Battle for Hong Kong Is Shifting to City’s Financial Markets
Sofia Horta e Costa and Richard Frost – Bloomberg
Hang Seng Index has worst month versus world since 1998; Mainland funds are helping shore up city’s battered stocks
The struggle to maintain confidence in Hong Kong’s future is manifesting in its stock and currency markets. Waves of mainland capital are flooding into equities, especially megacap Chinese banks, countering losses sparked by sweeping national security legislation. Tension is also building in the foreign exchange market, where options and forwards show the pegged currency will reach the weak end of its trading band.
S.Korea will respond if FX volatility spikes over U.S-China tensions – finmin
South Korea’s finance minister on Friday pledged to take steps to stabilise its currency if volatility rises sharply in light of heightened tensions between the United States and China over Beijing’s plans to impose national security laws for Hong Kong.
U.S. crude stocks swell as tankers from Saudi Arabia unload
John Kemp – Reuters
U.S. petroleum inventories increased sharply last week as the fleet of tankers sent from Saudi Arabia at the height of the volume war started to discharge their crude while the recovery in domestic fuel use remained sluggish. Total stocks of crude and products outside the strategic petroleum reserve climbed by almost 15 million barrels to a record 1.41 billion barrels, according to the U.S. Energy Information Administration.
Exchanges and Clearing
Cboe Global Markets to Present at Piper Sandler Global Exchange and Financial Technology Virtual Conference Thursday, June 4
Cboe (press release)
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, announced today that Ed Tilly, Chairman, President and Chief Executive Officer, and Chris Isaacson, Executive Vice President and Chief Operating Officer, will present at Piper Sandler Global Exchange and Financial Technology Conference, to be held virtually, on Thursday, June 4 at 9:00 a.m. ET (Eastern Time).
CME Bitcoin options set new record in trading volume
Tim Copeland – Decrypt
Bitcoin options trading on the Chicago Mercantile Exchange (CME) has just seen its best day of trading yet. According to data provider Skew, trading volumes hit $60 million yesterday ahead of the options expiry date today. However, up until that point, trading volumes had been very low—below $10 million per day.
Regulation & Enforcement
USO Oil ETF Faces U.S. Probes Over Investor Risk Disclosures
Matt Robinson, Benjamin Bain and Catherine Ngai – Bloomberg
A popular exchange traded fund that uses complex derivatives to track oil is being investigated by U.S. regulators over whether its risks were properly disclosed to investors, scrutiny triggered by crude’s historic slump during the coronavirus crisis, said three people familiar with the matter.
The Securities and Exchange Commission and the Commodity Futures Trading Commission have both opened probes into the $4.64 billion United States Oil Fund, which lost 75% of its value in the two months ended April 30, said the people who asked not to be named because the matter is private.
Covered Call Backtest: Finding The Best Maturity, Strike, IV, And Earnings Methods
We ran a large backtest to identify the best maturity, delta, call value as a percent of stock price, earnings strategy, and implied volatility profile for call selling on S&P 500 components.
Goldman Sachs betrays bitcoin
Jemima Kelly – Financial Times
Remember when Goldman Sachs <3 bitcoin?
Back in the heady days of 2017 and 2018, the investment bank was so excited about this potential new asset class that it was said to be considering launching a bitcoin trading desk, a huge step in the direction of “mainstream adoption”.
The bank’s analysts would put out notes predicting all-time highs for bitcoin based on exciting bits of technical analysis, while former executives seemed to be leaving Wall Street in droves to pursue illustrious careers in crypto.