Hits & Takes
Joseph Sullivan, one of the founders of the Chicago Board Options Exchange and its first president, has passed away at the age of 82. He was such an influential figure in the establishment of the CBOE, and the U.S. options industry that followed, that the Options Industry Council named an award after him, given to recognize individuals who have made outstanding contributions to the growth and integrity of the U.S. options market.
Cboe Global Markets will honor Sullivan with a moment of silence today before the markets open.
JLN was lucky enough to work with Sullivan on the CBOE’s 40th anniversary video. He was an extraordinary man, who went from being a reporter for the Wall Street Journal covering Congress to an assistant to the president of the Chicago Board of Trade.
Here is the statement from the CBOE on Sullivan’s passing.
Here is the statement from the OCC on the passing of Joe Sullivan:
“OCC’s Board of Directors, management and colleagues join Cboe Global Markets and the U.S. exchange-listed options industry in honoring the life of Joseph Sullivan III. It was Joe’s vision and astute understanding of U.S. derivatives markets that helped lead the way to the creation of the Chicago Board Options Exchange, the trading of the first listed options contract, and ultimately the formation of the Options Clearing Corporation. Joe’s leadership, along with other knowledgeable industry experts, not only resulted in a strong and vibrant marketplace that provided a powerful risk management tool for investors, it also created economic opportunity for many in Chicago and the U.S., and enhanced the City of Chicago’s position as the financial derivatives capital of the world. We send our condolences to the Sullivan family.”
The FIA has a new podcast out, the title of which is “FIA Speaks Episode 14: CFTC Commissioner Russ Behnam on Climate Change.”
Does anyone have a copy of Leo Melamed’s book, The Tenth Planet, that I can borrow? I would like to read it. It is available on Amazon for $224.93.
The JLN GoFundMe campaign saw more progress yesterday with contributions from SuperCritical LLC, the Jay Cauuwe consulting firm. Also, rock and roll stars and former CME Groupers Steve Staszak and Raymond McKenzie gave. So did former CME Grouper Kelly Brown. Staszak is now retired and was the focus of a JLN video last year. Ray McKenzie, an all-around good guy, is now with Apple. And Kelly Brown recently left ErisX and has his own firm, Derivatives Advisor, LLC. Thank you to all of them, those who have given before and all who are yet to give.
MarketsWiki passed the 190 million page view mark. The next stop is 200 million.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Just in time for the November U.S. elections and beyond: Cboe Options Institute plans to host a 60-minute webinar on Wednesday, October 14, at 12 p.m. EST on “Shielding Against Drawdowns Using VIX Tradeable Products.” Registration information is here.~SC
Chris Hehmeyer: Open Outcry Traders History Project
Chris Hehmeyer started out as a runner in the CBOT grain pits, but he really wanted to get into the financial room – which many of the grain traders sneered at. He did it, trading bonds and eventually becoming a phone clerk. From there, he moved up to starting his own clearing firm with Ralph Goldenberg, growing the business over 20 years, and eventually becoming the CEO of Hehmeyer, a prop firm and futures broker. Hehmeyer spoke with John Lothian about the amazing energy of the trading floors and the burgeoning of electronic trading, telling some stories of highlights and lowlights from the open outcry pits.
Stuart Connolly of CloudMargin on bringing efficiencies to post trade derivative processing
There has been an advancement in efficiency in derivatives that has stopped before getting to the back end, and CloudMargin is working to change that. The company’s CEO Stuart Connolly wants to bring efficiencies to collateral management and take operational risk out of the process. He spoke to John Lothian about the solutions to these problems as well as the $15 million financing round CloudMargin just closed on, working with partners like DeutscheBank, Deutsche Boerse and Citi, and how the pandemic has actually accelerated people’s mindsets around transforming their technology stack.
San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
Noah Buhayar – Bloomberg
San Francisco’s sky-high apartment rents are falling fast. The median monthly rate for a studio in the city tumbled 31% in September from a year earlier to $2,285, compared with a 0.5% decline nationally, according to data released Tuesday by Realtor.com. One-bedroom rents in San Francisco fell 24% and two-bedrooms were down 21%, to $2,873 and $3,931 a month, respectively.
*****If there was a market ready for a correction, this one was it. Work from anywhere could change the dynamics of a lot of real estate markets. Need to get to work, forget taking BART, just Zoom to work.~JJL
Cabin fever: tickets for meal onboard Singapore parked plane sell out
Gwyn Topham – The Guardian
Diners have rushed to pay up to £360 per head to eat a meal on a stationary plane, in the latest sign of public appetite to recreate the onboard experience without travelling.
Singapore Airlines launched a waiting list after tickets rapidly sold out for two weekends of sittings onboard two stationary A380 superjumbos, with meals at seats and the chance to watch a movie, albeit no longer in-flight.
Fraud and Ineptitude Are Undermining Covid Relief; Before any more stimulus money gets handed out, Congress and the White House have to clean up some messes.
Timothy L. O’Brien – Bloomberg
How easy is it to steal federal funds meant for jobless Americans struggling to survive the Covid-19 economy? It’s this easy: “Using huge databases of stolen personal information, cybercriminals based everywhere from Nigeria to London have pocketed an estimated $8 billion meant for people forced out of work due to the coronavirus so far,” Katy Murphy and Rebecca Rainey wrote in Politico on Monday.
*****With that much money being distributed, it was inevitable some would be fraudulently acquired.~JJL
A Dose of Optimism, as the Pandemic Rages On; The months ahead will be difficult. But the medical cavalry is coming, and the rest of us know what we need to do.
Donald G. McNeil Jr. – NY Times
On March 16, back when White House news conferences were still deemed safe to attend, President Trump stood before reporters and announced that drastic nationwide restrictions — in schools, work places, our social lives — were needed to halt the coronavirus.
*****I need a daily dose of optimism. It is nice to see one on the pandemic.~JJL
Monday’s Top Three
Our top story Monday was John Lothian News’ Help John Lothian News Capture Industry History with GoFundMe Campaign. Second was The New York Times’ When Your Last $166 Vanishes: ‘Fast Fraud’ Surges on Payment Apps. Third was the Intercontinental Exchange’s Intercontinental Exchange Provides Update on Plans to Launch ICE Futures Abu Dhabi and World’s First Murban Crude Futures Contracts.
190,002,873 pages viewed; 24,455 pages; 226,286 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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Cboe mourns the death of first president and founder; Joseph Sullivan III founded the Chicago Board Options Exchange (Cboe) 47 years ago and established the listed options industry in the US.
Annabel Smith – The Trade
Exchange operator Cboe Global Markets has released a statement confirming the passing of its founder and first president, Joseph Sullivan, on the 2 October. Joseph Sullivan III launched Cboe 47 years ago and established the listed options industry in the US. Sullivan began his career for the Wall Street Journal before joining the Chicago Board of Trade. He went on the launch Cboe on 26 April 1973.
Hong Kong Markets Shut Tuesday on Tropical Storm Nangka
Dominic Lau and Richard Frost – Bloomberg
Stock, bond trading scrapped as No. 8 signal was in force; Trading in the city was last affected by weather in August
Hong Kong scrapped trading of stocks and bonds Tuesday after tropical storm Nangka prompted authorities to shutter businesses and close schools. The move came after the Hong Kong Observatory kept its storm signal at No. 8, the third-highest on its scale, until 7:40 p.m. The warning meant that winds of mean speeds of 63 kilometers (39 miles) per hour or more were expected. The No. 3 signal, meaning wind speeds of 41 to 62 kilometers, replaced the No. 8 and “is expected to remain in force for some time,” the Observatory said.
Central Banks in QE Overdrive to Finance Deficit Spending
David Powell – Bloomberg
Central banks put their printing presses into overdrive this year as governments opened the fiscal floodgates to cushion the economic blow from the coronavirus. The Federal Reserve will purchase assets equivalent to about 13% of GDP in 2020, according to calculations by Bloomberg Economics. The figure for the European Central Bank is 12% and the tallies for the Bank of England and the Bank of Japan are 14% and 8%, respectively.
The Future of U.K. Banking Rests on a Process Run by European Politicians
Silla Brush and Alexander Weber – Bloomberg
The City of London is weeks away from being free of the European Union’s rules, but its status as a global financial hub still rests on an obscure process controlled by politicians in Brussels known as “equivalence.” The EU has granted one main equivalence decision to the U.K. this year — but there are about 40 more to go before it’s clear how much investment banking business can stay in Britain, and the EU’s in no rush.
China Bolsters Its Dominance of Global Trade
September was another bumper month for China’s trade data; Economists are asking if the rebound is as good as it gets
China is cementing its status as the world’s dominant trading nation, confounding warnings that a once in a century pandemic combined with simmering tensions with the U.S. would derail that status. Surging global demand for everything from hazmat suits to work-from-home technology has allowed China, which contained the virus months ago, to capture record market share of global exports by quickly reopening its factories while the rest of the world grappled with lockdowns. It’s a striking reversal from the first two months of the year when China’s exports contracted by 17.1%.
Who’s Afraid of the Big Blue Wave? Not the FANGs; Robin Hood and the whale are the more significant figures in this modern market fairy tale.
John Authers – Bloomberg
Robin Hood Loves Joe
It’s hard to say that the stock market is running scared of a Joe Biden presidency on the latest evidence. Monday saw the former vice president’s lead over Donald Trump in polls of polls top 10 percentage points for the first time. Justified or not, there is a growing sense of certainty that in three months there will be a new U.S. president. This will bring a fresh commitment to raising corporate taxes and increasing regulation, from a party with many politicians who want to split up the large tech companies, which they see as overmighty. So of course the Nasdaq had its best day since April:
Billionaire financier Leon Black paid $50m to Jeffrey Epstein
At least one of the payments was flagged as unusual by Deutsche Bank
Kaye Wiggins and Stephen Morris, and Laura Noonan – FT
Leon Black, the billionaire co-founder of private equity group Apollo Global Management, made at least $50m in payments to Jeffrey Epstein after he had been convicted in 2008 of soliciting sex from a minor, two people familiar with the matter said.
Leon Black Says ‘I Deeply Regret’ Involvement With Epstein
Heather Perlberg – Bloomberg
Financier addresses relationship after New York Times article; Black says Epstein provided estate planning, tax services
Apollo Global Management Inc. co-founder Leon Black expressed his regret at being involved with Jeffrey Epstein in a letter to the firm’s investors. Black reiterated that he had turned to Epstein for financial matters such as taxes, estate planning and philanthropy, after a New York Times report about the billionaire’s relationship with Epstein, who died in jail after his arrest on federal sex-trafficking charges.
Summers Says Covid-19 Will End Up Costing U.S. $16 Trillion
Olivia Rockeman – Bloomberg
Economist says pandemic four times as costly as last recession; Urges U.S. to invest permanently in more tracing, testing
The Covid-19 pandemic will exact a $16 trillion toll on the U.S. — four times the cost of the Great Recession — when adding the costs of lost lives and health to the direct economic impact, according to former U.S. Treasury Secretary Lawrence Summers and fellow Harvard University economist David Cutler.
Day-Trader Options Action Is Spotted Yet Again in Nasdaq Surge
Sarah Ponczek and Katherine Greifeld – Bloomberg
Nasdaq 100 rises 3.1% in biggest advance since late April; Investors see similarities to August rally before correction
Neither stalled stimulus, booming valuations nor even a congressional report implying they should be broken up is proving any impediment to megacap technology stocks, which jumped the most in almost six months with help from newbie traders.
Barclays trades blows with Amanda Staveley as trial draws to close; High Court case centres on emergency fundraising in October 2008
Jane Croft – FT
Barclays has traded blows with Amanda Staveley’s firm, PCP, accusing the financier of “obvious embellishment and invention”, as her lawsuit against the bank entered its final stages. The High Court trial centres on the events of the financial crisis in October 2008, when Barclays raised funds from Qatar and Abu Dhabi to avoid being nationalised by the UK government.
Winning bid: how auction theory took the Nobel memorial prize in economics; Paul Milgrom and Robert Wilson’s work transformed how countries allocate resources in the public interest
Tim Harford – FT
If you and I were to bid against each other in a charity auction for, say, dinner with Princess Marie of Denmark, little would have to be explained about how the details of the auction work. One of us values the prospect more, would pay more, and would win.
Human judgement still king in a world of algorithmic trades; Following extreme market conditions at the height of the COVID-19 crisis, David Whitehouse explores how algorithmic trading performed in comparison to other market-moving events, and find the human touch remains critical.
David Whitehouse – The Trade
As the head of fixed income trading at a European bank in 2007, Jens Kramarczik was troubled by the early stages of the US subprime mortgage crisis. He shifted out of risk assets, shorted Italian government bonds and bought the yen as a flight to safety. In this case, human judgement was the key, and the shift was made “long before the rocket science told us to,” he says.
Derivatives trading surges for big US tech companies; Volume in Apple options hits second-highest level of the year, helping push market higher
Eric Platt and Richard Henderson – FT
A wave of equity derivatives trading in Apple and other large tech companies helped push US stocks higher on Monday in a move analysts said recalled the frenzied market conditions of late summer. Nearly 4m options contracts tied to the iPhone maker were purchased on Monday, the second-highest level of the year and among the busiest Apple options trading days on record, according to exchange operator Cboe. The purchases were concentrated in calls, which offer investors the chance to benefit from a rally in Apple shares.
Big Money, Day Traders Both Love Japan Tech Darling Mercari
Gearoid Reidy and Ayaka Maki – Bloomberg
Mercari Inc., the online flea-market operator that has become one of Japan’s most closely watched tech ventures, is closing in on new highs as the stock has drawn both big and small money.
Washington’s One-Two Antitrust Punch Is About to Smack Big Tech
David McLaughlin – Bloomberg
Attorney General Barr’s Google case is expected to be narrow; Cicilline legislation could have wider, more immediate effect
U.S. Attorney General William Barr and Representative David Cicilline are far from ideological soulmates. But in a one-two punch, they’re about to take on the country’s biggest technology platforms and could drive the most significant changes to antitrust law enforcement in decades. Barr, one of President Donald Trump’s most loyal cabinet members, is poised to file a monopoly-abuse lawsuit as soon as this week against Alphabet Inc.’s Google. Cicilline, a Rhode Island Democrat, is preparing legislation based on last week’s report alleging wide-ranging antitrust violations by Google, Facebook Inc., Apple Inc. and Amazon.com Inc.
U.S.-Europe Relations Tested as Talks on Taxing Multinationals Fall Short; Governments are trying to agree on new rules for taxing profits of international companies, especially tech giants
Paul Hannon – WSJ
World governments have failed to agree to new rules on taxing the profits of multinational companies, a long-running point of tension between the U.S. and Europe over levies paid by the likes of Apple Inc. and Google and one that has raised the threat of trans-Atlantic tariffs.
The Fed Still Has a Powder Keg at Its Disposal; So far, central bankers have simply exhorted Congress to provide more Covid-19 aid. They could be much more forceful if they wanted.
Brian Chappatta – Bloomberg
The Wall Street Journal’s editorial board published a column last week titled “The Fiscal Federal Reserve,” which admonished Chair Jerome Powell for imploring the U.S. Congress to do more to aid out-of-work Americans, struggling small businesses and strapped state and local governments. “Powell signs up to monetize trillions of dollars in more spending,” they wrote.
The $120 Billion Idea Behind This Year’s Nobel Prize in Economics; Auctions are everywhere. These two economists made them work better.
Peter Coy – Bloomberg
You know that feeling of elation when you win an auction—say, a bidding war for a house—and how it’s immediately followed by that sinking feeling that you overpaid? That’s the winner’s curse. It’s a real thing. Once you stop to think, you realize there’s probably a good reason other people weren’t willing to pay as much as you did. By winning, you just lost.
China’s vaccine diplomacy has broader aims; Beijing is attempting to portray itself as a good global citizen
THE EDITORIAL BOARD – FT
As the US under President Donald Trump retreats from multilateral efforts on climate change and health, so China is rushing to fill the void. First came Xi Jinping’s commitment last month to make his country carbon neutral by 2060. Then late last week Beijing signalled it would join a World Health Organization initiative aimed at ensuring fair distribution of Covid-19 vaccines around the world. Both moves appear part of a wider public relations effort by Beijing to present itself as a good global citizen, and counter souring international perceptions of China. Both leave important questions unanswered. But like the climate move, China’s vaccine commitment deserves — with caveats — to be welcomed.
Hospitalizations increase in New York amid second COVID-19 spike
Bernadette Hogan – NY POST
Hospitalizations have increased in New York alongside an alarming spike in coronavirus cases that have caused Gov. Andrew Cuomo to reinstate cluster containment zones and shut down schools in specific areas.
Coronavirus Pandemic Speeds Shift to Cleaner Energy; Spending on oil and gas has fallen much more than investment in renewables, according to International Energy Agency
Russell Gold and David Hodari – WSJ
The world’s transition to cleaner sources of energy is gaining speed as the coronavirus pandemic accelerates a shift in investment away from fossil fuels, according to the International Energy Agency. Capital spending on energy this year is set to plunge by 18%, as global energy demand is expected to fall by 5% in 2020, a pullback not seen since World War II, the Paris-based agency said in its annual report on the future of the industry.
First confirmed US coronavirus reinfection worries health experts; Blow to ‘herd immunity’ theory compounded by Nevada man having a more serious illness after second infection
Clive Cookson – FT
The first confirmed case of Covid-19 reinfection in the US has added to doubts about “herd immunity” from the virus and worried experts because the patient became more seriously ill following the second infection.
The Keys to Speed in Race for Vaccine, and Its Perils
James Paton – Bloomberg
When Merck & Co. won regulatory approval for its mumps vaccine in 1967, it set the record for speed. The process had begun four years earlier when scientist Maurice Hilleman was awakened one night by his sick 5-year-old daughter, swabbed her throat and took the specimen to his lab. This year, thousands of researchers in more than 30 countries have been racing to not just beat Hilleman’s time but to bury it, collaborating and competing on more than 600 projects to develop a vaccine against the novel coronavirus. Authorities in China and Russia claim to be near the finish line, but researchers elsewhere are skeptical. Decisions by AstraZeneca Plc and Johnson & Johnson to pause testing on their promising candidates, both after one person got sick, highlighted the risks. With the best hopes for ending the pandemic resting on an effective vaccine, the stakes are immense.
J&J Halts Covid-19 Vaccine Trial Due to Unexplained Illness
Move follows temporary pause of AstraZeneca tests last month; J&J plans to share more details after further investigation
Johnson & Johnson halted clinical trials of its Covid-19 vaccine after a participant fell ill, the second time that a front-runner developer has paused testing in the race to create a viable immunization against the virus. The participant’s illness is being evaluated, the New Brunswick, New Jersey-based company said late Monday, adding that it would share information after further investigation. J&J shares fell 2.4% in trading before U.S. exchanges opened. The vaccine is undergoing tests in as many as 60,000 volunteers from Peru to South Africa.
Singapore Marks Milestone in Virus Fight with No New Local Cases
Philip Heijmans – Bloomberg
City-state has bolstered contact tracing and testing; Total Covid-19 cases in country stands at over 57,000
Singapore recorded no new local cases of Covid-19 for the first time since February, as the city-state rebounded from an outbreak in migrant worker dormitories that at one stage contributed to more than a thousand infections a day. There were no cases in the com
Russia’s daily coronavirus cases, deaths rise to record highs
Russia on Tuesday reported record high daily coronavirus cases and deaths, pushing total infections to 1,326,178, but authorities said they do not plan to impose lockdowns across the vast country.
munity as well as in the foreign worker dormitories, according to a statement Tuesday from the Ministry of Health. This was the first time that no new cases were reported in the workers’ dorms since late March. The country still saw four new imported cases.
U.K. Moves Closer to Infect Healthy People With Covid to Aid Vaccine Efforts
James Paton and Suzi Ring – Bloomberg
Challenge trials have fueled debate over risks and benefits; Surging infections underscore urgency of speedy study results
Alex Greer says he’d rather put himself directly in the path of the coronavirus than get blindsided by the disease after an evening at the pub or with friends. It’s a scenario that could soon become a reality.
PC Demand During Pandemic Fuels Strongest U.S. Market Growth in a Decade; Chromebook shipments surged about 90% in the third quarter because of distance learning
Maria Armental – WSJ
A surge in remote work, study and home entertainment during the coronavirus pandemic boosted personal computer sales in the third quarter and drove the strongest growth in a decade in the U.S., according to industry data.
Dr. Fauci says U.S. faces ‘a whole lot of trouble’ as coronavirus cases rise heading into winter
Will Feuer – CNBC
The United States is “facing a whole lot of trouble” as coronavirus cases continue to surge across the country heading into the cold winter months, Dr. Anthony Fauci, the nation’s top infectious disease expert, told CNBC on Monday.
U.S. Virus-Death Rate Is World’s Worst Among Developed Nations
Michelle Fay Cortez – Bloomberg
Study says mortality worsened amid scattershot health steps; In other countries hit hard in spring, death rates leveled off
The proportion of Americans dying from coronavirus infections is the highest in the developed world, according to a study of global mortality rates that shows the U.S. pandemic response left citizens exposed to the lethal disease.
Exchanges, OTC and Clearing
Cboe Statement on Passing of Founding President Joseph Sullivan III
CHICAGO – October 12, 2020 – Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today issued the following statement:
Cboe Global Markets mourns the loss of Joseph Sullivan III, the Founder and first President of the Chicago Board Options Exchange, who passed away on October 2, 2020. Cboe extends condolences to the Sullivan family and expresses sincere gratitude for Sullivan’s vision and drive to launch Cboe 47 years ago, establishing the listed options industry in the U.S.
SGX and NZX to explore global dairy derivatives partnership
Singapore Exchange (SGX) and New Zealand’s Exchange (NZX) have today signed a Heads of Agreement in relation to a global partnership to grow NZX’s dairy derivatives market together. The non-binding agreement signed between both exchanges will explore the listing of NZX’s suite of dairy derivatives contracts on SGX’s trading and clearing platforms. This would see NZX bring its dairy product development expertise and client relationships, while leveraging SGX’s global market connectivity, strong Asian presence and international distribution, to scale growth and liquidity in the trading of dairy derivatives. Market participants could expect augmented access via current and new trading and clearing channels.
Application for Copper Regularity
Notice is hereby given that Kodiak Warehouse, LLC has applied for regularity for copper deliverable against the COMEX Copper futures contract:
Product Modification Summary: Amendments to the Exercise Price Rule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts – Revised Effective Date
Effective Sunday, November 22, 2020, for trade date Monday, November 23, 2020, the Chicago Mercantile Exchange, Inc. (CME or Exchange) will amend the strike listings for Options on ThreeMonth Eurodollar Futures and Options on Three-Month SOFR Futures, as defined below, on CME Globex, the CME Trading Floor and for submission for clearing on CME ClearPort.
LCH SA to clear EU’s SURE bonds
EUR87.4 billion of loans will be provided to 16 EU member states through EU’s SURE programme; LCH SA to support the EU SURE programme by clearing these Bonds; Clearing provides enhanced risk management, liquidity and efficiencies to market participants; Members will benefit from clearing at RepoClear’s deep netting pool of EUR debt
LCH, a leading global clearing house, today announced that it will be supporting the clearing of bonds issued as part of the European Union’s temporary support to mitigate unemployment risks in an emergency (SURE) programme*. Bonds issued as part of the scheme will be eligible for clearing at LCH SA’s RepoClear service. Participants in the market will therefore be able to benefit from enhanced counterparty risk management as well as operational and capital efficiencies. LCH SA offers clearing of Euro-denominated bonds and repos across 13 government bond markets
HKEX: No Trading Today In Securities And Derivatives Markets Due To Issuance Of Typhoon Signal No. 8
Hong Kong Exchanges and Clearing Limited (HKEX) announced that today’s trading sessions in the securities and derivatives markets, including After-Hours Futures Trading, have been cancelled due to the issuance of Typhoon Signal No. 8.
Singapore’s First Centre Of Excellence To Drive Asia-Focused Green Finance Research And Talent Development
Imperial College Business School and the Lee Kong Chian School of Business at Singapore Management University (SMU) today launched the Singapore Green Finance Centre (SGFC). This is Singapore’s first research institute dedicated to green finance research and talent development.
Ex-Wirecard clients scramble to process payments in Singapore; Regulator’s decision to stop the German payment group’s local operations disrupts businesses
Stefania Palma – FT
Businesses across Singapore have been left scrambling to process payments for everything from hotel stays to telephone bills after the city-state’s regulator shut down the payment services of fraudulent German group Wirecard.
KPMG audited Mauritian company used in suspicious Wirecard deals; Accountancy firm had criticised EY for the way it handled fraud allegations
Olaf Storbeck and Dan McCrum – FT
KPMG, which this year revealed its rival accounting firm EY had missed a chance to stop Wirecard’s fraud, was itself the auditor to a suspicious vehicle that investigators believe may have been used to siphon off the payments group’s funds.
Fintech Equality Coalition Engages Black Fintech CEOs
Dahna Chandler – Forbes
Frequently, questions about diversity in fintech center on gender diversity, and that gender diversity means “white women.” When any organization is predominantly white, it tends to focus on attracting customers who look like its employees and leadership—white ones, though that’s often not deliberate. This often leaves nonwhites, both employees and customers, feeling alienated and underserved. In financial services, where Blacks get excluded from access to products, services and fair lending practices, it also perpetuates systemic inequities. This problem is prevalent in fintechs, too, and gets driven by a lack of Black leadership in the firms.
Some Chinese firms are unfazed by worsening U.S. relations. A fintech unicorn’s IPO is the latest proof
Naomi Xu Elegant – Fortune
Chinese financial technology firm Lufax last week filed for an initial public offering on the New York Stock Exchange in what could be the largest Chinese company IPO on a U.S. exchange so far this year. Lufax didn’t say when it will list or how much it aims to raise, but the Wall Street Journal reports that the firm plans to list by the end of the month and raise around $3 billion. Shanghai-based research firm Hurun Report ranked Lufax, an online wealth-management and lending platform backed by Chinese insurance giant Ping An, the fourth-most valuable unicorn in the world in 2020 with an estimated $38 billion valuation.
TNS Launches New Financial Markets Online Customer Monitoring Solution
Transaction Network Services (TNS) is launching TNS Oculus, a new online portal that provides financial markets customers visibility into their TNS services, including performance and utilization tracking.
Grayscale Ethereum Trust Becomes SEC Reporting Company
Globe Newswire (press release)
Grayscale Investments, the world’s largest digital currency asset manager and sponsor of Grayscale Ethereum Trust (the “Trust”), today announced that the Registration Statement on Form 10 that it filed with the Securities and Exchange Commission (“SEC”) on behalf of the Trust has become effective. The Trust is now an SEC reporting company with its shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).* The Trust is solely and passively invested in Ethereum. The shares of the Trust are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ETH.** Now, the Trust is also the second digital currency investment vehicle to become an SEC reporting company, following Grayscale Bitcoin Trust on January 21, 2020.
When crypto exchanges decentralise
Izabella Kaminska – FT
Earlier this month, the Department of Justice brought criminal charges against the founders of the Seychelles-based crypto exchange BitMEX. The Commodity Futures Trading Commission also brought civil charges against the founders and five other entities behind BitMEX for failing to register with the agency and for not implementing AML procedures. The founders were also accused of running an internal trading desk on a conflicted basis.
PwC: blockchain potentially has LOADS of potential
Jemima Kelly – FT
Some people think there’s potentially a lot of potential in the blockchain. But it can be hard to visualise potential, can’t it? Because it’s so vague, so amorphous, so indeterminate. That’s why we need numbers. And charts. Because even if those numbers and charts are just potential numbers and charts with absolutely no connection to reality, they give us something that we can actually see with our own eyes.
Report: G7 financial leaders say they will oppose Libra until it is ‘adequately’ regulated
Saniya More – The Block
Financial leaders from the world’s seven largest economies (G7) will oppose the launch of Facebook’s Libra stablecoin until it is “adequately” regulated, according to a Reuters report published Monday. Reuters reviewed a draft statement that had been prepared for a meeting of finance ministers and central bankers from the U.S., Canada, Japan, Germany, France, Italy and Britain. According to the report, the statement said that although digital payments have several benefits, payment services must be supervised and regulated to protect consumer privacy and maintain cybersecurity.
Japan must revise BOJ law to speed digital yen, enshrine inflation goal: senior official
Leika Kihara and Takahiko Wada – Reuters
Japan must swiftly revise laws to allow the central bank to issue a digital currency, a move that could provide a chance to reform the Bank of Japan’s existing mandates and enshrine its inflation target, a senior ruling party official said on Monday.
IMF, World Bank, G20 Countries to Create Central Bank Digital Currency Rules
Ada Hui – Coindesk
International financial authorities and 20 of the world’s largest economies are establishing official standards for regulating and issuing sovereign digital currencies. The Group of Twenty (G20) — an organization of finance ministers and central bank governors representing the European Union and 19 countries across every continent — said in a report today that it is working with the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS) to formalize the use of central bank digital currencies (CBDC) in banking systems.
An Advisor to a Cryptocurrency Project Just Won a Nobel Prize
Jeff Benson – Decrypt
Algorand, a proof-of-stake blockchain platform founded by zero-knowledge proof inventor Silvio Micali, boasts a team of advisors that includes MIT economics researchers, game theory experts, several Turing Award winners, and AngelList co-founder Naval Ravikant. Now, it can add a Nobel Laureate to the mix. Today, the Royal Swedish Academy of Sciences awarded the Nobel Prize in Economic Sciences to Algorand advisor Paul Milgrom. Together with his Stanford colleague and co-awardee Robert Wilson, Milgrom designed new types of auctions for markets that don’t typically lend themselves to auctions, such as radio frequencies.
Nearly 2 Million Sign Up for China’s Digital Yuan ‘Lottery’
Sebastian Sinclair – Coindesk
Almost two million people living in the Chinese city of Shenzhen signed up for a 10 million (US$1.48 million) digital yuan giveaway over the weekend. According to reports by AsiaOne, of the 1.91 million residents that put their hands up for the latest test of China’s sovereign digital currency, only 2.3% of applicants won their free money. Around 50,000 digital “red envelopes,” reminiscent of the traditional gifts doled out in China for special occasions and each containing 200 digital yuan ($29.60), were handed out Monday.
Serena Williams Looks to Have Dropped Coinbase Investment After Activism Row
Daniel Palmer – Coindesk
Tennis superstar and investor Serena Williams may have shed her stake in popular U.S.-based cryptocurrency exchange Coinbase. As reported by Business Insider late on Monday, the website of Williams’ venture firm no longer displays Coinbase among its portfolio firms. Serena Ventures – a company launched in secret in 2014 – first listed the investment in Coinbase in April of last year. William’s also tweeted about the investment at the time.
Coinbase Wallet Users Can Now Purchase Crypto Inside the App
Nathan DiCamillo – Coindesk
For Coinbase users who don’t want to keep their funds on an exchange, the buying and storing crypto just became a lot easier. On Monday afternoon, the company announced Coinbase Wallet users would now have a fiat on-ramp within the wallet itself. Previously, users holding their crypto in the self-custodial wallet would have to buy crypto on the Coinbase app (or elsewhere) and then send funds to Coinbase Wallet. This meant people trying to use, say, a DeFi protocol would have to install two separate apps to get started.
Coinbase Commerce now allows merchants to convert crypto to fiat from within the platform
Yogita Khatri – The Block
Coinbase Commerce, the exchange operator’s payment service for merchants, will now let users convert cryptocurrencies to fiat currencies and stablecoin from within the platform. Previously, merchants had to move their crypto payments to Coinbase’s exchange platform for conversions. Now they can do them without having to leave the Commerce platform, Coinbase announced in a blog post shared with The Block on Monday.
Militias on standby as Trump warns of rigged election; Alleged kidnap attempt of Michigan governor suggests civilian armed groups are on high alert
Katrina Manson – FT
The FBI’s disruption of a plot by the Wolverine Watchmen to kidnap the Democratic governor of Michigan has highlighted the potentially violent role a clutch of self-styled militias could play as Americans go to the polls next month.
Voter suppression: US election generates avalanche of litigation; Democrats push back against Republican attempts to impose restrictions on mail-in ballots
Kadhim Shubber – FT
The 2020 elections have generated an avalanche of litigation in states across the US. With the coronavirus pandemic driving the use of mail-in voting to unprecedented levels, Republicans and Democrats have battled in court over the precise rules of how those ballots will be handled.
Boris Johnson’s political fear is starting to show; The UK prime minister must stop apologising for his Covid strategy and start evangelising
Robert Shrimsley – FT
Fear is information. Boris Johnson’s ill-judged speech to his virtual party conference last week, in which he chose not to focus on the virus but on the bold future that lay on the other side of the crisis, told us something. It told us that the British prime minister is scared.
US investors pivot to ‘blue wave’ as odds favour Biden; Markets shift towards small-cap companies and value shares over growth stocks
Richard Henderson and Colby Smith – FT
Shifts in markets, from US government bonds to small-cap stocks, suggest investors are starting to prepare for the Democrats to win not just the White House in next month’s election but both houses of Congress as well, in a so-called blue wave.
Investors Turn Skeptical of U.S. Democrat ‘Blue Wave’ Victory
Joanna Ossinger – Bloomberg
Some analysts question if Democrats will win control of Senate; Tech, growth stocks both outperformed other sectors on Monday
Markets are turning increasingly skeptical about the chances of a “Democratic sweep” in November’s U.S. elections. And that’s bad for almost all asset classes. When Democrat Joe Biden’s poll numbers increased, numerous strategists started talking about the idea of a “Blue Wave,” where his party would retain control of the House and win the Senate. That prospect could be favorable to markets as a Biden presidency is seen adding to the odds of a fresh round of fiscal stimulus.
Florida Could Seal Trump’s Fate on Election Night; A surge of early votes from seniors has put Joe Biden ahead in this critical battleground. If it continues, we’ll know the identity of the next president on Nov. 3.
Joshua Green – Bloomberg
Donald Trump has a lot to worry about right now, but winning Florida should be at or near the top of his list. There’s no realistic path to reelection for him without it. In 2016, Trump carried Florida by crushing Hillary Clinton among voters ages 65 and older, who, exit polls showed, supported him by a 17-point margin. But seniors are a group that’s moved away from Trump during his presidency, and even more so with the onset of Covid-19. Early returns in senior-heavy Florida suggest they may vote in historic numbers. That would seem to be bad news for Trump, whose support among seniors in a recent Quinnipiac University poll has cratered. The Oct. 7 poll shows Biden winning seniors by 15 points (55% to 40%), up from a 3-point lead in early September.
As Trump flouts safety protocols, news outlets balk at close coverage.
Major news organizations have become increasingly wary of sending journalists to travel with President Trump to White House events and campaign rallies, as the president and his aides continue to shun safety protocols after an outbreak of the virus within their ranks.
Online Disinformation Campaigns Undermine African Elections; Some governments use social media to dominate the narrative around campaigns.
Pauline Jax, Loni Prinsloo – Bloomberg
In the runup to Guinea’s elections on Oct. 18, voters are grappling with a familiar-sounding problem: disinformation and a lack of transparency over who’s providing the news they’re getting.
Georgia Voters Set Record on First Day of Early Voting; State officials say voter enthusiasm is driving turnout and creating long lines
Alexa Corse and Cameron McWhirter – WSJ
Georgia voters flooded to polling places on the first day of early voting Monday, creating long waits for some as state election officials cited record turnout due to voter enthusiasm.
New Zealand Gives U.S. a Lesson in Pandemic Democracy; The U.S. could learn from a country that runs elections — and Covid-19 policy — with maturity.
David Fickling – Bloomberg
What if the coronavirus pandemic delayed an election and no one cared? That’s pretty much what’s happening in New Zealand, where Prime Minister Jacinda Ardern appears to be cruising toward victory in an election this Saturday after rival politicians sought postponement from the original Sept. 19 date. At a time when America is tearing itself apart over the crises of Covid-19 and a president who’s refused to commit to a peaceful transfer of power after earlier calling to set back the vote itself, the spectacle of a nation tackling the same problems with calm consensus seems extraordinary.
Tommy Tuberville’s Financial Fumbles; Mr. Tuberville, the former football coach and Alabama Senate candidate, is leading Senator Doug Jones in the polls. But his financial record raises questions.
Danny Hakim – NY Times
Tommy Tuberville, the Republican candidate for Senate in Alabama, is running in large measure on his experience in college football’s Southeastern Conference, known as the S.E.C., where he coached Auburn University.
Trump Rallies Raise Concern About Spread of Virus, Fauci Says
Jordan Fabian – Bloomberg
President resumes campaign travel after bout with Covid-19; Trump campaign defends putting Fauci interview clip in TV ad
President Donald Trump’s planned campaign rallies this week — starting with one on Monday night in Florida — threaten to advance the spread of the coronavirus, warned Anthony Fauci, the top U.S. infectious disease expert.
FCA regulation of consumer credit – during the pandemic and beyond
Speech by Nisha Arora, Director of Consumer and Retail Policy, given at the Financial Leasing Association conference.
Steven Maijmoor Speaks at the ESAS Annual Econ Committee Hearing
The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, participated today in the annual hearing of the European Parliament’s Economic and Monetary Affairs Committee (ECON), together with the Chairmen of the European Banking (EBA) and European Occupational Pensions Authority (EIOPA).
Regulators urge Australian institutions to adhere to the ISDA IBOR Fallbacks Protocol and Supplement
Regulators and industry are taking further steps to transition away from LIBOR, which is expected to cease after the end of 2021. In particular, on Friday 9 October 2020 the International Swaps and Derivatives Association (ISDA) announced that it will launch the 2020 IBOR Fallbacks Protocol and associated Supplement to the 2006 ISDA Definitions on 23 October 2020. These are needed to implement robust fall-back provisions for derivative contracts referencing key interbank offered rates (IBORs), including the London Interbank Offered Rate (LIBOR). The protocol and supplement are informed by extensive consultation with industry, including in Australia.
Market Abuse In A Time Of Coronavirus, Speech By Julia Hoggett, Director, UK Financial Conduct Authority Market Oversight, At The City Financial Global Event
There is no doubt, as demonstrated by the fact that this conference is taking place virtually, that we are living in unusual times. Times that provide a great number of challenges for all of us, both personal and professional. The word ‘unprecedented’ has been used in conjunction with the pandemic too many times to count. Whilst, on occasion, historians may accurately be able to say that there are precedents for the times we are living in, there are other experiences and challenges that will be wholly new – in part because every generation lives through a different era in terms of how society and the economy function.
Investing and Trading
Investors Prepare for Higher Treasury Yields as Election Looms; A government controlled by one party is seen as more likely to expand the federal budget deficit, which could lift bond yields
Sam Goldfarb – WSJ
The prospect of a Democratic sweep in next month’s elections is helping to push U.S. government-bond yields higher, stirring memories of four years ago when yields climbed sharply after a Republican victory. Yields, which rise when bond prices fall, have climbed in recent days as polls have shown a growing lead for former Vice President Joe Biden over President Trump, as well as improving chances that Democrats could end up holding both houses of Congress.
Shale binge has spoiled US reserves, top investor warns; QEP’s Wil VanLoh says country’s oil production capacity is lower than believed
Derek Brower – FT
A fracking binge in the American shale industry has permanently damaged the country’s oil and gas reserves, threatening hopes for a production recovery and US energy independence, according to one of the sector’s top investors.
Economists are Starting to Think Like Engineers; No longer just a bunch of arcane theories, the field of economics is providing solutions to real-world problems.
Noah Smith – Bloomberg
The Nobel-prize-winning work of economic theorists Paul Milgrom and Robert Wilson of Stanford University on how to set up auctions shows how the field is evolving. No longer is economic theory merely a glorified way of using mathematics to tell allegories about the world — now it has practical engineering applications.
Why are VCs launching SPACs? Amish Jani of FirstMark shares his firm’s rationale
Connie Loizos – Tech Crunch
It’s happening slowly but surely. With every passing week, more venture firms are beginning to announce SPACs. The veritable blitz of SPACs formed by investor Chamath Palihapitiya notwithstanding, we’ve now seen a SPAC (or plans for a SPAC) revealed by Ribbit Capital, Lux Capital, the travel-focused venture firm Thayer Ventures, Tusk Ventures’s founder Bradley Tusk, the SoftBank Vision Fund, and FirstMark Capital, among others. Indeed, while many firms say they’re still in the information-gathering phase of what could become a sweeping new trend, others are diving in headfirst.
Many Corporate Boards Still Face Shortage of Tech Expertise; But more CIOs are expected to earn a seat as the pandemic forces companies to lean on digital
Angus Loten – WSJ
Corporate boards could soon be on the hunt for fresh technology expertise as digital business models pursued in the wake of the coronavirus pandemic reshape business strategy.
Why You Didn’t Notice a Japanese Stock Index Beating the Nasdaq This Year; There’s a boom in Japan’s high-growth small-cap stocks, but few Western investors have heard
Mike Bird – WSJ
If you’re not a Japanese investor, you may not have heard of BASE. 4477 -3.88% It’s your loss: The small-cap tech stock, a sort of Japanese Shopify, has beaten Tesla’s rally this year by several hundred percentage points.
Environmental, Social and Corporate Governance
MackeyRMS Launches ESG Scorecard; Ratings toolkit includes features to help investment teams grade securities and funds to meet sustainability mandates.
Mariella Reason – Waters Technology
Research management software provider MackeyRMS is launching ESG Scorecards, a toolkit to improve investment selection, monitoring, and reporting in environmental, social, and governance-focused portfolios. The scorecards are designed to help investment teams grade securities and funds before inclusion in client portfolios, as well as to monitor existing portfolios.
Ray Dalio Donates $50 Million to Fight Health-Care Injustice
Devon Pendleton – Bloomberg
Billionaire’s gift to fund center at New York-Presbyterian; Dalio Center will focus on disparities in health-care access
Bridgewater Associates founder Ray Dalio is giving $50 million to New York-Presbyterian Hospital to fund a center dedicated to health equity and justice, at a time when the Covid pandemic has underlined the stark racial disparities in the U.S. The Dalio Center for Health Justice, a research and advocacy organization, will focus on reducing differences in access to quality health care that overwhelmingly affect communities of color, New York-Presbyterian and Dalio Philanthropies said in a statement.
The World’s Top Energy Agency Is Pressing for Aggressive Carbon Cuts; The International Energy Agency has published a roadmap for decarbonizing the global economy
Akshat Rathi and Eric Roston – Bloomberg
The world’s most authoritative body of energy analysts, the International Energy Agency, has found in its annual flagship report that the world is headed toward global warming higher than the Paris Agreement’s most aggressive limit of 1.5°C. The agency, long known for its expertise in fossil fuels, lays out a path for countries to move toward using more renewable energy on an aggressive timeline. Getting fossil fuels substantially out of the energy system, it says, would cost 25% more than the $54 trillion the world is already expected to invest by 2040.
ESG in mining requires greater ‘policing,’ mandatory standards: EBRD director
Diana Kinch – S&P Global
London — Many environmental, social and governance initiatives in mining require “much tougher policing,” and the mandatory introduction of recognized standards, according to Eric Rasmussen, natural resources director of the European Bank for Reconstruction and Development. The mining sector needs to move away from the current situation where ESG is practiced largely on a voluntary basis, Rasmussen said during a Natural Resources Forum webinar on ESG.
The 100 Most Sustainably Managed Companies in the World; A new ranking by The Wall Street Journal puts Sony at the top, as hardware companies claim 18 of the 100 positions on the list
Fabiana Negrin Ochoa, Dieter Holger, Maitane Sardon and Catherine Lindsay – WSJ
When Sony Corp. SNE 0.05% Chief Executive Kenichiro Yoshida took the helm in 2018, he declared it his mission to ensure the company’s long-term sustainability. Mr. Yoshida stepped into the role after four years of squeezing out costs as chief financial officer, so he understood all of the challenges facing the electronics, entertainment and financial-services giant. After two years of losses, the company had hit rock bottom in 2014, the first year in its history that it failed to pay a dividend, Mr. Yoshida says.
Earth is hurtling toward a catastrophe worse than the dinosaur extinction
Andrew Glikson – MIC
At several points in the history of our planet, increasing amounts of carbon dioxide in the atmosphere have caused extreme global warming, prompting the majority of species on Earth to die out.
In the past, these events were triggered by a huge volcanic eruption or asteroid impact. Now, Earth is heading for another mass extinction—and human activity is to blame.
Venture Capital Struggles to Boost Funding for Startups With Women Founders; Some progress has been made at young companies, but a surge of giant late-stage funding deals largely left female entrepreneurs on the sidelines
Yuliya Chernova – WSJ
Sara Jensen believes venture capitalists want to back female entrepreneurs. That’s why, when it came time for the startup she launched with her husband to raise seed-stage funding, she took charge of reaching out to investors.
“Harnessing The Power Of Finance For A Sustainable Future”- Keynote Speech By Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, At The Financial Times Investing For Good Asia Digital Conference On 13 October 2020
I thank the Financial Times for the opportunity to speak on this important topic and to reach out to an audience across the globe.
China’s Secret to Reaching Carbon-Neutral Goal Raises Questions; China estimates that “carbon sinks” could wipe one-third of the emissions it wants to cut. But the approach has serious challenges.
China’s announcement last month that it aims to become carbon neutral by 2060 set off a flurry of discussion among climate watchers about how it would do that. If the world’s largest emitter realizes the goal, it would go a long way in helping keep global temperatures from rising more than 1.5°C by the end of the century. President Xi Jinping’s commitment will require a massive overhaul of China’s energy mix, but officials have also indicated that strategies to absorb and capture carbon dioxide will be a significant part of the plan.
JPMorgan Profit Rises 4%, A Surprising Show of Coronavirus Resilience; The bank set aside just $611 million for potential future loan losses, compared with $10.47 billion in the previous quarter
David Benoit – WSJ
JPMorgan Chase JPM 1.23% & Co. said Tuesday its third-quarter profit rose 4%. The bank set aside just $611 million for potential future loan losses, far less than expected and the $10.47 billion it booked in the second quarter. Profit doubled from the second quarter. The bank’s profit rose to $9.44 billion, or $2.92 a share, from $9.08 billion, or $2.68 a share, a year earlier. Analysts had expected $2.23 a share, according to FactSet.
Global ETF inflows surge 40% amid ‘tectonic shift’; Investor inflows jump to $488bn in first nine months of 2020
Chris Flood -FT
Net flows into exchange traded funds have jumped 40 per cent so far this year with the growing shift into low-cost index tracking vehicles forcing the pace of consolidation across the asset management industry to accelerate markedly.
BlackRock assets climb to record $7.8tn in third quarter; Fund manager bolstered by buoyant markets and injection of $129bn in new client money
Richard Henderson – FT
BlackRock’s assets under management swelled to a record $7.8tn in the third quarter as the stock market rally that began in March helped the fund manager beat revenue and profit forecasts. The world’s biggest fund manager said revenue jumped 18 per cent compared with 2019 to $4.37bn, while net income climbed more than a fifth to $1.36bn.
Deutsche Bank Says Top Investor Capital Group Raises Its Stake
Stephan Kahl – Bloomberg
The U.S. firm already is the No. 2 investor in Commerzbank; Stake is ‘clear vote of confidence,’ Deutsche Bank says
Deutsche Bank AG said Capital Group, already a top investor in the German lender, raised its stake further, in a vote of confidence in Chief Executive Officer Christian Sewing’s turnaround plan. The Euro Pacific Growth Fund, part of the American Funds family of mutual funds that is run by the Los Angeles-based asset manager, held 3.61% of Deutsche Bank as of Oct. 6, according to the German lender’s website. The stake is disclosed separately from the 3.74% holding that Capital Group reported owning as of March.
Argentina on ‘collision course’ towards currency devaluation; Gap between official and black market exchange rates continues to widen
Benedict Mander – FT
Argentina is heading towards its seventh currency devaluation in 20 years, analysts say, as pressure builds on the peso and investors lose faith in the government’s ability to stabilise the economy.
The king’s money: Thailand divided over the $40bn question; The role and wealth of the Germany-based king is under unprecedented scrutiny amid national protests
John Reed – FT
For such a big change it was a very small announcement. An unscheduled communiqué published on its website on Saturday June 16 2018 revealed that Thailand’s Crown Property Bureau had transferred its entire portfolio — royal assets worth tens of billions of dollars held for more than 80 years on behalf of the monarchy and the nation — into the hands of the new King Maha Vajiralongkorn.
HSBC Is Left Off First China Dollar Bond Deal Since 2017
HSBC left off deal list amid tensions over Huawei, Hong Kong; Bank is targeting an expansion in China to revive fortunes
HSBC Holdings Plc was left off the list of banks arranging China’s sovereign dollar debt sale for the first time since the nation returned with big annual deals in 2017.
New Italian Debt Offers 0% Interest for First Time
James Hirai – Bloomberg
Italy sells full amount of three-year bonds with 0% coupon; Average yield at three-year auction drops to record low
Investors bought the full amount of debt Italy was selling that offers no payment for the first time, as the country capitalized on its record-low borrowing costs. The country’s Treasury sold 3.75 billion euros ($4.4 billion) of new benchmark three-year debt with a 0% coupon at auction on Tuesday. The offering was 1.4 times oversubscribed, signaling slightly slower demand than at the previous sale, and bond prices dipped after the result.
China’s Stock Market Tops $10 Trillion First Time Since 2015
World’s No. 2 market surged more than $3 trillion since March; Equities rallied over the summer as investors took on leverage
Chinese domestic equities are worth more than $10 trillion for the first time since 2015, when a record crash erased half the market’s value in months and saddled millions of investors with losses.
London Stock Exchange Group makes plans for a no-deal Brexit; The exchange’s contingency plan will come only into play if equivalence decisions to allow cross-border services between the UK and the EU are not agreed upon.
Annabel Smith – The Trade
LSEG’s pan-European equities trading venue Turquoise has released a contingency plan that will come into affect in the event of a no-deal Brexit. The stock exchange confirmed that European Economic Area (EEA) securities would be available for trading on its Dutch platform, the MTF operated by Turquoise Global Holdings Europe B.V, under the plan.
How a Brexit deal, or no deal, will affect markets; Investors braced for long-awaited resolution to EU-UK negotiations on their future ties
Karen Ward – FT
The midnight hour in the Brexit negotiations is fast approaching. The outcome will be far-reaching for markets, and not just for sterling and UK assets. The sticking point is the same issue that has weighed heavily on negotiations for the past four and half years. The UK wants to maintain access to the single market but, in a bid to regain “sovereignty”, it does not wish to adhere to EU regulations. In this context it seems impossible to see a deal being reached.
Chemicals sector faces double blow of Brexit and new EU rules; Industry chiefs say coming changes risk damaging highly integrated EU-UK supply chains
Peter Foster and Michael Pooler – FT
The European chemicals industry is facing a ‘double whammy’ from the threat of a hard Brexit and newly divergent rules between the EU and UK, the heads of chemical industry associations from both sides of the Channel have warned.
English villages wake up to find they’re Brexit’s new border
Jill Lawless – Associated Press
Four years after Britain voted to leave the European Union, Brexit can still seem abstract. But in the county known as the Garden of England, it is literally taking concrete form. Just beyond the ancient oaks and yews that surround medieval St. Mary’s Church in the village of Sevington, bulldozers, dump trucks and cement mixers swarm noisily over a field. They are chewing up land to create part of Britain’s new border with the European Union — a customs clearance depot with room for up to 2,000 trucks. No one asked local people for permission, and even in this Brexit-backing area, the disruption is straining support for the U.K.’s rupture with the EU.
Brussels Edition: Brexit Talks Enter the Danger Zone
Viktoria Dendrinou and Ian Wishart – Bloomberg
Talks between the EU and the U.K. are on a knife-edge, with only two days of negotiations left before Prime Minister Boris Johnson decides whether he’s seen enough to keep going. Major differences remain between the two sides, as the bloc’s chief negotiator Michel Barnier will outline today when he addresses European affairs ministers in Luxembourg. With France digging in over access to British fishing waters, EU governments are getting nervous about the prospects of no deal and want to step up preparations. That’s likely to be a focus of discussions when leaders meet this week.
U.K. Government Split Over Carbon Market After Brexit
Jess Shankleman, Tim Ross, and Will Mathis – Bloomberg
U.K. Chancellor Rishi Sunak’s Treasury is locked in a battle with Alok Sharma’s Business Department over how to ensure polluters pay for their emissions after Brexit. The Treasury is pushing to replace the European Union’s cap-and-trade system with an economy-wide carbon tax, which would come into effect after Britain exits the bloc in January. The Department for Business, Energy and Industrial Strategy is drawing up a new emissions-trading system to start in January similar to the EU program that the U.K. currently participates in.
Enough of Zoom—Office Happy Hours Return; After months of virtual meetings, some employees are finding ways to get back to in-person socials and the connections they had missed
Ray A. Smith – WSJ
They made do for a while with Zoom happy hours. But as coronavirus cases eased, office workers at KDG, a professional technology services company in Allentown, Pa., were eager to get together for drinks in person. Meeting on the building’s outdoor deck, about 35 employees, all still working from home, brought their own booze. Food was individually packaged. Those attending had to stay six feet apart, and bathroom doors were labeled as entrances and exits.