Hits & Takes
John Lothian & JLN Staff
On the day after his wife lost her U.S. Senate race, Jeff Sprecher was given some solace as the stock price for his firm, Intercontinental Exchange, hit an all-time high price of $116.57. It was a Jerry Seinfeld like moment, where when something bad happens, something good happens to even it out.
On the day of tumult in the U.S. Capitol, the U.S. recorded the deadliest day of the pandemic to date with 3963 deaths reported. New daily death tolls were also set in the states of New Hampshire, Oklahoma and Pennsylvania.
The New York Post reported that Mick Mulvaney resigned after the Capitol siege saying, ‘I can’t stay’. Also, CNN reported that Stephanie Grisham, the former White House communications director and press secretary and current chief of staff for First Lady Melania Trump, has resigned.
Also, ABC is reporting “Members of Trump Cabinet discussing invoking 25th Amendment: Sources.” Invoking the 25th Amendment of the Constitution would remove Trump from the presidency.
Japan has declared a state of emergency because of the Covid-19 outbreak, and JPX has issued a statement that “Trading to Continue After the State of Emergency Declaration.” JPX said, “Trading on all markets of the Tokyo Stock Exchange, Osaka Exchange and Tokyo Commodity Exchange is scheduled to continue as normal on January 8 and beyond.”
The last time the U.S. Capitol building was breached was during the war of 1812, when it was burned down. And never, even during the Civil War, was the battle flag of the Confederate States of America waived inside the building.
Tom Scanlan, formerly of the CME Group, is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Tom is a longtime JLN reader who joined the CME Group as part of the acquisition of NEX Group, where he worked as part of the BrokerTec team. He also formerly worked for the Chicago Board of Trade, where he got his start on the recommendation of Lance Murdock, a CBOT board member. Thank you to Tom 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.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The Futures Industry Association (FIA) issued a statement yesterday condemning the violence in Washington, D.C. as Trump supporters stormed the Capitol. It reads: “FIA strongly condemns the violence that took place today at the US Capitol and urges elected officials to unite in denouncing these actions. FIA firmly believes that the rule of law is the cornerstone of a free and democratic society and vehemently opposes any efforts to use violence to disrupt the peaceful transition of power guaranteed by the US Constitution.”~SR
Also, the FIA thanked all who donated prizes and supported its online auction in December. The auction raised £7,000 for Futures for Kids, the industry’s charitable foundation that raises funds to support disadvantaged children and young people in the UK and around the world. The top auction items were bottles of Chateau Palais Cardinal St-Emilion Grand Cru 2015, a week-long stay on the North Cornwall coast, and the perennial giant Toblerone chocolate bar.~SR
And, finally, FIA is hosting a webinar on “2020 annual trends in futures and options trading” on January 27 from 10:30 a.m. to 11:30 a.m. ET. The webinar will highlight the main trends in trading activity in 2020 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings. The moderator is FIA Senior VP of Publications, Data and Research Will Acworth. You can go here to register.~SR
Bill Brodsky – The Path to Electronic Trading Part 1
Former Cboe Global Markets Chairman and CEO Bill Brodsky’s career in the financial industry spanned multiple decades and took him on a path from Wall Street to LaSalle Street. In a wide-ranging, two-part interview, he gave JLN an eyewitness view of the evolution of the options business, the exchanges and trading technology.
Trump Era Ends on a Sour Note for a Wall Street Power Couple
Sam Mamudi – Bloomberg
The Donald Trump era is ending badly for the Wall Street power couple of Jeff Sprecher and Kelly Loeffler. First, the New York Stock Exchange, owned by Sprecher’s Atlanta-based Intercontinental Exchange Inc., flip-flopped — twice — on whether to delist several major Chinese companies, as the Trump administration has demanded.
*****”We will always have the ICE stock price” – said with an accent reminiscent of the movie Casablanca.~JJL
Members of Trump Cabinet discussing invoking 25th Amendment: Sources
John Santucci, Katherine Faulders, Emily Shapiro, Johnathan Karl – ABC News
There have been discussions among some members of the Trump Cabinet and allies of President Donald Trump about the 25th Amendment, which would be a vehicle for members of the cabinet to remove Trump from office, multiple sources with direct knowledge of the discussions tell ABC News.
*****As they should.~JJL
Pro-Brexit campaign Leave.EU relocates to Waterford [Ireland]
Charlie Taylor – Irish Times
Leave.EU, a pro-Brexit campaign bankrolled by UKIP backer Arron Banks, has migrated its registered office for its website to Waterford so that it can retain its ‘.eu’ internet address. The move, first reported by the Euractiv website, comes as more than 80,000 .eu domain suffixes belonging to British users were recently suspended following Britain’s withdrawal from the European Union.
*****You gotta do what you gotta do.~JJL
Covid-19 Live Updates: U.S. Records Its Deadliest Day, With a Toll of Nearly 4,000
As Americans were transfixed by the spectacle of the Capitol under siege, the coronavirus continued to sweep across the United States. Officials reported at least 3,963 new coronavirus deaths in the United States on Wednesday, a new single-day record, though delayed recording because of the holidays might have played a role. The daily death toll in New Hampshire, Oklahoma and Pennsylvania also set records.
*****In other news, there is still a pandemic raging and yesterday’s superspreader event in Washington, DC will only make it worse.~JJL
Mick Mulvaney resigns after Capitol siege: ‘I can’t stay’
Mark Moore – FT
Mick Mulvaney, former White House chief of staff and current special envoy to Northern Ireland, has announced he is stepping down. “I called [Secretary of State] Mike Pompeo last night to let him know I was resigning from that. I can’t do it. I can’t stay,” Mick Mulvaney told CNBC in an interview on Thursday.
*****Why did he take the job in the first place?~JJL
Wednesday’s Top Three
Our top story Wednesday was the Financial Times’ London unlikely to regain lost EU share trading, warn City figures. Second was Salon’s Kelly Loeffler’s new Facebook ad darkens skin of Raphael Warnock, her Black opponent, which doesn’t matter much now because the senate race is over and Loeffler lost. Third was Refinitiv’s announcement, Refinitiv to launch production Term SONIA benchmark on January 11, 2021.
196,715,075 pages viewed; 25,047 pages; 228,676 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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Biden Victory Is Certified After Day of Debate and Tumult
Jennifer Epstein, Billy House, and Erik Wasson – Bloomberg
Lawmakers count Electoral College votes after Capitol stormed; President-elect says violence shows ‘democracy is fragile’
Joe Biden was formally recognized by Congress as the next U.S. president early Thursday, ending two months of failed challenges by his predecessor, Donald Trump, that exploded into violence at the U.S. Capitol as lawmakers met to ratify the election result. The Democratic president-elect’s victory was sealed after House and Senate members fended off a final round of objections to the Nov. 3 election outcome raised by a handful of Republicans on Trump’s behalf. The proceedings were disrupted for several hours as pro-Trump demonstrators overran police lines, besieged the House chamber and entered the Senate chamber, sending lawmakers fleeing for safety.
Pro-Trump Mob Driven From Capitol After Breach, Fatal Shooting
Josh Wingrove, Ari Natter, and Billy House – Bloomberg
Clyburn vows certification of electoral vote will continue; Woman fatally shot in the violence, circumstances unclear
The U.S. Capitol was declared secure on Wednesday evening, about four hours after a mob of President Donald Trump’s supporters stormed the building and forced debate on Joe Biden’s victory in the Electoral College to be suspended. “I have faced violent hatred before. I was not deterred then, and I will not be deterred now,” Representative Jim Clyburn of South Carolina, a member of the congressional leadership and a veteran of the civil rights movement, said in a tweet. “Tonight, Congress will continue the business of certifying the electoral college votes.”
Nasdaq Led all Exchanges in 2020 Equity Options Trading; Nasdaq-listed companies fuel investor demand for options trading
Nasdaq (Nasdaq: NDAQ) announced today that 2020 was the first year it led all exchanges in total volume traded for equity options across all categories, including proprietary single-exchange-listed options products. It was also the 11th consecutive year Nasdaq led all exchanges in trading of multiple-listed equity options contracts.
Bank of France Says High Debt Puts Financial System at Risk
Alexandre Rajbhandari and William Horobin – Bloomberg
Low interest rates, rising credit risk weigh on banks’ profits; Extended lockdown would make it harder to pay off loans
Rising corporate debt and the prospect of further Covid-19 lockdowns pose a systemic risk to France’s financial system that may rise in the coming months, according to the country’s central bank. Debts of non-financial companies are now the greatest vulnerability in the system, the Bank of France said in its semi-annual review of financial risks. While the second lockdown starting in November didn’t hit some companies as severely as the first, a slow economic recovery will make it tough for some to pay off debts built up since the start of the crisis.
FCA warns 4,000 financial firms risk failure due to Covid; Industry-wide survey finds six in 10 expect coronavirus pandemic to reduce their net income
Matthew Vincent – FT
Up to 4,000 financial services groups are at a heightened risk of failure due to the coronavirus pandemic, the UK regulator has warned, and nearly a third of these “low resilience” businesses could cause harm to consumers.
Japan declares state of emergency in Tokyo as coronavirus cases surge; Economists cut first-quarter growth forecast almost to zero but expect ‘robust pick-up’ in the spring
Robin Harding and Kana Inagaki – FT
Japan has declared a “soft” state of emergency in Tokyo and three surrounding prefectures after a steady rise in coronavirus cases raised fears of breakdown in the capital’s medical system.
Robinhood Wants More Female Investors. So Does Everyone Else; Attracting more women will be key to its growth. But getting more women to trade can be a tall task for all online brokerages.
Veronica Dagher and Caitlin McCabe – WSJ
Fast-growing online brokerage Robinhood Markets Inc. just capped a blockbuster year, one that saw seemingly anyone ranging from college students to retirees transform into stock-market traders. Now, the company has its sights set on another demographic: female customers. Attracting more women to Robinhood’s platform will be key to its growth, especially as the company aims to evolve beyond its retail trading roots.
China ADRs Sink on Report U.S. Eyeing Alibaba, Tencent Bans
Bailey Lipschultz – Bloomberg
Pair lead declines for Chinese-based companies after report; Weakness leaked over to high-fliers like JD.com and Nio
Alibaba Group Holding Ltd and Tencent Holdings Ltd. tumbled, pulling down other Chinese stocks that trade in the U.S. after a report the U.S. is considering adding the two internet heavyweights to the China stock ban that has whipsawed some Asian-based companies this week.
JPMorgan CEO Jamie Dimon Calls for Violence to Stop at Capitol
Daniel Taub – Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon called for violence to cease at the U.S. Capitol, where President Donald Trump’s supporters overwhelmed police and stormed the halls of Congress on Wednesday. “I strongly condemn the violence in our nation’s capital,” Dimon said in an emailed statement. “This is not who we are as a people or a country. We are better than this. Our elected leaders have a responsibility to call for an end to the violence, accept the results and, as our democracy has for hundreds of years, support the peaceful transition of power.”
Covid-19 Aftermath Could Spell a ‘Lost Decade’ for Global Economy, World Bank Says
Yuka Hayashi – WSJ
Even before Covid-19, the World Bank had lowered its projections for global growth in the 10 years that began in 2020. The pandemic is exacerbating that trend, raising the prospect of a “lost decade” ahead, the World Bank said Tuesday, as it also cut its forecasts for the coming year.
COVID-19 and CCP Risk Management Frameworks
After the market turmoil caused by the COVID-19 pandemic in March and April 2020, the ISDA Clearing Member Committee analyzed how central counterparty (CCP) risk management frameworks reacted to the crisis, based on feedback from CCPs.
CDC Says 1 in 100,000 Had Severe Allergic Reaction to Covid Shot
Robert Langreth and Emma Court – Bloomberg
Vaccine benefit outweighs risk of severe reaction, agency says; 29 Americans have had allergic reactions to Covid vaccines
Roughly 1 in 100,000 people have had a severe allergic reaction to the first Covid-19 vaccine, a rate that’s higher than the flu vaccine but still quite rare, U.S. health officials said.
South Africa to Get First Vaccines for Health Workers This Month
Paul Vecchiatto and Janice Kew – Bloomberg
Health Minister says 1.5 million doses to come from India; Government criticized for slow planning as virus cases surge
South Africa agreed a deal to receive the country’s first coronavirus vaccines this month and next, the first phase of a plan the government says will inoculate two-thirds of the population by the end of 2021.
Hospitals in London set to run out of beds in a fortnight; NHS presentation to senior doctors forecasts 2,000 shortfall in ‘best-case scenario’
Anna Gross – FT
London hospitals will be overwhelmed by Covid-19 patients in two weeks unless the current rate of admissions drops significantly, according to a briefing given to senior doctors.
South African Covid variant may affect vaccine efficacy, warn scientists; Mutation reduces ability of antibodies to bind to virus and could make some shots less effective
Clive Cookson in London and Joseph Cotterill – FT
The new coronavirus variant linked to a surge in Covid-19 cases in South Africa is not only more infectious than previous forms of the virus but could make some vaccines less effective.
Europe’s Covid-19 Vaccination Campaign Off to Slow, Uneven Start; Rollouts in France and the Netherlands fall far behind those in the U.S., U.K. and Germany
Matthew Dalton in Paris and Eric Sylvers in Milan – WSJ
Coronavirus vaccination campaigns are off to a slow start across much of Western Europe, sparking criticism of authorities and demands to pick up the pace as hundreds die and tens of thousands are infected each day.
Londoners Searching for More Space During Covid Are Buying Up English Country Manors; The coronavirus pandemic is reinvigorating Britain’s prime country house market as remote work becomes the norm
Ruth Bloomfield – WSJ
The pandemic is having an unexpected side effect. Suddenly, Britons are eager for the space and grandeur of a country manor house. They are breathing life into Britain’s prime country house real-estate market after a malaise in that sector that has lasted for more than a decade.
Exchanges, OTC and Clearing
Cboe Global Markets Reports Trading Volume for December and Full Year 2020
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today reported December monthly and full-year 2020 trading volume, and provided selected revenue per contract (RPC) guidance for the fourth quarter of 2020.
The data sheet “Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report” contains an overview of certain December and full-year trading statistics and market share by business segment, volume in select index products, and RPC, which is reported on a one-month lag, across business lines.
MarketAxess Announces Monthly Volume Statistics for December 2020
MarketAxess Holdings Inc.
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced monthly trading volume for December 2020 of $472.3 billion consisting of $203.5 billion in credit volume and $268.7 billion in rates volume.
Tradeweb Reports December Total Trading Volume of $18.2 Trillion; Average daily volume (ADV) for the month was $834.5 billion (bn), an increase of 28.0 percent (%) year over year (YoY). Average daily trades for the month totaled 50,774.
Tradeweb fully electronic trading captured a record 10.6% of U.S. High Grade TRACE and 4.5% of U.S. High Yield TRACE in December. Rates Derivatives captured record SEF market share for the month. For the fourth quarter of 2020, Tradeweb reported record ADV of $897.9bn, up 30.9% YoY, Tradeweb captured quarterly record TRACE market share in U.S. High Grade and U.S. High Yield bonds, with fully electronic representing the majority of each. Quarterly ADV records were also set in U.S. High Yield, Chinese bonds and Repurchase agreements.
NYSE Updates Guidance on Delisting Determination for Securities of Three Issuers in Relation to Executive Order 13959
Executive Order 13959 (“EO 13959”) prohibits, beginning at 9:30 a.m. eastern standard time on January 11, 2021, any transaction in publicly traded securities, or any securities that are derivative of, or are designated to provide investment exposure to, companies identified as a Communist Chinese Military Company (“CCMC”). On January 5, 2021, the Department of Treasury’s Office of Foreign Asset Control (“OFAC”) provided additional, specific guidance to the NYSE stating that U.S. persons cannot engage in certain transactions (as specified in EO 13959) in the ADRs of China Telecom Corporation Limited (CHA), China Mobile Limited (CHL), and China Unicom (Hong Kong) Limited (CHU) (the “Issuers”) after 9:30 a.m. eastern standard time on January 11, 2021.
Cboe Silexx: Trading at Your Fingertips
Throughout the many challenges presented by 2020, Cboe Global Markets remained steadfast in providing superior technology solutions and client workflow optimizations to its electronic trading environment. By leveraging its mature and robust proprietary trading platform, which was acquired in 2017, Cboe Information Solutions began to transition its legacy platform into a next generation trading software and connectivity solutions provider.
New York Stock Exchange reverses course again on China delistings; Exchange operator will drop 3 Chinese telecoms after criticism from US Treasury for initial backtrack
Eric Platt in New York – FT
The New York Stock Exchange on Wednesday said it would go ahead with its plan to delist three Chinese telecommunications companies next week, after drawing criticism from the US Treasury secretary over its earlier decision to keep the businesses trading on the Big Board.
CME Group to Launch Six New Japanese Energy Futures Contracts on February 8
CME Group, the world’s leading and most diverse derivatives marketplace, today announced four new Japanese electricity futures contracts and two new LNG futures contracts will be available for trading on February 8, 2021, pending regulatory review. The four new electricity futures contracts expand CME Group’s already robust suite of global power futures and options and fill a gap in the Japanese electricity futures market, providing traders a robust platform for block-trade submission to CME Clearing. The two new LNG contracts provide Japanese power producers a more efficient tool to manage their price risk.
JP Morgan and Deutsche Bank clear first non-deliverable FX options on LCH ForexClear; The two investment banks were the first to clear the non-deliverable foreign exchange (FX) options that launched today extending the offering at LCH ForexClear.
Annabel Smith – The Trade
Investment banks JP Morgan and Deutsche Bank have become the first members to clear the freshly launched non-deliverable FX options at LCH ForexClear.
Video: ETF TV series
We at Eurex have the broadest choice of ETF derivatives and the market for ETFs continues to grow. We discussed the most important and current questions about ETFs together with ETF TV and our customers.
LCH ForexClear non-deliverable FX options clearing goes live
Non-deliverable FX options clearing complements ForexClear’s deliverable and non-deliverable offerings; Provides further risk management, capital savings, margin and operational efficiency opportunities across FX portfolios; Supports market participants in managing initial margin under the Uncleared Margin Rules; Deutsche Bank and JPMorgan among the first participants to clear the product
LCH, a leading global clearing house, today announced that it has successfully launched non-deliverable FX options clearing across nine currency pairs. Deutsche Bank and JPMorgan are among the first participants to clear the product at LCH.
ASX Group Monthly Activity Report – December 2020
Initial Listing of Four (4) Japanese Electricity Futures Contracts
Effective Sunday, February 7, 2021, for trade date Monday, February 8, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list four (4) Japanese electricity futures contracts (the “Contracts”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort as noted in the tables below.
CME Globex Notices: January 4, 2021
Critical System Updates
New Resource for Critical Configuration Files
iLink 3 Configuration File Enhancement – This Week
iLink 2 on MSGW Decommission – February 26
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
iLink 3 SBE Schema Update – January 24
Phase 1 CME FX Link Enhancements – February 21
Phase 1 CME FX Link Enhancements: Drop Copy Impact – February 21
CME STP Notices: January 7, 2021
CME STP Support of BrokerTec Markets – January 18
BrokerTec Stream on CME STP – February 1
Update – Postponed – New Aggressor Indicator Flag on CME STP UPDATE
Update – Postponed – Enhancements for Exercise and Assignment Trades on CME STP UPDATE
CME STP FIXML API Connectivity Documentation
Trading to Continue After the State of Emergency Declaration
The government of Japan has today announced its plan to make a state of emergency declaration effective from January 8 over the Covid-19 outbreak. Despite this, trading on all markets of the Tokyo Stock Exchange, Osaka Exchange and Tokyo Commodity Exchange is scheduled to continue as normal on January 8 and beyond.
Options Technology Announces Agreement to Purchase Fixnetix from DXC Technology
Options Technology, a leading provider of IT infrastructure to global capital markets firms backed by Abry Partners, today announced a definitive agreement to purchase Fixnetix, a DXC Technology Company. Financial terms of the agreement were not disclosed. The transaction is expected to close during the first half of this calendar year.
Banks Still Have Cards to Play in Payments Race; JPMorgan Chase’s deal for a loyalty and rewards business is the latest example of payment providers betting on the payment itself being just a part of the value chain
Telis Demos – WSJ
With people traveling less and spending more on digital platforms, banks with big credit-card units may have lost some relative luster with investors. But they still have cards to play.
Eventus Systems caps off year of unprecedented growth
Trade surveillance solution provider poised for further expansion in 2021
Eventus Systems, Inc., a leading global provider of multi-asset class trade surveillance and market risk solutions, announced today that the firm experienced unprecedented growth on multiple fronts in 2020, marking its strongest year to date in revenue and new client onboardings. The company has additional expansion plans for 2021, with deeper penetration in asset classes such as equities, foreign exchange (FX), fixed income and digital assets.
Fintech Company Paysafe’s SPAC Deal Will Power BFT Higher
Mark R. Hake – Investorplace.com
Bill Foley is really quite proud of his latest acquisition. His SPAC (special purpose acquisition company) uses his initials “BF” in the listed symbol for BFT stock, Foley Transimene Acquisition Corp II. The presentation for the deal to combine with Paysafe, a U.K. fintech company, spends an inordinate amount of time talking about Foley’s illustrious acquisition history. Despite all this, I think BFT stock is worth 40% more than its price today.
Jamaican fintech company receives massive boost from Black-led Florida firm
Abu Mubarik – Face2Face Africa
A Black-led investment firm Blue Mahoe Capital Partners Inc has acquired a 40% equity stake in Jamaica-based microfinance company Sprint Financial Services Ltd (SFS). SFS is operated virtually, providing loans and customer solutions to Jamaicans. The monetary value of the acquisition has not been declared but this can be considered significant as many banks and small businesses in Jamaica struggle to raise capital and expand their operations. In a statement, SFS founder Christopher Barrett said, the investment will position the company in a firm place for growth.
Green Dot Introduces GO2bank To Help Cash-Strapped Consumers
California FinTech Green Dot is rolling out the mobile bank GO2bank to assist people who are living paycheck to paycheck. “Too many Americans struggle to access their money, are paying too much for financial products and are negatively impacted by the lack of solutions designed to suit their needs,” Dan Henry, CEO of Green Dot Corp., said in a press release. Henry added that “GO2bank is built to be the go-to destination for seamless, affordable, useful banking – combining the security, stability and experience of an FDIC-insured bank with the innovation and agility of a leading FinTech.”
Crypto Market Value Tops $1 Trillion as Bitcoin Hits $38,000
Olga Kharif – Bloomberg
The total market value of cryptocurrencies surpassed $1 trillion for the first time Thursday amid a frenzied and volatile rally in Bitcoin to yet another record. Cryptocurrencies hit the milestone after a fivefold climb in market value in the past year, data from tracker CoinGecko shows. Strategists have cited demand from speculative retail traders, trend-following quant funds, the rich and even institutional investors as among the reasons for the surge. Bitcoin rose as much as 6% on Thursday to touch a high of $38,169 and has more than quadrupled in the past year, according to a composite of prices compiled by Bloomberg. It accounts for about two-thirds of cryptocurrency market value, followed by Ether at about 13%, according to CoinGecko data.
Bitcoin is headed for a supply shortage — and that will keep pushing up prices
Anthony Scaramucci and Brett Messing – MarketWatch
In the financial world, “what’s past is prologue.” Overly rosy perspectives often set off the boom-and-bust cycles that have become all-too familiar over the past 20 years, from the dot-com bubble to the mortgage crisis.
Crypto Fans See Regulatory Update as a Step Closer to Mainstream
Joanna Ossinger – Bloomberg
The cryptocurrency sector may be inching closer to mainstream finance after fresh guidance from a U.S. banking regulator on using certain types of less volatile digital coins for payments.
Federally chartered banks can use so-called stablecoins for payment activities and participate in the underlying blockchain that verifies and records transactions, according to a statement from the Office of the Comptroller of the Currency on Monday. Analysts said the move may encourage banks to develop stablecoins for faster payments.
Stablecoins are designed to avoid wild swings by being pegged to another asset, such as the U.S. dollar or gold. In contrast, Bitcoin is famously volatile, surging to a record above $35,000 on Wednesday just two days after registering its biggest one-day decline since March.
Jump in Active Bitcoin Accounts Nears High Set Before 2018 Crash
Olga Kharif – Bloomberg
Less than 18% of all Bitcoin supply is dormant, Flipside says; Binance CEO says true believers adding to Bitcoin holdings
of active Bitcoin accounts is approaching the all-time peak reached just before the notorious volatile cryptocurrency crashed three years ago. Bitcoin has long had numerous dormant accounts attributed to a fierce buy-and-hold contingent, who claim the “hodl” moniker as a mantra meant to reassure nervous investors during wild price springs. With Bitcoin surging again to all-time highs, many of these anonymous accounts look to be waking up.
CME Becomes Biggest Bitcoin Futures Exchange as Institutional Interest Rises
Omkar Godbole – Coindesk
Chicago Mercantile Exchange (CME) has taken the prime spot on the list of the biggest bitcoin futures trading platforms, indicating a continued rise in institutional participation. With an open interest of $2.1 billion, the CME accounted for 19.09% of the global tally of $11 billion on Wednesday – the highest among major exchanges tracked by Skew, a crypto derivatives research firm. OKEx was the second-biggest exchange with an open interest of $1.97 billion, while Binance, the word’s biggest crypto spot exchange by trading volume, ranked third with $1.82 billion. Open interest refers to the number of contracts traded but not squared off with an offsetting position.
South Korean gaming giant Nexon is preparing to acquire crypto exchange Bithumb for about $460 million: Report
Yogita Khatri – The Block
South Korean gaming giant Nexon is reportedly preparing to acquire Bithumb, the country’s biggest cryptocurrency exchange, for around 500 billion won (~$460 million).
Local outlet Maekyung reported the news on Thursday, saying that Nexon is known to have signed a memorandum of understanding with Bithumb at the beginning of this month to acquire its 65% stake. Nexon is reportedly working together with Vidente, a major shareholder of Bithumb, to acquire the stake.
Crypto Broker Voyager to Suspend Trading of XRP
Kevin Reynolds – Coindesk
Voyager Digital announced it’s suspending trading in embattled token XRP, becoming the latest cryptocurrency broker to do so. Voyager said it will suspend trading in XRP (+14.18%), effective Monday, Jan. 18, at 12:00 p.m. ET. Customers will still be able to maintain custody of XRP on Voyager and make withdrawals after that date. Crypto brokers and exchanges have been dropping XRP support in droves following the U.S. Securities and Exchange Commission’s lawsuit against the cryptocurrency’s issuer, Ripple Labs.
PayPal, Coinbase Invest in Crypto Tax Automation Startup TaxBit
Tanzeel Akhtar – Coindesk
TaxBit, a firm providing cryptocurrency tax automation software, says it has secured investments from the venture arms of PayPal and Coinbase, as well as its existing investor Winklevoss Capital. The amount invested was not disclosed in an announcement Thursday. The backing reinforces “the importance of tailored software solutions, like TaxBit, in driving widespread cryptocurrency adoption,” the company said. TaxBit automates the complex task of cryptocurrency tax compliance for consumers, businesses and exchanges through its two primary apps.
Coronavirus Vaccines Certified With VeChain’s Blockchain Tech in Cyprus
Tanzeel Akhtar – Coindesk
The Mediterranean Hospital of Cyprus has vaccinated 100 doctors and nurses against COVID-19, using a blockchain-based mobile app to certify the immunizations. In an announcement Tuesday, the hospital said the certifications were made via the E-HCert app backed by the VeChainThor blockchain. The first vaccine was administered on Jan. 4. The hospital described the move as a “great step for the return to normalcy” and another move towards the digital transformation of the healthcare industry via VeChainThor blockchain. E-HCert was first used in June 2020 for certifying COVID-19 tests results for more than 8,000 people arriving in Cyprus, said the Mediterranean Hospital.
FiCAS’ Actively Managed Crypto ETP Gets Green Light for European Expansion
Tanzeel Akhtar – Coindesk
Swiss crypto investment manager FiCAS AG says it has received regulatory approval to make its cryptocurrency exchange-traded product (ETP) available across the European market. FiCAS announced Thursday it now has permission to make its 15 FiCAS Active Crypto ETP (BTCA) available to a wider pool of investors outside of the Swiss market. The company launched the ETP on July 15, 2020, listing it on SIX Swiss Exchange. FiCAS said EU approval gives it the green light for all types of investors in the EU to purchase the BTCA through their bank or broker.
Iranian Authorities Close 1,620 Illegal Cryptocurrency Mining Farms: Report
Zack Voell – Coindesk
Iranian authorities shut down 1,620 illegal cryptocurrency mining farms that collectively used 250 megawatts of electricity over the past 18 months, per a report by Financial Tribune. A spokesperson for the state-run power company Tavanir, whose electricity these miners reportedly used, said, “Tavanir is strict in dealing with unauthorized miners. Those who use subsidized power, such as unlicensed miners, will be fined as much as the loss they impose on the national grid.” The illegal mining operations will be disconnected from the national power grid and the miners will face prosecution.
First Mover: As Bitcoin Rally Pauses, DeFi Keeps Astounding
Bradley Keoun and Omkar Godbole – Yahoo Finance
Bitcoin (BTC) was lower, after the quick reversal of a brief rally late Monday reportedly spurred by the U.S. Office of the Comptroller of the Currency’s decision to let banks participate in blockchain networks and use stablecoins as payments.
“Bitcoin has started 2021 with a stark reminder that volatility is the norm,” Matt Blom, head of sales and trading with the cryptocurrency firm Diginex, wrote Monday.
No, bitcoin is not “the ninth-most-valuable asset in the world”; Time for some realism.
Jemima Kelly – FT
You might have noticed that the bitcoin is . . . mooning. No, we don’t mean that the bitcoin bros are showing their bottoms to the rest of the world (well, not literally anyway). What we mean is that bitcoin has been on a skyward trajectory ever since it climbed above $20,000 for the first time ever in mid-December, and on Wednesday morning reached an all-time-high of $35,751, according to Coindesk.
Democrats Win U.S. Senate as Ossoff Tops Perdue in Georgia Sweep
Steven T. Dennis, Billy House, and Daniel Flatley – Bloomberg
Wins give Democrats control of House, Senate and Biden agenda; Ossoff, documentarian, becomes youngest member of U.S. Senate/THE
Democrats won control of the U.S. Senate for the first time in six years with victories in two runoff races in Georgia — a stunning result in a state that hadn’t sent a new Democratic senator to Washington for two decades.
Boris Johnson Braces England For Long Haul Lockdown After Surge in Virus Deaths
Emily Ashton – Bloomberg
Restrictions will end with ‘gradual unwrapping’ not ‘big bang’; Daily U.K. death toll hits 1,041, the highest since April
Boris Johnson prepared the ground for lockdown rules to last for several more months as U.K. coronavirus deaths hit the highest daily total since April. Speaking in Parliament ahead of a vote on the measures, the prime minister said pandemic restrictions will be lifted only gradually. While schools will be the priority for reopening, the goal of a return to face-to-face teaching from Feb. 22 is far from certain, he warned.
Holding Donald Trump to account for storming of the Capitol; Options that seemed exotic a few days ago are now merited
THE EDITORIAL BOARD – FT
The world’s foremost power and oldest democracy lost control of its own capital on Wednesday. The storming of the US legislature by a rightwing mob suspended its business, forced elected politicians into hiding and, while details remain scarce, cost lives. American institutions have come under attack before. Never, though, at the instigation of its own president.
Chinese officials and media mock storming of Capitol Hill; Beijing compares chaos in Washington to Hong Kong protests as US allies condemn unrest
Chinese officials and social media users mocked Wednesday’s chaotic scenes in Washington as Donald Trump supporters stormed the US Capitol building and delayed the confirmation of Joe Biden’s presidential election victory.
Mark Cuban Will Run For President When Bitcoin Touches $1M
Shivdeep Dhaliwal – Yahoo Finance
The “Shark Tank” fame investor proposed the foray into politics on Twitter.Cuban also decried the current system in a separate tweet which he described as “broken.” The entrepreneur prophesied that there would be a viable third political party in the U.S. by 2030.
A Single Day Shakes Two Presidencies, Two Parties and One Nation to the Core; The efforts of President-elect Joe Biden to calm and unify the nation have become more complex
Gerald F. Seib – WSJ
Never in recent memory have the events of a single 24-hour period so shaken two presidencies, the very Capitol of the United States and the nation itself as they did on Wednesday. The remarkable scenes of political violence that broke out amid what was to be a peaceful confirmation of the transfer of power are testing America’s democratic institutions, and it’s far from clear how they will respond. President Trump’s term, which began with Republicans fully in charge of Washington and the promise of a new kind of populist leadership, effectively came to an end Wednesday with his party aflame and out of power, some of its top leaders excoriated by a president they had loyally supported, and a mob of Trump supporters occupying and vandalizing the Capitol.
CEOs Consider Ways to Smooth Biden’s Presidential Transition, Including Holding Back Campaign Money; Leaders of some large companies say they may withhold political donations and investments in states whose lawmakers are challenging Electoral College results
Emily Glazer and Chip Cutter – WSJ
In a virtual gathering of chief executives convened to discuss political turbulence stemming from the 2020 election, leaders of some of the largest U.S. companies said they were considering withholding donations to Republican lawmakers seeking to impede the presidential transition.
Why Warnock and Ossoff Won in Georgia; Far more people of both parties voted than usual in a runoff, but the Democratic turnout was stronger, largely because of Black voters.
Nate Cohn; Graphics by Charlie Smart – NY Times
Two months ago, Republicans in Georgia won more votes for Senate than the Democratic candidates, even as Joe Biden defeated President Trump at the top of the ticket. On Tuesday for the runoff races, the Georgia electorate was very different; so was the outcome.
Not so Fast: SEC’s SIP Rule Speeds Ahead, But Faces Bumpy Road; Jo is skeptical that the SEC’s finalized market data infrastructure rule will make the public market data feeds faster.
Joanna Wright – Waters Technology
The Securities and Exchange Commission (SEC) says that market data consumers operate in a two-tier system, where the haves can afford direct feeds from exchanges, and the have-nots make do with the public, consolidated feeds from the securities information processors (SIPs), which contain less information and are slower.
‘Cultural background’ of Wirecard sellers noted by German regulator
BaFin found it ‘striking’ that many investors betting against company were Israeli and British
Olaf Storbeck – FT
Germany’s financial regulator discussed the “cultural background” of Wirecard short-sellers and told the country’s finance ministry that it was “striking” that most of those betting against the now-defunct payments group were British and Israeli, documents seen by the Financial Times show.
FINRA asks participants how to improve US Treasury securities TRACE reporting; The US watchdog has asked market participants to submit comments on how they would enhance the way the data is collected for FINRA’s TRACE for US Treasury securities.
Annabel Smith – The Trade
The Financial Industry Regulatory Authority (FINRA) has requested comments from market participants on ways to improve data collection for its trade reporting and compliance engine (TRACE) for US Treasury securities.
FCA publishes coronavirus financial resilience survey data
The Financial Conduct Authority (FCA) has today published the results of its coronavirus (Covid-19) financial resilience surveys. The surveys were sent to solo-regulated firms to inform the FCA of the impact of coronavirus on firms’ financial resilience.
Investing and Trading
‘Blue wave’ trade back on after Georgia Senate poll; Reflation hopes likely to spur investment rotation within markets as economic growth picks up
Michael Mackenzie – FT
With the US Senate run-off elections in Georgia close to giving control of the chamber to Democrats, investors are betting the result will deliver increased spending under president-elect Joe Biden to boost the ailing US and global economies and inflation.
The Wealth Tax Is Going Global; Argentina imposed a one-time levy on millionaires in December, and other serious proposals are being floated from California to Germany.
Ben Steverman and Benjamin Stupples – Bloomberg
The fortunes of the world’s richest people soared in 2020 even as the pandemic caused economic devastation, a stark trend that is reviving calls to tax all that new wealth. From Chile to the U.K., left-leaning parties, lawmakers, activists and academics are floating new proposals for levies on millionaires and billionaires, with the goal of directly taxing their assets rather than hiking rates on sources such as income.
Oil Market Gears Up for $9 Billion Index Buying Spree
Alex Longley – Bloomberg
BCOM, GSCI seen adding about 100,000 crude oil contracts; Annual re-balancing begins Friday and will last for five days
Tens of billions of dollars worth of commodity investments are about to be switched around in a move that’s set to cause a wave of oil-futures buying. While the move happens every year, crude’s 20% decline in 2020 means that the value of oil index investments has been far below its target for months. As a result, as much as $9 billion of oil contracts could be purchased over the five days of re-balancing that start Friday, according to Citigroup Inc., at a time when the market is already surged to 10-month highs.
Activists eye targets in weak and vulnerable corporate UK; Investors see value in economy laid low by the pandemic and Brexit uncertainty
Peggy Hollinger, Laurence Fletcher, and Kaye Wiggins – FT
Corporate Britain is a top target for activist investors in 2021, with funds looking for opportunities in the relatively weak stock market and pandemic-ravaged economy.
Environmental, Social and Corporate Governance
Episode 6: Derivatives and Sustainable Finance
As sustainable finance rises up the agenda around the world, ambitious targets are being set to support the transition to a green economy. What role will the derivatives market play in supporting hedging and standardization? Bob Litterman, founder of Kepos Capital and chair of the CFTC’s climate-related market risk subcommittee, shares his perspective.
Oil auction in Arctic wildlife refuge draws scant interest; Just three bidders emerge in sale pushed through by Trump administration in its final days
Myles McCormick – FT
A mere three bidders, including a state agency, put forward offers for controversial oil leases in an ecologically sensitive area of Alaska during an auction that the Trump administration rushed to conduct in its final days.
Commodities trader Trafigura sets first emissions reduction target; Move shows how even largely privately owned industry faces pressure to cut carbon footprint
Neil Hume and David Sheppard – FT
Trafigura has announced its first emissions reduction target in a sign that even the mostly privately owned commodity trading industry is under growing pressure to take action on global warming.
Exxon’s brand-new emissions disclosures; 4 ESG trends to watch in 2021
Declan Harty – S&P Global
ESG investing gained huge momentum in 2020 and appears poised to continue growing in 2021. In the latest episode of the ESG Insider podcast, we talk to experts from State Street Global Advisors Inc., standard-setting organization SASB, sustainable investment firm Trillium Asset Management LLC and proxy advisory firm Glass Lewis & Co. LLC about the trends that will drive the ESG agenda in the year ahead.
Covid is changing the way we invest
Guillaume Mascotto – FT Advisor
We have no doubt that tackling the Covid-19 pandemic will remain a top priority for the international community in 2021. Despite the virus accelerating around key parts of the world, and officials (re)imposing restrictions to flatten the curve, there are reasons to be optimistic. Recently, “white shoe” vaccine makers have released results from their late-stage studies suggesting their experimental vaccines are strongly effective, which paved the way for emergency use authorisation to innoculate the public, notably in the UK and in the United States.
Creighton University to divest from fossil fuels
Brian Croce – Pensions & Investments
Creighton University, Omaha, Neb., will divest from fossil fuels over the next decade. The move for the university’s endowment, which had $566 million in assets as of June 30, comes after its board of trustees approved a modified investment policy in September, according to a news release posted Monday. That modified policy also includes withdrawing from ownership of public securities of fossil-fuel companies within the next five years and seeking investments that target a market rate of return in renewable energy and energy efficiency, the university said.
Brevan Howard’s Main Hedge Fund Gains 27% in Best-Ever Year
Nishant Kumar -Bloomberg
Returns mainly came in March when the pandemic roiled markets; Macro trading firm is rebounding after sharp drop in assets
Brevan Howard Asset Management has recorded its best year since the hedge fund firm began investing nearly two decades ago. The main fund at billionaire Alan Howard’s firm was up 27.4% last year, the most since 2003, according to an investor letter seen by Bloomberg. That compares with a 3.4% average return for macro hedge funds through November, according to data compiled by Bloomberg.
TP ICAP seeks rights issue to pay for $575m Liquidnet purchase; Interdealer broker intends to boost its revenue growth and margins with acquisition
Philip Stafford – FT
TP ICAP has launched a rights issue that is equal to 40 per cent of its existing share capital to help pay for the interdealer broker’s planned $575m acquisition of Liquidnet.
From hedge fund to sovereign wealth: Norway’s investment chief eyes active approach; If new chief executive Nicolai Tangen tries to pick more stocks, he could encourage greater political interference
Richard Milne – FT
Nicolai Tangen is used to turning heads in his native Norway. Several years ago, when he was a successful hedge fund manager in London, he arrived at the weekly regatta in a millionaires’ playground in the south of the country in a shiny modernised vessel that put the other shabby chic boats in the shade.
Standard Chartered goes live on Cobalt for its prime brokerage and execution broking business; The bank invested in Cobalt in July last year following its announcement that it had become a client of the platform’s shared ledger technology in February.
Annabel Smith – The Trade
Standard Chartered has made its prime brokerage and executing broking businesses live on the post-trade and blockchain technology platform, Cobalt.
Ballinger & Co signs FX partnership agreement with ED&F MAN Capital Markets; Collaboration between Ballinger & Co and ED&F MAN Capital Markets to support spot and forward FX liquidity.
Kiays Khalil – The Trade
Financial brokerage ED&F Man Capital Markets (MCML) has entered into a partnership with Ballinger & Co after investing in the foreign exchange specialist.
Goldman Sachs forms strategic relationship with Trumid following rapid growth; The investment bank will offer liquidity to its institutional clients through the Trumid platform’s network and will join its advisory committee to aid product development.
Annabel Smith – The Trade
Fixed income e-trading platform provider, Trumid, has formed a strategic relationship with Goldman Sachs following a year of significant growth for the New York-based FinTech firm.
Abu Dhabi’s Top Bank Follows Dubai Rival to Dollar Bond Market
Archana Narayanan – Bloomberg
First Abu Dhabi Bank PJSC followed its Dubai rival to the debt market by starting to market dollar-denominated Islamic bonds on Thursday. Abu Dhabi’s biggest lender opened books on a $500 million five-year sukuk, setting initial price guidance at between 100 and 105 basis points over midswaps, according to a person familiar with the matter, who asked not to be identified because the matter is private. A senior unsecured debt sale is expected to be closed on Thursday.
Alibaba and Tencent shares drop on US investor blacklist report; Trump administration block on US investments into Chinese tech groups could inflame tensions
Thomas Hale and Ryan McMorrow – FT
Shares in Alibaba and Tencent sank following a report that the Trump administration could prevent US investment into the Chinese tech groups, risking a severe escalation in tensions between Washington and Beijing.
BOE Governor Bailey Warns Brexit Will Bring Big Economic Losses
Andrew Atkinson – Bloomberg
Central bank chief wades into politically charged issue; Boris Johnson’s government has hailed trade deal with EU
Bank of England Governor Andrew Bailey risked reigniting the politically charged debate over Brexit by predicting that the trade deal struck with the European Union could end up costing the U.K. economy the equivalent of more than 80 billion pounds ($109 billion).
EU firms face margin threat as Brexit tips futures into OTC regime
Helen Bartholomew – Risk.net
European Union-based users of some popular UK-listed commodity contracts saw their trades reclassified as over-the-counter on January 4 after the Brexit transition period expired without a deal on equivalence for trading venues. Brent oil contracts at Ice Futures Europe and aluminium futures traded at the London Metal Exchange (LME) are among the affected contracts.
The Brexit Deal: Some Good, Some Bad, Some Ugly
Milton Ezrati – Forbes
The United Kingdom (UK), if it still warrants that name, has reached an exit agreement with the European Union (EU), if it still warrants that name. This Brexit settlement lifts a lot of the uncertainty that has dogged all parties involved for years. On that basis alone, it constitutes a positive economic step for those on both sides of the English Channel. It will, of course, hurt the EU to lose its second largest economy. And even with this deal, Britain still has a long and difficult road to travel.
Customers in Europe hit by post-Brexit charges when buying from UK
Jon Henley – The Guardian
Customers in Europe buying products ranging from furniture to pet food from UK companies are receiving unexpected bills for VAT and customs duty or finding household names have stopped shipping to the continent, as post-Brexit trading rules bite. “We bought a EUR47 [£42] shelf from Next for our bathroom,” said Thom Basely, who lives in Marseille. “On the morning it was supposed to be delivered we received an ‘import duty/tax’ demand for over EUR30, like a ransom note. It came as a complete surprise.” A Frankfurt resident who ordered cycle clothing from a UK company was sent a tax and duty demand for EUR102, while a woman in the Netherlands who bought trousers in December “with no issues” faced a EUR40 bill for two more pairs ordered in January.
Bailey Sees Stress Test Guiding Bank Payouts in 2021: BOE Update
Silla Brush, Andrew Atkinson, and Lucy Meakin – Bloomberg
Bank of England Governor Andrew Bailey struck a note of caution on how Brexit will constrain economic growth, while indicating he was pleased with market stability in the first week after the transition period ended. He said it was too early to tell whether this week’s lockdown — the nation’s third — will be as disruptive as the first one, or smoother, like the second. He also indicated that bank stress tests this year should take the place of the “guardrails” constraining dividends that the BOE unveiled as it loosened a ban on payouts.