New York Stock Exchange

Market Volatility Leads to Fresh Focus on Machinery Beneath Trading

Dec 12, 2018

First Read

Hits & Takes
JLN Staff

Longtime markets industry professional Robert T. Cox passed away at home on December 7 after a brief illness.

Bob had recently traveled to Singapore for FIA Asia, Indianapolis for the Big Ten Championship game and New York and Washington, DC before becoming ill.

Cox served as a vice president in the financial markets group at the Chicago Federal Reserve and would often represent the central bank for various international organizations. He had also worked for HSBC in the Americas and Goldman Sachs in East Asia.

A memorial celebration will be held at Donnellan Funeral Home, 10045 Skokie Boulevard, Skokie IL 60077 on Saturday, December 15, from 3:00 to 5:00 pm. www.donnellanfuneral.com. In lieu of flowers, donations may be made in Bob’s name to support the work of Dr. Pat Garcia and the women’s HIV clinic at Northwestern Memorial Hospital. www.Hope-Chicago.org.~JJL

At one time, Bob lived in Elmhurst, IL, two blocks away from where I currently reside. Our condolences to his family and friends on his untimely passing.~JJL

The Guardians and the War on Truth were named the Time Magazine Person of the Year for 2018.~JJL

NFA: Due to maintenance, NFA’s website and the following systems may be intermittently unavailable for a brief period of time between the hours of 8:00 a.m. and 8:00 p.m. CT on Saturday, December 15, 2018: Online Registration System (ORS), BASIC Data Entry, BASIC, NFA Rulebook, News & Notices, Security Futures Products Training, Online Payments, Online Arbitration Claims, Arbitrator Profile, Arbitrator Training, Employment Application and Profile System, and all Electronic Filings Systems including EasyFile, Exemptions, Questionnaire, and Disclosure Documents.~JJL

Imagine if our markets were like the retail shops sending out email marketing messages that flood my inbox. Soybeans today 60% off!!! Buy $100 and get half off your next purchase of E-mini S&Ps? Thank goodness for price discovery and liquidity..~JJL

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Robert Cox
Chicago Fed
Robert T. Cox passed away on December 7, 2018. He joined the Federal Reserve Bank of Chicago in August 2014 and served most recently as vice president in the financial markets group. Among other things, Bob represented the Chicago Fed in the activities of the OTC Derivatives Regulators’ Forum, an international forum for information sharing and regulatory cooperation among central banks, prudential supervisors and securities and markets regulators.
bit.ly/2RQTxHx

****Do you have memories of Bob? We will be happy to aggregate them and share them with the readers of this newsletter. He was much loved and respected. I am sure there are some stories to share. Email them to me at johnlothian@johnlothian.com.~JJL

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Markets Conclude the U.S. Is Riskier Than China; Now the Treasury has to pay a premium over Chinese bonds to attract investors. They see four major red flags in U.S. debt.
Matthew A. Winkler – Bloomberg
Here’s another reason Donald Trump is “not at all happy with the Fed” and will continue to be frustrated by the world’s No. 2 economy. He is the first president to suffer the new normal of China becoming more creditworthy than the U.S. That’s right: America now pays more to borrow money than China does.
/bloom.bg/2C8vD4M

***** Listen to Mr. Market.~JJL

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Rich People Are Getting Away With Not Paying Their Taxes
Paul Kiel, Jesse Eisinger and ProPublica – The Atlantic
An eight-year campaign to slash the IRS’s budget has left the agency understaffed, hamstrung, and operating with archaic equipment. The result: a hundred-billion-dollar heist.
bit.ly/2zW5Zi2

***** Where can I invest in pitchfork futures?~JJL

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Tuesday’s Top Three
Our top read stories of the day were led by CryptoGlobe’s Why Chicago is Fast Becoming the Crypto Trading Capital of the World, providing a nice list of firms that have moved into the crypto space. Second was The Block’s piece Two identities, one man: the story of $800 million hedge fund fraudster Boaz Manor who led the alleged $31 million Blockchain Terminal ICO. Third was the New York Times’ look at the bursting bubble, Are You Ready for the Financial Crisis of 2019?

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Lead Stories

Market Volatility Leads to Fresh Focus on Machinery Beneath Trading; Investors struggle to pivot from calm, rising markets to a period of lurches in asset prices
Gunjan Banerji and Telis Demos – WSJ
Wild trading is straining the plumbing that powers global markets. In November, natural-gas futures surged 18% in one day, the biggest jump in more than a decade, only to plunge nearly 17% the following day. That caused some contracts tied to the fuel to breach central clearinghouse margin limits.
/on.wsj.com/2Gbd6su

CFTC Seeks Public Comments on Crypto-asset Mechanics and Markets
CFTC
The Commodity Futures Trading Commission (CFTC) is seeking public comment and feedback in order to better inform the Commission’s understanding of the technology, mechanics, and markets for virtual currencies beyond Bitcoin, namely Ether and its use on the Ethereum Network.
bit.ly/2QtZFJ9

Ether Futures Likely Stalled as CFTC Launches Review of Token
Benjamin Bain – Bloomberg
Swaps watchdog plans to study how coin compares with Bitcoin; Traders thought futures were imminent after SEC’s June remarks
Crypto enthusiasts cheered in June when the U.S. Securities and Exchange Commission removed what traders believed was a major hurdle to Ether joining Bitcoin in the futures markets.
/bloom.bg/2C81ZN6

EU steps up no-deal Brexit plans for derivatives traders; Move seeks to fulfil commitment to prevent sudden breakdown in access to UK clearinghouses
Philip Stafford in London and Jim Brunsden in Brussels – FT
Brussels is planning to grant temporary market access to UK clearing houses in the event of a no-deal Brexit as it steps up preparations to prevent financial turmoil should Britain crash out of the EU.
/on.ft.com/2C7TilG

Square Mile hiring slumps 40% due to Brexit; Hiring in the City has dropped by almost 40% thanks to Brexit uncertainty, recruiter says
By Emily Horton – Financial News
Job creation in the City has been severely dented by the UK’s impending exit from the European Union, with the number of new jobs coming to market plummeting, the latest figures show.
bit.ly/2C6CnAe

New DTCC Risk Survey Reveals Growing Concerns over Brexit’s Systemic Implications
DTCC
The slower than expected negotiating progress between the United Kingdom and the European Union and the ongoing uncertainty of the outcome has positioned Brexit as a top systemic risk concern for 2019, although cybersecurity and other geopolitical risks around the globe continue to dominate the risk landscape, according to a new survey published by The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry.
/goo.gl/c4Wbrr

Violent Stock Reversals Are Coming Faster Than Any Time Since 2011
Lu Wang – Bloomberg
Equity investors are getting used to whiplash. They got a dose today, when the S&P 500 wiped out a 1.4 percent rally. And the day before, when a 1.9 percent loss was erased. So far, there have been six days this quarter when stocks completely reversed an intraday move of at least 1 percent, the most since 2011, when Standard & Poor’s downgraded the U.S. sovereign rating, sending stocks to the brink of a bear market.
/bloom.bg/2C826bu

Fed, big banks on collision course over payments
Victoria Guida – Politico
The Federal Reserve, in an effort to speed up paychecks, rent and other transactions, is floating the idea of building a new infrastructure for faster payments. The nation’s big banks are not happy about that.
/politi.co/2RTnI0O

Investment consultants to face greater scrutiny from regulators;Antitrust watchdog calls for more transparency on fees
Jennifer Thompson – FT
Investment consultants who advise on £1.6tn in UK retirement savings will be subject to greater regulatory scrutiny over their fees and performance and forced to compete more intensively for business following an extensive probe by the antitrust watchdog.
/on.ft.com/2LcpUxL

Business crime is a white-hot legal sector; Top law firms are on a hiring spree for specialists in fraud and regulatory cases
Barney Thompson – FT
When Elly Proudlock qualified as a solicitor in 2008, the financial crisis was in full swing and being a corporate crime lawyer “wasn’t cool”.
/on.ft.com/2LaScbT

Brexit Britain’s financial sector faces ‘slow puncture’
Huw Jones, Sinead Cruise, Andrew MacAskill – Reuters
Life in London’s financial district will appear little changed when Britain leaves the European Union on March 29, defying predictions of an exodus of high-flyers to rival centres like Paris, Frankfurt and Dublin.
/reut.rs/2C6pPJ9

Cboe names derivatives business leaders with new hires from Goldman and DRW Trading; Arianne Criqui joins Cboe from Goldman Sachs, and Rob Hocking joins from DRW Trading, while Matt McFarland is promoted to head of futures at Cboe Futures Exchange.
Hayley McDowell – The Trade
Exchange operator Cboe Global Markets has made several new appointments within its derivatives trading leadership team, including new hires from Goldman Sachs and DRW Trading Group
bit.ly/2LeWz5N

Exchanges, OTC and Clearing

Cboe Global Markets Announces Appointments of Three Executives to its Markets Division
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. today announced it has hired Arianne Criqui as Senior Vice President, Head of Options and Business Development, and Robert Hocking as Senior Vice President, Head of Derivatives Strategy. The company also announced the promotion of Matthew McFarland to Vice President, Head of Futures, Cboe Futures Exchange (CFE). All three will hold leadership positions within the Markets division of Cboe Global Markets.
/prn.to/2C8wWkc

Trading Charity on the Frankfurt Stock Exchange brings 100,088.97 euros for non-profit organizations; Deutsche Börse and specialists donate stock exchange fees on St. Nicholas Day / handover this morning in the Frankfurt Stock Exchange
Deutsche Börse
Deutsche Börse and Wertpapierhandelsbanken, specialists in securities trading on the Frankfurt floor, handed over the proceeds of the “Trading Charity – Action and Help” campaign to four non-profit organizations in the Börsensaal this morning . Altogether the action brought together 100,088.97 euros.
bit.ly/2LevmjI

ICE Pursues Keeping Post-Brexit Oil Trading in London
Mathew Carr and Will Hadfield – Bloomberg
Intercontinental Exchange Inc. is betting it can keep its futures and options markets — home to half of the world’s crude oil trading — in London in the event of a no-deal Brexit, a strategy at odds with the plans of almost every other major U.K.-based trading venue.
/goo.gl/xK2kgA

2018 Year in Review
Tradeweb
The growing quantity of data that the street could see on screens defined fixed income markets in 2018. Interest rates – and yields – flickered up, prices scuttled down, international and local politics pushed spreads out, and for the first time, electronic quotes lit up in existing asset classes and new markets.
bit.ly/2C68cZU

Eurex Clearing clears first repo trades executed on BrokerTec; Eurex Clearing has cleared the first repo transactions received from BrokerTec, an anonymous dealer-to-dealer platform for the fixed income markets.
Eurex
The new connection gives BrokerTec clients a greater choice. They can now choose Eurex Clearing as CCP for clearing EUR repos. Customers choosing to clear repo transactions through Eurex Clearing are able to realize capital and margin efficiencies through balance sheet netting and collateral re-use.
bit.ly/2LhfuwY

Fixed Income Highlights – December 2018 edition
Eurex
November was a strong month overall for Eurex, with futures and options volumes up across the board. Despite the European Central Bank meeting being close to expectations, Draghi failed to talk up the possibility of quantitative easing extending beyond December. Although growth was ever so slightly downgraded, the overall picture has held up relatively well. Despite headwinds from Brexit negotiations from a political standpoint, the markets saw an uptick in volatility. This helped to underpin our volumes.
bit.ly/2LhfTiY

Equity Index Highlights – December 2018 edition
Eurex
Volatility was this month’s theme, as November took us on a roller coaster ride leaving us right back where we started. It seems that investors remain uncertain if the most recent wave of selling pressure is the last in a row of short-term buying opportunities. The rotation between momentum, low volatility and value stocks has been evident and is reflected by increased volumes across our suite of STOXX® sector futures and options. Heightened activity was visible in Oil & Gas, Basic Resources, Telecommunications, Utilities and Autos.
bit.ly/2LeulIq

Three Charts That Show the Importance Of A Competitive Bid/Offer NBBO
Phil Mackintosh – Nasdaq
We in equity markets sometimes take for granted the level of transparency and the quality of information available. We forget how that creates a competitive market for bids and offers that benefits all investors.
bit.ly/2LcWMqb

NYSE CEO: ‘People and Technology’ Makes the Big Board the Best Place to IPO
By Carlo Versano – Cheddar.com
Times Square is known as the “crossroads of the world,” but tell that to Stacey Cunningham.
The CEO of the New York Stock Exchange, the first woman to hold the job in the exchange’s 226-year history, said it’s at the NYSE where capitalism, economics, politics and “the world at large” converge.
bit.ly/2LehbLk

Fintech

Swift CEO Steps Down After Era of Tech Disrupting Global Banking
Edward Robinson – Bloomberg
Led payments network through Bangladesh heist, Iran dispute; Ex-McKinsey man retooled technology to compete with blockchain
Gottfried Leibbrandt will step down next June from Swift, the cross-border payment system, after spending seven years leading a key piece of global economic infrastructure through crises from hacking to sanctions on Iranian banks.
/bloom.bg/2C6YO8d

UBS Prepares Cloud Move to Secret Microsoft Data Centers
Patrick Winters and Jan-Henrik Foerster – Bloomberg
UBS Group AG reached a deal worth hundreds of millions of Swiss francs to use Microsoft Corp. cloud services in a bid to reduce costs while complying with strict Swiss privacy laws, according to people familiar with the matter.
/bloom.bg/2C6BUOu

Brazilian Fintech Nubank Launches Debit Card To Reach 120M Clients
Forbes
Brazilian fintech Nubank has launched a debit function for its card offering as well as the ability to withdraw cash from ATMs, in a move that aims to extend its reach to as many as 120 million customers.
The startup created in 2013 and valued at over $4 billion has initially offered a no-fee credit card as its key product. Just over a year ago, the company launched a digital bank account, with deposits tied to interest-bearing government securities.
bit.ly/2G9sntN

Greycroft’s Kamran Ansari on fintech disruption
Madeline Shi – Business Insider
Financial technology is a massive industry, with startups taking over nearly every corner of Wall Street, from banking to wealth management. But there are a few areas that haven’t been hit yet.
That’s where Kamran Ansari, a venture partner at venture-capital firm Greycroft, is focusing his time. At Greycroft, Ansari has driven the fund’s investments in Venmo (acquired by Braintree) and Braintree (acquired by PayPal).
/read.bi/2Gd0mSr

Why London Is Home For My FinTech Firm
Forbes
When Christo Georgiev was choosing a headquarters for his FinTech firm myPOS his shortlist had only one name on it: London. Christo is clear about the reasons for his choice: “Europe really has no answer to London, which is by some margin the most attractive city for a FinTech startup to locate in today. I knew that for my business to be successful we needed access to the world’s top talent, the most robust financial regulation, and excellent connections to Europe.”
bit.ly/2Gefcb5

Fintech is fighting back on fraud
Myles Dawson – Finextra
Retailers are in the midst of the busiest shopping period of the year, starting from Black Friday, through to Cyber Monday, pre-Christmas, Boxing Day and then the January sales. Huge volumes of money will be changing hands, often in high-pace, stressful situations. While on the whole this will be welcomed by retailers, it doesn’t come without its challenges. These extremely busy periods also bring an increased risk of fraud, as scammers use sophisticated technology to try and dupe both customers and retailers. Fintech, and innovative payments technology, is helping retailers to not only make the shopping experience more engaging and convenient, but to also help prevent fraud.
bit.ly/2GdFV7U

Cryptocurrencies

Yep, Bitcoin Was a Bubble. And It Popped; Millennials, like generations before them, just got a painful lesson about speculation.
Noah Smith – Bloomberg
It seems like every asset bubble has a famous anecdote of someone claiming, right at the top, that a crash is impossible. In the stock-market bubble leading up to the Great Depression, it was economist Irving Fisher, who declared in the New York Times that stocks “have reached what looks like a permanently high plateau” a few days before a collapse that would see stocks lose 89 percent of their value. In 2007 and 2008, many optimistic pronouncements by current National Economic Council Director Larry Kudlow turned out to be disastrously wrong.
/bloom.bg/2C8atE4

Winklevoss Twins Ignore Crypto `Winter,’ Looking Toward 2019
Annie Massa – Bloomberg
Plans for mobile customers and Asia expansion in new year; Gemini Trust operates crypto exchange, institutional services
Cameron and Tyler Winklevoss aren’t deterred by the exodus of retail investors during this year’s cryptocurrency market collapse.
/bloom.bg/2C76eIN

Surviving the crypto price-plunge: the ICO projects weathering the storm
Isabel Woodford – The Block Crypto
Media coverage of the crypto market over the last month has been dominated by headlines from the downright apocalyptic (“Crypto is dead”) to the self-congratulatory (“We told you so”). The bear market and investors’ resulting woes have even captured the attention of the major broadsheets. Unsurprisingly, reports that the likes of Steemit and Spankchain have been forced to cut their teams by more than 50% paint a worrying landscape of countless crypto projects who, after failing to hedge for a price-collapse, were now struggling to operate.
bit.ly/2C897Ju

*****”About 86% of the ICOs from 2017 are trading below their listing price, according to accounting firm Ernst & Young, while 30% have lost nearly all of their value.”~from WSJ

Bitcoin Bull Mike Novogratz Has A Stark Warning For The Crypto Community
Billy Bambrough – Forbes
Bitcoin is down more than 80% from its all-time high, having plummetted since the beginning of this year, dragging most major cryptocurrencies with it, including the likes of ethereum and Ripple’s XRP.
bit.ly/2C7SgGk

Gemini Launches New Mobile App for Crypto Traders
Nikhilesh De – Coindesk
Crypto exchange Gemini has just launched a mobile wallet for its users.
bit.ly/2C6n9v5

DTCC Security Chief Cites Blockchain As Systemic Risk
Michael del Castillo – Forbes
The Depository Trust and Clearing Corporation today identified blockchain as a potential threat to global financial infrastructures, in its annual Systemic Risk Barometer survey.
bit.ly/2C78wr7

ConsenSys ‘Town Hall’ Shows Staff Shaken at Ethereum’s Largest Startup
Zack Seward – Coindesk
Internal chat logs from a town hall held Friday by ethereum production studio ConsenSys show that employees are grappling with uncertainty in the face of recently announced layoffs.
bit.ly/2C80deM

Coinone Exchange Launches Cross-Border Payments App With Ripple Tech
Nikhilesh De – Coindesk
South Korea-based crypto exchange Coinone has officially launched Cross – a remittance app utilizing Ripple’s xCurrent product to facilitate speedy cross-border payments.
bit.ly/2C8TVMd

Politics

Here’s What Would Happen If There’s a Government Shutdown in December
Erik Wasson, Laura Litvan, and Christopher Flavelle – Bloomberg
Treasury, SEC would be shut after Dec. 21 without funding; Homeland Security is among agencies whose funding expires
A government shutdown sparked by a fight between President Donald Trump and Democrats over his demand for a border wall would have a smaller impact than others in recent years.
/bloom.bg/2C7b6xr

Pelosi’s Team Under Rising Pressure to Pursue Trump Impeachment
Billy House and Arit John – Bloomberg
House Democratic leaders are downplaying the possibility that they’ll quickly seek President Donald Trump’s impeachment after they take over the chamber in January, but the steady trickle of revelations against the president may make it harder to say no.
/bloom.bg/2C6U3f9

As many Americans blame the media for the negative tone in politics as blame Trump
Philip Bump – The Washington Post
President Trump’s strategy is well established. He asserts that he is a counterpuncher who will only attack if he himself has been attacked. He positions himself as a truth-teller in a world of fake news.
/wapo.st/2BdWudZ

The political tribalism of Andrew Sullivan
Ezra Klein – Vox
I knew when we launched Vox that there would be criticisms I didn’t anticipate, but I’ll admit, I never foresaw one of them being that writing explainers doesn’t satisfyingly replace the role of religion in people’s lives.
bit.ly/2Qp19nX

Michael Flynn Asks Judge for Leniency for Lying to F.B.I.
Adam Goldman – The New York Times
WASHINGTON — Lawyers for Michael T. Flynn, President Trump’s first national security adviser, asked a federal judge late Tuesday to spare him prison time for misleading investigators, and they suggested that the F.B.I. agents who interviewed him last year at the White House had tricked him into lying.
/nyti.ms/2C5OIEA

Regulation

SEC Charges Agria Corporation and Executive Chairman With Fraud
SEC
A multinational agricultural company has agreed to pay $3 million to settle charges that it concealed substantial losses from investors through fraudulent accounting in connection with its divestiture of its primary operating entity. In a related action, the company’s executive chairman Lai Guanglin (aka Alan Lai) settled charges that he manipulated the company’s share price.
/goo.gl/ioQizE

SEC Charges The Hain Celestial Group with Internal Controls Failures
SEC
The Securities and Exchange Commission today announced settled charges against a natural and organic food company stemming from weaknesses in the company’s internal controls related to end-of-quarter sales practices that were designed to help the company meet its internal sales targets. Based upon its extensive cooperation with the SEC’s investigation, which included self-reporting and remediation efforts, the SEC did not impose a monetary penalty on the company.
bit.ly/2LcETI5

Statement of Chairman J. Christopher Giancarlo on the White House Intent to Nominate Heath Tarbert as CFTC Chairman
CFTC
Washington, DC – Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo issued the following statement regarding the White House announcement of President Donald J. Trump’s intent to nominate Heath P. Tarbert as the next Chairman of the CFTC:
bit.ly/2C8fPPx

SEC Names Danae M. Serrano Acting Ethics Counsel and Designated Agency Ethics Official
SEC
The Securities and Exchange Commission today announced that Danae M. Serrano has been named Acting Ethics Counsel and Designated Agency Ethics Official.
bit.ly/2EqUweb

ESMA publishes the responses to its Consultation on stress testing guidelines for Money Market Funds
ESMA
ESMA has published the responses received to the Consultation Paper on draft guidelines on stress test scenarios under the MMF Regulation
bit.ly/2LjlJAt

Public Forum On Millennials And Investing: December 12, 2018
FINRA
FINRA Investor Education Foundation Hosts A Public Forum On Millennials And Investing With Remarks By U.S. Representatives Joyce Beatty And Steve Stivers
bit.ly/2LaWJep

Investing and Trading

Profit Outlook Weakens for S&P 500 in Latest Worrying Plot Twist
Lu Wang and Vildana Hajric – Bloomberg
Fourth-quarter EPS forecast down 2.5% in past two months; Low valuations no reason to buy if predictions don’t come true
Cook up whatever narrative you want for the stock market, in the end it will come down to earnings. And that’s a story that has been gradually getting darker.
In the latest twist, analysts have trimmed forecasts for S&P 500 profits in the fourth quarter to $41.58 a share from $42.66 two months ago. The 2.5 percent reduction is the most at this point in a quarter since early 2017, data compiled by Bloomberg show.
You’ve reached your free arti
/bloom.bg/2EtH5ua

Many U.S. Financial Officers Think a Recession Will Hit Next Year; Almost half of U.S. chief financial officers believe a recession will strike the U.S. economy by the end of 2019
Sharon Nunn – WSJ
Almost half of U.S. chief financial officers believe a recession will strike the U.S. economy by the end of 2019, with the tight labor market and growing trade tensions driving economic jitters among corporate America.
/on.wsj.com/2LesRhk

Markets Should Embrace Volatility While It Lasts; The complexities of trading on trade dominates the day’s market commentary
Robert Burgess – Bloomberg
It sounds simple. Buy stocks when there’s news that the U.S. and China are making headway in resolving the escalating trade war. Sell them when the divide seems to be growing. But the problem for markets these days is that it appears as if every positive development seems to be followed closely by a negative one, sometimes within hours, and investors are having a hard time keeping up with the rapid-fire developments.
/bloom.bg/2C6URkb

Lack of a clear policy on climate-risk disclosures is a risk for U.S. companies, report finds
Ciara Linnane – MarketWatch
The lack of a clear policy on climate-risk disclosures is putting U.S. companies and their customers at risk from climate change, according to a new report published Wednesday.
/on.mktw.net/2C89ALK

Stocks cheered by Trump trade talk; sterling claws off lows
Marc Jones – Reuters
LONDON (Reuters) – Stock markets rallied on Wednesday as U.S. President Donald Trump sounded upbeat about a trade deal with China, while sterling rose off 20 month lows as Prime Minister Theresa May vowed to fight a challenge to her leadership.
/reut.rs/2rwuy0v

Institutions

HSBC Ex-Markets Chief Said to Have Left After Misconduct Claim
Stefania Spezzati and Ambereen Choudhury – Bloomberg
HSBC Holdings Plc’s head of global markets, Thibaut de Roux, left the bank after a junior female employee accused him of inappropriate conduct at a hotel bar in New York, people with knowledge of the matter said.
/bloom.bg/2EpkOxz

Index fund managers are too big for comfort; Investors such as BlackRock cannot keep quiet and hope that no one will notice them
John Gapper – FT
Think of an industry in which three big companies have used technology and economies of scale to become oligopolies and wield power over other enterprises. It hails not from Silicon Valley but the US east coast.
/on.ft.com/2LbDuBl

The ‘clear pattern’ to Deutsche Bank’s mounting legal woes; Christian Sewing’s ‘new era’ hamstrung by repeated emergence of lender’s past problems
Olaf Storbeck- FT
When Christian Sewing was appointed Deutsche Bank’s chief executive in April, his mandate was to lead Germany’s largest lender “into a new era” — but the 48-year-old increasingly looks like a prisoner of its chequered past.
/on.ft.com/2C8VQQJ

HSBC Ex-Markets Chief Said to Have Left After Misconduct Claim
Stefania Spezzati and Ambereen Choudhury – Bloomberg
Thibaut de Roux was head of HSBC’s global markets unit; Bank had announced de Roux’s departure in mid-September
HSBC Holdings Plc’s head of global markets, Thibaut de Roux, left the bank after a junior female employee accused him of inappropriate conduct at a hotel bar in New York, people with knowledge of the matter said.
/bloom.bg/2EpkOxz

Thiam’s Revamp Rewards Leave Credit Suisse Investors Unimpressed
Jan-Henrik Foerster and Patrick Winters – Bloomberg
Swiss bank to repurchase as much as 3 billion francs of stock; ‘Overall we see the targets as unambitious,’ says one analyst
As Tidjane Thiam handed out rewards to Credit Suisse Group AG investors who stuck with him through his three-year turnaround plan, perhaps the biggest surprise was a decided lack of excitement.
/bloom.bg/2C6xPJU

Credit Suisse Plans to Buy Back Up to $3 Billion of Stock
Jan-Henrik Foerster – Bloomberg
Swiss bank is due to hold investor day on Wednesday in London; Credit Suisse is also said to be planning to boost dividend
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam is poised to announce a stock buyback of as much as 3 billion francs ($3 billion) and a dividend increase, aiming to boost shares that have tumbled during his tenure.
/bloom.bg/2C7TukU

Regions

U.S. Soybean Farmers Work to Loosen China’s Grip; Agriculture officials are looking to Asia and Europe amid trade tensions, while producers consider new domestic uses
Jesse Newman and Jacob Bunge – WSJ
U.S. soybean farmers worked for decades to make China their biggest foreign customer. Now they face a tougher challenge: weaning themselves off the market.
/on.wsj.com/2LcBjxD

US farmers hit by soaring storage costs; Trade war double whammy as soyabeans go unsold and tariffs push up cost of metal bins
Gregory Meyer – FT
American farmers are being hit not once but twice by the Trump administration’s trade war. Retaliatory tariffs imposed by the country’s trading partners have already led to a pile-up of unsold crops — and now the metal bins needed to store the produce have soared in price thanks to US tariffs on foreign steel.
/on.ft.com/2Leawki

Goldman and Citi See Risks for Hong Kong Banks
Alfred Liu – Bloomberg
Hong Kong’s banks are staring at a tough year for business, marred by lower demand for loans and a peak in local property prices.
/bloom.bg/2C8W5vj

Britain Halts Suspension of Visa Program for Rich Investors
Tom Metcalf – Bloomberg
The U.K. government didn’t follow through on a pledge last week to overhaul a visa program popular with wealthy people.
/bloom.bg/2C75MKB

Brexit

British prime minister vows to fight for her job as colleagues try to oust her over Brexit
By F. Brinley Bruton and Alexander Smith – NBC
Lawmakers from British Prime Minister Theresa May’s party will vote on whether to remove her from power Wednesday.
/nbcnews.to/2C982RD

Brexit tops risk concerns as worries over cyber risk and regulatory impact fall; Survey from the DTCC finds that half of respondents believe Brexit will pose a threat to the broader economy, as concerns about cyber risk and regulation ease.
Jon Watkins – The Trade
A new systemic risk survey from the DTCC has shown that almost half of respondents believe Brexit will pose a risk to the broader economy, though concerns about cyber risk and regulatory impact are lessening.
bit.ly/2LcRF9o

EU to act on derivatives clearing in case of no-deal Brexit: document
Huw Jones – Reuters
The European Union is set to implement a commitment to avoid disruption in the cross-border derivatives market if Britain crashes out of the bloc next March without a deal, an EU document showed on Tuesday.
/reut.rs/2EquiZx

EU to grant derivatives traders emergency market access in no-deal Brexit; Brussels seeks to avoid financial turmoil should Britain crash out of the EU
Jim Brunsden – FT
Brussels is set to grant a 12-month window for European derivatives traders to continue using crucial market infrastructure in the UK in the event of a no-deal Brexit, as it seeks to avoid financial turmoil should Britain crash out of the EU.
/on.ft.com/2C6zXl8

The EU Is Playing Trump Just Like It Played the Brexiters; U.S. officials shouldn’t underestimate Europe’s skill at the waiting game.
Leonid Bershidsky – Bloomberg
The Trump administration has pulled out all the stops to attack the European Union. Realizing its relative weakness, the EU hasn’t tried a muscular response. Instead, it has used the same tactic as it did with Britain’s Brexiters.
/bloom.bg/2C88Q9q

Theresa May defiant in battle against Brexit critics to save job; Tory Eurosceptics trigger vote of confidence to seize control of EU divorce
George Parker, Henry Mance and Laura Hughes – FT
Theresa May is facing a vote of confidence in her leadership on Wednesday evening after Eurosceptic MPs launched a coup attempt against the prime minister to try to seize control of the final stages of Brexit.
/on.ft.com/2C88Je0

Brexit in chaos as Tory MPs trigger vote of no confidence in Theresa May
Jessica Elgot – The Guardian
Conservative MPs have triggered a vote of no confidence in Theresa May, plunging the Brexit process into chaos as Tory colleagues indicated they no longer had faith in the prime minister to deliver the deal.
bit.ly/2Lc6Q2I

Brexit: May cancels Dublin visit over confidence vote
Jayne McCormack – BBC News
The prime minister has cancelled a visit to Dublin later due to a vote of no confidence she faces from her party. Theresa May had been planning to discuss the Brexit negotiations with the taoiseach (Irish prime minister) on Wednesday night. She has said she will now remain in London, but that progress on the Irish border backstop had been made in recent days.
/bbc.in/2LeXFhV

Miscellaneous

Kickbacks and ‘Sandwiches’: How Insiders Ran an Alleged Construction Fraud at Bloomberg; Charges announced Tuesday by the Manhattan district attorney’s office reveal details on the alleged $15 million scheme
Corinne Ramey – WSJ
Inside a Bloomberg LP office building in Manhattan, the president of a heating and air-conditioning company left a hidden payment, according to an indictment unsealed Tuesday.
/on.wsj.com/2LgqNpe

David Solomon Leads $31 Million Night for UJA Wall Street
Amanda L Gordon – Bloomberg
Goldman Sachs CEO began supporting Jewish charity as a kid; ‘Anti-Semitism has no place’ post-Pittsburgh, Charlottesville
With David Solomon as an honoree and Lloyd Blankfein as chair, the UJA-Federation of New York Wall Street Dinner raised $31 million Monday night, a success that had humble beginnings.
/bloom.bg/2C8yzyk

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