First Read

Hits & Takes
JLN Staff

Welcome to Presidents’ Day in the U.S. This is the day when U.S. Presidents have historically taken the day off from Twitter. Just kidding. But it is the day we are not going to publish JLN Options and the JLN staff gets the rest of the day off. Have a great day!~JJL

Last week’s CryptoCon 2018 produced some interesting insights into the cryptocurrency space. DRW Cumberland’s Bobby Cho and Jim Radecki revealed just how large that operation is today, with crypto trades representing about 25 percent of DRW’s trades on 30 different currencies with a minimum $100,000 transaction size. Its main counterparties are hedge funds.~JK

SGX put out a notice it will be listing “successor products” to its SGX Nifty index contracts before August and details will be announced next month. It also said it is working on a link to the National Stock Exchange of India in Gujarat International Finance Tech, or (GIFT) City. ~JK

Quantitative Brokers has won the category for Best Broker-Dealer Algorithm in the 2018 Fund Technology and WSL Awards, which recognize and reward providers catering to asset managers and institutional traders who have demonstrated exceptional customer service and innovative product development over the past 12 months.~JJL

We may have missed the news on Friday that Gaurang Desai stepped down as CEO of the Dubai Gold and Commodities Exchange (DGCX) effective February 18. Les Male assumes the role effective immediately.~SR

Reuters has a good niche story out about fund investments in dry bulk shipping. The main instrument of choice is freight forward agreements, or FFAs. One broker estimated that the underlying transaction value of FFAs this year could reach $24 billion, up from $16.5 billion in 2017 and $9 billion in 2016.~SD

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Lying to Investigators Shouldn’t Be a Crime; Everyone from President Trump to a petty thief is at the same disadvantage when talking to prosecutors.
Stephen L. Carter – Bloomberg
Former federal prosecutor Ken White created a stir with his recent argument at Reason.com that neither President Donald Trump nor anyone else should voluntarily meet with investigators. By anyone else, White does not simply mean other people facing scrutiny in special counsel Robert Mueller’s probe. He means you and me. Ever.
/goo.gl/9MG7z2

***** The logic is, if they can lie to you, you should be able to lie to them. No lie!~JJL

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Between Bridges – February 19, 2018: CFTC Says Futures Brokerage Firm’s Failure to Supervise Led to Unauthorized Cyber Attack; Trader Criminally Charged for Allegedly Misappropriating Employer’s Cryptocurrencies
Gary DeWaal – Bridging the Week
Last week, a futures commission merchant settled an enforcement action brought by the Commodity Futures Trading Commission, claiming that it failed to supervise a third-party technology provider it engaged to implement “critical” elements of the FCM’s information system security program. As a result of the breakdown, claimed the CFTC, an unauthorized individual improperly infiltrated the FCM’s technology system and copied files containing customers’ records and private information. Unrelatedly, a Chicago-based trader was criminally charged in a federal court in Chicago with fraud for misappropriating his employer’s cryptocurrencies.
/goo.gl/nkTKW5

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The Spread – Week of 2/12 – 2/16
JohnLothianNews.com
Manipulating, gaming, rigging – that’s the nature of VIX talk this week. But before we get to those allegations in this week’s options recap, we cover a few other stories that didn’t get as much press.

Watch the video here »

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Friday’s Top Three
Our top read story from Friday was Bloomberg’s piece This Short Seller Pressed ‘Tweet.’ Then the FBI Showed Up. Second went to the Financial Times’ piece on the saga of the Chicago Stock Exchange, or CHX, US blocks Chinese-led takeover of Chicago exchange. Third went to Business Insider’s Coinbase cryptocurrency investors hit with credit card glitch.

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Lead Stories

What Shaped the Stock Market’s $3 Trillion Trauma
Elena Popina, Kailey Leinz – Bloomberg
S&P 500 posts best week since 2013 even as yields increase; Daily volume at Goldman Sachs’s buyback unit shot up last week
Want a neat narrative? There isn’t one. Stocks buckled, $3 trillion was lost, then just as quickly, roughly half of it came back. Nothing quite explains every little twist and turn. Much of it remains a blur. But there are clues to be gleaned from the behavior of buyers and sellers.
/goo.gl/tMwRZC

FCA and US CFTC sign Arrangement to collaborate on FinTech innovation
UK FCA
The Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC) have today signed an arrangement that commits the regulators to collaborating and supporting innovative firms through each other’s financial technology (FinTech) initiatives – LabCFTC (link is external) and FCA Innovate.
/goo.gl/EeptTs

***** CFTC Version ~JJL

Euronext Plans More Acquisitions After Buying Irish Stock Market
Viren Vaghela – Bloomberg
Euronext NV will acquire more companies this year to help diversify its revenues.
The Amsterdam-based exchange operator is open to tie-ups with other European exchanges like its combination with Irish Stock Exchange Plc — to complete in March — that gives Euronext a foothold in the ETF market, said Chief Executive Officer Stephane Boujnah on a call after reporting full-year earnings.
/goo.gl/p6o9tL

LSE goes head to head with ICE over Libor replacement
Reuters Staff
The London Stock Exchange Group (LSE.L) will launch a contract to compete directly with rival InterContinental Exchange (ICE.N) to wean markets off Libor by 2021, the British bourse said on Monday.
/goo.gl/qURQwA

Start preparing for the next financial crisis now; We need measures to limit the likelihood of disorderly market processes in the next downturn
William White – FT
Global monetary policy has been “ultra-easy” for many years. Yet it is becoming clear it is now caught in a debt trap of its own making.
/goo.gl/RWXgmP

Ethereum Founder Vitalik Buterin Warns That Cryptocurrencies Could Drop to ‘Near-Zero’
David Meyers – Fortune
Vitalik Buterin, the co-founder of the Ethereum blockchain and its associated cryptocurrency, does not want people throwing their life savings into virtual coins just yet.
/goo.gl/2D3odn

Price war between banks could offset benefits of volatility; Competition among the world’s biggest investment banks could undermine revenue growth
Laura Noonan, Investment Banking Correspondent – FT
A looming price war between the world’s biggest investment banks could erase the revenue rebound promised by a recent surge in market volatility, research group Coalition has warned.
/goo.gl/2drk7W

Munich Security Conference: US government nowhere near regulating bitcoin
Natasha Turak and Hadley Gamble – CNBC
There’s a long way to go before the U.S. government starts regulating bitcoin, Rob Joyce, special assistant to the president and White House cybersecurity coordinator, told CNBC on Friday.
cnb.cx/2ExQWLS

Ex-JPMorgan trader turned bitcoin fund manager: ‘There’s trench warfare going on between analogue and digital financial services’
Oscar Williams-Grut – Business Insider
A former high-flying trader who has embraced the world of cryptocurrencies says there is a “trench warfare” going on between traditional financial services and digital upstarts.
/goo.gl/R8iRc2

All aboard for hedge funds as trade tide lifts shipping
Jonathan Saul, Maiya Keidan – Reuters
Forced to abandon ship after mistiming their investments five years ago, hedge funds are venturing back in a bid to profit from growing global trade flows.
Around 90 percent of traded goods by volume are transported by sea and global shipping sectors, including dry bulk, are on course for a recovery this year after a near-decade long crisis, ratings agency S&P said in a report last week.
/goo.gl/seQgmp

Wall Street’s Five CEOs Get Biggest Payday Since 2006; Combined compensation for chiefs of the biggest banks hit $126 million, the highest annual tally since before financial crisis
Liz Hoffman, Christina Rexrode and Aaron Lucchetti – WSJ
Wall Street CEOs are getting paid the big bucks again. Goldman Sachs Group Inc. and Citigroup Inc. said Friday that they gave their CEOs raises for 2017, meaning all five large U.S. banks with significant trading and investment-banking operations have done so.
/goo.gl/9Cxqdn

Eyes wide shut: the $1.8 billion Indian bank fraud that went unnoticed
Krishna N. Das, Aditya Kalra, Devidutta Tripathy, Tom Lasseter – Reuters
The Punjab National Bank branch in south Mumbai sits just down the road from both the Bombay Stock Exchange and the Reserve Bank of India, at a physical center of one of the world’s fastest growing major economies.
/goo.gl/VWtG3Q

Is it possible to reverse Brexit?
Anand Menon – The Guardian
It’s all kicking off. A poll carried out by ICM for the Guardian showed that, excluding those with no opinion, voters support the idea of a second referendum by a 16-point margin.
/goo.gl/hZhP7s

Few Wealthy Investors Deployed Cash in Meltdown, UBS Survey Says
Joanna Ossinger – Bloomberg
Investors, business owners see market dip as temporary; Companies tempering their actions amid a drop in optimism
Only about 10 percent to 15 percent of investors took advantage of the recent market pullback to boost their equity allocations or put cash to work, according to UBS Group AG.
/goo.gl/xvp3qs

Exchanges, OTC and Clearing

Chicago Stock Exchange Statement on SEC Acquisition Ruling
Medium
On behalf of its shareholders, board of directors and management team, the Chicago Stock Exchange (“CHX”) would like to express its disappointment with the decision by the Commissioners of the U.S. Securities and Exchange Commission (“SEC”) to overrule their own staff’s recommendation in rejecting the acquisition of CHX by a majority American investor group led by North American Casin Holdings, Inc. The disapproval order of February 15, 2018, contains logic and representations with which CHX strongly disagrees.
/goo.gl/UBKQ6r

Update on SGX India Equity Derivatives
SGX
SGX announced today that it will list successor products to its SGX Nifty family of products before August 2018. This will provide market participants with the same ability to invest and maintain their risk exposure to the Indian capital markets. Market participants will be able to transition seamlessly to these products before the expiry of SGX’s licence agreement with the National Stock Exchange of India (NSE).
/goo.gl/aSXj5y

Nasdaq Dubai launches Abu Dhabi, Dubai equity index futures
Stanley Carvalho – Reuters
In a move that could attract fresh money to the United Arab Emirates’ equity markets, the Nasdaq Dubai exchange launched futures contracts on Sunday covering the main indexes of the country’s two main stock markets in Abu Dhabi and Dubai.
/goo.gl/FvoTCZ

CurveGlobal To Launch Three-Month SONIA Futures Contract
London Stock Exchange Group
New SONIA futures contract will aid UK transition from LIBOR Benchmark; Addresses client demand for liquidity in the new SONIA rate; CurveGlobal is making the SONIA contract clearing and exchange fee-free for the remainder of 2018
CurveGlobal, the interest rate derivatives platform, announced today its intention to launch a three-month SONIA futures contract, which will be admitted to trading on London Stock Exchange Derivatives Market (LSEDM). The innovative CurveGlobalÆ Three Month SONIAÆ Future will address client demand for liquidity in the Bank of England’s reformed benchmark rate, which is set to replace LIBOR by 2021.
/goo.gl/aMhDfZ

Singapore Exchange to launch new Indian derivatives before NSE deal ends
Reuters
Singapore Exchange Ltd (SGX) said on Monday it will launch successor products to its flagship Indian equity index derivatives before the bourse’s licence agreement with the National Stock Exchange of India (NSE) expires in August 2018.
/goo.gl/hpv6md

TMX profit beats as lower expenses offset revenue fall
Reuters Staff
Toronto Stock Exchange operator TMX Group Ltd reported on Monday a higher-than-expected fourth-quarter profit as lower operating expenses before acquisition costs helped offset a fall in revenue.
/goo.gl/whQqJh

SGX to launch Nifty index successor before shut down; SGX will launch successor products following shut down of Nifty index and termination of data contract with the NSE in India.
Hayley McDowell – The Trade
Singapore Exchange (SGX) has confirmed it will list successor products to the Nifty family of products before its contract with the National Stock Exchange of India (NSE) expires in August.
/goo.gl/SY92JV

Euronext publishes Full Year 2017 Results
Euronext
Today Euronext, the leading pan-European exchange in the Eurozone with nearly 1,300 listed issuers, announces its results for the full year 2017.
/goo.gl/hknLxK

Euronext lowers growth revenue target by almost EUR20m; Targets were outlined as part of a strategic plan outlined in the years after 2014 initial public offering
Samuel Agini – Financial News
Euronext has lowered a revenue target put forward nearly two years ago as part of strategic plan outlined in the wake of its initial public offering.
/goo.gl/ikwNhk

Eurex Clearing FpML Interface: New server certificates
Eurex
New SSL/TLS certificates will be installed on the AMQP brokers used for the Eurex Clearing FpML Interface in production. They will replace the existing certificates which will expire on 26 May 2018. The certificates will be signed by the Comodo certification authority (CA). The root and intermediate certificates of the CA can be downloaded from their website www.comodo.com.
/goo.gl/fCbk5R

Dr. Michael Josef Lappe is the new Chief Justice of Deutsche Boerse AG
Deutsche Boerse AG
Dr. Michael Lappe (60) will become Chief Financial Officer of Deutsche Boerse AG on March 1st. Michael Lappe is currently working as an independent lawyer in the consulting and transaction business and as Senior Counsel for various international consulting firms. Until 2012, Michael Lappe was a corporate and M & A partner for more than 20 years, with a focus on the financial services sector and also a senior partner of the international law firm Linklaters with offices in London, Berlin, Frankfurt and Munich.
/goo.gl/aeTpcc

Fintech

Fidessa group announces the preliminary results for the year ended 31st December 2017
Fidessa
bit.ly/2ETiVca

Coinbase Runs From One Fire to the Next
Julie Verhage – Bloomberg
Coinbase Inc. is one of the most popular online exchanges for digital currencies. But last year, it started seeing complaints soar on the U.S. Consumer Financial Protection Bureau’s website. Unfortunately for the San Francisco business and its customers, things have only gotten worse.
/goo.gl/ntrR3y

Visa confirms Coinbase wasn’t at fault for overcharging users
Fitz Tepper – TechCrunch
Yesterday, we wrote that Coinbase customers were being charged multiple times for past transactions.
/goo.gl/Y3kUwA

Bitcoin’s Latest Glitch: Double Charges at Fast-Growing Coinbase; Thousands may have been affected, company executive says; customers will be compensated
Paul Vigna and AnnaMaria Andriotis – WSJ
Thousands of customers of Coinbase, one of the largest bitcoin-related firms dealing with the public, may have suffered repeated, incorrect duplicate charges on their digital-currency purchases, the firm said Friday.
/goo.gl/nJK8RX

Thieves used the international payment system SWIFT to steal $6 million from a Russian bank last year.
Ivana Kottasova – CNN
Thieves used the international payment system SWIFT to steal $6 million from a Russian bank last year.
/goo.gl/ga8ubE

ICO startups band together to create $100M+ grant fund for Ethereum projects
Jon Russell – TechCrunch
In a first of its kind, half a dozen ICO companies have come together to collaborate on a new fund that plans to pay out more than $100 million to promising projects in the Ethereum crypto space.
/goo.gl/iLG85C

This company has filed for more Bitcoin patents than any other
Aaron Hankin – MarketWatch
It’s no surprise that cryptocurrency patents have risen at an extreme rate since the inception of bitcoin in 2008. In fact, the long-term chart of patents looks eerily similar to its price. However, what is surprising is who tops the list.
/goo.gl/A9zLPb

Anonymous trader buys $400 million in bitcoin
Aaron Hankin – MarketWatch
Go big or go home. That’s the motto of one mysterious investor who put his chips on the table, buying close to $400 million of the No.1 digital currency, bitcoin.
/goo.gl/ur2AuY

Bitcoin Thieves Threaten Real Violence for Virtual Currencies
Nathaniel Popper – NY Times
The currency they were after was virtual, but the guns they carried were anything but.
/goo.gl/UNRZAe

ETFs drive demand for electronic trading services at Fidessa; Fidessa sees greater demand from top-tier firms for electronic and programme trading services.
Hayley McDowell – The Trade
The growth in exchange-traded funds (ETFs) and MiFID II requirements are driving demand for electronic and programme trading services at Fidessa.
/goo.gl/qsGU3m

S&P Global Ratings: Cryptocurrency crash will not impact financial markets; Regulation needed
Tom Eckett – InvesmentWeek
S&P Global Ratings has said regulation and guidance needs to be implemented before cryptocurrencies can influence financial institutions.
/goo.gl/PXw6Gi

Investment Association targets buy-side FinTech with accelerator scheme; VeloCity will launch in Q2 this year and aims to increase buy side take-up of emerging technologies.
Hayley McDowell – The Trade
The UK’s Investment Association (IA) is to work alongside FinTech firms to help bring new technology services to asset managers through the launch of the IA FinTech accelerator, Velocity.
/goo.gl/sW8HkR

An audience with IHS Markit’s Lance Uggla: Going big with big data; Data provider’s founder on how size drove the merger with IHS and his new role as chairman and chief executive
By Samuel Agini – Financial News
Lance Uggla is used to being the public face of Markit, the data provider he founded 15 years ago in a St Albans barn. Perhaps the biggest price of his latest move ó joining with another chief executive to create $18bn data and analytics company IHS Markit ó was eschewing the limelight for more than a year.
/goo.gl/dHbeUq

Politics

Whatever Trump Is Hiding Is Hurting All of Us Now
Thomas L. Friedman – NY Times
Our democracy is in serious danger. President Trump is either totally compromised by the Russians or is a towering fool, or both, but either way he has shown himself unwilling or unable to defend America against a Russian campaign to divide and undermine our democracy.
/goo.gl/DW61B4

Mueller Shows How Russians Sowed Discord With Dirty Tricks
David Voreacos, Chris Strohm – Bloomberg
Troll farm tricked Facebook, PayPal, Trump campaign officials; Mueller Indictment Lays Out Sweeping Conspiracy Plan by Russians
The sweeping conspiracy detailed by Special Counsel Robert Mueller exposes the sophistication of Russian efforts to undermine U.S. democracy using social media — and how vulnerable the U.S. remains to foreign intervention ahead of 2018 midterm elections.
/goo.gl/gVKEVB

Trump Criticizes Everyone But Russia for 2016 Election Meddling
Shannon Pettypiece, Mark Niquette – Bloomberg
President again refers to collusion ‘hoax,’ Democrats’ fault; Trump tweets 14 times in 24 hours on Russia investigations
President Donald Trump spent much of his weekend hammering the FBI, Democrats, Robert Mueller’s investigation and his own national security adviser over Russia’s efforts to sway the 2016 election that he won. Excepted from the criticism — Russia.
/goo.gl/bRFGFS

How Vladimir Putin mastered the cyber disinformation war; Robert Mueller’s move to indict organisations affiliated to the Kremlin is a change in tack
Andrei Soldatov – FT
In order to understand the Russian campaign to disrupt the 2016 presidential election, described in detail in the indictment unveiled on Friday by US special counsel Robert Mueller, you have to go back 18 years. In 2000, when the brutal military campaign known as the second Chechen war was in full swing, the Kremlin developed a new view of the nature of information. The recently installed Russian president, Vladimir Putin, decided to treat it as a weapon.
/goo.gl/qCKxNL

Russian Influence Operation Allegedly Ran Like a Propaganda Startup; Federal indictment describes Internet Research Agency as having deep understanding how to use Silicon Valley technology to sow discord
Robert McMillan, Deepa Seetharaman and Georgia Wells – WSJ
The alleged Russian campaign to manipulate the U.S. presidential election was orchestrated by what amounted to a propaganda startup, with finance and graphics departments, performance targets and a sophisticated social-media strategy designed to gain maximum attention, according to U.S. authorities.
/goo.gl/6dtmLb

Facebook and Twitter Are Too Big to Allow Fake Users
Leonid Bershidsky – Bloomberg
There’s something in common between amazing story of “Nicole Mincey,” the pseudonymous Twitter user with 146,000 followers who was retweeted by President Donald Trump and then disappeared overnight along with a few other online personae, and a recent prank by a Berliner frustrated with his inability to get Twitter to remove hate speech. The common element is the obvious solution to both problems, which rarely surfaces in discussions of trolling, fake news and cyberbullying.
/goo.gl/JZo6NE

Regulation

India’s City Union Bank CEO says suffered cyber hack via SWIFT system
Devidutta Tripathy – Reuters
India’s City Union Bank said on Sunday that “cyber criminals” had hacked its systems and transferred nearly $2 million through three unauthorized remittances to lenders overseas via the SWIFT financial platform.
/goo.gl/4NfJx2

Japan’s Financial Regulator To Conduct Inspections Of 15 Unregistered Crypto Exchanges
Molly Jane Zuckerman – Cointelegraph
Japan’s Financial Services Agency (FSA) will conduct on-site inspections of 15 cryptocurrency exchanges that are currently awaiting registration in the aftermath of the Coincheck hack, the local news outlet The Japan Times wrote today, Feb. 16.
/goo.gl/PPTnqM

UK’s Financial Conduct Authority Publishes Report On The Supervision Of Algorithmic Trading
Mondivisione
The Financial Conduct Authority (FCA) has today published a report on the supervision of algorithmic trading in wholesale markets.
/goo.gl/QPyJUJ

FCMs warn EU client-clearing rules could increase risk; Emir review calls for clearing access to be ‘non-discriminatory’ – might mean banks have to take risky clients
Nazneen Sherif – Risk.net
Draft rules that are designed to improve access to derivatives clearing for smaller counterparties in Europe might expose clearing members to riskier clients, banks are warning.
/goo.gl/twtKz2

Imposter Scams: Don’t Be Fooled By “Guarantees” or Money-Making Pitches from “Regulators”
FINRA
There is nothing like an iron-clad guarantee to make you feel secure about a purchase. Sadly, financial fraudsters know what a psychological balm the word “guarantee” can provide, and use it as a tactic to make their investment pitches look more appealing.
/goo.gl/82NbeB

FINRA Warns Investors of ‘Regulator’ Imposter Scams; Con Artists Posing as FINRA CEO ‘Guarantee’ Fraudulent Investments
FINRA
The Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert warning investors to beware of financial scams in which con artists are posing as regulators to make fraudulent investment pitches.
/goo.gl/pr3NGa

China to retaliate against U.S. metal tariffs
Yoel Minkoff, Seeking Alpha
It’s the latest trade tension escalation between the world’s top two economies.
China has threatened retaliation after the Trump administration received a green light to impose steep tariffs on aluminum and steel imports on national security grounds.
/goo.gl/rYTifK

Order Regarding Chicago Stock Exchange
SEC
/goo.gl/nohsci

Investing and Trading

Private Trades in Spotify Shares to Play Key Role in Upcoming Debut; Using direct listing will require Spotify to find novel ways to guide the market to a price
Maureen Farrell – WSJ
Spotify AB is counting on its surging private-market value to bolster the music-streaming service’s appeal to investors in an unorthodox public debut that could be the biggest since Snap Inc.’s SNAP 3.39% $20 billion IPO last year.
/goo.gl/MD5co8

How One of the Most Profitable Trades of the Last Few Years Blew Up in a Single Day
Tracy Alloway and Joe Weisenthal – Bloomberg (PODCAST)
Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance and economics.
/goo.gl/RqXa62

We can’t rely on corporations to save us from climate change; The demands of radical decarbonisation clash with the imperatives of profit and shareholder value
Christopher Wright and Daniel Nyberg – London School of Economics and Political Science
Climate change is now the ever-present reality of human experience. Late last year we witnessed a procession of huge hurricanes batter the US and Caribbean, the largest wildfires on record burn through California, and in Australia, despite the death of up to half of the Great Barrier Reef in back-to-back coral bleaching events, political support for new mega-coal mines and coal-fired power stations. While there is now a clear scientific consensus that the world is on track for global temperature increases of 4 degrees Celsius by century’s end (threatening the very viability of human civilization), our political and economic masters continue to double down on the fossil fuel bet, transforming perhaps the greatest threat to life on this planet into ‘business as usual’.
/goo.gl/h6WXxN

Hedge funds forced to cut fees to lure investors; $9.8bn of cash was ploughed into hedge funds last year after $70bn withdrawn in 2016
Chris Flood – FT
Hedge fund managers are being forced to offer lower fees and improve terms to win new business in spite of better performance and a modest rebound in investor inflows in 2017.
/goo.gl/dVW1nW

Institutions

Noble Group Flags $5 Billion Loss as Debt-Deal Endgame Nears
Jake Lloyd-Smith – Bloomberg
Commodity trader expects to be in negative net-asset position; Hong Kong-based company seeking to press ahead on debt deal
Noble Group Ltd., the commodity trader battling to survive, warned that it’ll report another vast loss including from the operations meant to sustain a revamped business, and while it signaled progress in debt-restructuring talks, hurdles to a deal remain.
/goo.gl/9fBNPr

HSBC hopes to leave era of scandals behind; The bank has been held back by big fines and hasty acquisitions but believes it is in a position to grow again
Martin Arnold in London – FT
It was just over five years ago when a team of stern-faced US law enforcement officials brandished colourful flow charts at a Brooklyn press conference to illustrate how HSBC’s Mexican business had laundered at least $881m for two of Latin America’s bloodiest drug cartels.
/goo.gl/Vkq6ym

Hedge Funds Regain Their Appeal for a $57 Billion Asset Manager
Bloomberg
CIO of Ilmarinen says he may raise hedge fund allocation; More positive view follows recent sudden spike in volatility
With volatility back on the radar, one of the Nordic region’s biggest asset managers is considering relying a bit more on hedge funds to help oversee his portfolio.
/goo.gl/9fPvLf

Point72 Judge Urged Not to Cloak Allegations of Gender Bias
Chris Dolmetsch – Bloomberg
Firm asked judge to force suit to be heard in arbitration; Plaintiff says request is attempt to hide claims from public
Steven Cohen’s Point72 Asset Management LP is trying to hide its misconduct from public scrutiny by attempting to force an associate director’s gender-bias lawsuit into arbitration, the woman suing the firm
/goo.gl/3bnyPS

Record $23 Billion Flees World’s Largest ETF
Luke Kawa, Joanna Ossinger – Bloomberg
Investors actively abandoned the world’s biggest passive fund during the onset of market mayhem.
/goo.gl/eLzCVe

Citi refreshes FX business with retirement of veteran Sinniah
Laura Noonan – FT
Citi veteran Bernie Sinniah is stepping down after a 38-year run at the bank. Citi confirmed the retirement of the banker – who joined as a spot foreign exchange trader in Colombia and rose to become its global head of foreign exchange solutions – in an email to staff on Monday morning. He will leave by the end of the first quarter.
/goo.gl/v9JGMW

Regions

Deutsche Bank to Cut at Least 250 Investment Bank Jobs
Ambereen Choudhury, Dinesh Nair, Ruth David, Steve Arons – Bloomberg
Reductions are said to continue, could rise to more than 500; CFO has urged more cost discipline after target was abandoned
Deutsche Bank AG has started cutting at least 250 jobs globally at its corporate and investment bank as Germany’s largest lender seeks to keep a lid on expenses amid a sustained slide in the securities unit, according to people with direct knowledge of the matter.
/goo.gl/UWGiVz

‘No Cash’ Signs Everywhere Has Sweden Worried It’s Gone Too Far
Amanda Billner – Bloomberg
Cash usage declining both as share of GDP and in nominal terms; Riksbank committee could publish report on issue in summer
“No cash accepted” signs are becoming an increasingly common sight in shops and eateries across Sweden as payments go digital and mobile.
/goo.gl/C1AV1P

China Pushes Back on Possible U.S. Metals-Import Limits; Beijing pledges to ‘safeguard its legitimate rights’ as U.S. considers tariffs and quotas
Wayne Ma – WSJ
China hit back at the U.S. a day after the Trump administration said it would consider sweeping new limits on imports of steel and aluminum, measures that could affect Chinese exporters in particular and cause a trade war.
/goo.gl/nSNzgQ

Indonesia Hopes to Lure the World’s Top Oil Companies
Yoga Rusmana, Eko Listiyorini – Bloomberg
Nation offers up to 24 oil, gas blocks to investors: Ministry; Indonesia seeks to boost energy investment as output drops
Indonesia will hold roadshows in the U.S. and Europe later this month to lure investments from the world’s top energy companies as the former OPEC member seeks to reverse a decline in oil and gas production.
/goo.gl/KDNX4N

India’s government says PNB fraud points to supervisory failure at central bank: media
Devidutta Tripathy and Aditya Kalra – Reuters
India’s government has said the $1.77 billion fraud at state-run Punjab National Bank (PNBK.NS) was a “manifestation of supervisory failure” at the country’s central bank, local media reported on Monday.
/goo.gl/S5shCi

SEC Suspends Trading in Three Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
SEC
The Securities and Exchange Commission today suspended trading in three companies amid questions surrounding similar statements they made about the acquisition of cryptocurrency and blockchain technology-related assets.
/goo.gl/wNSb4R

Academics blame algo trading for amplifying 2015 Swiss franc jump;FX mo vements after the currency cap removal were compounded by hands-off
By Samuel Agini – Financial news
Algorithmic traders exacerbated volatility in the Swiss franc/euro exchange rate that arose when Switzerland’s central bank unexpectedly removed its currency cap in January 2015, according to new analysis.
/goo.gl/afVMbf

Brexit

Deal, or no deal? The £2,000 question
National Institute of Economic and Social Research
Recent leaks of a Brexit impact study produced for the Department for Exiting the EU have reignited the debate about the costs of leaving the EU without a comprehensive trade agreement. The reported magnitude of estimated aggregate effects for such a ‘no-deal’ scenario is very similar to estimates published independently from each other prior to the Brexit referendum and also in line with updated work presented in our latest National Institute Economic Review: a loss in annual GDP relative to what it would otherwise have been of 7 to 8 per cent within the next 10 years. Put differently, annual income per head would be up to £2,000 less, compared to a scenario in which the UK remains in the EU’s single market.
/goo.gl/GimqkR

Spooked fund managers look at rivals to London; With UK’s exit from EU looming ó and transition rules unclear ó many options are on the table
Owen Walker – FT
Politicians in Westminster and Brussels are not the only ones furiously drawing up plans for the UK’s post-Brexit relationship with Europe. Across the City of London and financial centres around the world, asset management bosses are carefully considering how to restructure their operations to cope with Brexit disruption.
/goo.gl/PCxgXQ

‘Brexitannia’: an unsettling, beautiful insight into post-referendum UK
London School of Economics and Political Science
Brexitannia is a sociological portrait of post-referendum Britain. Travelling around the UK, its director invited people to talk about Brexit and left their responses to speak for themselves. Oliver Daddow (University of Nottingham) says the documentary is an unsettling insight into a Britain coming to terms with an imagined past, a leadership-less present and a manifestly uncertain future.
/goo.gl/SWLbfD

Sadly, Brexit must mean leaving the EU single market; I have concluded this is essential for fundamental democratic reasons
Malcolm Rifkind – FT
As the UK enters the most crucial stage of the Brexit negotiations the issues are getting even more challenging and intractable. One could be forgiven for saying that as one door closes another slams in your face.
/goo.gl/qMrGzW

It’s Not Just Bankers – U.K. Farmers Also Face Brexit Confusion
Nicholas Larkin – Bloomberg
Parliament committee calls for funding to help food industry; More Brexit impact analysis needed; new trade partners crucial
Spare a thought for British farmers after the country’s exit from the European Union.
/goo.gl/En65oT

Brexit shutout fears spur asset managers into action; Half of UK investment companies are planning to establish European operations
Attracta Mooney and Owen Walker – FT
Britain’s exit from the EU has spurred UK asset managers to beef up their operations on the continent as concerns mount that the industry risks being cut off from European investors in little more than a year.
/goo.gl/9pXtU4

Keep Looking for the Brexit Effect on U.K. Banking; The country has grown as a base for global lending since the 2016 referendum.
Mark Whitehouse – Bloomberg
People keep saying that the U.K.’s decision to leave the European Union will force the global financial industry to move some of its business out of London. It’s thus odd to see it doing the exact opposite, at least in terms of lending.
/goo.gl/2pB47F

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