Hits & Takes
LinkedIn is reporting the 15-year anniversary of John Lothian being at John J. Lothian & Company, Inc. Time flies when you publish a newsletter.~JJL
CME Economist Erik Norland is back with more super weird spaghetti graphs, this time contained in his new piece The Yield Curve – Unemployment Feedback Loop.~SD
The Security Traders Association of Chicago Mid-Winter Meeting begins today and I will again point out that the marketing material was themed “mid-winter is coming.” While rain is in the forecast, travelers to the City of Windbags should be grateful that it feels about 40 degrees warmer than a week prior. ~SD
In the FT’s story today Blow to Mifid II as regulator halts European equity trading shake-up, Esma received files from three-quarters of trading venues, but complete data from about 2 percent of the expected total. Not a great start in the equity space.~JK
The chip fallout (quite literally a “Meltdown”) continues as yesterday Microsoft said its patches for the security issues were slowing servers and PCs.~SD
TABB Group is conducting a brief and confidential survey about how ready the industry is for the implementation of the consolidated audit trail.~SD
SGX finished the year with record open interest in FX futures. We wrote about SGX’s plans and success of its FX complex at the end of 2017.~SD
The Hedge Fund Association is hosting an event at the Chicago law firm Stradley Ronon called Cryptocurrency & Hedge Funds on February 13th.~JK
FinTech Exchange 2018 – Presentation & Sponsorships Now Open
FinTech Exchange is like no other event. It’s engaging, innovative, and what you have been looking for to promote your product and brand. Back for its 4th year in Chicago on April 25 & 26, this sellout event has been the leading venue for financial markets and trading technology in Chicago. This year will also feature an additional half day free event dedicated entirely to start-ups, plus new in-depth sessions focused on the most exciting opportunities in the industry. Learn more about the event and sponsorship opportunities at www.fintechchicago.com.
ESMA’s first Heisenberg moment
Steve Grob – Fidessa Fragmentation
Anyone who has watched the cult TV series Breaking Bad knows that Heisenberg was the clandestine alias adopted by the show’s chief protagonist, Walt White. The ‘original’ Heisenberg was, of course, the brilliant German theoretical physicist who developed his famous Uncertainty Principle. Simply stated it says that one can know either the position of a particle or its velocity but not both. Or, put more colloquially, the harder you try and measure something the less likely you are to be successful. I wonder, therefore, whether ESMA is facing its first MiFID II ‘Heisenberg moment’ as it realises the difficulty in calculating something as seemingly simple as the dark pool caps. These were due out yesterday and were supposed to tell us which stocks had breached arbitrary dark trading limits, but they are now delayed until March.
***** I am not sure how I feel about a “Breaking Bad” reference in a markets newsletter while US bond prices are plunging.~JJL
Is the VIX Being Gamed? A Sudden Swoon Has Traders Talking Again
Nikolaj Gammeltoft and Cecile Vannucci – Bloomberg
The volatility gauge took a quick tumble on morning of Dec. 20; Futures tied to the gauge settled right around that time It made for quite a chart. On the morning of Dec. 20, just as billions of dollars of futures tied to the Cboe Volatility Index were set to expire, the index plunged. The result was a settlement price, a weekly value critical to holders of some the most heavily traded derivatives in the country, that was 13 percent below the prior day’s close. A nice break, if you were short.
***** Never fall on Boardwalk on expiration day!~JJL
Cryptocurrencies Drop as High Flier Ripple Trades 50% Below Peak
Justina Lee – Bloomberg
Ripple, one of the best-performing cryptocurrencies in 2017, led a retreat among peers on Wednesday as some investors reassessed whether last year’s gains were justified.
***** Ripple was ripped in half.~JJL
Growing number of cryptocurrencies spark concerns; Problems over valuing volatile market highlighted as digital currencies proliferate
Chloe Cornish in San Francisco – FT
At least 39 digital currencies have market capitalisations of more than $1bn, according to three price tracking websites.
****Sooo many paper millionaires.~SD
Tuesday’s Top Three
Yesterday’s top read story came from the FT, with Two big futures exchanges call for post-Brexit rethink on Mifid. Second shows we have some Lake Geneva homeowners on the newsletter, with Crain’s Wife of Starz CEO, Tina Trahan spends $16 million on Lake Geneva mansion. Third went to City A.M.’s piece on the crypto-waffler, JP Morgan Chase’s Jamie Dimon says he regrets calling bitcoin a “fraud”
|MarketsWiki Statistics Sponsored by Level Trading Field|
Blow to Mifid II as regulator halts European equity trading shake-up; Hundreds of blue-chip stocks were set to be temporarily barred from dark pools
Philip Stafford in London – FT
European regulators late on Tuesday abruptly delayed the introduction of Mifid II rules that form a key part of their push for greater transparency in share market trading.
‘Fiduciary Rule’ Poised for Second Life Under Trump Administration; SEC working on own version of Labor Department rule that would apply to all brokerage accounts, not just retirement funds
Dave Michaels – WSJ
The Trump administration’s threat to dismantle Obama-era rules that cracked down on conflicted advice from stock brokers won’t mean no rules at all. Instead, they could emerge from a different regulator who Wall Street knows a little better.
Emerging Managers Outperform Established Funds In 2017
FundSeeder Technologies, whose platform tracks thousands of independent traders, has published statistics that show smaller traders, or so-called “emerging managers,” can dramatically outperform established hedge fund managers. According to data recently made available by FundSeeder, as of the end of December 2017, the FundSeeder Top Trader Index (formerly known as the NHT5 Index) was up approximately 18.5%. When contrasted against the comparable HFRI Fund Weighted Composite Index, which was up roughly 8.5% for 2017 or the Barclay BTOP50 Index, an alternative investment CTA index, which was actually down approximately 0.9% for the year the index figures tracking emerging managers are impressive.
China moves to shutter bitcoin mines; Beijing views cryptocurrencies as not strategically important technology
Gabriel Wildau in Shanghai – FT
China is moving to eradicate the country’s bitcoin mining industry over concerns about excessive electricity consumption and financial risk, reflecting authorities’ judgment that cryptocurrencies are not a strategic industry.
Block Trades Come to Agriculture, Sparking Transparency Concern
By Jeff Wilson – Bloomberg
Block trading — when two customers agree outside of open outcry or outside of the electronic trade to transact a deal — has come to the world of Chicago agriculture trading, and not everyone’s happy about it.
India Eases Rules to Lure Foreign Investors
Anurag Kotoky and Shruti Srivastava – Bloomberg
Foreign airlines allowed to buy 49% in state-run Air India; Need for approval scrapped for foreign single-brand retailers
Indian Prime Minister Narendra Modi eased restrictions on foreign direct investment across several sectors, including allowing overseas airlines to invest in state carrier Air India Ltd., in a bid to revive growth in Asia’s third largest economy.
Bitcoin ETFs Hit Regulatory Road Block
Jeremy Herron – Bloomberg
SEC raises concern over ‘liquidity, valuation’ of bitcoin; Direxion, Exchange Listed Funds, ProShares, VanEck drop bids
The race for the first bitcoin ETF has hit a regulatory speed bump. In the past 24 hours, four prospective issuers withdrew requests at the U.S. Securities and Exchange Commission for approval to list exchange-traded funds based on the largest cryptocurrency. Direxion Shares ETF Trust said the regulator “expressed concerns regarding the liquidity and valuation of the underlying instruments” its proposed fund would invest in.
The Curse of Continuous Trading
Don Ross, PDQ Enterprises – TABB Forum
With a new regime at the Securities and Exchange Commission, now is the perfect time to reconsider assumptions that have driven the regulation of stock trading for decades. None is more ripe for rethinking than the belief that investors need continuous trading, and that it is the job of the Commission to link all venues that provide it.
The Yield Curve – Unemployment Feedback Loop
Erik Norland – CME
Following up on our papers regarding the Yield Curve-VIX and Yield Curve-Credit Spreads cycles: here’s one more weird chart with which to inaugurate (and forecast likely developments in) 2018. Turns out that credit spreads and volatility aren’t the only things involved in a cyclical relationship with the yield curve. Since 1983, the cycle has repeated three times and can be broken down into four parts.
Treasuries Traders Brace for the End of Three-Decade Bull Market
Anooja Debnath and Charlotte Ryan – Bloomberg
Slump in global debt securities ebbs as Treasuries are steady; Markets to recover given interest in primary issuance: Mizuho
With some of the biggest names in the market urging caution and governments flooding the market with paper, debt traders braced for what they feared could be the final days of a three-decade bull market.
Hedge Fund Strategies Tweaking Algorithms Were Big Winners In 2017
Mark Melin – ValueWalk
For certain hedge funds, 2017 might be considered the year of the strategy adjustment – and the attainment of alpha over the performance of an index. This is particularly true among noncorrelated hedge funds, those strategies that are not entirely dependent on the performance of the stock market.
International RegTech Association names Ben Richmond as first CEO
Hayley McDowell – The Trade
The International RegTech Association (IRTA) has appointed a chief executive officer to manage and take responsibility for its global operations and expansion.
The Swiss central bank’s record-breaking profit would make it the second most profitable listed company in the world, after Apple
Eshe Nelson – Quartz
Watch your back Apple, the Swiss central bank is coming for your profit throne.
The SNB expects to report a staggering profit for 2017 of 54 billion francs ($55 billion). That’s just below expected earnings for Apple in 2017 of $57.5 billion, according to data from FactSet. Of all the listed companies in the world, the SNB’s performance comfortably puts it in second place, ahead of China’s big four banks, Samsung, Microsoft and JPMorgan.
Bitcoin Powers Big Returns for a Pair of ETFs; Two funds from Ark Investment Management have returned more than 97% since the end of 2016
Asjylyn Loder and Dave Michaels – FT
Bitcoin boosted the returns of two of the top-performing exchange-traded funds last year, signaling that some fund companies aren’t waiting for regulators to approve a U.S. fund devoted exclusively to the cryptocurrency.
Exchanges, OTC and Clearing
Cboe to Provide Market and Trade Data to Thomson Reuters
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced that it is now providing its Cboe One real-time stock quote and trade information to Thomson Reuters, one of the world’s leading sources of news and information for professional markets.
End of Consultation on amendments to Special Provisions regarding the appointment of a Bidding Agent for default management auctions
As announced in Eurex Clearing circular 124/17, Eurex Clearing AG (Eurex Clearing) intends to clarify the Default Management Auction Rules regarding the possibility of the appointment of a Bidding Agent to perform the bidding obligation. In particular, Eurex Clearing intends to specify in detail the arrangements around the appointment of a Bidding Agent in order to retain a proper incentives structure within the CCP and to increase transparency.
Deutsche Börse welcomes Expat Asset Management as new ETF issuer; First ETF with access to the Bulgarian stock market launched on Xetra
Deutsche Börse Group
Since Wednesday, an exchange-traded fund (ETF) of the issuer Expat Asset Management has been tradable for the first time via Xetra and Börse Frankfurt. The expat Bulgaria SOFIX UCITS ETF tracks the performance of the Bulgarian SOFIX Index and offers investors access to the 15 most liquid stock companies of the Bulgarian Stock Exchange.
Deutsche Börse Photography Foundation presents “The Biography of Things”; Cooperation with the Fotoclass Liebscher of the HfG Offenbach and the course Curatorial Studies of the Goethe University / Städelschule in Frankfurt; Exhibition from 2 February 2018 to 27 April 2018 in The Cube, Eschborn; Press preview on Thursday, February 1, 11:00
Deutsche Börse Group
From February 2, 2018 to April 27, 2018, the Deutsche Börse Photography Foundation will be showing the exhibition “The Biography of Things” at the corporate headquarters of Deutsche Börse, The Cube, Eschborn. She explores the question of when and how things can become actors through photography and unfold new realities. “The Biography of Things” is a cooperation of the Deutsche Börse Photography Foundation and the Fotoclass Liebscher of the Hochschule für Gestaltung (HfG) Offenbach as well as students of the course Curatorial Studies of the Goethe University / Städelschule in Frankfurt / Main.
Nasdaq December 2017 Volumes, 4Q17 Estimated Revenue Capture and Listings Statistics
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for December 2017, as well as quarterly volumes, number of listings and estimated revenue capture for the quarter ending December 31, 2017, on its investor relations website.
FIS signs third client to derivatives post-trade utility, targets further evolution; Non-bank derivatives broker Wedbush Futures joins Barclays and Credit Suisse on utility as vendor drives componentised services model.
Joe Parsons – The Trade
Trading technology vendor FIS is aiming to evolve its back-and middle-office derivatives utility to offer a more componentised service as it seeks to widen its client base.
WFE publishes position paper on FinTech in the market infrastructure space
The World Federation of Exchanges (WFE), which represents more than 200 market infrastructure providers including exchanges and CCPs, today published a position paper summarising the WFE’s current views on FinTech and the regulatory environment surrounding it.
Can Bitcoin or any other cryptocurrency actually work as money?
James Connington – Telegraph
Most buyers of cryptocurrency are betting that the price of whichever “coin” they buy will increase in value dramatically. However, the ultimate aim of many digital currencies is not to remain a highly volatile asset for speculative investors but to offer a viable decentralised alternative to the current system of money.
Nvidia says some chipsets hit by Spectre, gives security patches
Nvidia Corp said some of its chipsets have been affected by Spectre, a memory corruption flaw that allows hackers to bypass operating systems and steal passwords of devices.
Trump Administration Waives Punishment For Convicted Banks, Including Deutsche — Which Trump Owes Millions
David Sirota and Josh Keefe – International Business Times
The Trump administration has waived part of the punishment for five megabanks whose affiliates were convicted and fined for manipulating global interest rates. One of the Trump administration waivers was granted to Deutsche Bank — which is owed at least $130 million by President Donald Trump and his business empire, and has also been fined for its role in a Russian money laundering scheme.
Trump to attend tony economic forum in Davos, Switzerland
Dan Merica and Jim Acosta – CNN
President Donald Trump plans to attend the World Economic Forum in Davos, Switzerland, later this month, his press secretary announced on Tuesday. Sarah Sanders said Trump was excited to attend the tony forum in the Swiss Alps, his fifth foreign trip as president.
Trump tells farmers he supports crop insurance
Jeff Mason – Reuters
U.S. President Donald Trump on Monday told farmers gathered in Tennessee that he supports crop insurance, signaling a possible shift from his proposals last year to shrink a program that many farmers rely on for funding their operations.
Trump’s ‘war’ on California prompts state to fight back; On tax, net neutrality, cannabis and more, the biggest US state is asserting its rights
Leslie Hook in San Francisco – FT
When he was sworn into office last year, President Donald Trump wasted no time taking aim at California. He quickly declared that the Democrat-run state was “out of control”, and threatened to cut off federal funding if the state government did no co-operate with his harder-line immigration policy.
U.S. Senators Urge Government to Probe Intel CEO’s Share Sales
Benjamin Bain – Bloomberg
Reed and Kennedy call reports on Krzanich trades ‘alarming’; Intel says it will fully cooperate with any investigations
Two key U.S. senators are pushing authorities to investigate whether Intel Corp. Chief Executive Officer Brian Krzanich violated insider-trading rules when he sold off a chunk of his shares in the chipmaker late last year.
Citi Says Trump and War Could Help Drive Oil to $80
Sharon Cho – Bloomberg
OPEC disruptions led by Iran, Iraq may rise to 3m b/d in 1H; U.S. military actions over North Korea among bank’s wildcards
This year may be anything but staid for the oil market as Citigroup Inc. predicts wildcards including war, Middle East tensions, Donald Trump and Kim Jong Un driving crude toward $80 a barrel.
Trump Gets a Reality Check on Deregulation; Rollback of environmental rules has found some pushback from parts of an industry they are supposed to help.
Spencer Jakab – WSJ
President Donald Trump declared last month that “the never-ending growth of red tape in America has come to a sudden, screeching and beautiful halt.”
CFTC Approves Amendments To Commission Regulations Under Parts 3 And 9
The Commodity Futures Trading Commission (CFTC) today unanimously approved final rules that update Parts 3 and 9 to integrate existing advisory guidance, incorporate swap execution facilities (SEFs), and update provisions currently applicable to designated contract markets (DCMs).
Spread betting shares fall after FCA warns consumers ‘may be at serious risk of harm’
Jack Torrance – Telegraph
Shares in UK spread betting firms slumped this morning after the financial watchdog warned some providers were flouting its rules, meaning consumers who invest in the derivatives “may be at serious risk of harm”.
MiFID II sees $300 million decline of equity research industry; Study finds a reduction in equity research budgets across Europe and the UK under MiFID II has already caused a decline in the market
Hayley McDowell – The Trade
The market for European equity research has already seen a decline of $300 million in the wake of MiFID II’s rules on unbundling payments for investment research and execution fees.
Public Register for the Trading Obligation for derivatives under MiFIR
In accordance with Article 34 of Regulation (EU) No 600/20141 (MiFIR), ESMA shall maintain a Public Register to inform market participants on the trading obligation for derivatives.
Latest Mifid II hiccup: European regulator delays revealing list of stocks set to be affected by dark pool volume caps
Lucy White – City AM
European markets regulators admitted last night that the publication of a list of shares affected by new dark pool caps was delayed.
ESMA delays publication of double volume cap data
The European Securities and Markets Authority (ESMA) today decided to delay the publication of the data on the double volume cap (DVC) mechanism for January 2018. The current quality and completeness of the data does not allow for a sufficiently meaningful and comprehensive publication of double volume cap calculations, as required under MiFID II/MiFIR, and ESMA has taken this decision to avoid creating an unlevel playing field.
ESMA issues list of trading venues temporarily exempted from open access under MiFIR
The European Securities and Markets Authority (ESMA) has published today a list of those trading venues for which a temporary exemption from the open access provisions under 36(5) of the Markets in Financial Instruments Regulation (MiFIR) exists.
ESMA publishes register of derivatives to be traded on-venue under MiFIR
The European Securities and Markets Authority (ESMA) has published today a public register of those derivative contracts that are subject to the trading obligation under the Markets in Financial Instruments Regulation (MiFIR).
Securities Class Action Lawsuits: What Investors Should Know
It is not uncommon for FINRA to receive calls from investors about a securities class action lawsuit, especially on the heels of a large settlement. Based on questions we receive from investors, here are eight things you should know about securities class actions involving investors.
Giancarlo Statement on Letter from Senate Ag Leadership
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo released the following statement in response to a letter from Senate Committee on Agriculture, Nutrition, and Forestry Chairman Pat Roberts and Ranking Member Debbie Stabenow:
Member obligations under NFA Bylaw 1101 and Compliance Rule 2-36(d) with respect to CPOs/CTAs exempt from registration
The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end. Persons that fail to file the affirmation notice by March 1, 2018, will be deemed to have requested a withdrawal of the exemption and, therefore, may be required to be registered and NFA Members.
Investing and Trading
Spread Bettor IG Among Biggest Holders of Bitcoin Futures
Eddie Van Der Walt – Bloomberg
IG Group says it hedges exposure using futures and underlying; CME’s contract now has greater open interest than Cboe
A company offering some of the riskiest trades in financial markets is hedging its exposure to bitcoin, making it one of the biggest players in the embryonic cryptocurrency futures market.
Kodak shares soar as it becomes latest company to jump on cryptocurrency craze
Matthew Field – Telegraph
Kodak has become the latest company to pivot to cryptocurrency, a move seen as a gamble to gain from the craze surrounding Bitcoin and other digital currencies from the faded photography giant.
A bitcoin bubble made in millennial heaven; Owning a currency whose value gyrates wildly may reflect youthful rebellion
Roula Khalaf – FT
There was a pattern to conversations with friends and family over the Christmas holidays. It went something like this: “Are your kids buying bitcoin?” before moving on to: “Have they convinced you to invest?”
Last of the market bears wait in hope of a crisis; Despite barnstorming 2017, some still bet on crash in financial assets
Miles Johnson – FT
With markets starting January without missing a beat from a barnstorming 2017, these are happy times for fund managers, with one notable exception — the increasingly small number of investors who have been doggedly betting on a crash in financial assets.
An IPO Is Hard, but the Headaches of Being Public Last a Lifetime; If Spotify’s direct listing ends up looking like an initial public offering, then perhaps the process isn’t broken.
Matt Levine – Bloomberg
We have talked a few times about the weirdness of Spotify AB’s plan to go public via a direct listing rather than an initial public offering, but Kadhim Shubber at FT Alphaville thinks that I am overreacting:
Traders Remind Central Banks to Take Care on Route to Exit Door
David Goodman – Bloomberg
BOJ, PBOC, ECB have all jolted investors eying policy shifts; Lesson is to be careful when anything can be taken as a signal
Global central banks are being served a sharp reminder by investors that their monetary policy planning carries the potential to roil financial markets in 2018.
Ethereum bucks negative cryptocurrency trend to reach an all-time high
Courtney Goldsmith – City AM
While nearly all major cryptocurrencies traded in the red today, ethereum shot up to an all-time high.
INTL FCStone merges LME, precious metals units under Canham; Leonard to retire
INTL FCStone has merged its London Metal Exchange and precious metals departments, with the new unit headed by Barry Canham, the company said.
The Fed Just Can’t Quit Its Forward Guidance Habit
Daniel Moss – Bloomberg
Markets now rely on hints from central bankers, a clever art from an institution that used to speak with one voice.
BNP Paribas Asset Management uses blockchain for fund transactions; Asset manager has completed test of end-to-end fund transaction using blockchain technology.
Hayley McDowell – The Trade
BNP Paribas Asset Management has completed a full end-to-end fund transaction test using blockchain technology.
Howard Lutnick’s Real-Estate IPO Flops as Newmark Misses the Mark; Odd timing of public offering, investor concern about rising interest rates contributed to poor showing
Peter Grant – WSJ
The stock market has been hitting records lately, but you would never know that from the flop of the initial public offering of Howard Lutnick’s commercial real-estate services firm last month.
The World’s Best Female Poker Player Joins the World’s Biggest Hedge Fund
Nico Grant – Bloomberg
Vanessa Selbst, changing careers at 33, now at Dalio’s firm; Like gambling, investing is ‘also really freaking difficult’
Vanessa Selbst, the most successful woman ever in tournament poker, is working at Bridgewater Associates to learn another big-money grind: hedge funds.
Troubled Noble Group says goodbye to global oil trading
Julia Payne and Ahmad Ghaddar – Reuters
Noble Group is closing down its London oil desk and winding down its Asia oil operations, sources familiar with the matter said, as heavy losses and high debt force what was once Asia’s biggest commodities trader to restructure.
No, JPMorgan Chase CEO Jamie Dimon Has Not Changed His Stance on Bitcoin
Robert Hackett – Fortune
JPMorgan Chase CEO Jamie Dimon said he regrets calling Bitcoin a “fraud” last year
“I just have a different opinion than other people,” Dimon said an interview with Fox Business on Tuesday. “I’m not interested that much in the subject at all.”
India’s bitcoin exchanges under pressure as banks choke payments and withdrawals
Nupur Anand – Quartz
The splash of 2017 may turn into a fight for survival for bitcoin this year in India.
As the country’s cryptocurrency exchanges deal with the manic rush, banks have become a stumbling block. Possibly taking cue from the uneasiness shared by the Reserve Bank of India (RBI) and the Narendra Modi government, some of the lenders are no longer comfortable with virtual currencies. This has led to issues with deposits and withdrawals.
The Mystery of the Exiled Billionaire Whistleblower; From a penthouse on Central Park, Guo Wengui has exposed a phenomenal web of corruption in China’s ruling elite — if, that is, he’s telling the truth.
Lauren Hilgers – NY Times
On a recent Saturday afternoon, an exiled Chinese billionaire named Guo Wengui was holding forth in his New York apartment, sipping tea while an assistant lingered quietly just outside the door, slipping in occasionally to keep Guo’s glass cup perfectly full. The tycoon’s Twitter account had been suspended again — it was the fifth or sixth time, by Guo’s count — and he blamed the Communist Party of China. “It’s not normal!” he said, about this cycle of blocking and reinstating. “But it doesn’t matter. I don’t need anyone.”
Coffee output in Honduras poised to shake up market; Prospects for bumper arabica production damps enthusiasm for price of commodity
Emiko Terazono – FT
A surprise bumper crop in Honduras is set to shake up the arabica coffee market as prospects of a new record high for output in the Central American country is damping enthusiasm for prices of the commodity.
Silvio Berlusconi lures Italian voters with flat tax plan; Adviser advocates ‘fiscal shock’ to boost growth but critics say it is unaffordable
James Politi – FT
Italy’s resurgent centre-right led by former prime minister Silvio Berlusconi has put a “flat tax” plan at the heart of its economic platform for the March general election, sparking concern about the potential impact on the country’s strained finances.
China May Halt Purchases of U.S. Treasuries
Officials have recommended slowing or halting purchases; China is world’s biggest foreign holder of U.S. Treasuries
China added to bond investors’ jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market.
Alibaba’s Jack Ma Will Consider Listing Units in Hong Kong
China’s richest man is pondering floating pieces of Alibaba; A debut of Alibaba units will mark a triumph for Hong Kong
Alibaba co-founder Jack Ma will consider floating pieces of the Chinese e-commerce titan in Hong Kong, taking advantage of regulations that will allow the listing of companies with dual-class shares.
‘Encourage farmers in commodity trading’; MP raises issue in Rajya Sabha
Rajya Sabha member N. Gokulakrishnan has urged the National Bank for Agriculture and Rural Development and Securities and Exchange Board of India to encourage farmers in commodity exchanges and features trading.
Brussels warns UK companies of shut-out in event of no-deal Brexit; Drugmakers and airlines among sectors told to expect no automatic access to single market
Alex Barker in Brussels and Sarah Gordon and Jim Pickard in London – FT
The EU is systematically warning UK companies of a regulatory chill after Brexit as it seeks to accelerate the private sector’s preparations for a no-deal UK exit, according to legal notices reviewed by the Financial Times.
Europe Has Completely Turned the Tables on Brexit; Britain is paying for threatening to walk away from the EU without a deal.
Leonid Bershidsky – Bloomberg
The U.K.’s obvious turnabout on the desirability of a no-deal exit from the European Union shows how completely the tables have turned in the Brexit negotiations. With less than a year to seal a trade deal, the EU is nudging the U.K. toward an understanding that the only benign outcome is agreeing to a long transition period. That could allow a different U.K. team to emerge with a humbler approach.
EU Risks Global Bank Crisis If It Blocks Brexit Deal, U.K. Warns
Tim Ross and Ian Wishart – Bloomberg
Davis, Hammond seek ‘intelligent cooperation’ of regulators; Barnier says no way banks will keep full market access rights
The European Union risks opening the door to another global financial crisis if it refuses to give London’s bankers a good trade deal, two senior U.K. ministers said, as the finance industry emerged as a key battleground for Brexit talks.
German hostility risks derailing UK plans for bespoke Brexit trade deal
Peter Foster – Telegraph
Britain’s plan for a bespoke Brexit trade deal is at risk of being derailed by German opposition even before negotiations on the EU-UK future relationship begin later this year, the Telegraph can reveal.
Charged With Journalism: Reuters Reporters Face 14 Years in Myanmar Prison; Myanmar’s crackdown on press freedoms prompts international condemnation
James Hookway – WSJ
Prosecutors in Myanmar formally charged two Reuters reporters under archaic, colonial-era secrecy laws Wednesday as criticism grew over the restriction of press freedoms in the country under the leadership of Aung San Suu Kyi.