Thomas F. Chlada, Earle Combs, Gerry Corcoran and Martin Mosbacher
Steptoe & Johnson LLP Makes Good Use of Pandemic Time with Financial Services University Video Series
By John J. Lothian
Matthew Kulkin of Steptoe & Johnson LLP figured out a new way to help his law firm during the coronavirus pandemic. When he came back to Steptoe after a tenure at the CFTC, after taking the spot previously occupied by now-author Eileen Flaherty as director of the Division of Swap Dealer & Intermediary Oversight, he was impressed with how many different pieces of the firm “plug into the financial services industry,” he said.
He started thinking about how to communicate that to their customers and colleagues in the company around the world. He came up with the idea of a Financial Services University, consisting of a series of video interviews of colleagues across the organization.
He wanted to help both to understand the opportunities to leverage the vast skills of Steptoe in financial services.
To read the rest of this commentary, go here.
FIA Data Underscores Explosive 2020 Growth in Equity, Commodity Volume
By Suzanne Cosgrove – John Lothian News
Global volume in futures and options is on track for a banner year in 2020, with growth fueled largely by equity derivatives amid unparalleled levels of volatility. Equity derivatives saw a total of more than 7 billion contracts traded in the third quarter, according to data compiled by the FIA.
Total volume for all exchanges tallied 11.8 billion contracts for the third quarter, compared with 8.6 billion in third-quarter 2019. For the year 2020 through September, the volume tally was 33.7 billion contracts.
Looking at the top five exchanges by total volume, the FIA ranked the National Stock Exchange of India as No.1 with about 6.1 billion contracts traded in the nine months from January through September 2020, followed by the B3 (Brasil, Bolsa, Balcão), which was ranked as No. 2 with 4.5 billion contracts. CME Group’s exchanges came in at No. 3 with a combined total of about 3.8 billion contracts, ICE was No. 4 with 2.1 billion and Cboe Holdings was No. 5 with 1.9 billion contracts traded.
To read the rest of this story, go here.
Hits & Takes
I have a correction in my reflection about Peter Wind. After talking with his son Christian Wind yesterday, I found out that Stephanie Wind, Peter’s wife, was home at the time Peter collapsed. When she found him, she applied CPR and called 911. Peter could not be revived. My deepest apologies for the error. It has been corrected in the story and the audio podcast version of the story.
We had additional reflections of Peter on JohnLothianNews.com. The reflections are from Michael Cahill, Tony Drake, Doug Ashburn and Chris Hehmeyer. If you have a reflection about Peter and his impact on your life, please email it to me at email@example.com
Our GoFundMe campaign exceeded $10,000 yesterday. We have received more donations to the JLN MarketsWiki Education GoFundMe campaign, including a $1000 donation from Gerry Corcoran and a $500 donation from Martin Mosbacher. Others contributing included Thomas F. Chlada and Earle Combs. Gerry Corcoran is the CEO of RJ O’Brien, an industry-leading non-bank futures commission merchant. Martin Mosbacher is the president at Lansons Intermarket, a fim JLN has worked with for many years. He is also a member of the John J. Lothian & Company, Inc. advisory committee. Tom Chlada is a managing director at RCM Alternatives and Earle Combs is a trader and CBOT member from a historic Chicago Board of Trade family and member firm. Thank you to Gerry, Martin, Tom and Earle and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
The FIA has issued a white paper on the impact of pandemic volatility on CCP margin requirements. The paper found that central counterparty (CCP) margin requirements rose dramatically during pandemic. The FIA calls for improvements to margin models to reduce liquidity risk.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
U.S. Election Seen As Possible Pivot Point for Cannabis Legislation
Initiatives to legalize marijuana are on the ballot in five states this Election Day, giving voters the chance to move the industry toward wider acceptance. In addition, several Senate and gubernatorial races are seen as key to unlocking stalled legislation. JLN talks with Kerry Jordan, co-founder and managing partner of Supercritical, about how the vote is expected to impact the cannabis landscape.
FIA Issues White Paper on the Impact of Pandemic Volatility on CCP Margin Requirements; Paper finds central counterparty (CCP) margin requirements rose dramatically during pandemic; FIA calls for improvements to margin models to reduce liquidity risk
FIA today released a white paper that examines the dramatic increase in margin requirements at derivatives clearinghouses during the first quarter of 2020 due to increased market volatility related to the pandemic. Although the clearing system performed well during exceptional volatility and trading volume, the increase in margin requirements created a large and sudden demand for liquid assets that contributed to stress in the financial markets. FIA views this episode as an important test of the clearing system and in this paper puts forward several recommendations to improve margin models.
*****The FIA is keeping busy, even while preparing for EXPO-V.~JJL
GOP Sen. Kelly Loeffler: ‘Not familiar’ with Trump’s infamous 2005 ‘Access Hollywood’ tape
Savannah Behrmann, USA TODAY
Sen. Kelly Loeffler, R-GA., claimed Wednesday night she was “not familiar” with President Donald Trump’s now-infamous 2005 “Access Hollywood” tape where he described sexually assaulting women. Loeffler, who is in a tight reelection race, gave a vague answer when local reporters asked Wednesday if she was aware Trump had been recorded talking about groping women, after saying previously she’d never disagreed with anything Trump has said or done.
*****She has said she never disagreed with anything President Trump has said or done? I have never heard of anything like that. ~JJL
The Pandemic Is Affecting The Mental Health Of The Rich More Than The Poor
Mark Travers – Forbes
A recent Axios-Ipsos poll found that high earners and the highly educated showed sharper declines in emotional well-being during the pandemic. New research forthcoming in the Journal of Applied Psychology corroborates this finding. A team of psychologists led by Connie Wanberg of the University of Minnesota found that the two defining features of socio-economic status (SES), education and income, were both associated with greater declines in psychological well-being over the course of the pandemic.
*****Money can’t buy you pandemic wellness.~JJL
A Covid-19 Outbreak at Wisconsin Pushes College Football Toward the Edge; A contender for the College Football Playoff, the Badgers have been sidelined by the virus. It’s a sign of how hard it will be to make it to a championship game.
Laine Higgins – WSJ
The fragile foundation of college football in 2020 is at risk of buckling in Wisconsin, where a Covid-19 outbreak on the No. 9 Badgers is showing how little room for error the sport has in attempting to complete its pandemic season. College football has already been in near chaos thanks to the fact that the major conferences have taken different approaches to staging a season. The conferences started play at different times, have different protocols for dealing with the virus and have had to rearrange schedules on the fly to try to stay on track.
*****The Badgers were down to asking their mascot “Bucky the Badger” to play quarterback.~JJL
Wednesday’s Top Three
Our top story Wednesday was The Guardian’s How does one of the world’s biggest pork firms go bust during a boom? Second was a repeat from Tuesday – The Atlanta Journal-Constitution’s Loeffler and Sprecher’s $31 million year. Third was the Los Angeles Times’s Investor Bill Gross accused of blaring ‘Gilligan’s Island’ song on loop to torment neighbor, which was our top story Tuesday.
191,341,800 pages viewed; 24,481 pages; 226,501 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Banks roll out robots as pandemic shakes up IT plans
Iain Withers, Anna Irrera – Reuters
When banks were flooded with loan requests from businesses struggling with the fallout of the coronavirus pandemic, hastily built robots helped several lenders cope with the deluge. The bots were one of many quick technology changes deployed across the industry during the crisis, a contrast to the slow progress it’s made in the past two decades to improve technology in the face of increasing competition from fintech rivals. Now the jolt from the COVID-19 pandemic has accelerated the process even though banks globally are having to cut IT spending this year for the first time since 2009, based on data from research company IDC.
Exchanges, retail brokers, say they are ready for any post-U.S. election volatility
John McCrank – Reuters
Exchanges and retail brokers, under scrutiny after recent outages within their industries, have spent months planning for Election Day. Now their preparations, for what could be a highly volatile trading period, are about to be put to the test.
Explainer: How U.S. exchanges are prepared for possible post-election chaos
John McCrank – Reuters
Wall Street could see sharp swings in trading after the Nov. 3 U.S. presidential election. But there are safeguards in place to keep the stock market or equity futures from sliding out of control. Here is a guide to what exchanges do to halt trading if shares fall sharply.
US SEC opens door to more leveraged ETFs; Pre-clearance requirement removed for exchange traded funds using up to two times leverage
Kadhim Shubber and Richard Henderson – FT
The US Securities and Exchange Commission opened the door to more leveraged exchange traded funds on Wednesday as it passed new regulations governing the use of derivatives in the retail-friendly products. The securities regulator, in a 3-2 vote, said ETF providers which abided by certain requirements could now offer products with up to 200 per cent leverage without seeking prior approval from the SEC.
MEMX prepares to complete launch following delays; US challenger exchange MEMX currently has 541 symbols trading as it prepares to go live in all NMS names this week.
Annabel Smith – The Trade
US equities exchange MEMX is ready to go live in all NMS names and conclude its launch process on 29 October following delays due to the global pandemic. The exchange operator said that after a month of adding new securities to its offering 541 symbols are now trading on MEMX with participation from member firms.
Central Banks Sell Gold for First Time in a Decade
Eddie Spence – Bloomberg
Turkish and Uzbek central banks lead selling in third quarter; Overall gold demand fell 19% year-on-year: World Gold Council
Central banks became gold sellers for the first time since 2010 as some producing nations exploited near-record prices to soften the blow from the coronavirus pandemic.
Manhattan Bosses Pull Back Expectations for Return-to-Office
Natalie Wong – Bloomberg
New York’s technology and finance bosses are tempering their expectations for bringing people back to work. Only 15% of office workers are projected to return by the end of this year, according to the Partnership for New York City, which surveyed major employers in Manhattan over the past two weeks. That’s down from an August estimate of 26%.
Steptoe Launches Financial Services University; Video Series to Explore Financial Services Legal, Business and Regulatory Matters
Steptoe & Johnson LLP
Steptoe & Johnson LLP is pleased to announce the launch of its Financial Services University, a video series that illustrates the financial services legal, business, and regulatory issues companies face around the world.
Ant IPO Promises $8 Billion Gain for Elite Group of Foreign Investors; In 2018, the financial-technology giant raised $10.3 billion in its first and only private sale of stock to institutions outside China
Stella Yifan Xie and Serena Ng – WSJ
Ant Group Co. ‘s market debut will bring a windfall to a carefully curated group of international investors that bought a piece of the company two years ago. In the summer of 2018, the fast-growing financial-technology giant raised $10.3 billion from investors outside mainland China, including wealthy individuals and private funds as well as larger institutions. It was the company’s first and only private sale of stock to foreign investors before its initial public offerings.
Ant Speeds Ahead with Record IPO After Investor Orders Pour In; Financial-technology company part-owned by Alibaba Group is set to raise at least $34.4 billion through dual listings in Shanghai and Hong Kong
Jing Yang and Joanne Chiu – WSJ
Ant Group Co. stopped collecting orders from institutional buyers for the Hong Kong leg of its record initial public offering on Wednesday, a day ahead of schedule, after meeting strong demand from investors, according to people familiar with the matter.
The long journey to frictionless electronic trading; Having been instrumental in the development of the Financial Information Exchange (FIX) Protocol, chairman of Rapid Addition and director at FIX Protocol Ltd, Kevin Houstoun, provides a brief history of the industry’s messaging standard.
Kevin Houstoun – The Trade
Thinking about how integral FIX protocol has become to electronic trading, it’s interesting to reflect on the long journey that has brought us to where we are today. FIX started out as an experiment between Salomon Brothers and Fidelity in the fledgling days of electronic trading with the aim of automating the sending of execution reports and IOI transmissions.
ASX post-trade system replacement delayed to 2023 in latest setback; The latest delay will push the DLT post-trade project at ASX back to April 2023, as the exchange again cites COVID-19 as a cause.
Jon Watkins – The Trade
The Australian?Securities Exchange (ASX) will once again delay the replacement of its CHESS equities clearing and settlement system with a new distributed ledger technology (DLT) based platform by another year to April 2023.
Reflections and expectations; Julia Streets, CEO of Streets Consulting, takes a look at how data and technology have impacted the industry over the past decade and highlights how emerging technologies could reimagine the trading desk in the years to come.
Julia Streets – The Trade
I first walked the TradeTech halls in 2006 with client Chi-X Europe at a time when most discussions about a European multilateral trading facility (MTF) were met with ‘an MT-what?’ and ‘kai-x? What’s that?’ Removing the European concentration rules paved the way for a lit and dark venue explosion: Chi-X, BATS and Turquoise. Then Baikal, Burgundy (remember those?) and hundreds more.
The Next Wave Is Here, and Winter Is Coming
Anthony Halpin – Bloomberg
The second wave has arrived. After some success in tamping back the Covid-19 pandemic, Europe’s governments are again buckling under its pressure, while in the U.S. contagion is spreading at record-setting levels just as Americans choose their next president.
Too few companies disclose financial hit from climate change, regulator says
Huw Jones – Reuters
Too few companies specify their prospective financial hit from climate change under a voluntary global disclosure code that needs wider backing from asset managers and others to be fully effective, a global regulatory body said on Thursday.
Can Liberty Oil maverick’s corporate culture survive the U.S. shale bust?
Liz Hampton – Reuters
Chris Wright stands out as an oilman who might be more at home in Silicon Valley than the shale fields of North Dakota.
HSBC Reveals Less Than 1% of U.K. Senior Employees Are Black
Viren Vaghela – Bloomberg
Lender pledged earlier this year to double senior Black staff; Banks are under increasing pressure to publish diversity data
HSBC Holdings Plc published a breakdown of ethnicity in its U.K. staff for the first time, revealing that less than 1% of senior employees in its home market are Black.
An Avalanche of Fraud Buried a Small-Business Relief Program; Scams went viral as SBA gave out $10,000 grants to almost anyone who asked.
Michelle F Davis, Zachary Mider, Polly Mosendz – Bloomberg
For a few months this year, a U.S. government aid program meant for struggling small-business owners was handing out $10,000 to just about anyone who asked. All it took was a five-minute online application. You just had to say you owned a business with at least 10 employees, and the grant usually arrived within a few days.
U.S. States Face Biggest Cash Crisis Since the Great Depression; The drop in tax revenue has led to a total shortfall expected in the hundreds of billions of dollars—greater than 2019’s K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure
Heather Gillers and Gunjan Banerji – WSEJ
Connecticut acted fast. Social distancing, lockdowns and testing slashed Covid-19 cases in the spring. But when Comptroller Kevin Lembo opened an email from his budget director on April 15, it was clear the state’s quick action to contain the pandemic hadn’t insulated its finances.
BOJ’s Kuroda Says Will Act If Needed Amid High Virus Uncertainty
Toru Fujioka and Sumio Ito – Bloomberg
Central bank chief flags renewed nervousness in markets; Kuroda speaks after stand-pat decision, lowering FY20 GDP view
Bank of Japan Governor Haruhiko Kuroda said he stands ready to act if needed amid heightened uncertainty over a resurgence in the pandemic though he still doesn’t see a pressing need to extend or change existing virus-response measures.
Covid Vaccine Would Help World Avert Crisis With Ballooning Debt
Rahul Satija – Bloomberg
Debt globally likely to rise 10% to $200 trillion in 2020: S&P; Concerns about surging virus cases hit markets this week
The recent surge in coronavirus cases in the U.S. and Europe is underscoring the importance of finding a vaccine as soon as possible, first and foremost for public health, but also for the global economy.
Scientists warn of new coronavirus variant spreading across Europe; Genetic mutation that originated in Spain transmitted by returning holidaymakers, researchers find
Clive Cookson – FT
A coronavirus variant that originated in Spanish farm workers has spread rapidly through much of Europe since the summer, and now accounts for the majority of new Covid-19 cases in several countries — and more than 80 per cent in the UK.
Minister rejects calls for lockdown in England as Covid infections soar; R number estimated at 1.6, despite efforts to keep it below 1, says study
Sarah Neville and Jasmine Cameron-Chileshe – FT
A government minister on Thursday rejected calls for a national lockdown to combat the spread of coronavirus even as a new report indicated that the rate of infections in England was in excess of government targets.
Long Covid casts a lasting shadow over workers; Prolonged coronavirus symptoms present a challenge for both employers and staff
Emma Jacobs – FT
More than six months after becoming ill, Paul Garner’s out-of-office email message asked for patience due to recovery from “post-viral symptoms associated with a Covid-19 infection”.
Australia’s compliance culture breeds Covid-19 success; Efficient testing and contact tracing is at the forefront of its virus response
Jamie Smyth – FT
When I came down with a nasty head cold last week, my first concern was not Covid-19, but that I would miss coaching my son’s team for their first game of the cricket season. Under Australia’s strict health guidelines, even people with mild symptoms are told to be tested and self-isolate. I had just 48 hours to get a negative test result and prove my fitness to fellow parents.
How Many Have Recovered From Covid-19 Cases? No One Knows; Popular Covid-19 trackers say 3.5 million Americans have recovered—an undercount, although public-health authorities aren’t sure by how much
Sarah Toy – WSJ
Health researchers collect various pieces of Covid-19 data to get a handle on the spread of the new coronavirus, but one metric has proven tough to pin down: how many infected people have recovered. Among the 8.8 million coronavirus cases reported in the U.S. so far, some 3.5 million have recovered, according to Johns Hopkins University, which tracks the pandemic.
Wedding and Birthday Party Infect 56, Leaving Nearly 300 in Quarantine; “This kind of blatant disregard for the well-being of others is not only extremely disappointing; it will not be tolerated,” a Long Island official said.
Ed Shanahan – NY Times
Long Island health officials scrambled to contain a coronavirus outbreak in Suffolk County when dozens of people tested positive for the virus after attending a high-end Sweet 16 party in September that violated state restrictions on gatherings.
New Coronavirus Concerns Drive Selloff in Raw Materials; Summer rally starting to show cracks with commodities among market’s worst performers during this week’s bout of selling
Amrith Ramkumar – WSJ
The threat of new coronavirus lockdown measures around the world dragged down raw materials prices Wednesday, heightening concerns among traders that investments tied to the global economy are set for another painful selloff.
Next crop of COVID-19 vaccine developers take more traditional route
Julie Steenhuysen, Caroline Copley – Reuters
The handful of drugmakers dominating the global coronavirus vaccine race are pushing the boundaries of vaccine technology. The next crop under development feature more conventional, proven designs.
India to Prioritize Covid Vaccine for Front Line Health Workers
Archana Chaudhary – Bloomberg
India’s front line health workers will be the first to be inoculated once an effective vaccine is available, according to a senior Indian official involved in immunization planning. Three vaccines are currently at different stages of development in the country so far and a safe candidate is expected early next year, said Dr. Vinod Paul, member of the federal government planning organization Niti Aayog and the head of a panel advising the prime minister on the country’s efforts to produce and roll-out the inoculation.
China Marks Another Step in Virus Rebound With Singapore Opening
Niluksi Koswanage and Will Davies – Bloomberg
Singapore to loosen curbs on mainland visitors from Nov. 6; Coronavirus outbreak began in Chinese city of Wuhan in January
Singapore will lift border restrictions on visitors from mainland China from Nov. 6, a further reminder that the nation where the coronavirus outbreak first began is firmly on the road to recovery as the pandemic rages elsewhere.
Lilly Races Ahead on a Single-Antibody Covid-19 Treatment; The drugmaker plans to have 1 million doses available by yearend, far more at first than rival Regeneron’s dual-antibody combo.
Robert Langreth, Riley Griffin – Bloomberg
In April, Eli Lilly & Co. Chief Executive Officer David Ricks made a radical decision. He told U.S. regulators the drug giant would shut down production of a colon cancer drug at a New Jersey plant in order to start manufacturing a coronavirus antibody treatment that hadn’t even moved into human testing. “We had no evidence it would work,” Ricks recalls. “It now sounds slightly crazy, but in the middle of the pandemic, it seemed like the right thing to do.”
Covid-19 Vaccine Won’t Be Available Until January, Fauci Says
Michelle Fay Cortez – Bloomberg
Researchers may be able to get first look at data in December; Emergency-use authorizations may be given in January or later
A vaccine to help control the coronavirus outbreak isn’t likely to be available in the U.S. until January, if then, according to Anthony Fauci, the nation’s top infectious-disease doctor.
Inside Operation Warp Speed’s $18 Billion Sprint for a Vaccine; It’s expensive, secretive, and—if the president stays out of the way—our best hope of getting out of this pandemic.
Stephanie Baker, Cythia Koons – Bloomberg
On a late August day in an industrial corner of Baltimore that had been mostly silenced by the pandemic, a red-brick manufacturing plant was buzzing with activity. Deep in the building, in a zone called Area 3, the stainless steel shell of a bioreactor lay on its side, having just arrived from Massachusetts. Employees had begun the task of making the bioreactor operational. Within weeks it would be the center of a production line for coronavirus vaccines.
Scientists Warn Americans Are Expecting Too Much From a Vaccine
Liz Szabo and JoNel Aleccia – KHN
The White House and many Americans have pinned their hopes for defeating the COVID-19 pandemic on a vaccine being developed at “warp speed.” But some scientific experts warn they’re all expecting too much, too soon.
Death Rates Have Dropped for Seriously Ill Covid Patients; Survival rates have improved with medical advances and less crowded hospitals, studies say. But the latest record-breaking surge in infections could reverse the gains.
Roni Caryn Rabin – NY Times
The coronavirus struck the United States earlier this year with devastating force. In April, it killed more than 10,000 people in New York City. By early May, nearly 50,000 nursing home residents and their caregivers across the country had died.
Exchanges, OTC and Clearing
Flow Traders and other market makers join ICE ETF Hub basket negotiation pilot; Brownstone Investment Group, Sumridge, and Wolverine have joined Flow Traders in participating in the ICE ETF Hub basket negotiation pilot scheme.
Annabel Smith – The Trade
Flow Traders has signed up to participate in a pilot scheme to assemble custom baskets for ETFs in the ICE ETF ecosystem alongside three other market makers. Brownstone Investment Group, Sumridge, and Wolverine join Flow Traders and existing market makers Jane Street, Old Mission, and CTC, also participating in the pilot scheme in the ICE ETF Hub.
Interview: The future(s) of FX trading;Are FX Futures a “One size fits all” solution? What is driving the buy-side demand for FX Futures?
Joshua Hurley, FX Sales and Business Development at Eurex, quizzes Chris Callander, Head of FX Futures Sales & Trading/Client Facilitation London at Societe Generale, on the extent to which FX Futures can replicate the flexibility of an OTC market, the key drivers pushing buy-side firms towards these products and why there is growing demand for them regionally in Europe.
Fashionette AG goes public in the Scale segment on the Frankfurt Stock Exchange
Deutsche Börse Group
Fashionette AG (ISIN: DE000A2QEFA1 ) has been listed in the Scale segment of the Frankfurt Stock Exchange since today. At the start of trading, the shares were listed at EUR 29.00. The issue price was EUR 31.00.
Unscheduled change in the SDAX index
Deutsche Börse Group
STOXX Ltd., the global index provider of the financial services provider Qontigo, announced an unscheduled change in the SDAX index on Wednesday. Due to the delisting of Rocket Internet SE (DE000A12UKK6), the company will be deleted from the index. The deletion will take place on November 2, 2020 based on the last rate on October 30, 2020. The successor is CropEnergies AG (DE000A0LAUP1).
Quarterly statement Q3 / 2020
Deutsche Börse Group
Deutsche Börse AG has just published its quarterly report Q3 / 2020. An analyst and investor conference will be held on Thursday, October 29, 2020 at 2 p.m. on the business figures.
Intercontinental Exchange Approves Fourth Quarter Dividend of $0.30 per Share
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced today a $0.30 per share dividend for the fourth quarter of 2020, which is up 9% from the $0.275 per share dividend paid in the fourth quarter of 2019. The cash dividend is payable on December 31, 2020 to stockholders of record as of December 16, 2020. The ex-dividend date is December 15, 2020.
Intercontinental Exchange Reports Strong Third Quarter 2020
YTD revenues of $4.4 billion, +12% y/y; Third quarter revenues of $1.4 billion, +6% y/y; YTD GAAP EPS of $2.83, +8% y/y; Third quarter GAAP EPS of $0.71, -24% y/y; YTD Adj. diluted EPS of $3.37, +15% y/y; Third quarter adjusted EPS of $1.03, -3% y/y; Third quarter Data Services revenues +6% y/y; Completed the strategic acquisition of Ellie Mae on September 4, 2020
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, today reported financial results for the third quarter of 2020. For the quarter ended September 30, 2020, consolidated net income attributable to ICE was $390 million on $1.4 billion of consolidated revenues, less transaction-based expenses. Third quarter GAAP diluted earnings per share (EPS) were $0.71. Adjusted net income attributable to ICE was $569 million in the third quarter and adjusted diluted EPS were $1.03. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and free cash flow.
CME Globex Notices: October 26, 2020
Critical System Updates
iLink 2 on MSGW Decommission – February 26, 2021
iLink 3 – IP Address Change for BrokerTec Order Entry Service Gateways – This Week
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
iLink Enhancements for Location ID and Displayed Quantity – November 15
iLink 3 SBE Schema Update – January 24, 2021
Phase 1 CME FX Link Enhancements – February 21, 2021
Phase 1 CME FX Link Enhancements: Drop Copy Impact
CME Optimizer Software Version 15 Release, Mandatory Upgrade Required December 7, 2020
In conjunction with CME expanding the Portfolio Margin program to include Options on Eurodollar Futures, CME is releasing a new build of the Optimizer software, version 15. Optimizer users must upgrade to the newest build by the production deadline December 7, 2020. Firms who do not upgrade on the production deadline will experience subsequent Optimizer failures. Optimizer is now available and ready to install and test in the New Release environment as of October 28th, 2020.
Review of Collateral Haircuts – 3rd Quarter 2020
In conjunction with regular review of market volatility and to ensure adequate collateral coverage, the third quarter haircut review is posted.
Appointment of New Governor of Japan Exchange Regulation
We hereby announce that Japan Exchange Regulation has appointed a new Governor at its extraordinary general meeting held today. Details are as follows: Japan Exchange Regulation Governor Okada Joji
Japan Exchange Group, Inc. and Consolidated Subsidiaries Consolidated financial results for the six months ended September 30, 2020
MIAX Options: New ISO PRIME Order Type
MIAX Options will implement a new ISO PRIME order type that allows a Member to submit a PRIME Order without regard for better priced Protected Bids or Protected Offers when the Member simultaneously routes ISOs to execute against the full displayed size of any better-priced Protected Bid or Protected Offer and sweeps all interest in the Exchange’s Book priced better than the proposed Auction starting price.
Vega Investment Managers adopts Bloomberg PORT Enterprise; Bloomberg’s PORT Enterprise will provide Vega Investment Managers with reporting capabilities and portfolio and risk analytics.
Annabel Smithe – The Trade
European asset management firm Vega Investment Managers has implemented the PORT Enterprise solution from Bloomberg in a bid to enhance its portfolio analytics and risk management processes.
UBS has launched $200 million fintech venture fund
Victor Chatenay – Business Insider
UBS Next will focus on early stage fintechs and other relevant tech companies, per Finextra. The global wealth manager is also partnering with venture capital (VC) firm Anthemis to help identify promising fintech startups and boost deal flow.
The perils of the fintech deal flurry
Lucinda Shen – Fortune
It was already a big deal when Visa agreed to acquire fintech startup Plaid for $5.3 billion in January—two times the company’s previous private market valuation. But the deal heralded something even larger, helping ignite a flurry of mega fintech deals: Intuit announced plans to acquire Credit Karma for $7.1 billion just a month later, while competitor Mastercard said it planned to acquire Finicity for nearly $1 billion in June.
Crypto Exchange FTX to Trade Top Stocks From Tesla to Amazon
Eric Lam – Bloomberg
Cryptocurrency traders will soon be able to trade tokenized shares of some of the world’s largest companies like Apple Inc. and Amazon.com Inc. Crypto exchange FTX, in partnership with German financial firm CM Equity AG and Swiss-based Digital Assets AG, is offering what they call fractional stocks — about a dozen stock and crypto pairs that will be traded on FTX’s platform — according to a press release seen by Bloomberg. Other notable names include Facebook Inc., Netflix Inc., Tesla Inc. and the SPDR S&P 500 exchange-traded fund.
Fidelity Digital Crypto Pact Aims at Rich Asians Wanting Bitcoin
Joanna Ossinger – Bloomberg
Stack Funds will make custody services available to customers; Bitcoin reached the highest level since 2018 this week
A new partnership for Fidelity Digital Asset Services aims to facilitate the growing interest in cryptocurrencies among Asian investors. Stack Funds, which is based in Singapore and provides access to crypto products, will make FDAS’s secure custody services available to its clients in a bid to meet increasing demand from Asia’s high-net-worth investors and family offices, according to a statement.
Moon time for central bank digital currencies? ‘We’re believers,’ says Mastercard’s CEO
Jen Wieczner and David Z. Morris – Fortune
Bitcoin’s star has been rising lately. The pioneering cryptocurrency bottomed out around $5,000 at the beginning of the pandemic in March, but this week traded above $13,800. Helping to spur those moves is increasing corporate bullishness on cryptocurrency—as evidenced by Square’s recent $50 million Bitcoin buy and last week’s announcement that PayPal will offer Bitcoin and other crypto trading. Even J.P. Morgan is now predicting a coming liftoff for Bitcoin.
Coinbase launches crypto debit card in U.S. with 1% Bitcoin reward
Jeff John Roberts – Fortune
Owning cryptocurrencies like Bitcoin has long come with a drawback: There are few practical opportunities to spend them since so few merchants accept them, and for those stores that do, transactions can take 10 minutes or more to clear. Now cryptocurrency giant Coinbase is hoping to change that by rolling out a debit card that can be used at any business that uses the Visa network. The card will allow customers to draw funds from various cryptocurrency accounts, while letting the merchant instantly receive payment in U.S. dollars.
JPMorgan launches blockchain division called Onyx after a big tech client adopts its cryptocurrency for commercial use
Shalini Nagarajan – Markets Insider
JPMorgan has launched Onyx, a new business division for its blockchain projects, after its digital token was adopted for commercial use by a big technology client for the first time this week, CNBC reported. A JPMorgan spokesperson confirmed the report. JPM Coin is now being used for round-the-clock global payments by a “large technology client,” the bank’s global head of wholesale payments told CNBC. The client was not named. “We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” Takis Georgakopoulos said in a CNBC interview.
Why PayPal’s crypto plan may not be fully mainstream
Kate Fitzgerald – PaymentsSource
PayPal wants to clear the way for its users to buy, sell, hold — and shop with — cryptocurrency, but some obstacles may prove costly to overcome. It seems as if PayPal could use more cryptocurrency expertise before its services fully roll out next year. PayPal is in talks to acquire BitGo or another firm with experience serving as a custodian of cryptocurrency and crypto wallets, according to a recent Bloomberg report. San Jose-based PayPal declined to comment on the report but some observers say it underscores PayPal’s lack of certain infrastructure needed to effectively manage cryptocurrencies.
Avanti gains bank charter status from Wyoming state regulator
Saniya More – The Block
Crypto startup Avanti has gotten the green light from the Wyoming State Banking Board on its business plan for digital asset custody and the creation of Avit, a tokenized U.S. dollar. According to the announcement published today, Avanti is now a bank charter, which means it has the same amount of power as national banks. The company’s application for a bank charter was accepted in July. It is the second crypto company to become a bank, the first being Kraken’s launch of Kraken Financial.
Bitcoin’s Options Market Sees Just 6% Chance of $20K Before Year’s End
Omkar Godbole – Coindesk
While bitcoin’s rally over the past month has revived talks of its price reaching new record highs above $20,000 by the end of the year, the cryptocurrency’s options market continues to assign a very low probability of that scenario playing out.
BitLicense Holder SoFi’s Application to Create a National Bank Conditionally Approved by US
Kevin Reynolds – Coindesk
Student loan and financial services provider SoFi’s application to establish a new national bank was granted conditional approval by the Office of the Comptroller of the Currency (OCC), opening the door for the new bank to custody cryptocurrencies. In an announcement Wednesday, the OCC said the preliminary approval is conditional pending a thorough evaluation of all information available.
Bank of Canada Governor Says Digital Dollar Project Moving Past Trial Stage
Sebastian Sinclair – Coindesk
The chief of Canada’s central bank has said its national digital currency initiative is progressing past the experimental phase. In an interview with Reuters published Thursday, Bank of Canada (BoC) Governor Tiff Macklem said his institution is working with G7 member states on its plans for a central bank digital currency (CBDC). The digital dollar project, he said, is now moving beyond the proof-of-concept stage and closer to a launchable product. However, the governor deflated expectations saying he thought there isn’t a need for one “right now.”
Ripple to Invest in Japan’s SBI Subsidiary MoneyTap
Sandali Handagama – Coindesk
Ripple plans to invest in MoneyTap, the blockchain payments firm birthed through a joint venture between the San Francisco-based startup and Japan’s SBI Holdings, the companies announced Wednesday. The value of the investment has not been announced yet, CoinDesk Japan reported. MoneyTap, a blockchain money-transfer app launched through a joint venture between SBI and Ripple called SBI Ripple Asia, went live in 2018. Like Venmo, the app allows users to send and receive money with their telephone numbers or QR codes.
MakerDAO issues warning after a flash loan is used to pass a governance vote
Michael McSweeney – The Block
The team behind a DeFi protocol wanted white-list access to MakerDAO’s price oracle. And to make it happen, they used a flash loan to manipulate a vote in a process that has triggered questions about the stablecoin platform’s governance apparatus. The complicated nature of the situation was detailed in a forum post on Wednesday. It’s a notable example of flash loans, or lending arrangements that play out across a single Ethereum transaction, can lead to unexpected outcomes and create security quandaries across the largely experimental DeFi landscape.
CoinShares appoints Compass Financial Technologies to serve as independent calculation agent for XBT Provider Certificates; XBT Certificates to be independently calculated and prices to be published on Bloomberg and Refinitiv
CoinShares, Europe’s largest crypto asset management firm with over $1 billion in assets under management, has today announced that the official prices of the XBT Provider range of ETPs will be calculated and published by Compass Financial Technologies on Bloomberg and Reuters. Compass FT is a financial services company specialising in the design, calculation and publication of market benchmarks and financial indices and is registered as a benchmarks administrator under EU Benchmark Regulations.
Trump’s path to victory narrows as Covid cases surge in Midwest; President reliant on sweep of sunbelt battlegrounds as Biden cements lead in areas where virus rages
Kiran Stacey and Peter Wells – FT
Donald Trump’s chance of victory in next week’s presidential election rests on a dwindling number of swing states as a spike in coronavirus cases across the Midwest dents his ratings in crucial battlegrounds, according to pollsters.
Incompetence is the real threat to democracy; The west has to think of governance as a kind of permanent referendum on the efficacy of the system itself
Janan Ganesh – FT
The most famous quotes in praise of democracy do not make a principled case for it. If, as Winston Churchill claimed, it is the worst form of government bar all the others “that have been tried”, then verifiable outcomes are what matter. “No famine has ever taken place in the history of the world in a functioning democracy,” found the economist Amartya Sen, implying, once more, that utility is the test. Popular self-rule is to be preferred because it allows for better results, not because it is right in and of itself.
History shows that equities outperform under Democrats; But time in the market matters more than timing it
Liz Ann Sonders – FT
It’s been an emotional year to say the least, heightened by one of the most contentious US election seasons in memory. As November 3 draws close, it is worth questioning the common assumption that elections have a significant impact on the economy, the stock market or both. The reality is reversed; at least based on history.
Bets on Biden-Led Stimulus Fuel Outperformance by Small Stocks; Many investors are hoping greater fiscal spending can offset potential corporate-tax increases or greater regulation in ‘blue-wave’ scenario
Amrith Ramkumar – WSJ
Small stocks are outpacing larger companies by the greatest amount in years so far this month, underscoring investors’ bets on Democrats gaining control in Washington and ramping up spending to support the economy.
Trump Administration Proposes Eliminating H-1B Visa Lottery; Proposal is one of remaining pieces of visa-program overhaul before U.S. presidential election
Michelle Hackman -WSJ
The Department of Homeland Security is proposing to effectively replace the H-1B visa lottery, the method for selecting which foreign professionals receive the coveted visas each year, with a selection process that gives priority to the jobs with the highest salaries.
Turkish Bank Case Showed Erdogan’s Influence With Trump; New details of the Justice Department’s handling of the accusations against Halkbank reveal how Turkey’s leader pressured the president, prompting concern from top White House aides.
Eric Lipton and Benjamin Weiser – NY Times
?Geoffrey S. Berman was outraged. The top federal prosecutor in Manhattan, Mr. Berman had traveled to Washington in June 2019 to discuss a particularly delicate case with Attorney General William P. Barr and some of his top aides: a criminal investigation into Halkbank, a state-owned Turkish bank suspected of violating U.S. sanctions law by funneling billions of dollars of gold and cash to Iran.
Many on Wall Street Who Predicted a Trump Win in 2016 Aren’t So Sure Now; Few investors and executives got the last presidential race right. Many of those have gone quiet.
Gregory Zuckerman and Ken Brown – WSJ
They predicted a victory for Donald J. Trump in 2016 when almost everyone else on Wall Street counted him out. This year they aren’t quite so bold. In 2016, a small number of well-known investors and executives, including Jeffrey Gundlach, who runs asset manager DoubleLine Capital LP, investor Carl Icahn, hedge-fund manager John Paulson and a few others made a truly contrarian bet. While pundits and others anticipated a victory for Democratic nominee Hillary Clinton, these investors predicted a win for Mr. Trump.
SEC Shelves Measure to Protect Investors in Leveraged ETFs; Proposal requiring leveraged and inverse exchange-traded funds to vet investors needs further study, officials say
Paul Kiernan – WSJ
The Securities and Exchange Commission on Wednesday shelved a measure intended to protect investors who trade the shares of a class of exchange-traded funds it considers risky, saying it would review the issue later. The SEC in November had proposed requiring broker-dealers and investment advisers to vet individual investors before approving them to trade the products, known as leveraged and inverse exchange-traded funds. Such funds use debt to double or triple the gains—and losses—of an underlying index and are often poorly understood by investors.
Ex-Trump advisor Gary Cohn silent on Goldman’s 1MBD clawback efforts
Thornton McEnery – NY Post
It’s been a week since Goldman Sachs asked current and former top executives to cough up millions for their roles in the 1MDB Malaysian corruption scandal — and the silence from former Trump advisor Gary Cohn is deafening.
ESMA Submits Two Draft Technical Standards Under the Revised Market Abuse Regulation to the European Commission
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published the Final Report on the amendments to the Market Abuse Regulation (MAR) for the promotion of the use of SME Growth Markets (SME GMs). These amendments focused on liquidity contracts and insider lists for SME GMs.
Proposed Amendments to FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) that Would Require Members to File Retail Communications Concerning Private Placement Offerings
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) proposed amendments to FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) that would require members to file retail communications concerning private placement offerings that are subject to those rules’ filing requirements.
SEC Adopts Modernized Regulatory Framework for Derivatives Use by Registered Funds and Business Development Companies
The Securities and Exchange Commission today voted to enhance the regulatory framework for derivatives use by registered investment companies, including mutual funds (other than money market funds), exchange-traded funds (ETFs) and closed-end funds, as well as business development companies. The new rule and rule amendments will provide a modernized, comprehensive approach to the regulation of these funds’ derivatives use that addresses investor protection concerns and reflects developments over the past decades. The Commission is committed to designing regulatory programs that reflect the ever-broadening product innovation and investor choice available in today’s asset management industry, while also taking into account the risks associated with funds’ increasingly complex portfolio composition and operations.
NFA permanently bars Malaysia commodity pool operator and commodity trading advisor Dafex Global Ltd. from membership
NFA has permanently barred Dafex Global Ltd. (Dafex), a former NFA Member and current CFTC registered commodity pool operator and commodity trading advisor located in Malaysia from membership and from acting as a principal of an NFA Member.
FCA to participate in GFIN cross-border testing of financial products and services
The FCA will be among 23 regulators across 5 continents taking part in the cross-border testing initiative organised by the Global Financial Innovation Network (GFIN).
Investing and Trading
Lessons from Ruth Krivoy, the Former Head of Venezuela’s Central Bank
Joe Weisenthal and Tracy Alloway – Bloomberg
The COVID-19 crisis has pushed central banks around the world into uncharted territory. Typically when we talk about this, it’s from the perspective of the Fed or the ECB. But this has also been an extraordinary period for emerging market central banks. On this episode, we speak with Ruth Krivoy who ran the Venezuelan central bank in the early 1990s. She discusses the lessons she learned during that period and how they apply now.
Distressed debt investors still await rich pickings from pandemic; The industry expects bankruptcies to throw up opportunities, but not on the scale of the financial crisis
Robin Wigglesworth and Sujeet Indap – FT
A dozen years on from the collapse of Lehman Brothers, some of its remaining creditors received word that a payment would be coming their way. The announcement last month that holders of two “enhanced capital advantaged preferred securities” issued by Lehman with a face value of $735m — though now trading at mere cents on the dollar — will soon receive $33m was a timely reminder that money can be made betting on even the most turbulent and convoluted bankruptcies.
Shell Tries to Woo Investors With Dividend Raise, Promise of Future Payouts
Oil major said it would channel more cash to shareholders once it reduces debt
Sarah McFarlane – WSJ
Royal Dutch Shell PLC said it would start raising its dividend again—after slashing it just months earlier—and planned to eventually increase shareholder payouts further, projecting an upbeat assessment of its ability to weather a pandemic-inspired oil demand shock.
Sovereign Bonds May Not Save Your Portfolio; Government debt cannot diversify your portfolio. It may end up amplifying your risks.
Richard Cookson – Bloomberg
My working life has included pretty much the highest and lowest government bond yields in history. In the early 1980s U.S. 10-year yields touched 16%. Earlier this year they fell to 50 basis points. That’s generous compared with yields in Europe, mind, where any borrower approaching creditworthiness (and lots that aren’t) offer negative yields.
The Lockdown Meltdown Is Coming for Everything; Even haven assets such as gold are being sold. Previous volatility spikes suggest the situation won’t turn around quickly.
John Authers – Bloomberg
Another October Surprise
We are in the presence of the Lockdown Meltdown. Stocks across the world have just suffered their biggest jolt since the March seizure that was prompted by the advent of Covid-19. What is striking about this selloff is that, for the most part, it is indiscriminate.
Even Billionaires Like Saving $500 Million On Diamonds; France’s luxury mogul Bernard Arnault has gone to extraordinary lengths to avoid overpaying for Tiffany’s.
Lionel Laurent – Bloomberg
Most of us would probably swallow nervously at the thought of splashing several thousand dollars on a diamond ring in the current environment. It looks particularly extreme, though, to see Bernard Arnault — the fifth-richest person in the world — go to such extraordinary lengths to renegotiate his $16 billion acquisition of Tiffany & Co. for what may well end up being a 2.6% price cut. But hey, maybe that’s why he’s a billionaire.
BIS: Have The Driving Forces Of Inflation Changed In Advanced And Emerging Market Economies?
BIS Working Papers via Mondovisione
Inflation has remained remarkably stable in many economies since the Great Financial Crisis (GFC). The fact that inflation did not fall as much as might have been expected given the high degree of economic slack during the crisis or rise much in the recovery afterwards has raised questions about what contributed to the recent stability of inflation and whether the slope of the Phillips curve has flattened. This paper empirically investigates possible structural changes in the driving forces of inflation and their quantitative effects before, during and after the GFC for a number of advanced and emerging market economies.
Environmental, Social and Corporate Governance
Asset managers warned over ‘insufficient’ climate risk reporting; Regulatory task force says clients unable to make informed choices
Matthew Vincent – FT
Asset managers are not providing enough information about climate risks at the companies they invest in to enable clients to make informed choices, a regulatory task force has warned.
Australia’s banks stop funding coal as trading partners decarbonise; Move by ANZ means industry will now have to seek financing from overseas
Jamie Smyth – FT
The last of Australia’s Big Four banks has said it will stop financing thermal coal projects as the country’s big trading partners seek to cut emissions, in a move that will force the industry to turn to foreign lenders for new funds.
BlackRock pushes for global ESG standards; Overhaul is vital if investors are to understand the risks companies face, says US asset manager
Attracta Mooney – FT
BlackRock, the world’s largest asset manager, has called for the “alphabet soup” of standards used by companies to showcase their sustainability efforts to be replaced by a globally recognised framework, warning an overhaul was vital for investors to understand the risks companies face.
Most of the World’s Biggest Public Companies Support Climate Risk Disclosure; TCFD’s annual report found a huge increase in corporate embrace of transparency about climate impacts.
Todd Gillespie – Bloomberg
A task force set up to improve the reporting of financial risks caused by climate change has seen support for its recommendations soar in the past year as demand grew from investors for more information on how a warming planet will affect business. But disclosures by companies on the financial impact remain low, according to a new report from the Task Force on Climate-related Financial Disclosures.
Lloyds returns to profit as it strikes brighter note; UK’s largest retail bank benefits from buoyant property market and reports drop in new provisions for bad loans
Nicholas Megaw – FT
Lloyds Banking Group has become the latest in a wave of lenders to strike an optimistic tone after returning to profit and comfortably beating analysts’ forecasts in its third-quarter results.
Could negative rates signal the end of free banking? HSBC hints it will soon look at charging for current accounts
Claer Barrett – FT
Everybody knows there’s no such thing as a free lunch. But is there any such thing as a free bank account? Current account customers in the UK could be about to find out. This week, HSBC admitted it would have to look at charging for basic banking services in some markets, because it was losing money on large numbers of accounts.
Apollo Earnings Fall as CEO Wrangles With Jeffrey Epstein Ties; Leon Black faces investors Thursday, after questions have swirled about his relationship with Mr. Epstein
Miriam Gottfried – WSJ
Apollo Global Management Inc. APO -3.23% reported lower third-quarter earnings Thursday as the firm’s chief executive, Leon Black, prepares to confront renewed speculation about his ties to the late financier Jeffrey Epstein.
Credit Suisse Targets Share Buybacks Despite Earnings Miss; Swiss lender joins a wave of cautious optimism among Europe’s banks, but CEO Thomas Gottstein says challenges lie ahead
Margot Patrick – WSJ
Credit Suisse Group AG said Thursday it would restart buying back shares next year as its capital base strengthened despite lower-than-expected third-quarter earnings. Revenue fell in the lender’s key businesses, including international wealth management and its Swiss unit, as margins were squeezed by negative interest rates and recurring fees fell. A strong Swiss franc also hit revenue. A solid performance from the bank’s investment-banking business helped offset those declines.
Wells Fargo MD departs for JonesTrading equity trading lead role; Jon Jefferies joins JonesTrading as managing director of equity trading in New York after almost five years with Wells Fargo.
Annabel Smith – The Trade
US-based institutional equities and derivatives broker JonesTrading has appointed a former Wells Fargo managing director of equity trading in the firm’s New York office.
Turkish lira drops to record low as central bank defends approach; Governor Murat Uysal says the bank has reacted strongly to currency’s weakness
Ayla Jean Yackley and Laura Pitel – FT
Turkey’s central bank governor insisted on Wednesday that the bank had responded robustly to a slide in the lira even as the currency sunk to another record low. Murat Uysal acknowledged that the lira, which has fallen about 28 per cent against the dollar this year, had suffered “volatility” due to geopolitical tensions and other factors. On Wednesday, it fell as much as 1.6 per cent to set its weakest level yet at 8.3211 to the dollar.
China’s Sinopec to accelerate push into hydrogen energy; Move by country’s biggest oil refiner follows Beijing pledge to cut emissions to near zero
Thomas Hale – FT
Sinopec says it will push deeper into China’s fast-growing hydrogen energy sector in a move that could reverberate through the global oil industry, as the country’s biggest refiner unveiled record quarterly earnings.
Taiwan asset owner pre-emptively terminates Vanguard mandate; Move comes after US manager signals it planned to pull out
Selena Li – FT
A major Taiwanese asset owner has decided to redeem its investment in a number of Vanguard’s funds and pre-emptively terminate a mandate with the US investment giant, after being informed that it planned to pull out.
Why Emerging Markets Are Wary of a Modern Monetary Fix; The Covid-crisis fashion for freely spending money is piling pressure on governments that perhaps can’t handle it.
Andy Mukherjee – Bloomberg
Modern monetary theory is suddenly everywhere. The idea that a government that can freely print and spend its own currency shouldn’t deny anyone a job is gaining currency in our pandemic-ravaged world. Coming amid a sharp increase in public expenditure, Democratic presidential candidate Joe Biden’s $2 trillion clean energy plan shows a disregard for debt and deficits that was unimaginable after the 2008 subprime crisis.
China’s Strengthening Currency Is Increasingly Outside Beijing’s Control; Allowing more foreigners to buy the country’s bonds means strong inflows of capital to China, but that also means abdicating some control of the country’s financial conditions or currency
Mike Bird – WSJ
The Chinese yuan has strengthened this year, and the country’s central bank seems to be trying to slow the rise. But having ceded a portion of the currency’s control to international markets, there’s less they can do this time around.
Majority of Britons unclear on post-Brexit rules; Survey finds most are unaware of or are confused over change in policies, including travelling within Europe
Jasmine Cameron-Chileshe – FT
Two-thirds of Britons are unclear about how the UK’s relationship with the EU will change when the Brexit transition period ends, a survey found, as government concerns grow over the preparedness of UK businesses for the new era.
The Issue That Might Sink the Brexit Trade Talks: Fishing
Stephen Castle – New York Times
In the greater scheme of things, fishing is a tiny industry. Just 12,000 people in Britain fish from 6,000 vessels, contributing less than half of one percent of gross domestic product — less than the upmarket London department store Harrods, according to one analysis. The same holds true for most continental European nations. Yet, as negotiations between Britain and the European Union on a long-term trade deal grind along toward the Dec. 31 deadline, fisheries are proving to be one of the most politically treacherous sticking points. Here’s why the issue is giving negotiators such fits.
Welcome to the Bright Side of Brexit
Joe Mayes, Deirdre Hipwell, and Lucy Meakin – Bloomberg
Britain’s exit from the European Union’s single market is expected to cause significant disruption and cost. Yet the upheaval is also supposed to yield opportunity. The case for Brexit, which convinced a majority of voters in the 2016 referendum and helped Prime Minister Boris Johnson win power, leaned heavily on the purported long-term benefits of being outside the now 27-member EU. They range from new regulatory freedoms, an independent trade policy and a stricter immigration system to reinvent the labor force.
Brexit Deal Inches Closer Into View as Talks Make Progress
Alberto Nardelli and Ian Wishart – Bloomberg
European Union and U.K. negotiators made progress this week toward resolving some of the biggest disagreements that have long bedeviled the Brexit talks, raising hopes that a deal could be reached by early November, according to people familiar with the discussions.
The two sides have begun work on the text of an agreement on the level competitive playing field, and are close to finalizing a joint document covering state aid, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The U.K. and EU have also moved closer to deciding essential aspects of how any accord will be enforced, the people added.