Bond Market Turmoil Sparked E-Trading; Japan’s 10-Day Break Has Markets Worried

Apr 15, 2019

First Read


The DLT Wars – Zohar Hod, Digital Asset
JohnLothianNews.com

In this video from JLN’s Industry Leader Series, Digital Asset Chief Strategy Officer Zohar Hod talks about public versus private blockchains and how Digital Asset is positioning itself within the digital asset infrastructure space.

Watch the video »

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Hits & Takes
JLN Staff

At Eurex’s Derivatives Forum 2019, 56 percent of the audience said they were considering using derivatives based on Environment, Social and Governance (ESG) principles. ~JK

The SEC Fixed Income Market Structure Advisory Committee is holding a meeting on the Sunshine Act, which is open to the public, today, April 15, at 9:30 a.m. E.T. in Multi-Purpose Room LL-006 at the Commission’s headquarters, 100 F Street, NE, Washington, DC. ~SR

If you have someone in your life whose political views cause a strain on your relationship, NPR has been publishing a useful series of articles about the polarizing effect contemporary politics are having on families and friends in the U.S. This article gives some good tips for keeping it civil when discussing political topics that have a tendency to touch nerves, and this article describes people around the country salvaging (or trying to) their relationships with friends and loved ones with starkly different political views.~MR

Frustration with existing payment systems has caused many throughout the world to consider crypto as a viable alternative, especially in many African countries. Cointelegraph published a story recently describing how Google’s search metrics show disproportionately high numbers of searches for “bitcoin” in African countries like Nigeria, South Africa, and Ghana, compared to European, American, and even Asian countries.~MR

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The Spread – Gavel Action
JohnLothianNews.com

There was some big courtroom news this week – we give all the updates in this episode of “The Spread.”

Watch the video and see the stories referenced here »

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Declining market competition never good for futures markets
Mark Rzepczynski
Few will disagree with the idea that competition through a diverse set of independent traders is good for futures markets trading, but this issue should be broadened to the subtle impact of general competition across firms in the economy, not just the futures markets themselves. There is a growing set of recent research that suggests that the US is becoming less competitive and dominated by fewer big firms. See the Kansas City Jackson Hole Conference in 2018, “Changing Market Structure and Implications for Monetary Policy,” as a sample of the work.
bit.ly/2UDWC2Q

*****Mark is always worth reading.~JJL

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$2,198,468,000,000: Federal Spending Hit 10-Year High Through March; Taxes Hit 5-Year Low
Terence P. Jeffrey – CNS News
The federal government spent $2,198,468,000,000 in the first six months of fiscal 2019 (October through March), which is the most it has spent in the first six months of any fiscal year in the last decade, according to the Monthly Treasury Statements.
bit.ly/2GlPnUP

***** Other people’s money is fun to spend.~JJL

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Three Minutes With Thom Thompson; A Conversation with a Bitcoin Quasi-Maximalist
Jessica Darmoni – Hehmeyer
“Bitcoin exists in a fully permissionless environment, but with Ethereum or Ripple you need to do things in compliance with someone else’s changeable rules,” said Thom Thompson, a self-proclaimed Bitcoin Quasi-Maximalist. “Bitcoin is very robust and has all these incentives built in to secure the network.”
bit.ly/2UCKE9S

***** Somehow Jessica Darmoni did not mention that Thom Thompson is an employee of John J. Lothian & Company, Inc. and an editor with John Lothian News who works on CryptoMarketsWiki.com. She also neglected to mention the excellent work Thom did the last two weeks on the Jitesh Thakkar trial case, which would have been a timely tie-in. She also did not mention she now works for ErisX, which would be relevant to the subject, too. I could go on, but oh well.~JJL

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Bridging the Week: April 8 – 12 and April 15, 2019 (Not In An Empire State Of Mind; Mistrial For Programmer)
Gary DeWaal – Bridging the Week
The New York State Department of Financial Services cancelled the temporary authority of a major cryptocurrency exchange to operate in New York, saying its failure to meet anti-money laundering, AML compliance officer quality and potential capital requirements disqualified it for a BitLicense or a money transmitter license. The firm now has less than 60 days to liquidate or off-load its existing NY customers. Separately, a mistrial was declared in the criminal action against the alleged programmer for the purported flash crash spoofer in connection with two counts of aiding and abetting spoofing. The prosecution has less than two weeks to determine whether to subject the programmer to a second criminal trial.
bit.ly/2ZeZq5a

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Friday’s Top Three
Our top read story of the day was Bloomberg’s China’s P2P Crackdown Pushes Millennials Into Speculative Trading. Second was TheBlockCrypto’s piece on Bo Collins, Why the former president of NYMEX is betting his wealth on building a crypto bank. Third was our MarketsWiki page on Anthony Saliba, who is participating in JLN’s Open Outcry Traders Industry Project.

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MarketsWiki Stats
148,935,406 pages viewed; 23,686 pages; 218,475 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

Recently Updated Pages

Recently updated pages include
Litecoin
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CryptoMarketsWiki Stats

1,043 pages; 9,253 edits
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Lead Stories

Bond Market Turmoil Sparked E-Trading; Nearly one-quarter of all investment-grade corporate bond trades in December were on the MarketAxess digital trading platform
Matt Wirz – WSJ
When global markets tumbled in December, U.S. corporate bond investors scrambled to sell holdings they feared would drop further. But bank traders weren’t buying, so many fund managers turned to a fast-growing electronic marketplace to reduce their exposures.
/on.wsj.com/2UGknr9

Why Japan’s 10-Day Break Has Markets Worried
Shoko Oda – Bloomberg
Japan’s extended spring vacation, when a series of national holidays bunch up, is known as “Golden Week.” This year adds the May 1 accession of the new emperor, Crown Prince Naruhito, to the mix. The result: a 10-day stretch that wipes out six trading sessions — the longest market closure since the end of World War II. What might sound like a nice, relaxing break actually has traders and regulators alike fretting about the potential for cash shortages, market volatility or even the kind of “flash crash” that happened during Japan’s last New Year holiday. That was only four days long.
/bloom.bg/2UHwFQl

SEC Cracks Down on ETF Names That Could Be Misleading Investors
Vildana Hajric and Reade Pickert – Bloergomb
SEC is asking more about names as themed products proliferate; More than a third of such funds tweaked their titles last year
Exchange-traded funds looking to tap some of the hottest investment trends are going undercover.
/bloom.bg/2GdGgUT

TP ICAP calls time on troubled executive incentive scheme; Interdealer broker’s new plan will have much lower potential payouts
Philip Stafford – FT
TP ICAP plans to end a contentious incentive scheme for senior executives, with the interdealer broker’s departing chairman calling it “no longer fit for purpose”.
/on.ft.com/2GfcKxQ

Quant funds train sights on private equity market; Investors explore using data-intensive processes for opaque corners of the market
Robin Wigglesworth – FT
Maths-savvy, computer-toting investors have already disrupted traditional tactics in asset management. Next in their sights is the red-hot private equity world.
/on.ft.com/2GfzIVL

Winter is Coming for Managed Futures? (aka Vanguard)
RCM Alternatives
No, we didn’t miss this headline. And we haven’t just hiding our heads under a rock pretending to not have seen it. We definitely saw the news of Vanguard launching a commodities product. But unlike Josh Brown, this doesn’t seem like “lights out” for the managed futures space.
bit.ly/2KxJOXq

IG seeks new chair as it shakes up management in business overhaul; Andy Green to step down in September as derivatives trader struggles with regulatory clampdown
Sarah Provan – FT
IG Group said it is looking for a chairman to replace Andy Green, who will step down in September, as the online derivatives trader takes a revamp of its management board a step further in the face of a regulatory clampdown.
/on.ft.com/2GceB6C

Inside the scheme that allegedly used fake debt to steal $360 million from investors in Maryland and Virginia
Aaron Gregg – Washington Post
Cameron Jezierski was stoic but offered his attorney a brief smile as proceedings wrapped up at the federal courthouse. This wasn’t where he’d expected to land. He’d imagined that before he was 30, he’d be a millionaire.
/wapo.st/2UCrUHn

Regulators press Deutsche Bank to shrink US investment bank; Chief executive under pressure to take a more decisive action at the failing unit
Olaf Storbeck – FT
Regulators are calling on Deutsche Bank to further shrink its US investment bank, increasing the pressure on chief executive Christian Sewing to take more decisive action at the failing unit.
/on.ft.com/2GiVQyv

BofA extends financing for activist Bramson’s Barclays stake; Investor widens duration of ‘put’ and ‘call’ options, according to US securities filing
David Crow and Owen Walker – FT
Edward Bramson, the activist investor targeting Barclays, has extended the duration of a controversial arrangement with Bank of America that allowed him to build the majority of his stake with a $1.4bn loan.
/on.ft.com/2GcMlRo

Conduct in business needs regulating like conduct in banking; Companies and their senior staff need to be held to higher standards of behaviour
Patrick Jenkins – FT
The future of the Serious Fraud Office’s case against four former Barclays directors is unclear. The judge in the trial last week discharged the jury.
/on.ft.com/2GdeqrH

How 38 miles of cable changed the stock market forever
Fast Company
In 2012, a few years after the financial crisis, Brad Katsuyama quit his seven-figure job to start a new stock exchange with the sole objective of making the market more fair. Some called it a Wall Street revolt; others called the move long overdue.
bit.ly/2GgbVFa

Exchanges, OTC and Clearing

Stephen McComb Joins IncubEx as Senior Vice President
IncubEx
IncubEx, a developer for exchange traded environmental products, services, and technology solutions, is pleased to announce that Stephen McComb has joined as Senior Vice President.
In his role with IncubEx, he will provide strategic and operational support in North American environmental markets including the Western Climate Initiative (WCI), Regional Greenhouse Gas Initiative (RGGI), renewable energy certificates (REC) and renewable fuels, among others. He will report to Dan Scarbrough, IncubEx President and COO.
bit.ly/2Iisuna

Plenty of food for thought at the Derivatives Forum 2019 in Frankfurt
Eurex
More than 150 experts from the derivatives community gathered in a beautiful location in Frankfurt’s “new” Old Town to join the Derivatives Forum 2019. The overall themes of the event hosted by Eurex were the changes in the financial industries with a special look on sustainability and new market structures.
bit.ly/2GfgQpI

New Eurex Flow Insights File Service
Eurex
As of 15 April 2019, Deutsche Bˆrse Data Services will be introducing a new analytics data product that offers valuable information on Eurex order flow by trading account type(agent, market maker and proprietary trader).
bit.ly/2Gg5L7R

Nasdaq takes latest step towards acquiring Oslo B¯rs by purchasing additional shares; Nasdaq acquires 844,071 shares in Oslo B¯rs, taking its total ownership of the Norwegian exchange to 37%.
Joe Parsons – The Trade
Nasdaq has taken its latest step to fully acquire Oslo B¯rs, by acquiring 844,071 shares, taking its total ownership of the Norwegian exchange to 37%.
bit.ly/2GdihFb

The IPO market has come storming back. Nasdaq’s head of healthcare listings gave us the lay of the land.
Rebecca Ungarino – Business Insider
Stop us if you’ve heard this before: investors are expecting a red-hot initial-public-offering market this year.
bit.ly/2UBEgQn

Fintech

AcadiaSoft Provides Industry Automation Report at ISDA’s 34th Annual General Meeting
AcadiaSoft
AcadiaSoft Inc., the leading industry provider of margin automation solutions for counterparties engaged in collateral management worldwide, today announced a number of industry milestones that have been achieved via its services through Q1 2019 and a new Risk Services Suite that will support buy-side firms coming into scope for Phase 5 of the uncleared margin rules in September 2020. The announcements come as AcadiaSoft is participating in the 34th ISDA Annual Group Meeting in Hong Kong this week.
bit.ly/2KtWJt9

IPads in Lieu of Weathervanes as U.S. Farmers Seek Climate Edge
Lydia Mulvany and Brian K Sullivan – Bloomberg
Companies push satelites, exotic seeds as wild weather tools; Bayer among seed sellers geo-engineering tougher plants
When surprise hailstorms hit the 6,000 acres Trevor Scherman plants each year with peas, wheat, canola and lentils, his first move isn’t to his truck to assess the damage. These days, it’s to his iPad.
/bloom.bg/2GcKpYX

Asia’s tech champions zero in on main street banking
Alun John, Sumeet Chatterjee – Reuters
Asia’s internet firms are challenging the region’s traditional banks for consumer finances, tapping their massive user networks for business and following a trail blazed in China by tech giants Alibaba and Tencent.
/reut.rs/2UBiNac

Cryptocurrencies

Bitcoin and TIPS: A Field Guide for Investing in an MMT World
Brandon Kochkodin – Bloomberg
MMT might be here already and risk assets will continue upward; Get defensive and start hedging against prospect of inflation
now you’ve almost certainly heard (and heard) about Modern Monetary Theory. Opinions on the validity of MMT are a dime a dozen, but how to trade MMT has been Wall Street’s great unknown, according to Bloomberg Opinion’s Brian Chappatta.
/bloom.bg/2Gjpt2r

Binance Labs Grants $45,000 to 3 Open-Source Blockchain Startups
Yogita Khatri – Coindesk
Binance Labs, the investment arm of cryptocurrency exchange Binance, has awarded grants of $15,000 each to three startups developing open-source blockchain technologies. Receiving the grants are Ironbelly, a mobile wallet for the Grin/Mimblewimble blockchain; HOPR, privacy-preserving messaging protocol; and Kitsune Wallet, an upgradeable on-chain wallet.
bit.ly/2X642ZE

Coinbase Exec Dan Romero Leaving Crypto Exchange After 5 Years
Yogita Khatri – Coindesk
Cryptocurrency exchange Coinbase is losing another executive. Dan Romero, who works as vice president for Coinbase’s international business, announced in a Medium post on Friday that he will be leaving the firm at the end of this month. Romero joined Coinbase in April 2014, according to his LinkedIn profile. While he didn’t provide a specific reason for departing the firm, Romero said: “Staying true to a mission often requires doing hard (or even unpopular) things. But I’ve been lucky to learn first-hand that it’s those hard things that often generate the most value.”
bit.ly/2IpFWoJ

Opera Launches Desktop Dapp Browser With Built-In Ethereum Wallet
Yogita Khatri – Coindesk
Opera has officially launched the desktop version of its new browser with a built-in cryptocurrency wallet.
bit.ly/2GivjS1

IMF and World Bank Launch Educational Blockchain Token
Yogita Khatri – Coindesk
The International Monetary Fund (IMF) and the World Bank have launched a crypto token called “Learning Coin” to better understand how blockchain technology works.
bit.ly/2Grss9t

How Crypto-Tracker Stocks Let You Invest In Cryptocurrency (Even If You Know Nothing About Bitcoin)
Moe Adham – Forbes
Only a few years ago, cryptocurrency was dismissed by most mainstream investors as a strange niche investment. Things change fast in the fintech world, and now many accredited and experienced retail investors are looking for exposure to this new asset class. But for those who don’t know where to start, what are the options? You have to go through the steps to educate yourself by studying how cryptocurrency addresses work, familiarize yourself with hardware and software wallets, and go through the somewhat cumbersome process of creating accounts on exchanges.
bit.ly/2KBPOOM

The Upside of Bitcoin’s Upside (It’s Not What You Think)
Noelle Acheson – Coindesk
The rally last week in cryptocurrency prices sent tremors of excitement through the mainstream press – is bitcoin “doing its thing” again? Could we be on the verge of a breakout? These reports attract clicks and eyeballs, so I understand why they are run – but their breathless fascination with price volatility and potential profits misses the bigger impact. While we can generally agree that investment gains are good, the broader benefit is this: cryptocurrency price increases throw into starker relief the uniqueness of the asset class. (To avoid over-complicating the discussion, in this article I’ll focus on bitcoin – but the same or similar arguments can also be applied to other cryptocurrencies, depending on their characteristics.)
bit.ly/2XeZlgg

Coinbase launches cryptocurrency debit card
Mike Moore – TechRadar
Cryptocurrency fans will now be able to spend their haul in a wider number of locations than ever before thanks to a new launch from Coinbase. The trading website has announced the launch of a new Visa debit card that will allow users to spend their Bitcoin, Ethereum and more. Payments can be completed with any merchant that accepts Visa, meaning there will be a whole load of real-life and online stores able to benefit from this new spending power.
bit.ly/2GeqWar

Why China Has Made The Right Call On Cryptocurrencies
Enrique Dans – Forbes
Last week we learned that China, which is estimated to be home to around 70% of cryptocurrency mining, is considering a ban on the activity. On April 8, the country’s National Development and Reform Commission (NDRC) published a list of sectors it intends to promote, restrict or eliminate, and cryptocurrency mining was cited as lacking safe production conditions, a waste of resources and extremely harmful to the environment.
bit.ly/2GogtdT

BitMEX CEO Arthur Hayes Reveals Plans to Open Crypto Options Platform
Marie Huillet – Cointelegraph
Arthur Hayes, co-founder and CEO of major crypto derivatives exchange BitMEX, has revealed that the firm is hoping to open a cryptocurrency options platform in the medium term. Hayes made his remarks during an interview on the Venture Coinist podcast on April 12. Hayes ó a former equities trader for Citigroup ó indicated a rough timeline for the prospective launch, stating that: “We hope to possibly have our own options platform in maybe 12 to 18 months.” Hayes hinted at aspirations to innovate options listing, saying “we have somebody working with some university professors on a complicated new way of doing this.”
bit.ly/2IzDcVU

NestlÈ, Carrefour Work With IBM to Track Mashed Potato Brand With Blockchain
William Suberg – Cointelegraph
Switzerland-based food giant NestlÈ, French supermarket chain Carrefour and IBM have partnered to use the latter’s blockchain technology to track a famous French convenience food, the companies announced in a press release on April 15. NestlÈ and Carrefour, both of which are members of IBM’s Food Trust blockchain platform, will use the technology from today to track the supply chain of Mousline, a well-known brand of instant mashed potatoes. Once it rolls out, shoppers will be able to scan a QR code with their smartphones to know exactly where the potatoes in a specific packet came from, as well as their journey to the specific Carrefour store.
bit.ly/2KCW3Sp

Politics

As Fed Chief, Jerome Powell Navigates an Angry President and Turbulent Markets
Jim Tankersley and Neil Irwin – WSJ
As soon as the Federal Reserve chairman, Jerome H. Powell, finished speaking at his December news conference, it was clear, even to him, that he had blown it. Stocks were tumbling. Analysts worried that the Fed was steering the economy into recession.
/nyti.ms/2GdUNQl

Attacks by Trump risk damaging the Fed’s credibility; Investors should pay closer attention to the political pressure levelled at Powell
Mohamed El-Erian – FT
Investors have been remarkably calm about the mounting political pressures on the Federal Reserve, the world’s most important central bank, in sharp contrast to what has been seen historically in advanced countries, and to what emerging economies continue to experience.
/on.ft.com/2UxIDf5

Trump Slams Fed Again, Says Stocks Should Be 5,000-10,000 Higher
Margaret Talev – Bloomberg
Says interest rate hikes have prevented GDP topping 4 percent; President has nominated two loyalists to fill empty Fed seats
President Donald Trump, renewing his attack on the Federal Reserve, claimed the stock market would be “5000 to 10,000” points higher had it not been for the actions of the U.S. central bank.
/bloom.bg/2Gdbtrg

Fund managers pay UK politicians £236,000 for speeches and advice; Payments to MPs over past year draw criticism from consumer rights group
Owen Walker – FT
Asset managers have paid UK politicians hundreds of thousands of pounds for speeches and advice over the past 12 months as investors desperately search for an edge as Britain messily negotiates its departure from the EU.
/on.ft.com/2Gdf0Wy

U.S. Farmers Fear China Deal Will Leave Them Worse Off Than Before Trade War
Mike Dorning – Bloomberg
Even after an agreement, agricultural levies could linger; Economic strains weigh on farmers as commodity prices plunge
Some U.S. farm groups fear that President Donald Trump’s terms for easing his trade war with China risk leaving large swaths of American agriculture worse off than before the conflict began.
/bloom.bg/2GcKo7w

Goldman Economists Say Trump Re-Election More Likely Than Not
Simon Kennedy – Bloomberg
Incumbency and state of economy help Trump’s chances; Trump ‘more likely to win’ than lose second term, says Goldman
President Donald Trump enjoys a “narrow advantage” over rival candidates heading into the 2020 election given the outlook for the U.S. economy, according to analysts at Goldman Sachs Group Inc.
/bloom.bg/2UDtt7Z

How Russian trolls use Facebook to influence Americans
NBC
Russian trolls are creating false personas on social media who accumulate followings of real people in order to stage protests and create chaos. Watch more of Richard Engel’s reporting when “On Assignment” airs tonight at 9pm ET on MSNBC.
/nbcnews.to/2UEsSD0

Regulation

EVENT: Commission Meetings Apr 23, 2019; CFTC to Hold an Open Commission Meeting on April 23
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced that the CFTC will hold an open meeting on Tuesday, April 23, 2019, at 10:00 a.m. to consider the following:
bit.ly/2Ga7sDM

Citigroup to refund over $3 million to clients following sale of complex products
ASIC
Following an ASIC investigation, Citigroup will refund over $3 million to 114 retail customers for losses arising out of structured product investments offered by Citigroup between 2013 and 2017. Citigroup will also write to over 1000 customers remaining in the products to provide them an opportunity to exit early without cost.
bit.ly/2GrqK83

Former Perth Insurance Broker sentenced to two years and nine months imprisonment for dishonest conduct
ASIC
Mr Sergio Amaranti has been sentenced to two years and nine months imprisonment, with a non-parole period of 18-months, in the District Court of Western Australia after earlier pleading guilty to seven counts of dishonest conduct.
bit.ly/2Gdgdx4

Investing and Trading

Trading Activity Stalls as Stocks Approach Records; Muted trading volumes come as S&P 500 rises to fresh six-month high and gets closer to record
Amrith Ramkumar – WSJ
Trading volumes have fallen as major indexes climb toward all-time highs, the latest sign that investors remain cautious despite 2019’s powerful stock rebound.
/on.wsj.com/2GdLYWE

Investors Handed an Oilman a ‘Blank Check’ Company. Here’s How It Turned Out; A cautionary tale for investors chasing wealth in the U.S. energy boom
Christopher M. Matthews – WSJ
Two years ago, investors handed veteran oilman Jim Hackett a $1 billion check and sent him to seek riches in shale drilling.Today, the company he founded with their money, Alta Mesa Resources Inc., has a market value of about $43 million and is teetering on financial ruinóone of the more spectacular failures met chasing the next big thing in the American shale boom.
/on.wsj.com/2GeQSTf

Large fund houses slash broker research spend after Mifid II; Budgets ‘down by an average of 30 per cent’ but variations are significant
Siobhan Riding – FT
Fund houses including Janus Henderson, Amundi and Invesco last year spent significantly less on broker research ó when compared with the original forecast by an investment professional association ó as the investment industry reacted to higher regulatory costs and increased margin pressure.
/on.ft.com/2GexVjO

Will impact funds’ lofty goals be matched by high returns?; Sceptics questioning the impact investing industry’s ethical credentials
Mark Vandevelde – FT
Some of the world’s richest people believe they have found a new way to tackle world poverty ó one that will make them even richer. Big investment groups are on board, too. But lately, not everything has gone to plan.
/on.ft.com/2GhvKM5

Wall Street braces for US earnings recession; Economic outlook and unflattering comparisons point to gloomy second quarter
Nicole Bullock – FT
Wall Street analysts are predicting shrinking profits for companies in the S&P 500 for the second quarter, setting up the prospect of an earnings recession in the US.
/on.ft.com/2GddqUC

IPOs Are Fashionable Again. Beware of the Hangover: Taking Stock
Michael Msika and Lisa Pham – Bloomberg
After a very quiet first quarter for IPOs, things are now bubbling again on that front, a sign of renewed investor confidence as European stocks keep adding to their new-year gains. However, not all new listings are skyrocketing.
/bloom.bg/2GdgT5r

After 60,000% Rally, America’s Top Stock Has Suddenly Gone Cold
Ryan Vlastelica – Bloomberg
Monster Beverage up against Amazon, Coca-Cola and Vital’s Bang; ‘The carbonated soft drink of this generation,’ analyst says
Who’s the biggest winner in the stock market this century? Amazon maybe? Or perhaps Apple? Up 2,300 percent and 5,300 since January 2000, respectively, they’re both good guesses.
/bloom.bg/2Gdg64t

Morgan Stanley Sees Two Big Reasons Low Volatility Will End
Joanna Ossinger – Bloomberg
Low liquidity and market complacency may boost price swings; Strategist Sheets sees risks whether data soften or pick up
A combination of low liquidity and high complacency mean cross-asset volatility won’t stay at historic lows for much longer, according to Morgan Stanley.
/bloom.bg/2G8igSM

Why Foreign Investors Aren’t Buying U.S. Treasuries Like They Used To
Joe Weisenthal and Tracy Alloway – Bloomberg
There’s something wrong with prices in funding and bond markets, according to this week’s Odd Lots guest. Zoltan Pozsar is a former adviser to the U.S. Treasury turned strategist at Credit Suisse. He argues that sweeping changes in the world’s money markets help explain why foreign investors aren’t buying as much U.S. debt as they used to. That could have big implications for the Federal Reserve as it attempts to wind down its balance sheet.
/bloom.bg/2VTK8Bb

The 5 Stock Market Crashes I’ve Lived Through ó and What I’ve Learned
Jonathan Clements, MarketWatch
We get more pain from losses than pleasure from gainsówhich might explain why I often think back on the five major market crashes that have occurred during my investing lifetime.
bit.ly/2UIyLiU

Fidelity’s Index-Fund Bashing Misses the Mark; A recent study from Fidelity Investments purports to show that active funds outperform passive. But there’s a catch.
Jason Zweig – WSJ
Sometimes, what research shows is less telling than what it doesn’t show.
/on.wsj.com/2UDtDfB

Institutions

Deutsche Bank-Commerzbank Deal Might Rest on Mountain of ‘Badwill’; Combined bank could recognize a profit of more than $18 billion using an obscure accounting method
Patricia Kowsmann and Paul J. Davies – WSJ
Deutsche Bank AG DB 2.62% will likely depend on an obscure but valuable accounting quirk to make a deal for smaller rival Commerzbank AG workable.
/on.wsj.com/2GeRVm9

TSB pledges to refund victims of online fraud; New guarantee will cover authorised and unauthorised losses by customers
Madison Marriage – FT
TSB, the UK bank, has pledged to refund any of its 5.2m customers who fall victim to online fraud in response to growing concerns about consumers being targeted by sophisticated criminals.
/on.ft.com/2GkVVBA

BlackRock boss Larry Fink paid $24m in 2018; Figure is 14% lower than previous year after fall in asset manager’s share price
Richard Henderson – FT
BlackRock chief executive Larry Fink has taken a $4m pay cut after the company’s stock performed poorly last year.
/on.ft.com/2Gdel7w

Jefferies brokers deal for US child migrant centre contractor; Investment bank is privately trying to sell shares in Caliburn International
Robert Smith – FT
US investment bank Jefferies is privately trying to sell shares in a controversial government contractor that has drawn criticism for operating a centre that has housed migrant children separated from their families at the US border.
/on.ft.com/2Gfz0YB

Regions

Global asset managers eye hordes of Chinese investors; Chart to start the week: doubling market share would bring in $500bn of new assets
Yusuf Khan – FT
Asset managers are increasingly looking to China and other Asian markets to boost their client base, with more than a third of inflows coming from the region.
/on.ft.com/2Gcf6h0

Russia’s Rusal plots first US investment since sanctions lifted; Group once controlled by Oleg Deripaska to buy 40% stake in Kentucky aluminium mill
Neil Hume – FT
Rusal, the Russian aluminium producer once controlled by oligarch Oleg Deripaska, has announced its first investment in the US since sanctions were lifted earlier this year.
/on.ft.com/2G8jtti

Investors Joining Saudi Stocks’ Big Moment Have to Pay a Premium
Filipe Pacheco – Bloomberg
Valuation spread to emerging markets is the widest since 2015; MSCI adding kingdom to emerging markets group in two phases
Visitors stand and watch stock movements displayed inside the Saudi Stock
Investors who are on the verge of buying Saudi Arabian shares for the first time should be ready to reach deep into their pockets.
/bloom.bg/2GdgIXP

GF Securities Hong Kong Chief Tang Xiaodong Resigns From Firm
Bloomberg News
Fund started by unit lost $139 million and faced margin calls; Tang was a deputy director at the securities regulator
GF Securities Co. said Monday the head of its Hong Kong unit has resigned from the firm, after losses rocked one of its hedge funds.
/bloom.bg/2GcdFiC

Iran Is Peddling a Million Barrels of Oil Again. No One Wants It
Arsalan Shahla – Bloomberg
Efforts to sell crude to domestic investors have languished; Iran is bracing for further U.S. sanctions on its oil industry
An Iranian exchange has offered investors as much as 6 million barrels of oil so far this year. Only a single deal closed, for the minimum 35,000 barrels.
/bloom.bg/2GelGUf

Brexit

London Finance Job Openings Halve in Two Years on Brexit Jitters
Jack Farchy – Bloomberg
Uncertainty over EU deal has ‘crushed’ employers’ confidence; Morgan McKinley warns outflow will continue amid Brexit delay
Job vacancies in London’s finance industry have halved in two years as uncertainty over Brexit knocks business confidence, a survey by recruiter Morgan McKinley has found.
/bloom.bg/2Gi2K6S

How the City of London’s Brexit lobbying barrage failed; Sector is not expected to achieve the ambitious partnership it was hoping for
Cat Rutter Pooley and Patrick Jenkins – FT
As 2018 dawned, Brexit was nearing, the City was worried and a lobbying frenzy was in full swing. Envoys from London’s financial services industry blanketed Europe, taking turns to scuttle between capital cities, trailing after ministers and Treasury mandarins.
/on.ft.com/2UHmSd3

Conservative MPs fear May’s Article 50 extension is the beginning of the end for Brexit
Thomas Colson and Adam Payne – Business Insider
Conservative members of parliament now fear that Theresa May’s move to delay Brexit until the end of October will ultimately lead to the complete collapse of the project to leave the European Union.
bit.ly/2UCoNzb

UK found to be hottest investment destination despite Brexit
Pam Pylas – Associated Press
Brexit may be causing all sorts of uncertainty in Britain but it doesn’t seem to be putting off foreign investors.
/abcn.ws/2UzhPem

Brexit: Jeremy Hunt says ‘absolute priority’ to avoid European polls
BBC News
It is an “absolute priority” for the government to leave the EU by 23 May to avoid having to take part in European elections, Jeremy Hunt has said. The foreign secretary said the public would find it “hugely disappointing” to be asked to send MEPs to Brussels. Asked if it could be a disaster for the Tories, he told the BBC “in terms of polling it certainly looks that way”. Some local Tory activists have signalled they will not campaign and regard the polls as a “distraction”.
/bbc.in/2v6gHzS

Can the Tories and Labour agree on Brexit?
Iain Watson – BBC News
Cross-party talks are continuing in Whitehall, amid parliamentary deadlock over Theresa May’s Brexit deal. So what are the sticking points and can Labour and the Conservatives reach an agreement? Public statements on the talks have tended to be bland, ranging from “constructive” and “serious” to the slightly more negative: “We have some way to travel.” Behind the scenes, the prospect of a deal, while difficult, is not impossible. There is a big incentive for both sides to reach agreement: the avoidance of next month’s European elections.
/bbc.in/2KEypFg

Miscellaneous

EU approves tougher EU copyright rules in blow to Google, Facebook
Foo Yun Chee – Reuters
Google will have to pay publishers for news snippets and Facebook filter out protected content under new copyright rules aimed at ensuring fair compensation for the European Union’s $1 trillion creative industries.
/reut.rs/2UDs8xZ

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