Cboe Futures Exchange and American Financial Exchange Announce Planned Launch of AMERIBOR Futures

Jun 28, 2019

First Read

A Look Back at Manipulation in the Metals Markets; Spoofing is Dunm (sic) and Just Plain Stupid
By John J. Lothian

If Bart Chilton were alive today, he would be smiling. The CFTC nailed another bank for metals futures market manipulation.

According to the CFTC website, “The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Merrill Lynch Commodities, Inc. (MLCI), a provisionally registered swap dealer, for spoofing, manipulation, and attempted manipulation over a six-year period with respect to certain precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX).”

Back in 2010, when Chilton was a CFTC commissioner, the CFTC held a meeting on manipulation of the metals markets and the potential for position limits. Gary Gensler was the chairman then, and Mike Dunn, Scott O’Malia and Jill Sommers were the other commissioners.

To read the rest of this commentary, go here.


Hits & Takes
JLN Staff

Chris Giancarlo will be a hard act to follow as chairman of the U.S. Commodity Futures Trading Commission. Last night at a farewell reception at the CFTC’s Washington, DC headquarters, Giancarlo was feted with praise, love and warm reflections of his time at the head of the CFTC. He leaves the CFTC as the GOAT, the Greatest Of All Time, according to staffers, former staffers, industry participants and other players. He also leaves as the best banjo playing CFTC chairman.~JJL

His term as commissioner and chairman was honored with an eight minute video of highlights of his tenure, including his being named ‘CryptoDad” by the cryptocurrency crowd for his support.~JJL

The video ended with a homage to the movie “The Usual Suspects” about how Giancarlo is really Satoshi Nakomoto/Keyser Sˆze. One wonders how this homage may have been connected to my bringing up Satoshi Nakamoto at a Technology Advisory Committee and having traveled down the rabbit hole of troubling possibilities.~JJL

It was an honor to be invited to the farewell reception for Chairman Giancarlo. Also in attendance were Jay Powell from the Fed, Jay Clayton, Chairman of the SEC, Texas Congressman Mike Conaway and Congressman and musician Collin Peterson

Giancarlo leaves the CFTC in two weeks with accomplishments too many to list, except for one. He is universally respected and loved. He will be off to new adventures yet to be disclosed, and more time with his family, whom he moved to Washington, DC five years ago.~JJL

The FIA’s applications for 2019 innovators are now open, and the FIA is calling for fintech startups who would like to be selected for a spot at the Innovators Pavilion at the FIA’s 35th Annual Futures & Options Expo. Firms should be no more than five years old and have a product or prototype to showcase at the Expo. You can go here to apply. The deadline is August 9, 2019.~SR

When the American Financial Exchange opened in December 2015, it had 6 banks as members. Today, it has 150 member banks, broker-dealers, private equity firms, business development corporations, hedge funds, futures commission merchants, insurance companies, asset managers and finance companies.~JK


The Spread – Getting Corn-y
As #NoPlant19 continues to garner attention on Twitter, we thought it was appropriate to take a look at the recent crazy weather in the United States and the ensuing volatility in corn.
Watch the video »


Special Report: FIA CEO Walt Lukken testifies at two Congressional hearings
FIA Staff – FIA
Both the House and Senate Agriculture committees heard from industry participants in a pair of congressional hearings about the derivatives industry. FIA President and CEO Walt Lukken took part in both, testifying on international and domestic regulatory issues affecting the cleared derivatives industry.
On June 26, a subcommittee of the House Agriculture Committee, which has jurisdiction over U.S. futures markets, held a hearing titled “Brexit and Other International Developments Affecting U.S. Derivatives Markets.”


20190624 – Critical System Updates
CME Group Notice
In Q3 2019, CME Group will implement the following changes to User Defined Spreads (UDS) functionality on CME Globex

****Also in this notice update is a section on CME Globex Market Segment Gateway Enhancements. “Customers are strongly encouraged to ensure all messages are contained within a single network packet by the following methods: 1) Ensure any packet sent to CME group contains only complete messages; 2) Limit the number of quote entries in a mass quote message that fits within a single TCP packet; 3) Disable nagling, an algorithm that concatenates a number of small buffer messages to decrease the number of sent packets, on your order routing systems.” Sorry, savvy market makers…~SD


Vladimir Putin says liberalism has ‘become obsolete’; In an exclusive interview with the FT, the Russian president trumpets growth of national populism
Lionel Barber and Henry Foy and Alex Barker – FT
Vladimir Putin has trumpeted the growth of national populist movements in Europe and America, crowing that liberalism is spent as an ideological force.

*****The root of “Liberal” is liber, which means free. A liberal is a “free man.” Free men and women are not obsolete, but rather freedom is the goal people strive for and defend to maintain. Without freedom to make decisions, there are no markets. I believe in market-based solutions, therefore I STRONGLY believe in FREEDOM!~JJL


Thursday’s Top Three
Our top story of the day on Thursday was the FT’s SGX hires Deutsche executive in internal reorganisation. Second was Seeking Alpha’s stock analysis piece on ICE, The Intercontinental Exchange: A One-Way Street – Intercontinental Exchange. Third was Thom Thompson‘s column for JLN, Can LedgerX Deliver?


MarketsWiki Stats
157,429,316 pages viewed; 23,830 pages; 220,419 edits
MarketsWiki Statistics


CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin hit a new yearly high of $13,563.76 this week before settling down around $11,500, where it sits at the time of this writing. Many have been speculating that these huge gains are due to increased trading activity by institutional investors; Arthur Hayes, the CEO of BitMEX, said recently that daily trading volumes on his bitcoin margin trading platform have surpassed $11 billion and are rapidly approaching $12 billion. Others speculate that the gains could be explained by Indian traders’ increased activity following the government’s recent proposed blanket ban on cryptocurrencies despite rising demand in the country. Whatever the reason, bitcoin’s price has increased more than 300 percent since the start of the year.

CryptoMarketsWiki Website»
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

Recently updated pages include

CryptoMarketsWiki Stats

1,153 pages; 10,332 edits
CryptoMarketsWiki Statistics


Lead Stories

Cboe Futures Exchange and American Financial Exchange Announce Planned Launch of AMERIBOR Futures
Cboe Global Markets, Inc. today announced plans to launch futures on the AMERIBOR (American Interbank Offered Rate) interest rate benchmark on Cboe Futures Exchange (CFE), subject to regulatory review. The new futures are expected to launch on trade date August 16, in honor of the 42nd anniversary of the launch of Treasury bond futures.

Project Heather: The new flower of Scotland; The soon-to-launch Scottish Stock Exchange aims to bring impact investing to the forefront of the capital markets.
John Brazier – Bloomberg
Tomas Carruthers, founder and chief executive of Borse Scot
As independent stock exchange’s across Europe become part of larger borse groups, there is one group working to launch a new trading venue with a focus on ‘capitalism for good’.

Silicon Valley eyes plan to reward long term shareholders; Long Term Stock Exchange proposals bring competition to listings rules
Richard Waters – FT
This is not an obvious time for Silicon Valley to complain that some of its best ideas are being ignored by Wall Street.

Swiss Bourse Fate Hangs in Balance on EU Brexit Hardball
Catherine Bosley and Alexander Weber – Bloomberg
Trading of Swiss shares to be barred in EU after talks fail; Wages, immigration among sticking points in political pact
Blame it (at least in part) on Brexit. In an unprecedented move, Switzerland said Thursday it will block trading of its shares in the EU starting July 1 and put in place measures to offset a loss of liquidity, after the European Commission said it wouldn’t extend recognition of the country’s stock exchange beyond the end of this month. The EU cited the lack of progress on a new umbrella treaty governing relations between Switzerland and the bloc to replace a smorgasbord of individual arrangements.

European regulators urged to remove transaction-level reporting for ETDs under EMIR; FIA has said firms should be required to submit position reports for ETDs under EMIR, rather than transaction-level details.
Hayley McDowell – The Trade
European regulators have been advised to remove certain reporting requirements related to exchange-traded derivatives (ETDs) under EMIR, due to concerns around the complexity of the derivatives reporting regime.

Death Toll at Glencore’s Mine Puts Spotlight on Illegal Mining
William Clowes and Felix Njini – Bloomberg
Congolese official says 36 bodies found after mine collapse; The workers trespassed on Glencore’s cobalt and copper mine
The dozens of people killed in a landslide at Glencore Plc’s mine in the Democratic Republic of Congo highlight a constant struggle in the industry: illegal mining.

Inside the Members-Only Tramp Club at the Heart of an Insider-Trading Scandal
Aaron Kirchfeld and Franz Wild – Bloomberg
Walid Choucair ran up $10,000 bills at Tramp private club; Club’s oldest rule is ‘What happens in Tramp, stays in Tramp’
“You know Walid?” asks the young receptionist at the discreet entrance on 40 Jermyn Street in London’s high-end Mayfair district.

Another Victim of Brexit: The World’s Fastest-Shrinking Stock Market
Ksenia Galouchko – Bloomberg
Brexit has claimed another victim: the U.K. stock market. Three years after the referendum to leave the European Union, the nation’s equity market is shrinking faster than any other major venue globally, according to Citigroup Inc. The reason? Depressed valuations and low borrowing costs have encouraged listed U.K. firms to pursue the biggest set of buybacks since 2008, fewer companies have gone public amid the uncertainty, and private equity funds and foreign buyers are chasing British acquisitions.

Bitcoin Is (Probably) Here to Stay; The resilience of cryptocurrency has a lot to do with the volatility of the real world.
Tyler Cowen – Bloomberg
In case you hadn’t noticed, Bitcoin has made a major comeback. After falling below $4,000 for much of 2018, the price reached almost $14,000 earlier this week. It’s still volatile, and fell sharply later in the week, but some Bitcoin optimists believe it will soon approach its late-2017 high of $20,000.

High-speed traders Optiver and Virtu back EU trading venue; Dutch trading firm Optiver becomes an investor in German-owned trading venue after signing a liquidity deal last year
Samuel Agini – Financial News
Optiver, the Dutch trading firm, and US rival Virtu have backed Equiduct in a funding round designed to support the EU trading venue’s expansion.

Cryptocurrency exchange Gemini expands to Chicago
Graysen Doran – Crain’s Chicago Business
New York-based cryptocurrency exchange Gemini Trust joined the Chicago sector today, opening a Loop office. Gemini intends the new office as an “engineering hub,” supporting professional trading and custody as well as new product lines, according to a statement. Cameron and Tyler Winklevoss, both 37, founded the company in 2014. Bloomberg reports their combined net worth, consisting mainly of bitcoin and other crypto assets, has climbed to approximately $1.45 billion.

****From The Block – Gemini is Chicago-bound after Coinbase’s exit, but who made the right move

French market watchdog to London: stop trading EU shares after Brexit
Huw Jones – Reuters
Britain should give investment firms clarity by signalling an end to the trading of European shares in the City of London after it leaves the European Union in October, a French regulator has said.

Exchanges, OTC and Clearing

Egbert Laege to leave EEX Group at the end of 2019
As of 30th June 2019, Dr Laege will step down and resign from his position as President of Powernext, based in Paris. He will oversee EEX Asia as CEO until the end of the year and afterwards seek new challenges outside EEX Group.
As of 1st July 2019, Dr. Tobias Paulun, Chief Strategy Officer of EEX, will additionally assume the function as president of Powernext.

SGX to report FY2019 results on 31 July
Singapore Exchange (SGX) is reporting its results for Financial Year 2019 (FY2019) after the market closes on 31 July 2019.

IPO of TRATON on the Frankfurt Stock Exchange; Commercial vehicle manufacturer from the VW Group listed in the Prime Standard / Dual Listing in Frankfurt and Stockholm
Deutsche Boerse Group
TRATON SE is listed in the Prime Standard of the Frankfurt Stock Exchange today . The shares of the commercial vehicle manufacturer from the VW group listed at the start of trading at 27.00 euros. The issue price was 27.00 euros.

Could slow be the better speed?; A matter of opinion by Randolf Roth, Member of the Executive Board of Eurex Frankfurt AG
The derivatives industry – which often has the reputation of being a rather dry and analytical undertaking – has been going through a quite emotional phase for some months now. This has been triggered by the plans of several stock exchange operators to introduce speed differentiation in some market segments, which slows some of the orders entered.

Extended trading hours again a success in roll month June; Second roll of 2019 during the extended trading hours another success
Once again, we experienced high trading activities and achieved another weekly volume record. This performance is a proof of our commitment to provide our customers with the best price quality and market depth during Asian trading hours. The figures in detail:


Barclays boss turned fintech pioneer hails his ‘Uber moment’; JPMorgan in talks for stake in Antony Jenkins’ 10x fintech business
Matthew Vincent – FT
Why is the arrival of a quantum leap in technology called an “Uber moment”? For all the ride-hailing app’s whizzy interface, all it arguably does is contact a nearby taxi and have it wait at your location ó sometimes even long enough for you to find it and get in. Yet that is how former Barclays boss Antony Jenkins has described the coming of digital banking services that can collate gigabytes of fragmented customer data, to transform the user experience ó and disrupt every lender from Walsall to Wall Street. No wonder this paper dubbed him “as British and understated as any banker one can meet”.

Berlin Scares Off Banks Targeting the Rich as Fintechs Boom
Stephan Kahl – Bloomberg
Several private banks stay away as they see lack of customers; City’s demographics turned out to be a boon for fintech firms
Berlin’s “poor but sexy” appeal has helped to turn the city into a fintech hub with Goldman Sachs Group Inc. investing there and local startup bank N26 being valued at $2.7 billion. For some of Germany’s biggest private banks, however, the city’s demographics are a reason to stay away.

A Goldman Sachs & JPMorgan quant trader has set up his own algo company
Sarah Butcher – efinancial careers
Once upon a time, traders left investment banks to set up hedge funds. Now, a safer bet is to set up a technology company that sells quantitative expertise and algorithms to existing hedge funds and asset managers. This seems to be the route taken by Simon Creeger, a former member of the systematic trading team at Goldman Sachs and JPMorgan.

The KYC Headache Worsens: An Examination of the Onboarding Process
Rebecca Natale – WatersTechnology
Despite technological advancements, the onboarding process is still a slog. Banks and vendors are trying to change that.


Snowden: ‘The Most Important Thing Bitcoin Is Missing Right Now Is Privacy’
Diana Aguilar – Coindesk
Bitcoin’s biggest flaw is its lack of privacy, said Edward Snowden at the Bitcoin 2019 conference. The cybersecurity expert noted the importance of privacy as a source of liberty. “The lack of privacy is an existential threat to bitcoin. Is the only protection users have from political change,” Snowden said. Snowden also stated that he was a bitcoin supporter and even used an encrypted service that he paid for with bitcoins in order to communicate with journalists in 2013.

Facebook’s Libra Cryptocurrency: How It Stacks Up to Bitcoin and PayPal;The social-media giant’s new payment system is a lot closer to traditional web-commerce systems than you might think
Kurt Wilberding – WSJ
Facebook Inc. last week unveiled plans to launch Libra, a payment system it describes as a new “global currency.” It’s based on blockchain, the same technology that powers bitcoin, and is backed by real assets and pegged to stable government securities. Over two dozen corporate partners are on board, including financial companies MasterCard Inc., Visa Inc., PayPal Holdings Inc. and Coinbase. Partners contribute a membership fee of $10 million each. Facebook’s goal is to line up a total of 100 corporate partners and $1 billion in assets.

US Lawmakers Question Terrorist Use of Facebook Cryptocurrency
Nikhilesh De – Coindesk
Members of the U.S. House of Representatives questioned Financial Crime Enforcement Network (FinCEN) director Kenneth Blanco about Facebook’s planned cryptocurrency Thursday. Representatives Emanuel Cleaver, II (D-MO), Trey Hollingsworth (R-IN), Bill Foster (D-IL) and French Hill (R-AR) held a briefing with members of the House Financial Services Committee, discussing the Libra project with Blanco, who heads up FinCEN, the U.S. Treasury Department’s anti-money-laundering wing.

Crypto News: Bitcoin Plunges, Coinbase Suffers Outage
Joe Tenebruso – The Motley Fool via Yahoo Finance
The crypto marketplace is like the Wild West of the financial world — and it’s been even wilder than normal over the past 24 hours. Here’s a recap of some notable events that took place over the past day.

Goldman Sachs Explores Creating a Digital Coin Like JPMorgan’s
Alastair Marsh – Bloomberg
David Solomon may take a leaf out of Jamie Dimon’s book by exploring a digital coin for payments.

Bitcoin Almost Wipes Out Its Mega Gain Just as Swiftly as It Came
Vildana Hajric – Bloomberg
Largest digital token reaches nearly $14,000 before reversing; Volatility is near highest levels since crypto bubble in 2018
Bitcoin’s rise was meteoric this week — and its decline has been just as swift.

Binance Talking to Facebook About Libra Listing, Becoming Node: Reports
Daniel Palmer – Coindesk
According to reports in the crypto press Thursday, cryptocurrency exchange Binance is talking to Facebook about getting involved in the social media giant’s upcoming Libra project.

A Wannabe Netflix Raised $575 Million on Ethereum – Then Ditched Crypto
Leigh Cuen – Coindesk
What started as a $575 million token sale is now a rewards program for watching videos. TaTaTu’s initial coin offering (ICO) was among the biggest of 2018, with film producer Andrea Iervolino raising money from royals like Lady Monika Bacardi, of the famous liquor family. Before this raise, Iervolino was best known for films such as “Bernie The Dolphin” and “Finding Steve McQueen.” As some token sales start to slowly yield results, TaTaTu offers a prime example of a platform that used “blockchain” as a fundraising technique and then largely moved on.

KKR’s Henry Kravis Invests in Crypto Fund
Alastair Marsh – Bloomberg
Henry Kravis is the latest titan of finance to take a shot at cryptocurrencies. The co-founder of KKR & Co. has invested in the flagship fund of ParaFi Capital of San Francisco, according to Ben Forman, a former employee who started his firm last year to focus on digital assets. A spokeswoman for Kravis, 75, declined to comment.

Another top Indian crypto exchange, Koinex, is shutting down amidst regulatory uncertainty
Yogita Khatri – The Block
Indian cryptocurrency exchange Koinex has announced that it is closing its operations today, citing lack of banking support and regulatory uncertainty in the country.

Iranian Government to Cut Off Power to Crypto Mining Until Approval of New Energy Prices
Helen Partz – Cointelegraph
The Iranian government will be cutting off power to crypto mining until new energy prices are approved, according to a report by local news agency Iran Daily on June 24.

Irish Crypto Exchange Bitsane May Have Disappeared With Users’ Funds
Daniel Palmer – Coindesk
Irish cryptocurrency exchange Bitsane may have done a runner with users’ funds. Forbes said Thursday that the Bitsane exchange, which offers spot trading of cryptos and gained popularity as an early provider of XRP trading, has gone offline and has deleted its social media accounts.


White House considers capital gains tax break that would benefit wealthy
Saleha Mohsin – Los Angeles Times
The White House is developing a plan to cut taxes by indexing capital gains to inflation, according to people familiar with the matter, in a move that would largely benefit the wealthy and may be done in a way that bypasses Congress.

Wall Street Spared in Democratic Debate as Crisis’s Impact Fades
Austin Weinstein and Matthew Leising – Bloomberg
Candidates mention Wall Street fewer than half-a-dozen times; Democrats focus instead on health care, climate, immigration
Wall Street emerged almost entirely unscathed from the first Democratic presidential debate, with no questions to candidates and few comments on an industry that has long been a favorite target of liberals.

Currency Wars Are Easy to Start and Tough to Win; Global devaluations don’t happen in practice because everyone loses. Trump and his G-20 peers would do well to remember that.
Daniel Moss – Bloomberg
To President Donald Trump, and any other Group of 20 chief thinking about waging a currency war: It’s basically impossible to win.

JPMorgan Chase CEO says student debt crisis a “disgrace” that’s “hurting America”
Kate Gibson – CBN News
Jamie Dimon is not exactly climbing aboard the Bernie Sanders bandwagon and the presidential candidate’s plan to eliminate $1.6 trillion in student debt with a tax on Wall Street trading. But the JPMorgan Chase CEO is again signaling his distress on a higher education issue that he views as a “disgrace” that’s “hurting America.”

Investors May Be Denying Risks of a Democratic Win, Analysts Say
By Felice Maranz – Bloomberg
Stock investors may be ‘complacent’ about nomination: RBC; Warren poses ‘enormous’ threat to financial firms: Valliere
Investors may be underestimating the risks posed by the possibility that the Democrats, particularly Senator Elizabeth Warren, will win in 2020, some analysts said in commentary ahead of Thursday night’s second debate.


FINRA Releases 2018 Annual Financial Report
As a not-for-profit, self-regulatory organization whose operations are funded by member firm feesówithout the support of any taxpayer dollarsóFINRA must prudently manage its finances to ensure it can appropriately fund its mission to protect investors and promote market integrity in a manner that facilitates vibrant capital markets.

Proposed Rule Change to Make Technical and Other Non-Substantive Changes within FINRA Rules
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to make technical and other non-substantive changes within FINRA rules.

ASIC approves an updated Banking Code of Practice
ASIC has approved an updated version of the Australian Banking Association’s (ABA’s) new Banking Code of Practice (the Code).

Burner Phones, Leaks to Journalists: Regulators Probe Suspected Insider-Trading Scheme
Bradley Hope – WSJ
A former Citigroup Inc. C 1.38% employee was the alleged middleman in what authorities believe may be an insider trading scheme, according to people familiar with the matter and disclosures in a U.K. court case that wrapped up Thursday.

State Street pays $94.3 million to settle U.S., state charges over hidden fund markups
Jonathan Stempel – Reuters
State Street Corp agreed to pay $94.3 million to settle federal and state regulatory charges it routinely overcharged mutual fund customers and other clients over roughly 17 years by adding hidden markups on back-office expenses.

CFTC Staff Issues No-Action Relief for Floor Traders Engaged in Swaps Activity
The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) announced today that it will provide no-action relief to registered floor traders from compliance with certain conditions in a CFTC regulation related to the “swap dealer” definition.

Statement of Commissioner Dan M. Berkovitz in Support of the Staff No Action Letter Regarding Floor Traders
I support today’s issuance by the Division of Swap Dealer and Intermediary Oversight of the letter entitled “No-Action Relief for Certain Conditions of the Floor Trader Provision.” Since my first public statement as a CFTC Commissioner in November 2018, I have urged us to fix the floor trader provision in the swap dealer definition so that it can serve its intended purpose.

Objection of Commissioner Brian Quintenz to No-Action Relief from Certain Conditions of the Floor Trader Provision
Today’s no-action letter brings to mind the old adage, “Anything worth doing, is worth doing right.”

CFTC Staff Issues No-Action Relief for Floor Traders Engaged in Swaps Activity
The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) announced today that it will provide no-action relief to registered floor traders from compliance with certain conditions in a CFTC regulation related to the “swap dealer” definition.

CFTC Announces LabCFTC Accelerator and Second FinTech Conference
The Commodity Futures Trading Commission (CFTC) announced today two events that facilitate and incorporate market-enhancing FinTech innovation. Today, CFTC launched LabCFTC Accelerator, a component of LabCFTC, and announced that it will hold FinTech Forward 2019, the second annual conference dedicated to exploring the latest in FinTech developments, on October 24, 2019 at its Washington, D.C. headquarters during D.C. FinTech Week.

Commodity Pool and its President Ordered to Pay $1.2 Million, Banned from Markets for Futures Fraud
The Commodity Futures Trading Commission (CFTC) announced today that a Virginia federal court has entered a Consent Order (Order) resolving a CFTC action against defendants The Kane Capital Investment Group, LLC and its President, Amrit Jaswant Singh Chahal (together, defendants), both of Virginia. The Order results from a CFTC Complaint charging the defendants with commodity futures fraud, commodity pool fraud, registration violations, and illegally commingling funds (see CFTC Complaint and Press Release 7712-18, dated April 13, 2018).

FCA response to European Banking Authority’s Opinion on Strong Customer Authentication
The EBA has published an Opinion on Strong Customer Authentication under PSD2.

New Chairs of the Financial Conduct Authority’s Practitioner Panel and Markets Practitioner Panel announced today
The Financial Conduct Authority Chair, Charles Randell, has today announced the appointments of new Chairs for the FCA’s independent Practitioner Panel and Markets Practitioner Panel.

Investing and Trading

Russell rebalance: Large U.S. companies are getting bigger while the small wither away
Chris Matthews – MarketWatch
FTSE Russell will rebalance its suite of indexes at the close of trade Friday, and the changes will reflect several broad trends in equity markets over the past year, including the resilience of large-capitalization companies, the dismal performance of smaller U.S. firms, and the emergence of new, highly valued technology companies that promise to, or already have, revolutionized their respective industries.

Up is down, forwards is backwards, Alpha is Beta
RCM Alternatives Blog
The good folks over at Transtrend (the 12th largest managed futures program in our top 100 managers infographic) are out with a new research piece via the CME that throws the whole Alpha concept out the window. They agree with the classical definition of Alpha as the amount of return not explained by the chosen beta benchmark, but argue somewhat convincingly that it doesn’t mean that Alpha equals skill, that just means we haven’t really identified the correct benchmark (or portfolio of mixed benchmarks/betas) in which to compare returns to.

Negative interest rates take investors into surreal territory; The markets are vulnerable to potential nasty losses if rates suddenly shoot up
Gillian Tett – FT
This summer, Germany’s housing market has turned into Alice in Wonderland: the yield on five-year bonds issued by mortgage banks slid to minus 0.2 per cent, compared to a level of plus 5 per cent a decade ago.

Financial Worries Keep Most Americans Up at Night; One nation, haunted by financial insomnia.
Luke McGrath – Bloomberg
People tumble into bed each night across the U.S., hoping for pleasant dreams. Most would likely settle for no dreams at all, just as long as they can get some rest. But more than half of Americans toss and turn because of money issues, according to a new survey.

Digital Transformation Of Business Creates Dazzling New Winners
Jon Markman – Forbes
This might be the greatest time ever for shareholders. A perfect storm is on the horizon. The tailwinds are going to be amazing. Many investors don’t realize it yet, but the great digital transformation unfolding now represents a tectonic shift in the way businesses will operate in the future.

World’s Rich Want More Feel-Good Investments From Their Private Banks
David Ramli and Chanyaporn Chanjaroen – Bloomberg
Standard Chartered is training bankers in impact investing; High-net-worth individuals will have $70 trillion by 2021
Some of the world’s richest people may take their money away from private bankers and wealth managers unless they offer more impact investments and philanthropy deals, according to family offices and foundations.

This Is No Time to Be a Hero in the Stock Market; A stock breather leads financial commentary. Plus no breather for Treasuries or emerging markets.
Robert Burgess – Bloomberg
The global stock market is wrapping up one of its best months in years, but the best that can be said about its performance this week is “meh.” The MSCI All-Country World Index is still headed for its first weekly loss since May despite rising on Thursday.

There Are Way Too Many Hogs in the U.S. and Not Enough Exports
Lydia Mulvany and Michael Hirtzer – Bloomberg
American hog herd hits highest since 1943 in second quarter; Trade disputes are making flow of supplies more difficult
The world is about to be split in two when it comes to protein.


BGC Partners Updates its Outlook for the Second Quarter of 2019
BGC Press Release
BGC Partners, Inc., a leading global brokerage and financial technology company, today announced that it has updated its outlook for the quarter ending June 30, 2019.1

Woodford Patient Capital unveils plans to reduce debt; Trust managed by former star clamps down on his trading activity and revamps board
Owen Walker and Naomi Rovnick – FT
The board of Neil Woodford’s listed investment trust announced it was clamping down on his trading activity and prioritising reducing the fund’s debt.

The longtime links between Neil Woodford and a City broking minnow; Cenkos Securities has often managed to secure backing from the former star stock picker
Cat Rutter Pooley- FT
For almost 15 years, a minnow of London’s broking world has had an impressive ability to secure investment from Neil Woodford, the once star stock picker whose flagship fund is now grappling with a flood of investor redemptions.

Deutsche Bank Whistle-Blower Raised Flags About Another Bank
Greg Farrell – Bloomberg
McFadden said to air concerns about Trump, Kushner accounts; She made previous claims of lax compliance at Bank of America
Tammy McFadden spent most of her career far from Wall Street, in banks and back offices in Jacksonville, Florida. She was let go three times, including last year by Deutsche Bank AG.

Deutsche Bank Gets a Win as Fed Unleashes Payouts for Banks
Yalman Onaran – Bloomberg
All 18 banks including embattled German firm pass stress test; Endorsement of U.S. unit is boost for Deutsche Bank CEO Sewing
Titans of the U.S. banking industry said they will pump out more cash to shareholders after all 18 lenders passed the Federal Reserve’s annual stress tests. The results were a particular win for Deutsche Bank AG after it repeatedly failed past exams.

H2O’s CEO Vows Never to Gate Funds, Avoiding Woodford Comparisons
Lucca De Paoli and Luca Casiraghi
Natixis SA-backed H2O Asset Management’s chief executive officer Bruno Crastes took his message directly to investors, vowing that he would never freeze investors’ money in his firm’s funds.

Credit Suisse singled out over ‘weakness’ in Fed stress test; Swiss bank banned from increasing payments to parent company
Kiran Stacey and Robert Armstrong – FT
The US Federal Reserve has demanded Credit Suisse fix “weaknesses” in its capital plans before it will allow the US arm of the bank to increase payments to its parent in Switzerland, following annual stress tests that otherwise painted a healthy picture of the industry.

Deutsche Bank completes talks to cut 750 jobs in Postbank integration: memo
Deutsche Bank (DBKGn.DE) has completed talks about cutting 750 jobs at the joint headquarters of its private and corporate clients businesses as part of the integration of retail lender Postbank, it said in a memo to staff on Friday.

Federal Reserve Clears Big Banks to Boost Payouts to Investors; All 18 banks reviewed pass second round of Fed’s stress tests
David Benoit and Lalita Clozel – WSJ
The Federal Reserve said the biggest U.S. banks are healthy enough to start whittling down their capital stockpiles, clearing them to make payouts to investors that exceed their expected profits.

Deutsche Bank’s Business Model Has Changed Considerably Over The Years And More Changes Are Underway
Deutsche Bank has revamped its business model several times after the economic downturn. Despite several attempts, the bank has been largely unsuccessful in reviving its profits. While the bank’s European and American counterparts have been able to demonstrate strong investor returns to shareholders for several years now, Deutsche Bank continues to struggle and recently announced plans to implement additional cuts to its equity trading business.


Investors in scandal-hit LCF may be due compensation, FSCS says; Financial compensation scheme says ‘misleading advice’ was given and some could be due redress
Philip Georgiadis – FT
The UK’s financial compensation scheme has said some victims of collapsed investment group London Capital & Finance may be due compensation, rowing back on an earlier suggestion that the issue was outside its remit and offering hope to the 11,500 customers wiped out by the £236m collapse.

Goldman and Facebook Confirm Geneva as Hot Ticket for Summer
Hugo Miller, Andy Hoffman and Dylan Griffiths – Bloomberg
MSC is also adding 300 jobs at cruise business in Swiss city; Geneva attracts firms after approval of corporate tax reform
Sunbathers flocking to Geneva’s new lakeside beach could soon face competition for the best spots on the pebbles after Facebook Inc. and Goldman Sachs Group Inc. committed to investments in the city.

Ivory Coast and Ghana team up for greater share of chocolate wealth
Ange Aboa, Joe Bavier – Reuters
Kouakou Kinimo is a pretty typical Ivory Coast cocoa farmer. He works a small holding. At 52, he’s roughly the mean age for a West African grower. And, like many farmers, he doesn’t want any of his six children to follow in his footsteps.

Wealth managers head to Singapore as China concerns dim Hong Kong’s lure
Sumeet Chatterjee, John Geddie – Reuters
Some foreign wealth managers are scrapping plans to open offices in Hong Kong in favor of Singapore, as the rich begin to move funds from the Chinese territory where a new extradition bill has stoked public unrest, people familiar with the matter said.

Exclusive: Morgan Stanley likely to gain majority control of China securities JV in H2 – sources
Kane Wu, Sumeet Chatterjee – Reuters
Morgan Stanley (MS.N) is likely to get regulatory approval for owning a majority stake in its Chinese securities joint venture in the second half of this year, people with direct knowledge of the matter told Reuters.


Can Parliament Stop a No-Deal Brexit? This Is How It Will Try
Robert Hutton – Bloomberg
They think they’ve got the votes, but do the British members of Parliament plotting to stop a prime minister taking the U.K. out of the European Union without a deal have the means?

Johnson Again Won’t Rule Out Suspending Commons: Brexit Update
Thomas Penny and Jess Shankleman – Bloomberg
Boris Johnson tries to keep both moderate Conservatives and Brexiteers onside, refusing to rule out suspending Parliament to force a no-deal Brexit, even as he said the odds of a chaotic divorce were “a million-to-one against.” His efforts to appeal to pro-Brexit Tory voters risk fueling parliamentary opposition to a Johnson premiership.

Why One Brexit Trade Myth Refuses to Die; For supporters of Boris Johnson, it’s doubly useful to pretend that international trade rules offer a free pass to a painless Brexit.
Therese Raphael – Bloomberg
One might have thought that the Brexit debate could not be made any more confusing. But the Conservative Party leadership race is doing just that. The obfuscation serves a political purpose.

Jeremy Hunt: Tories will be crucified without Brexit
BBC News (Video)
Jeremy Hunt has told a leadership hustings in Exeter that the Conservative party will be “crucified” if it holds a general election before the UK has left the EU. He pledged that he would not do anything to risk a general election before Brexit had been delivered.

Brexit: First ministers call for next PM to reject no deal
James Williams – BBC News
The Welsh and Scottish governments have said they will work together to try to keep the UK in the European Union. Mark Drakeford and Nicola Sturgeon also called on the next prime minister to “change course and rule out” leaving the EU without a deal. The first ministers are becoming “increasingly alarmed” by “hard-line rhetoric about a no-deal Brexit”. The joint statement was released ahead of a meeting of the British-Irish Council (BIC) in Manchester on Friday.

John Lothian Newsletter

So you want to know what’s happening in the financial markets?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 Newsletters

Central banks step up fightback against cryptocurrencies

Central banks step up fightback against cryptocurrencies

First Read $49,706/$300,000 (16.6%) ++++ Hits & Takes John Lothian & JLN Staff Would you like to serve the futures industry in the U.S. to preserve the self-regulatory structure? The NFA is seeking committee members and arbitrators. More details are HERE....

Why Crime Could Kill Crypto

Why Crime Could Kill Crypto

First Read $46,041/$300,000 (15.3%) ++++ Small Exchange Scores a First With Cannabis Futures Contract By Suzanne Cosgrove - John Lothian News The Small Exchange is known for its bite-size futures products aimed at retail customers, including the Small U.S. Dollar,...

Market Narratives Have Pushed Aside Fundamentals

Market Narratives Have Pushed Aside Fundamentals

First Read $46,041/$300,000 (15.3%) ++++ Hits & Takes John Lothian & JLN Staff We have a new and improved version of The Spread today. We have overhauled our approach to this video series and have the whole JLN team contributing to it. Suzanne Cosgrove has...

Pin It on Pinterest

Share This Story