Broker sued over ‘demo’ trading platform mix-up; Deutsche Bank risk questions

Jun 21, 2018

Broker sued over ‘demo’ trading platform mix-up; Deutsche Bank risk questions

Jun 21, 2018

Spencer Doar

Spencer Doar

Associate Editor

First Read

Hits & Takes
JLN Staff

Rumi Morales will be announcing the launch of a major investment platform in the US on Wednesday, June 27.~JJL

The 2018 Managed Futures Pinnacle Awards were last night in Chicago. Colin Jost from Saturday Night Live was the entertainment this year. He started by introducing well known “Irish Catholic” Sol Waksman. He later gave the CME Group a raunchy salute, probably for the political censorship by which he was confined, by sharing that he is a numbers guy. Enough said.~JJL

For those concerned that ETFs with illiquid components will be the cause of the next liquidity kerfuffle, take some solace from the fact that on Wednesday the market absorbed a block trade of more than 18 million shares ($321m worth) of an emerging market bond ETF without a hitch (via the FT). ~SD

A Scottish rehab facility is now offering crypto trading addiction therapy. Meanwhile, the World Health Organization stirred the pot the other day by adding “gaming disorder” to its disease classification manual.~SD

In case you missed it, the most read piece yesterday was JLN’s Chicago is Crypto-fuel For the Coinbase Rocket. Coinbase’s Chicago office is co-headed by Paul Bauerschmidt and Derek Groothuis, formerly of DRW.~JK

Some readers might have had difficulties viewing yesterday’s video from IDX featuring FIA’s Simon Puleston Jones speaking about the impact of Brexit. If you missed it, check it out here. ~SD

Busy man Mark Shore finished his first year of doctoral classes.~JJL

Journalist Ginger Szala has joined Investment Advisor Magazine as executive managing editor in a full-time position. She is the former publisher and editor-in-chief of Futures Magazine.~JJL

Don’t forget to sign your interns up for the MarketsWiki Education World of Opportunity in New York and Chicago in July.~JJL

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FIA IDX 2018 – Untangling the Execution Landscape
JohnLothianNews.com

One vendor, two vendor, red vendor, blue vendor – how many vendors does your company utilize for trading activity?

In this video from IDX in London, Fidessa’s head of business development, derivatives, Russell Thornton, talks about brokers’ need to find a one-stop shop for their execution needs and Fidessa’s GT workstation.

Watch the video here »

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Trump Retreats on Separating Families, but Thousands May Remain Apart
Michael D. Shear, Abby Goodnough and Maggie Haberman – NY Times
President Trump caved to enormous political pressure on Wednesday and signed an executive order meant to end the separation of families at the border by detaining parents and children together for an indefinite period.
/jlne.ws/2yxaLo8

***** Finally some good news.~JJL

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What The Crypto World Needs Is Trading, Data and Infrastructure… From Milwaukee
Jim Kharouf – JLN
Derek Urben didn’t look the least bit nervous.
As head of business development at Coinigy, he was in Chicago looking to break into the lucrative space of institutions interested in crypto trading, data and infrastructure. He wants to connect every broker, hedge fund and institutional player he can find to its pipeline of crypto markets around the world. Oh, and he had final exams at the University of Wisconsin-Milwaukee the next day too.
bit.ly/2IbofFp

***** I want to know how bowling and beer in Milwaukee are connected to crypto.~JJL

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Wedbush Futures Email Us

Exchange-Listed Options Mean Opportunity for Pensions and Endowments
Joseph Cusick, OIC – OCC
Pensions and endowments continue their efforts to become fully funded. If they don’t bridge their gaps, they risk not meeting at least part of their obligations to millions of pension plan participants, including school teachers, police officers and firefighters.
bit.ly/2K6s14K

***** Don’t just build a house with one tool. Use the whole toolbox.~JJL

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Congress’s Secret Crypto Fans Will Now Have to Reveal Themselves
Benjamin Bain – Bloomberg
Lawmaker disclosure rules apply to Bitcoin, House panel says; Digital token holdings exceeding $1,000 must be reported
Trading in Bitcoin and other cryptocurrencies is moving out of the shadows on Capitol Hill.
/jlne.ws/2tgrjvy

***** There is great risk here, assuming we get honest reporting from Washington players.~JJL

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Britain Risks Beer Shortages This Summer
Thomas Buckley – Bloomberg
It’s time to get those last orders in. U.K. pubs are facing a possible drought as stocks of carbon dioxide run low, which is expected to hurt the supply and sales of beer as well as soft drinks, according to the industry trade body.
/jlne.ws/2yxi0we

***** Long beer, short wine and long whine looks to be a noisy trade.~JJL

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Wednesday’s Top Three
Our top story of the day on Wednesday was Jim Kharouf’s piece Chicago is Crypto-fuel For the Coinbase Rocket about how the company is looking to expand in Chicago and beyond. Second went to the SEC announcement SEC Shuts Down $102 Million Ponzi Scheme, alleging that the defendants defrauded more than 600 investors through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp. Third went to the Wall Street Journal’s piece In a Year Marked by Controversy, Cboe Seeks to Improve ‘Fear Gauge’

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MarketsWiki Stats
128,283,977 pages viewed; 23,165 pages; 213,614 edits
MarketsWiki Statistics

Lead Stories

Day trader sues broker over ‘demo’ trading platform mix-up; Trainee found he was practising equity futures on live site and placed EUR1bn of orders
Martin Arnold in London – FT
A trainee day trader in France is suing a British brokerage for an amount comparable to almost its entire annual revenue after it seized the EUR10m profit he made using what he initially thought was a demonstration version of its platform.
/jlne.ws/2yv7be3

Wild Trading Day at Deutsche Bank Raises Questions on Risk
Shahien Nasiripour, Sonali Basak and Steven Arons – Bloomberg
Lender’s U.S. unit had a one-day loss that dwarfed estimates; Trading losses said to be offset by related gains in U.K.
U.S. regulators have spent much of the past decade trying to get a better handle on beleaguered Deutsche Bank AG. A wild trading day earlier this year shows how hard that will be.
/jlne.ws/2trhrhM

Risk? It’s probably that thing you’re ignoring; ‘It’s not the big, radical decisions that create disasters in finance but mission creep’
Gillian Tett – FT
Nearly 100 years ago, a US fire-safety inspector called Benjamin Lee Whorf noticed something odd about the way factory workers handled oil drums.
/jlne.ws/2MNnxSy

Central Bank Leaders Warn Trade Conflicts Could Damage Global Economy; Fed Chairman Jerome Powell says changes in trade policy ‘could cause us to have to question the outlook’
Tom Fairless – WSJ
Leaders of the world’s top central banks warned Wednesday that escalating trade conflicts could ricochet through financial markets and hurt the world economy, potentially prolonging the era of ultralow interest rates.
/jlne.ws/2tfF4L1

The Arms Race for Quants Comes to the World’s Biggest Asset Managers; Many traditional stock- and bond-picking firms are paying up to hire mathematical and computer experts
Justin Baer – WSJ
Neuberger Berman Group LLC’s data-science team began the year with big plans, if limited resources. “Just me and an intern,” group head Michael Recce said.
/jlne.ws/2tfWUgS

A Big Bite: How Blockchain is Changing the Ag Markets and What We Know About Our Food
Jim Kharouf – Gate39 Media Blog
Blockchain is the buzzword of the day in every industry, and its no exception in the ag markets. How it may revolutionize the industry, as some predict, is now beginning to be realized.
bit.ly/2MGSjfN

Deutsche Bank Settles New York Forex Probe for $205 Million
Greg Farrell – Bloomberg
Deutsche Bank AG agreed to pay $205 million to settle a long-running investigation of its foreign exchange trading by New York’s banking superintendent, resolving one of several remaining regulatory issues that have dogged the bank in the U.S.
/bloom.bg/2K5w55g

America’s Millennials Are Waking Up to a Grim Financial Future; Job prospects, savings, safety nets, life expectancy – the data show just how bad a mess they face.
Ben Steverman – Bloomberg
Lately I’ve been losing track of how old everyone is. Friends, co-workers and family members are resisting middle age with vigorous exercise, careful diets and regular doctor visits. Even when 50-year-olds look like they’re 50, they often dress or party as if they’re still in their twenties.
/jlne.ws/2tgqOSc

****I’m imagining some guy sarcastically saying, “Thanks, dad,” while retreating to his room in his parent’s basement.~SD

Exchanges, OTC and Clearing

CME Group Agricultural Futures and Options Surpass 10 Million Contracts Open Interest and Reach All-Time Daily Volume Record of 3.2 Million Contracts
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it reached an all-time daily open interest record of 10,054,696 agricultural futures and options contracts on June 19, 2018. The previous open interest record was 10,042,694 contracts, set on June 15, 2018.
/goo.gl/GUWQ2q

GLMX gains ATS and broker-dealer status; Repo trading platform GLMX will now operate as an alternative trading system (ATS) and broker-dealer.
Hayley McDowell – The Trade
A repo trading platform has won regulatory approval to operate as an alternative trading system (ATS) and broker-dealer in the US.
/jlne.ws/2MLzhow

“Let’s talk about opportunities!”; Randolf Roth on the first six months with MiFID II
Eurex
In January, the revised Markets in Financial Instruments Directive, MiFID II, finally became a reality. The largest overhaul in financial markets infrastructure in decades was challenging for all parties involved. After six months with MiFID II, Randolf Roth, Member of the Eurex Executive Board, gives an initial resumÈ.
/jlne.ws/2teM7U8

Fixed Income Highlights – June 2018 edition
Eurex
In May, geopolitical risks such as the uncertainty arising from the Italian elections continued to drive European FIC markets. Short covering in Bund Futures helped to drive futures volumes in German benchmark derivatives products. The spread between Bunds and BTPs was a focal point for fixed income traders and widened to levels not seen for five years, with a spread at 232 basis points (bps). Options volumes saw a strong pick-up, partly driven by the Italian turmoil and partly by short covering as Bund Futures rallied hard and the market sought protection to the upside. Implied volatility on ten-year Bunds rose from 3.85 percent to 5.5 percent, the top end of the 4 to 6 percent corridor that we have seen for much of the past 24 months.
/jlne.ws/2tdAQna

Variance Futures: Fee holiday for transaction fees from 1 July 2018 until 31 December 2018
Eurex
Effective 1 July 2018, the following measure of Eurex Clearing will come into effect:
/jlne.ws/2MEYzER

Exhibition “Deutsche Boerse Photography Foundation Prize 2018” at the MMK Museum of Modern Art in Frankfurt; To see works by the four finalists from June 22 to September 9, 2018
Deutsche Boerse
For the third time, the MMK Museum of Modern Art Frankfurt am Main is presenting the exhibition for the Deutsche Bˆrse Photography Foundation Prize. On display are works by the four finalists Mathieu Asselin, Rafal Milach, Batia Suter and Luke Willis Thompson. The £ 30,000 award was presented on 17 May 2018 at the Photographers’ Gallery in London to New Zealand artist Luke Willis Thompson for the film installation “autoportrait”.
/jlne.ws/2MJZ3th

Capsensixx AG new at the Frankfurt Stock Exchange; Financial service provider achieves first exchange price of 16.00 euros
Deutsche Boerse
Capsensixx AG is listed in the Prime Standard of the Frankfurt Stock Exchange today . The first exchange price was after an issue price of 16.00 euros at 16.00 euros. The current number of IPOs in Frankfurt since the beginning of the year thus increases to twelve.
/jlne.ws/2tdwUT4

Fintech

ABN Amro picks Israeli AI firm to detect terrorist financing risks
MarketBrains
Dutch bank ABN AMRO is going with ThetaRay’s machine learning technology for post-transaction monitoring in controlling money laundering and terrorist financing risks.
Implementation will be bank-wide for a period of five years, according to a company statement.
bit.ly/2MKTD0W

Firefox Is Back. It’s Time to Give It a Try.
Brian X. Chen – NY Times
Do you ever feel that the web is breaking? When shopping online for a toaster oven, you can expect an ad for that oven to stalk you from site to site. If you have just a few web browser tabs open, your laptop battery drains rapidly. And don’t get me started on those videos that automatically play when you’re scrolling through a webpage.
/jlne.ws/2tgen93

How to Sign Up for Bloomberg on WhatsApp; Get on-the-ground updates from reporters, breaking markets news, and more.
Megan Hess – Bloomberg
There’s a new way to get the latest business news and analysis from Bloomberg: We’re now on WhatsApp. Here’s how to get started.
/jlne.ws/2MH1xse

Cryptocurrencies

Winklevoss Twins Build Crypto-Tech Patent Empire In ETP
Pushpa Naresh – Zycrypto.com
The latest crypto technology patent awarded to Winklevoss Twins’ owned firm, clearly establishes their domination in financial technology, especially Exchange-Traded Products (ETP). It also marks their ascent from their initial investment days of pre-funding single-ventures like Zuckerberg’s Facebook Artificial Intelligence.
bit.ly/2tnoGqM

Crypto Mining Mogul Hits the Big-time with Portable Mining Containers
John McMahon – NewsBTC
Serial crypto entrepreneur Valery Vavilov of Bitfury has struck gold again with his latest venture by solving two of the main hurdles in mining cryptocurrency with some big black boxes.
bit.ly/2trrao3

The crypto world must stop inviting ridicule
Arjun Kharpal – City AM
The cryptocurrency world has its detractors, with JP Morgan chief executive Jamie Dimon and legendary investor Warren Buffett topping a long list. But sometimes it seems to be inviting ridicule.
/jlne.ws/2ML3UKW

Bitcoin birthday boy is an absurd star of a serious industry; The new face of cryptocurrencies is none other than online gambling kingpin Calvin Ayre
Jamil Anderlini – FT
When the founder or founders of bitcoin decided to use the name Satoshi Nakamoto they virtually guaranteed that Asia, and especially Japan, would be the epicentre of the cryptocurrency craze. Japan has led the world by legitimising the phenomenon through regulation. As a result, there are now more than 3.5m Japanese cryptocurrency traders and the country accounts for about 40 per cent of global bitcoin trading.
/jlne.ws/2MNmVwe

Tether Hired Former FBI Director’s Law Firm to Vet Finances
Matthew Leising – Bloomberg
Freeh Sporkin says Tether had $2.55 billion of cash on June 1; Crypto firm dogged by worries that pile of money doesn’t exist
Tether Ltd., issuer of a digital currency, said its bank deposits of $2.55 billion were confirmed by the law firm co-founded by FBI director Louis Freeh as the company seeks to reassure investors that its cryptocurrency is backed by U.S. dollars.
/jlne.ws/2thQzS1

SEC documents detail scores of fraud allegations against Coinbase
Jack Morse – Mashable
Life savings lost. Desperate cries for help. Allegations of fraud. In the six years since its founding, the San Francisco-based exchange Coinbase has established itself as one of the most trusted places to trade ether, bitcoin, litecoin, and bitcoin cash. It’s also run up its share of critics: namely, its customers.
/jlne.ws/2try3pB

Politics

When The White House Can’t Be Believed
David Folkenflik – NPR
This essay isn’t about spin, or splitting hairs, or differing opinions. This involves a reality check about our expectations of the people who act in our name. About credibility at the highest levels of our government. About people whose words are heard abroad as speaking for our nation. About the public and the media that try, however imperfectly, to serve it.
/jlne.ws/2tregGW

The arithmetic gymnastics needed to get the US to $200 billion in additional tariffs on China
Gwynn Guilford – Quartz
Donald Trump famously contends that trade wars are easy to win. But they’re certainly not easy to start.
On Monday (June 18), Trump told the US trade office to find $200 billion worth of Chinese goods to impose tariffs on, in the event that China retaliates against his latest round of tariffs.
Arithmetically speaking, that sounds doable. After all, the US imported $506 billion worth of Chinese products in 2017.
/goo.gl/DbXTrC

Michael Bloomberg: Why I’m Supporting Democrats in 2018
Michael Bloomberg – Bloomberg Editorial Board
Republicans in Congress have had almost two years to prove they could govern responsibly. They failed.
/bloom.bg/2MCZPs5

Congressional Black Caucus raises alarm over OCC chief’s comments
Neil Haggerty – American Banker
The Congressional Black Caucus has requested a meeting with Comptroller of the Currency Joseph Otting over comments he made last week that appeared to downplay the existence of discrimination in banking.
/goo.gl/H76X5N

The Risky Business of Speaking for President Trump; Flacks in this White House press office are getting enormous exposure ó but potentially at a long-term cost to their credibility.
Mark Leibovich – NY Times
It was getting late on a Wednesday, and by 2018 standards the evening’s news cycle felt almost serene. The only “breaking news” of the moment was about Dr. Harold Bornstein, Donald Trump’s doctor of 35 years, who had told NBC that the president’s bodyguard led a “raid” on his office and hauled away his medical files for “the healthiest individual ever elected to the presidency,” as Bornstein previously pronounced him. But that story was now a day old, a musty chyron at this point.
/nyti.ms/2GHYRXk

Ross blames speculators for driving up steel price after tariffs; US commerce secretary to investigate ‘anti-social behaviour by people in the industry’
Shawn Donnan – FT
The Trump administration blamed speculators for the extent of the rise in domestic steel prices since its introduction of tariffs, saying it would investigate what the commerce secretary Wilbur Ross called “profiteering”.
/jlne.ws/2tgLc5q

Bloomberg backs Democratic bid to win US House; Former NY mayor says Republicans have ‘failed’ to prove they can govern responsibly
Barney Jopson – FT
Michael Bloomberg, the billionaire executive and political independent, pledged to throw his financial clout behind the Democratic campaign to win the US House of Representatives this year as he attacked Republican leaders for being “absolutely feckless”.
/jlne.ws/2MM3BPJ

The Enemy in the White House; Trump’s latest lies are an open attack on the German government and the European Union. This U.S. president was never a partner. He is an aggressive opponent and should be treated as such.
Stefan Kuzmany – Der Spiegel
Vladimir Putin operates in the shadows. The Russian president controls a clever disinformation campaign with the aim of upsetting the populations of Western countries, discrediting their institutions, dividing society, influencing elections and ultimately causing the collapse of liberal democracy. Nevertheless, there are still many people who continue to believe that Putin is innocent and that the claims are merely the malicious fabrications of Western intelligence agencies. Is it all just a conspiracy theory?
/jlne.ws/2tpSB1B

‘A blowtorch to the tinder’: Stoking racial tensions is a feature of Trump’s presidency
Philip Rucker – Washington Post
President Trump this week likened Hispanic immigrants to vermin. He warned that they would “pour into and infest our country.” And he defended his administration’s family separation policy by alleging that parents crossing the southern border with their children were poised to commit crime and murder.
/jlne.ws/2yrVcxX

EU levies tariffs on $3.2B on US goods over metals duties
Vicki Needham – The Hill
The European Union on Friday will slap billions in additional tariffs on U.S. exports in reaction to President Trump’s steel and aluminum tariffs.
/jlne.ws/2yu4ARz

Regulation

London court chides FCA as it rejects former UBS trader’s appeal
Kirstin Ridley – Reuters
A London court on Wednesday described as “troubling” a case brought by the Financial Conduct Authority (FCA) against a former junior UBS (UBSG.S) trader for alleged Libor interest rate rigging.
/reut.rs/2MHWpUX

The auditor of Citi, Credit Suisse and Deutsche Bank was tipped off before regulatory inspection
Francine McKenna – MarketWatch
The auditor of some of the world’s largest banks including Citigroup, Credit Suisse and Deutsche Bank was tipped off before a regulator inspected them.
/on.mktw.net/2lokuUl

Whistleblowers Advocates Challenge Bank of England Over Report
Henry Cutter – WSJ
Two advocacy groups asked the Bank of England to withdraw a four-year-old report arguing against paying financial rewards to tipsters, seeking to correct what the organizations consider misinformation as countries around the world consider whistleblower legislation.
/on.wsj.com/2JTYzmL

Ex-Anglo Irish Bank chief David Drumm sentenced to six years in jail
Lisa O’Carroll and Nick Fletcher – The Guardian
The former chief executive of a bank that played a pivotal role in Ireland’s financial crash almost a decade ago has been jailed for six years.
/goo.gl/xmMSDv

Buy side, broker, vendor fee models “not sustainable” – report
Louisa Chender – Global Investor Group
The existing business models for fees that brokers and their buy side clients pay for vendor’s services are not sustainable, according to a report.
In the latest Aite Group report, ‘OMS in focus: The Light and Dark Sides of FIX and Client Connectivity’, the research group estimates that brokers paid US$1.23 billion globally in 2017 for client connectivity.
/goo.gl/9hjm4a

DTCC Comments Responding To ESMA Statement On LEI Grace Period
Press Release
ESMA issued a statement today announcing that the LEI grace period will not be further extended and will cease in July as originally planned.
/goo.gl/fA6Ess

Deutsche Bank fined $205 million for multiple FX violations; FX traders at Deutsche Bank were found to have used online chat rooms to coordinate trading activity and manipulate currency prices.
Hayley McDowell – The Trade
Deutsche Bank will pay a $205 million fine for various failures and misconduct across its foreign exchange (FX) trading business.
/jlne.ws/2th83Oi

Deutsche Bank to Pay $205 Million Fine to End N.Y. Currency-Trading Probe; New York Department of Financial Services says bank sought to manipulate rates, cheat customers
Jenny Strasburg – WSJ
New York’s financial-services regulator said it fined Deutsche Bank AG DB -0.81% $205 million over allegations it sought to manipulate currency prices and mislead clients while failing to protect confidential customer information.
/jlne.ws/2MJ8vx6

Sebi tweaks IPO norms, intends to rationalise FPI, MF regulations; Shareholding of foreign holding will be harmonised to 15% in Market Infrastructure Institutions
Business Standard
Market regulator Securities and Exchange Board of India (Sebi) has cut the time for the announcement of price band for initial public offers (IPOs) from five days to two.
/jlne.ws/2MM8dp1

Investing and Trading

Walgreens Is What You Get When You Can’t Put Amazon in the Dow
Sarah Ponczek and Lu Wang – Bloomberg
On paper, Walgreens Boots Alliance Inc. is an underwhelming choice for inclusion in the world’s most famous stock index. The shares are languishing, its industry keeps coming under threat, and it’s half the size of the company it’s replacing, General Electric Co. But for a clue as to why owners of the Dow Jones Industrial Average picked it, look at the companies they didn’t.
/goo.gl/TuWiAs

What have the Romans ever done for bond investors?
Waqas Samas, CEO benchmarks – FTSE Russell
At last, Netflix has included pretty much the entire back catalogue of Monty Python! Now, I think even the most ardent of Python fans would have to admit that one or two of the shows seem a little bit dated, but Life of Brian still hits the mark. I watched it for the nth time again the other week, and the character Reg’s exasperation in the scene where the revolutionary “People’s Front of Judaea” attempt to rally the disciples to revolt against the Romans is still funny:
“All right, All right, but apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, the freshwater system and public health … what have the Romans ever done for us?”
bit.ly/2MJuJiz

Mystery seller dumps shares in major emerging markets ETF
Robin Wigglesworth – Financial Times
Someone just threw the towel in on emerging markets.
VanEck’s flagship $4.5bn local-currency emerging markets bond ETF suffered a sudden sale of nearly 19m shares worth $321m in one giant block trade this morning, indicating that a single investor probably pulled the plug after a torrid time for the market.
/on.ft.com/2MFALAC

Chatting with Traders in Sydney: 4 Key Principles from John Moulton aka Rambo
Michel Peters – Trading Technologies Blog
On a blustery wet Tuesday night, 170 traders from all over Australia piled into the WeWork venue to attend the latest Chat with Traders event, hosted by Aaron Fifield.
bit.ly/2MGkNpS

Where Do Investors Hide in a Trade War? Small-Cap Stocks; A rising dollar and the concerns about weaker global growth are also driving investors into the relative safety of smaller-capitalization stocks
Jon Sindreu – WSJ
As a full blown trade war between the U.S. and China looms, investors are already picking winners: Shares of small companies that are insulated from overseas turmoil.
/jlne.ws/2teBLn1

US business fears choppy waters ahead due to Trump trade tariffs; While the economy is robust, there are fears of an extended drag on corporate earnings
Sam Fleming and Shawn Donnan – FT
The remorseless escalation of Donald Trump’s trade hostilities with key partners has yet to make a dent in the country’s buoyant growth figures ó but anxiety is rising over the impact of his tariffs on US economic prospects.
/jlne.ws/2MJ5mxb

Institutions

Brokers paying for trading technology used by money managers – report
Rick Baert – Pensions and Investments
Brokers are paying for much of the cost of third-party trading technology used by money managers, increasing revenue pressures on sell-side firms that have already lost revenue because of MiFID II disclosure rules that unbundle research from execution costs, according to an Aite Group report.
/goo.gl/3vGXsi

Horizons Is Launching a Blockchain ETF
Kristine Owram – Bloomberg
Fund offers exposure to blockchain infrastructure, services; Holdings include Hive, Nvidia, Intel, Advanced Micro Devices
A new blockchain ETF will begin trading Thursday on the Toronto Stock Exchange, offering exposure to the infrastructure behind the disruptive technology.
/jlne.ws/2teInlw

Goldman Says Emerging Markets Flash Green, Buy Local Debt
Chris Anstey – Bloomberg
‘Andean trio’ of Colombia, Peru, Chile currencies favored; Goldman also recommends shorting dollar versus loonie, aussie
Emerging market assets have been beaten up lately, but many of their fundamentals are still in good shape, and their local bonds are a buy, Goldman Sachs Group Inc. strategists say.
/jlne.ws/2yrHzyU

Man Behind an ETF of the ETF-Industry Wants to Help Others Get in the Game
Rachel Evans – Bloomberg
Toroso Investments wants to become a white-label ETF issuer; Firm hires Direxion’s Falkeis to run rebranded consulting unit
The man behind a very meta ETF is doubling down on exchange-traded funds. Michael Venuto, chief investment officer of Toroso Investments — a New York-based consultant, asset allocator and sub-adviser, as well as the index provider for the ETF Industry Exposure & Financial Services fund — now wants to become an issuer.
/goo.gl/s9c4Ka

Regions

Argentina, Saudi Arabia to be part of MSCI emerging markets index
Rodrigo Campos, Trevor Hunnicutt – Reuters
Index provider MSCI said on Wednesday it will reclassify Argentina as an emerging market and start including Saudi Arabia in that classification, sharply broadening the investor base for both countries in a move that could be supportive of their local equities.
/reut.rs/2JTCLYe

The Biggest U.S. Oil Patch Is Near Its Limit
Javier Blas – Bloomberg
The biggest U.S. shale region will have to shut wells within four months because there aren’t enough pipelines to get the oil to customers, the head of one of the industry’s largest producers said.
/bloom.bg/2JTfg1r

Legalise cannabis, say Adam Smith Institute and TaxPayers’ Alliance after William Hague admits war on drugs is lost
Catherine Neilan – City AM
Think tanks are calling on the government to review its position on cannabis, after the former Conservative leader William Hague called for a “decisive change” in the law.
/jlne.ws/2tefBS0

Eureka! Giant Oil Find Set to Bring Guyana Startling Riches. Maybe; Skepticism swells that the poor and isolated South American nation will reap the promised billions of dollars from an ExxonMobil-led project
Kejal Vyas – WSJ
Along the sea wall separating this sleepy capital’s moldering wooden houses from the coffee-colored Atlantic, construction workers in hard hats rush to expand ports, build luxury condos and open the country’s first Hard Rock CafÈ.
/jlne.ws/2tmjFzV

Oil trader warns Opec not to raise output too fast; Pierre Andurand points to low spare capacity to deal with unexpected supply outages
David Sheppard – FT
Hedge fund manager Pierre Andurand, one of the most storied oil traders of his generation, has a simple message for Opec and Russia as they meet in Vienna to discuss raising output: do not shoot all your bullets just yet.
/jlne.ws/2MINL8A

Italian Bonds Hit by Double Whammy of Euroskeptic Appointments
James Hirai and Anooja Debnath – Bloomberg
Italy’s bonds slid with the appointment of two euroskeptics to key posts in the Italian parliament, reigniting investors’ concerns over the populist government’s policy.
/jlne.ws/2th4eIW

Warning Shot From Germany Is Spooking This Market: Taking Stock
Arie Shapira – Bloomberg
Stock futures have been tumbling all morning (more than 20-handle reversal from the e-minis peak) as Italy’s political mess resurfaces, China reiterates its hard stance on tariff threats, India enters the trade conversation with levies on U.S. goods, and — perhaps most importantly — Daimler sends a warning shot (shares down ~4% in Frankfurt), becoming the first prominent company to blame escalation trade tensions between the U.S. and China for a profit forecast cut.
/jlne.ws/2MHsgF8

One of Asia’s Biggest Private Banks Goes on a Hiring Spree
Alfred Liu and Frederik Balfour – Bloomberg
Aims to raise headcount by minimum 20%, ‘50% would be perfect’; Wants to benefit from programs to expand China’s influence
BOC Hong Kong (Holdings) Ltd., which broke into the ranks of the 20 biggest private banks in Asia four years after getting into the business, is stepping up its expansion in the region.
/jlne.ws/2teGC7W

Erdogan’s Grip on Turkey Is Loosening Even in His Black Sea Home
Ugur Yilmaz and Constantine Courcoulas – Bloomberg
Turkish president’s appeal is weakened by economic turmoil; Not everyone buys the propaganda: ‘We’re not children’
With the most consequential election in Turkish history only days away, nowhere is President Recep Tayyip Erdogan’s grip on the nation more complete than in the lands from which he hails. On the 20-kilometer (12-mile) drive from Rize to Erdogan’s hometown of Guneysu, perched in the green rolling hills overlooking Recep Tayyip Erdogan University, his presence dominates the landscape.
/jlne.ws/2tri9eH

Inside Goldman Sachs’s Play to Squeeze Italy’s Riskiest Credit; The investment bank bought Astaldi loan at a discount and then pressed executives on the payment
Luca Casiraghi – Bloomberg
For Goldman Sachs’s Guillaume Saint, the knockout blow was at hand: he’d gotten Italian builder Astaldi to publicly concede that it was late on a loan payment. Goldman’s bet against the company was looking like a winner.
/jlne.ws/2ts7alg

OPEC Works Toward Deal as Saudis Propose Plan for Higher Output
Wael Mahdi, Elena Mazneva and Nayla Razzouk – Bloomberg
Saudis say the market needs more supply, reason will prevail; Iran has argued there’s no need to adjust existing quotas
The odds of OPEC reaching an oil-production deal increased as Iran edged away from a threat to veto any agreement that would raise output and Saudi Arabia put forward a plan that would add about 600,000 barrels a day to the global market.
/jlne.ws/2yu22mx

Brexit

Britain’s pro-Brexit business voices are being drowned out
Matthew Elliott – City AM
Saturday marks the second anniversary of the EU referendum, which I played a role in as chief executive of the Vote Leave campaign.
/jlne.ws/2tdvDvg

The City That Defined Brexit Has Given Up; As the consequences of the vote to leave the EU sap Britain’s political energy, the causes of it remain.
Thomas Penny and Rodney Jefferson – Bloomberg
It’s an unusually blustery day for early summer in northeast England, and on the streets of Sunderland people have to huddle together to hear one another speak.
/jlne.ws/2yu2xNr

May’s Brexit dividend and other myths worth exploding; Poor policymaking results from a misguided understanding of the economy
Chris Giles – FT
Move over Harold Wilson. The late UK prime minister’s fib 51 years ago that “the pound here in Britain, in your pocket” had not been devalued was usurped by Theresa May’s fabrication this week that a ” Brexit dividend” will pay for extra health spending. Instead of raking over the details of each lie, let us imagine a prime minister telling some truths about Britain’s economy.
/jlne.ws/2yuW8l6

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We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

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