Trump took office, according to numbers released Thursday by the Treasury Department.
The IRS might be closed, but your taxes are still due
Beth Pinsker – Reuters
The U.S. Internal Revenue Services is closed, thanks to the government shutdown, but your taxes are still due on April 15 and that is why individuals need to proceed through tax season as if nothing is amiss, experts say.
German politicians targeted in cyber attack; Hack involving MPs from most parties described as one of country’s worst data leaks
Guy Chazan – FT
Hackers have leaked the personal data of hundreds of German politicians in what is being described as one of the country’s worst ever cyber attacks.
The Courts Run Out of Cash Next Friday. Here’s What Happens Then
Erik Larson – Bloomberg
If U.S. government shutdown drags on, judges have to do triage; Businesses in system face uncertainty; Qualcomm goes to trial
Companies that turn to the federal courts to resolve fights with rivals and customers may find themselves in limbo if the government shutdown continues beyond next week.
Nancy Pelosi Elected Speaker as Democrats Take Control of House
Julie Hirschfeld Davis – NY Times
‘Ebullient Democrats assumed control of the House on Thursday and elected Representative Nancy Pelosi of California speaker, returning her to a historic distinction as the first woman to hold the post. They then moved to defy President Trump and passed bills that would open government agencies shuttered by an impasse over his insistence on funding for a border wall. Both measures are almost certain to die in the Senate.
Why Is Trump Spouting Russian Propaganda?; The president’s endorsement of the U.S.S.R.’s invasion of Afghanistan echoes a narrative promoted by Vladimir Putin
David Frum – The Atlantic
It was only one moment in a 90-minute stream of madness.
A balancing act: the case for macroprudential margin requirements
Cian O’Neill and Nicholas Vause – Bank Underground Blog
Certain policy actions require a high level of precision to be successful. In a recent paper, we find that using margins on derivative trades as a macroprudential tool would require such precision. Such a policy could force derivative users to hold more liquid assets. This would help them to meet larger margin calls and avoid fire-selling their derivatives, which could affect other market participants by moving prices. We find that perfect calibration of such a policy would completely eliminate this fire-sale externality and achieve the best possible outcome, while simple rules are almost as effective. However, calibration errors in any rule could amplify fire-sales and leave the financial system worse off than if there had been no policy at all.
Ex-Credit Suisse bankers charged over $2bn Mozambique ‘tuna bond’ scandal; Country’s one-time finance minister also arrested in connection with indictment
Joseph Cotterill, Laura Noonan and Kadhim Shubber – FT
Three former Credit Suisse bankers have been charged by US prosecutors with alleged fraud and receiving kickbacks in connection with Mozambique’s $2bn “tuna bonds” hidden loans scandal.
One year on and none the wiser
Christian Vogt – Fidessa
MiFID has achieved the rare feat of becoming a genericized trademark. In the same way that Xerox stands for copy machines in general, MiFID has turned into a synonym for all financial markets regulation. With the scorecard for its first birthday due, whether MiFID II really is ground-breaking, or deserving remains debatable. However, there is no doubt about its voluminous size. And it is because of this unusual size that even one year on, we are none the wiser.
ESMA updates its Q&As on MiFID II and MiFIR commodity derivatives topics
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on MiFID II and MiFIR commodity derivatives topics. These Q&As provide clarification on issues related to the MiFID II/MiFIR regime for commodity derivatives, including on position limits, position reporting and ancillary activity.
ESMA updates its Q&As on MiFID II and MiFIR transparency topics
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers regarding transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
Securities ArbitrationóShould You Hire an Attorney?
FINRA STAFF and PIABA Foundation
The vast majority of interactions between investors and investment professionals are positive. However, sometimes the relationship doesn’t go as planned, and the situation can’t be resolved by communicating directly with your firm or broker. In such a situation, you may find yourself considering arbitration or mediation.
Investing and Trading
Odds of Fed rate cut in 2019 jump as growth outlook dims
Robin Wigglesworth – Financial Times
Investors are now pricing in a greater probability that the Federal Reserve will cut rates than raise them in 2019, highlighting the rising fears that the economic slowdown could deepen into an outright recession.
Factor strategies beyond a market peak
Marlies van Boven and Philip Lawlor – FTSE Russell Blog
After a stormy Q4 in 2018, investors are pondering fundamental questions about global markets.
As our global markets research team has previously noted, there are concerns that we are at, or past, the peak of the economic cycle. Investors are also questioning the impact of tightening US financial conditions on the financial system and are worried about potentially optimistic EPS valuations at this point in the cycle.
Here’s How Powell Regains Control of the Fed’s Narrative; He must re-establish the central bank as a source of market stability, not volatility.
Mohamed A. El-Erian – Bloomberg
Using words to influence people’s behavior ó technically known as policy guidance ó is key to the Federal Reserve’s ability to deliver on its dual mandate of maximum employment and stable prices. Yet the effectiveness of the central bank’s communications strategy has taken a hit in the last few weeks. Chair Jerome Powell has a golden opportunity on Friday to advance the process of regaining the narrative.
The Market’s Obstacles Are Both Macro and Micro; A double whammy leads market commentary.
Robert Burgess – Bloomberg
When Apple Inc. dropped a bomb after the official close of trading Wednesday that its revenue would fall short of estimates because of softness in China, many cynics snickered. Everyone knew China’s economy was slowing, so blaming the Asian nation for a setback was just a convenient excuse to mask a deteriorating business, like when retailers blame the weather for a slump in sales. Now, 24 hours later, Apple’s explanation looks a little more plausible in a distressing sign for equities, with the S&P 500 Index tumbling 2.48 percent Thursday.
Investors Punish U.S. Companies Vulnerable to China Slowdown
Esha Dey – Bloomberg
Apple warning on sales abroad not limited to iPhone maker; Auto parts supplier, chipmakers and multinationals suffer
In the wake of Apple Inc.’s revenue warning, investors are finding that exposure to China is not all it’s cracked up to be.
Aggressive Change in Market’s Fed Outlook Drives Inversions in Yield Curve
Emily Barrett – Bloomberg
Spread between 3-month and 5-year yields turns negative; Inversion between these maturities is first since 2008
The bond market’s aggressive overhaul of its outlook for Federal Reserve policy is creating kinks in the front end of the Treasury yield curve.
Jerome Powell Pledged Allegiance to Data and Some of It Looks Grim
Jeanna Smialek – Bloomberg
Fed Chair to make first public remarks Friday since Dec. 19l; Some real economy and market metrics have soured in past weeks
Jerome Powell gave the U.S. economy a thumbs-up review last month. Since then, the Federal Reserve chairman has received several reasons to temper his assessment.
Last Month, Investors Seemed Too Pessimistic. Now, They Seem Prescient.
Peter Eavis and Binyamin Appelbaum – NY Times
Maybe the markets were not overreacting. With the United States economy posting solid numbers last year, the alarming signals coming out of stock and bond markets seemed out of whack with the real world. President Trump’s bellicose trade actions were a concern, but hiring was strong and corporate earnings were surging.
Audits reveal Deutsche Bank’s links to tax trade scandal
John O’Donnell, Tom Sims – Reuters
There are “lots of indications” that some managers discussed “the reputational risks” of Deutsche Bank’s involvement in a share-trading scheme that is the subject of Germany’s biggest post-war fraud investigation, according to a conclusion in one of five internal audits seen by Reuters.
Lehman spinout profits from buying into buyout groups
Dyal Capital is leading name in new field of investing in other private equity groups
Javier Espinoza – FT
Following the collapse of Lehman Brothers a decade ago Michael Rees and Sean Ward, former executives at the defunct investment bank, wondered what to do next.
Former Barclays bosses face London trial over Qatari cash call
Kirstin Ridley – Reuters
The most senior bankers to face criminal charges in Britain over conduct during the financial crisis will appear before a London jury next week in a trial that will test the mettle of the Serious Fraud Office.
How This Fidelity Fund Earned Healthy Returns in an Ailing Market; The Fidelity Select Medical Technology and Devices Portfolio bested its peers in 2018 with returns of 16 percent.
Matthew A. Winkler – Bloomberg
As 2018 came to an end, most investors were recoiling from the worst stock market in 10 years, with every benchmark bleeding losses and confusing even the most stalwart money managers. Except Eddie Yoon.
Hedge-Fund Bear Crispin Odey Gains 53% in a Bleak Year for Rivals
Nishant Kumar – Bloomberg
Hedge-fund contrarian Crispin Odey’s bearish bets finally paid off as the stock-market selloff he had long predicted kicked in.
Lehman spinout profits from buying into buyout groups; Dyal Capital is leading name in new field of investing in other private equity groups
Javier Espinoza – FT
Following the collapse of Lehman Brothers a decade ago Michael Rees and Sean Ward, former executives at the defunct investment bank, wondered what to do next.
China says will cut banks’ reserve requirements, taxes, as bad news piles up
China will cut banks’ reserve requirement ratios (RRRs), taxes and fees, Premier Li Keqiang said on Friday, as the world’s second-largest economy shows further signs of cooling.
China Is Hunting for Foreign Buyers for Its Sovereign Debt
Tian Chen and Chris Anstey – Bloomberg
Spooked by a massive exodus of Chinese capital in 2015, the country’s policymakers hit on a plan to alleviate pressures on their currency. They could attract foreign cashóand boost demand for the yuanóby opening the doors to fixed income investors. Big overseas funds are always looking for ways to diversify and would likely want some exposure to China’s bond market, the third-largest in the world.
Renewables overtake coal as Germany’s main energy source
Renewables overtook coal as Germany’s main source of energy for the first time last year, accounting for just over 40 percent of electricity production, research showed on Thursday.
Yen flash crash: what happened and why; Sudden move in Japanese currency has left traders and investors baffled and alarmed
Eva Szalay – FT
With 2019 barely begun, investors and traders in the $5.1tn-a-day foreign exchange market are trying to decipher a sudden and violent move in a series of currencies that unfolded early on Thursday in Asian trading.
Didi Chuxing moves into financial services; Chinese ride-hailing app will use location data to determine credit-worthiness
Yuan Yang – FT
Didi Chuxing, the Chinese ride-hailing app, has branched out into financial services as new regulations threaten to cut the number of its drivers.
PBOC Tweaks Liquidity Tap Again as China Growth Jitters Persist
RRR to drop 1 percentage point in two-step reduction; To release net 800 billion yuan ($116 billion) of liqudity
China’s central bank took a further step to secure liquidity to the slowing economy, amid investor jitters over the outlook and expectations that more easing moves are in the pipeline.
Italy Can’t Live Without Its ‘Naughty’ Bankers; The populists promised to stop giving money to banks and protect investors. But the plight of Carige shows this is pretty much impossible.
Ferdinando Giugliano – Bloomberg
Italy’s populist administration ended 2018 with a remarkable U-turn in its debut budget. The New Year has presented another awkward choice to the governing League and Five Star parties – this time on banks.
Europe suffers from the sorry state of its banks; The knot of sovereign and banking risk has yet to be cut while a unified sector remains a dream
Josef Ackermann – FT
Europe’s banking industry is in decline. This must be arrested and then reversed if the EU wants to remain a force to be reckoned with on the world stage amid unprecedented geopolitical volatility. To do so, it must become truly independent ó and a strong banking sector, particularly in the eurozone, is central to that ambition.
U.K. Economy Under Pressure as Brexit Deadline Approaches
Jill Ward – Bloomberg
Reports show housing, lending and businesses all under strain; Government has yet to secure a deal on exiting the EU
The first week of the new year brought a slew of bleak reports for the U.K. economy, highlighting the scale of the challenges to come as Britain prepares to leave the European Union.
Brexit threat to European sovereign bond sales; UK leaving EU without deal would jeopardise governments’ access to London banks
Kate Allen and Philip Stafford – FT
European governments risk a Brexit blow to their finances if the UK crashes out of the EU without a deal, an outcome that would jeopardise their access to the London-based banks that help sell their bonds.
Dublin says will not accept making Brexit backstop ineffective; ‘We need to know what UK wants,’ says Varadkar after brainstorming call with Merkel
Arthur Beesley and George Parker – FT
German chancellor Angela Merkel and Irish prime minister Leo Varadkar have held talks to “brainstorm” how they might help Theresa May pass her disputed Brexit treaty, although there is no sign of a breakthrough on the issue.
The quiet power of reading with your coworkers
Jessica Yuen – Quartz
The tech accelerator Y Combinator is known for producing forward-thinking companies like Airbnb and Dropbox, so when I sat down with a small group of successful startup founders at a panel the organization hosted last year, I was pleasantly surprised to learn that this innovative group all agreed on a classic learning tool: books.