CFTC Whistleblower Program in Peril Over Potential $100 Million-Plus Payout; Cboe Files to List Fidelity Bitcoin ETF Amid Regulatory Test

May 11, 2021

First Read

$41,726/$300,000 (13.9%)
Walter Lukken and Trading Technologies


Hits & Takes
John Lothian & JLN Staff

FIA CEO and President Walt Lukken‘s latest commentary is about the closing of the trading pits in Chicago and potentially in London at the LME. It is a very well-crafted homage to what the trading floors meant to our industry and to the people who were part of them.

He extolls the value of trading floors as the “ultimate internship, giving a generation of industry professionals a real-world experience filled with colorful characters and practical skills.”

At the end of the commentary he lauds Futures Fundamentals, the MarketsWiki Education World of Opportunity series and the Greenwood Project for “finding ways to provide knowledge, experience and opportunities for the next generation.”

He then gives a very kind plug to the JLN Open Outcry Traders History Project and pledges to give a second donation, which he did. Walt was also the second donation we received to our GoFundMe campaign the very first day we announced it.

Thank you, Walt, for your industry leadership, your eloquent words honoring open outcry, and your kindness towards our efforts to preserve industry history with our various video series.

Here is a brief recap of day one of ISDA’s AGM. — ISDA

Also, here are a couple of other items from ISDA. Video: What Role will Derivatives Play in Tackling Global Climate Change? — ISDA — and ISDA AGM 2021: Eric Litvack Chairman — ISDA

There was some good news on the COVID-19 front yesterday as there were no new deaths in the U.K. and in the U.S. new coronavirus cases dropped to an 11-month low. Also, the FDA in the U.S. authorized the use of the Pfizer vaccine in youths under 16 years old for the first time. — FT Bloomberg FT

Cboe is at it again. Cboe on Monday proposed a rule change to list and trade shares of the Wise Origin Bitcoin Trust (the “Trust”), under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares.

The CME Group is having some success with its micro bitcoin futures, with over 100,000 contracts traded to date. — CME Group via PR Newswire

Former Chicago Mayor Rahm Emanuel, a former congressman and chief of staff for President Obama, is to be appointed ambassador to Japan. — FT

As mentioned earlier, Walt Lukken gave his second donation to the JLN MarketsWiki Education GoFundMe campaign and Trading Technologies made their match of last week’s donations. Thank you to Walt and TT and all who have given and all who have yet to give. Follow Walt’s lead and help us preserve industry history by giving to our GoFundMe campaign.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


ISDA 35th AGM: In a virtual “fireside chat,” ISDA CEO Scott O’Malia asked CFTC Acting Chairman Rostin Behnam how the Dodd-Frank Act prepared regulators for the market volatility of March and April 2020 at the onset of the pandemic shutdowns. The CFTC was quick to react, Behnam said, but he added, “once-in-100-year events,” or market shocks, seem to be happening far more frequently. That “makes me think about tail risk” in the context of a crisis, he said. “We have to be prepared for tail risk,” especially given the global nature of markets. From a regulator’s standpoint, a lot of the Dodd-Frank reforms have borne fruit over the last 10 years, Behnam said, which was especially evident recently in the clearing space. Regulators “need to keep markets safe and transparent,” but not be a “market impediment” during stress periods, he said. “We’re working off Dodd-Frank, but are aware that the markets are dynamic and changing.” When O’Malia asked if the industry could expect “further relief” from initial margin rules, action that has been delayed for a year, Behnam side-stepped the question, saying the CFTC was “moving the conversation forward.” Asked about the CFTC’s role in climate change initiatives, Behnam said that while many companies now voluntarily disclose ESG goals, the U.S. has to move to a mandated disclosure system. Derivatives will play a key role in product development related to climate change, he suggested, and should help “at the back end of the transition” to 2050 and the Paris Agreement goals. ~SC

The London Metal Exchange is holding its LME Asia Metals Seminar on Tuesday, May 25, from 9:00-17.00 HKT. It is a virtual seminar, which “will bring together industry leaders to share their insights into the prospects of the metals market as well as the challenges and opportunities emerging from the COVID-19 pandemic.” Speakers will include the new HKEX Chief Executive, Nicolas Aguzin, and will discuss sustainability initiatives and the latest industry trends in the global commodities market. You can go here to see the agenda and register for free.~SR


Tom Sosnoff – The Path to Electronic Trading – John Lothian News

Tom Sosnoff is a serial entrepreneur whose endeavors are transforming how people trade and understand the markets. Expanding on his success as an open outcry options trader on the CBOE, Sosnoff and his business partner, Scott Sheridan, built one of the first all-electronic online futures brokerage firms, Thinkorswim (TOS).

Ten years after launching TOS, they sold it to TD Ameritrade (TDA) and moved on to their next startup, tastytrade.

Watch the video »


Viewpoint – The end of an era; As trading pits close, our industry must build knowledge and relationships in new ways
Walt Lukken, President and CEO – FIA
Last week’s announcement that CME will close most of its trading pits caught some by surprise, but it shouldn’t have. We all knew this day was coming, but it doesn’t take the sting out of it. Next month LME also intends to make the call whether to close its ring. Before the world discovered that computers could connect traders from around the globe, the open outcry pits of Chicago, London, and New York were where markets flamboyantly flourished and the wisdom of crowds came to discover prices, allocate capital, and hedge risk for agricultural, energy and financial instruments.

*****Walt Lukken is the right man for the right job at the right time.~JJL


CME Group: Micro Bitcoin Futures Surpass 100,000 Contracts Traded
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Micro Bitcoin futures volume surpassed 100,000 contracts in the new contract’s first six days of trading.

*****So how many Satoshis are in a micro bitcoin future at the CME Group?~JJL


Merriam-Webster plans to auction the NFT of its definition of NFT
Isabelle Lee – Business Insider
Merriam-Webster announced that it is planning to auction the NFT of its definition of NFT. NFTs, or non-fungible tokens, have surged in popularity this year, prompting the publisher’s iconic dictionary to officially add the definition Tuesday.

*****I am thinking of some new acronyms that start with NF that I may be able to sell as NFTs.~JJL


NGX Group To Launch “The Stock Africa Is Made Of” Campaign
Nigerian Exchange Group (NGX Group) Plc is set to launch a campaign to project its new positioning and commitment to the African financial markets as a leading capital market infrastructure provider, connecting Nigeria, Africa and the world. Themed, The Stock Africa Is Made Of, the campaign will kick off with a webinar on Tuesday, 18 May 2021 and will amplify NGX Group’s new brand identity and spotlight the growth potential of the African continent across traditional and digital media.

*****That is a catchy slogan. Where can I get a T-shirt with that on it? XXLT size?~JJL


Monday’s Top Three
Our most read story Monday was the tragic story from Crain’s Chicago Business, Helmut Jahn leaves architectural legacy in Chicago and around the world, about the architect of Chicago’s Thompson Center and United Airlines’ Terminal 1 at O’Hare International Airport (among others), who was killed in a bicycle accident on May 8. Second was the Wall Street Journal’s New SEC Chairman Sets Sights on Citadel Securities and Virtu, about Chairman Gary Gensler questioning Citadel and Virtu about payment for order flow. Third was I Came Close To Dying: Wall Street’s Most Photographed Man Is Ready For Normalcy, from NPR.


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Lead Stories

CFTC Whistleblower Program in Peril Over Potential $100 Million-Plus Payout; Agency in turmoil over proposed award to ex-Deutsche Bank executive who provided information in Libor investigation
Alexandra Berzon – WSJ
The Commodity Futures Trading Commission’s whistleblower program is in turmoil over a potential payout exceeding $100 million to a former Deutsche Bank AG executive—one so large it would deplete the agency’s whistleblower funds and has led it to seek congressional action. The executive had provided information that helped CFTC and Justice Department investigations that led to roughly $2.5 billion in settlements with Deutsche Bank in 2015, including $800 million with the CFTC. They alleged that the bank manipulated the London interbank offered rate, or Libor, a benchmark interest rate used to set short-term loans for global banks.

Cboe Files to List Fidelity Bitcoin ETF Amid Regulatory Test
Joanna Ossinger – Bloomberg
Cboe Global Markets Inc. is seeking to list a Fidelity Bitcoin exchange-traded fund in the U.S. despite the prospect of an icy regulatory reception. Cboe proposed Monday in a filing with the U.S. Securities and Exchange Commission to list Fidelity’s Wise Origin Bitcoin Trust, saying concerns about potential manipulation of a Bitcoin exchange-traded product have been “sufficiently mitigated.”

Wall Street Giants Get Swept Up by India’s Brutal Covid Wave
Saritha Rai – Bloomberg
About 8,300 miles east of Wall Street, on a stretch of Bangalore’s Outer Ring Road, sits what was once the heart of the global financial industry’s back office. Before the pandemic, this cluster of glass-and-steel towers housed thousands of employees at firms like Goldman Sachs Group Inc. and UBS Group AG who played critical roles in everything from risk management to customer service and compliance.

Commodities boom sends bulk shipping costs to decade highs; China’s ‘insatiable appetite’ for iron ore is key factor in surge in dry bulk index
Harry Dempsey and Neil Hume – FT
Rates for ships carrying commodities that fuel global industries and keep the world fed have soared, raising hopes of a turnround in fortunes for the embattled dry bulk shipping sector.

China factory gate prices climb on global commodities boom; Producer price index rises 6.8% in April after being stuck in negative territory for much of 2020
Thomas Hale and Alice Woodhouse – FT
The price of goods leaving factories in China rose at the fastest pace in more than three years, on the back of a rally in commodities supported by the country’s economic recovery.

Robinhood’s Big Gamble; In eliminating barriers to investing in the stock market, is the app democratizing finance or encouraging risky behavior?
Sheelah Kolhatkar – The New Yorker
Early on the morning of January 19th, Cody Herdman woke to the vibration of his smartphone alarm under his pillow. He immediately checked the finance app Robinhood for the trading price of a company called GameStop. Herdman, who is nineteen, is a freshman computer-science major at Dakota State University, where until recently he played center for the Dakota State Trojans football team, and he had been investing in the stock market for a month.

Biggest Crypto Exchange Binance Briefly Stopped Withdrawals
Lynn Thomasson and Joanna Ossinger – Bloomberg
Exchange disruptions are relatively common in crypto trading; Binance co-founder pointed to system maintenance work
Binance Holdings Ltd., the largest cryptocurrency exchange, briefly suspended withdrawals on Monday. The company made the announcement on Twitter that it had stopped withdrawals, and then about half an hour later said they had resumed. Changpeng Zhao, the Binance co-founder who goes by CZ, said by text message that “we sometimes have to do some system maintenance work,” without elaborating further.

Gas Stations Run Dry as Pipeline Hacking Will Take Days to Fix
Joe Carroll, Andres Guerra Luz, and Jill R Shah – Bloomberg
White House says there are fuel shortages in southeast U.S.; Colonial won’t substantially restore service until the weekend
Gas stations along the U.S. East Coast are starting to run out of fuel as North America’s biggest petroleum pipeline fights to recover from a cyberattack that has paralyzed it for days.

U.S. Fuel Crisis Sparks Refiners to ‘Smash and Grab’ Tankers
Elizabeth Low – Bloomberg
Marathon, Valero, P66 seek tankers; rates surge: brokers; Colonial’s shut pipe causing pockets of oversupply, shortage
Oil tanker charter rates skyrocketed in the U.S. with refiners scrambling for ships to store fuel that has nowhere to go due to a cyberattack on the country’s main pipeline. Companies such as Marathon Petroleum Corp, Valero Energy Corp and Phillips 66 were in the process of chartering several oil tankers for floating storage, according to shipbrokers who asked not to be identified. Ships can serve as offshore tanks during unexpected oversupply situations, such as last week’s shutdown of the Colonial Pipeline that halted fuel flows from refineries to customers along the East Coast.

US employers struggle to find willing workers after pandemic year; Jobless insurance sparks polarising debate as Joe Biden promotes stimulus plans
Taylor Nicole Rogers – FT
President Joe Biden defended his economic record on Monday as US jobs data reveal a puzzling pair of facts: millions remain unemployed after losing work in the pandemic, but businesses say they can’t find enough people to hire.

US opens debate over cyber ransom payments after pipeline hack; White House says companies ‘face a very difficult situation’ on compensating attackers
James Politi and Katrina Manson, Derek Brower and Myles McCormick and Hannah Murphy – FT
The White House has opened a debate over the merits of companies making ransom payments to cyber attackers after a group of hackers shut down a US oil pipeline over the weekend, highlighting the seriousness of the threat to critical infrastructure.

Virtu RFQ-hub hits $29.7 billion record quarterly volume; The new record $29.7 billion in quarterly notional trading volume at Virtu surpassed the previous quarterly record in single stock options by 37%.
Annabel Smith – The Trade
The bilateral request-for-quote platform from Virtu Financial has reached a new quarterly notional trading volume, hitting $29.7 billion in the first quarter of this year. The new record achieved in the first quarter for Virtu’s RFQ-hub surpassed the previous quarterly record in single stock options by 37%.

IOSCO Sees Strong Support For Its Vision For An International Sustainability Standards Board Under The IFRS Foundation
To support its work on securities issuers’ sustainability-related disclosures, the Sustainable Finance Taskforce (STF) of the International Organization of Securities Commissions (IOSCO) held two roundtables on 26 April and 7 May 2021– the latter jointly organized with the World Economic Forum (WEF). The objective of the roundtables was to engage in a constructive dialogue with global stakeholders on IOSCO’s priorities to enhance the reliability, comparability and consistency of sustainability-related disclosures and collect views on the practical implementation of a global system architecture for these disclosures.


England Reports Zero Covid Deaths for First Time in 14 Months
Neil Callanan – Bloomberg
England reported no deaths from Covid-19 in its latest daily update, a milestone that highlights the effectiveness of the U.K.’s vaccine program in stopping the spread of the disease. Sunday was the first day without any recorded deaths in England since the pandemic took hold in March of last year. More than 112,000 people have died since then, with the first wave in Spring 2020 followed later in the year by the emergence of a highly transmissible U.K. variant of the coronavirus.

Johnson gives go-ahead to further lockdown easing in England; Hint that social-distancing restrictions could be lifted completely in the summer
Sebastian Payne and Alice Hancock – FT
Boris Johnson hinted on Monday that social-distancing restrictions will come to an end this summer as the UK prime minister confirmed the next stage of lockdown easing in England.

Inside a Mumbai Pop-Up Hospital Providing Free Covid Treatment to Thousands
Rafiq Maqbool – AP
Inside Mumbai’s BKC jumbo field hospital, a health worker adjusts the oxygen mask of a COVID-19 patient as doctors, nurses and specialists keep a close eye and monitor hundreds of sick people.

There’s a Precedent for Overriding Patents on Vital Medications; More than 20 years ago, South Africa, frustrated with the high cost of AIDS drugs, passed a law giving the state the right to import cheap generic versions without permission from patent holders.
Joe Nocera – Bloomberg
The Origin
The idea of voiding patents on Covid-19 vaccines so poorer countries can have access to them—which President Joe Biden has proposed—sounds radical, but it’s been done before. During the AIDS crisis, one of the hardest-hit countries was South Africa. In 1997 the government, frustrated that HIV/AIDS drugs were too costly for its citizens, passed a law giving the state the right to import cheap generic versions without getting permission from the pharmaceutical companies that held the patents.

Singapore on ‘Knife’s Edge’ as Case Spike Risks Labor Shortage
Philip Heijmans and Michelle Jamrisko – Bloomberg
Local cases could go either way over next few weeks: Wong; Foreign worker entry approval wait may be more than six months
Singapore, battling an uptick in Covid-19 cases after months of success in containing the pandemic, says the virus situation is at a tipping point as it grapples with the costs of imposing more restrictions.

German Investor Confidence Jumps to 21-Year High on Vaccines
Carolynn Look – Bloomberg
ZEW expectations gauge rises to 84.4 vs. est. increase to 72.0; Pace of vaccinations has accelerated in recent weeks
Investor confidence in Germany’s economic recovery jumped to the highest level in more than 21 years after the country’s vaccine rollout gained speed. The ZEW institute’s gauge of expectations rose to 84.4 in May from 70.7 the previous month. A measure of current conditions improved, as did prospects for the euro zone.

New US Covid infections fall to lowest level in 11 months; White House adviser says pandemic nearly ‘on the run’ thanks to vaccination campaign
Peter Wells – FT
New coronavirus infections in the US have fallen to the lowest level in 11 months, a sign that the country remains on track to regain a sense of normality by the summer.

Norway and Sweden’s vaccine rollouts fail to engage at-risk migrant groups; Worried policymakers turn to community outreach to combat scepticism over jab safety
Richard Milne – FT
The conversation outside the fruit and vegetable store in eastern Oslo underscores why policymakers in the Nordics are so worried about a Covid-19 paradox: those hardest hit by the pandemic in Norway and Sweden are being vaccinated most slowly.

Covid batters India’s aspiring middle classes; More affluent under siege from second wave that threatens country’s economic recovery
Benjamin Parkin and Jyotsna Singh – FT
When Ram Prakash died after a feverish and breathless week, his wife and 16-year-old daughter’s heartbreak was compounded by fear that the modest middle-class safety net he had knitted together might be ripped apart.

US drugs regulator authorises BioNTech/Pfizer Covid vaccine for under-16s; FDA extends emergency authorisation after studies suggest jab is 100% effective
Kiran Stacey in Washington and Nikou Asgari – FT
Adolescents in the US are set to get vaccinated against Covid-19 after the country’s drugs regulator allowed BioNTech/Pfizer’s vaccine to be given to under-16s for the first time.

FDA Authorizes Pfizer-BioNTech Covid-19 Vaccine for 12- to 15-Year-Olds; First shot approved in U.S. for children paves way for inoculations before summer camps, start of next school year
Jared S. Hopkins, Thomas M. Burton and Jennifer Calfas – WSJ
U.S. health regulators have for the first time cleared a Covid-19 vaccine’s use in children, paving the way for many to be immunized before summer camps and the start of the next school year.

Exchanges, OTC and Clearing

DTCC approved as data repository for upcoming US swaps reporting rules; The DTCC has become the first security-based swap data repository in the US following the regulator’s approval for the new swaps reporting regime.
Annabel Smith – The Trade
The Depository Trust & Clearing Corporation (DTCC) has gained regulatory approval from the US watchdog to offer security-based data reporting services in the US ahead of new swaps reporting rules. Following the approval from the Securities and Exchange Commission (SEC), DTCC is the first security-based swap data repository (SBSSDR) in the US that can accept transaction reports as part of Security-based Swap Reporting (SBSR) requirements.

Upstart Crypto Exchange FTX Surges Toward Top of Trading Ranks
Vildana Hajric – Bloomberg
FTX, the digital-assets trading platform launched two years ago by Sam Bankman-Fried, said it handled enough volume last month to make it one of the largest crypto exchanges.
FTX posted more than $400 billion in trading volume in April, the firm said in a statement Monday. That amounts to about $14 billion per day and marks a 25-fold increase from the same period last year.

Initial public offering of APONTIS PHARMA AG in the Scale segment of the Frankfurt Stock Exchange
Deutsche Börse Group
APONTIS PHARMA AG (ISIN: DE000A3CMGM5 ) has been listed in the Scale segment of the Frankfurt Stock Exchange since today . At the start of trading, the shares were listed at EUR 18.90. The issue price was 19.00 euros.

Effective Dates for Spot Month Position Limits in the June 2021 Core Products
CME Group
Spot month limits are effective at the close of trading on the dates listed (in chronological order):

Performance Bond Requirements: Agriculture Margins – Effective May 11, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Shanghai Gold Exchange Data Highlights (Volume & Amount) April 2021
The monthly report of data highlights (April, 2021) is now available online.

CME Group Grows Suite of CVOL Indexes to Include Key Measures of Implied Volatility in Treasuries, Agriculture, Energy, Metals and Cross-Commodities
PR Newswire
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has added several new benchmark indexes to its suite of CME Group Volatility Indexes (CVOL). Together with the previously introduced indexes, CME Group now offers 40+ CVOL Indexes across nearly every major investible asset class. Beginning today, market participants can now access implied volatility information across five new multi-product indexes on Treasuries, agriculture, energy, metals and commodities, as well as several single-product benchmark indexes based on CME Group’s highly liquid options markets.

Capacity Building Opportunities Across Asset Classes At NGX Limited
Capacity building remains a high priority for Nigerian Exchange (NGX) Limited in its new era of operations. A wholly owned subsidiary of Nigerian Exchange Group (NGX Group Plc), NGX Limited has hosted several virtual training sessions since its emergence following the demutualization of the now defunct Nigerian Stock Exchange. These sessions continue to enhance the knowledge of capital market players across multiple asset classes including equities, fixed income, Exchange Traded Funds (ETFs) and derivatives trading.

Global Exchanges Recover From March Losses, FTSE Mondo Visione Index Up 3.3.% In April – Up 29.4% Over 12 Months Mondovisione
Global exchanges rebounded from the losses suffered in February and March with the FTSE Mondo Visione Index gaining 3.3% in April. The index closed at 74,469.49 points, up from the March close of 72,106.76, but below a new closing all-time high of 78,106.07 set on 19 February 2021.

Singapore Exchange Reports Jump in FX Volume during April 2021; INR/USD futures jumped 38% to 1.4 million contracts last month.
Bilal Jafar- Finance Magnates
Singapore Exchange (SGX) announced its market statistics for April 2021 today. The exchange reported strong growth in FX volume as the total number of contracts reached 2.2 million last month.

China exchanges move to cool iron ore, steel price rally
The Economic Times
China’s commodity exchanges on Monday moved to raise trading limits and margin requirements for some iron ore contracts and reinstated fees on steel futures as a blistering rally in the ferrous metals complex showed no signs of abating.


ALT/AVE Launches docStribute, First of Its Kind Distributed Ledger Solution Built on Hedera Hashgraph Distributed Network Helping Combat the Financial Industry’s Underreported Paper Waste Problem; docStribute provides financial institutions with a secure digital solution to distribute mandatory and regulated documents to customers, helping to combat the underreported paper waste problem plaguing the financial services sector.
ALT/AVE, the London-based Regtech startup helping to combat the underreported paper waste problem faced by financial institutions, today launches its distributed ledger solution, built on the Hedera Hashgraph network. The new docStribute solution enables financial institutions to distribute mandatory and highly regulated documents to customers, offering a secure and sustainable digital alternative to sending documents to customers via post, through which the financial services sector is currently estimated to distribute 5.2bn pieces of paper at a cost of £1.7bn a year, equivalent to 2.4 million trees.

IHS Markit’s thinkFolio and Wave Labs Partner to Deliver Insights and Operating Efficiencies to Fixed Income Managers
IHS Markit
thinkFolio from IHS Markit is partnering with Wave Labs, a firm that has created fixed income tools that deliver a functional window through a trader’s perspective. Wave Labs is an example of a new breed of specialists stepping in to fill the void left by the established Execution Management System (EMS) vendors who are challenged to keep up in the technology arms race that has a high bar for success for each asset class. This pattern is also evident in other areas of fixed income trading, as alternative liquidity providers challenge the established players with advanced technology that offers unique insights, workflows and a variety of flexible and innovative trading protocols.

Facebook Ordered to Stop Collecting German WhatsApp Data
Karin Matussek – Bloomberg
Hamburg regulator issues a three-month emergency order; Watchdog calls new terms intransparent and overly broad
Facebook Inc. was ordered to stop collecting German users’ data from its WhatsApp unit, after a regulator in the nation said the company’s attempt to make users agree to the practice in its updated terms isn’t legal.

Why fintech companies are winning big in banking and finance
Joe Devanesan – Tech HQ
Traditional banks have long reigned over the financial services industry. When the 2008 financial crisis shook the economy this began to shift, and new restrictions were put in place to pave the way for disruptors in the finance industry and challenger banks to emerge. The new contenders — operating on tech-powered platforms and with digital features — are set to offer new-age banking services that capitalize on “data-fueled, hyper-personalized experiences in real-time.” A phrase used in the new Capgemini World Fintech Report 2020 that captures the appeal of the innovative service and challenger banks. It also gives insight into the likely reason why 40 percent of Gen Z customers – notoriously tech-savvy and demanding – are unsatisfied with the existing services at their current banks and are ready to leave within the next year: they simply don’t feel catered to.

Fintech’s Role in Financial Wellness and Mental Health
Polly Jean Harrison – The Fintech Times
Financial wellness, the state of being in control of one’s finances and enjoying a degree of financial freedom, is a key component of mental health. Anybody who has felt a mortgage payment looming or feared the thud of a credit card bill hitting the doormat knows this. With some 77% of British residents reporting being stressed about money, financial wellness is a serious issue. Michael Kent, Chairman and Cofounder of Azimo, a global money transfer provider, shares his thoughts on how fintech can help improve financial and mental health.

New Fintech Delivery Model Transforming Financial Services Through Mutualized Services, Highlighted in Whitepaper from Broadridge
PR Newswire
As the financial services industry confronts the new realities of a post-pandemic era, many firms are beginning to shift toward mutualization models for their technology and operations, according to a new whitepaper released today by global Fintech leader Broadridge Financial Solutions, Inc. (NYSE:BR). Mutualization is a model where participants more quickly gain access to new technologies, scalability, and resiliency while saving time, money, and risk; by sharing in the benefits of an industry solution provided by a reliable, trusted, and independent third party.

Tier1 Taps FinTech Veteran James C. Mitchell to Accelerate Global Expansion
PR Newswire
Tier1 Financial Solutions (“Tier1”), a leading provider of client relationship management (“CRM”), AML compliance and fraud prevention solutions, has appointed James C. Mitchell as Managing Director (International), responsible for accelerating the adoption of the company’s advanced CRM and compliance solutions across Europe, and driving further global expansion in Asia Pacific. Based in London, Mitchell has over 18 years’ experience in the financial and capital markets space. Before joining Tier1, Mitchell was Sales Director for Capital Markets EMEA at FIS, where he oversaw their EMEA post-trade and regulatory compliance sales team. Prior to this, he was Director of Sales at Reval for over seven years, and has also held various senior sales roles at BottomLine Technologies, SunGard and Wall Street Systems.

Keeping fintech’s promise: A modest proposal
George Selgin – The Hill
The Federal Reserve is contemplating new rules for granting “master accounts” to “fintechs” — firms that offer high-tech payment services but aren’t eligible for ordinary bank charters. Firms with Fed master accounts can deposit funds in them and move them expeditiously along the Fed’s electronic rails. All ordinary banks have such accounts. But so far, fintechs don’t. The Fed can change this. And, despite the bank lobby’s concerted opposition, it should.

Finastra: Redefining finance for good with technology
William Girling – Fintech Magazine
If the pandemic has demonstrated anything, it’s that fintech can truly be a force for societal good and an anchor that provides surety during even the most uncertain times. Although this assessment is no surprise to industry leader Finastra, the potential for positive change has, in its view, reached a pivotal moment. Accelerated digital transformation around the world is widening the company’s scope to shape and be a part of the financial services industry’s new reality in every sense, from enabling broader financial inclusion to investing in the environment and developing its renowned platform.

Beijing Tries to Put Its Imprint on Blockchain; China offers cheap server space, other enticements, in effort to spread its vision
James T. Areddy – WSJ
China, home of the Great Firewall, is trying to bring order to a scrappy corner of cyberspace—and in the process put its mark on the next-generation internet. A Beijing-backed initiative aims to shape a category of online record-keeping called blockchain. Most commonly associated with bitcoin, blockchain holds broad promise for business and other uses but has been hobbled by a lack of uniform technical standards.

Abel Noser acquires TCA provider Trade Informatics; The combined entity will pool the resources of Trade Informatics and Abel Noser, establishing what the pair called the largest trade data universe of its kind.
Annabel Smith – The Trade
US agency broker Abel Noser has confirmed it will acquire New York-based equities transaction cost analysis (TCA) platform provider Trade Informatics to expand its data and brokerage services.

Scottish Equity Partners’ Investment Set To Fuel RegTech Revolution With FundApps
Scottish Equity Partners (SEP) has completed a significant growth equity investment in FundApps, one of the world’s most successful Regulatory Technology (RegTech) companies.

South Africa’s Largest Fund Administrator Goes Live With Temenos
Temenos (SIX: TEMN), the banking software company, today announced that Curo Fund Services, South Africa’s largest third-party administrator, has gone live with Temenos Multifonds Global Accounting platform, completing the first phase migration of funds from its five legacy systems to a single instance of Temenos’ award-winning funds administration platform.


Bitcoin ETF Approval Odds Grow Longer After Gensler Critique
Katie Greifeld and Claire Ballentine – Bloomberg
At least nine new U.S. crypto ETF filings stoked optimism regulatory approval was close. Wall Street’s top cop all but doused it with a string of comments last week.

Micro Bitcoin Futures Surpass 100,000 Contracts Traded
PR Newswire
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Micro Bitcoin futures volume surpassed 100,000 contracts in the new contract’s first six days of trading. “We are pleased to see strong customer adoption and support for our new Micro Bitcoin futures contract early on,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. “Together with our existing, full-sized Bitcoin futures, this new, smaller contract further strengthens our ability to help a broad array of clients – from institutions to sophisticated, active traders – to manage their bitcoin price risk.”

UBS Explores Offering Crypto Investments to Rich Clients
Ambereen Choudhury, Chanyaporn Chanjaroen, and Marion Halftermeyer – Bloomberg
Swiss bank seeing strong demand from wealthiest investors; Follows U.S. and Swiss rivals responding to client demand
UBS Group AG is in the early stages of planning to offer wealthy customers digital currency investments, joining U.S firms in seeking to give broader access in response to client demand. The Swiss firm is exploring several alternatives for offering the asset class, people familiar with the plan said. Any investment offering would be a very small portion of the clients’ total wealth because of the volatility, while options include investing through third party investment vehicles, one of the people said, declining to be identified as the details are private.

Gemini Crypto Exchange Lets Dogecoin Holders Earn 2.5% APY
Samyuktha Sriram – Benzinga
Winklevoss-owned crypto exchange Gemini announced on Sunday that investors holding Dogecoin could earn 2.5% APY through Gemini Earn.

Dogecoin May Be a Hustle, But It’s the People’s Hustle; Even if it’s a joke, Musk has tapped into a mood that makes millions of people feel like insiders.
Tim Culpan – Bloomberg
“Yeah, it’s a hustle.” And with that, Elon Musk as host of Saturday Night Live brought down the value of Dogecoin by 35% and cemented it firmly in the minds of millions more retail investors, forcing us all to wait and see whether such pessimism will be their final verdict.

The Winklevoss Twins Cold-Called Daniel Arsham to Sell Him on NFTs; Two years later, the superstar artist drops into a cooling market.
James Tarmy – Bloomberg
Two years ago, when Tyler Winklevoss acquired the online marketplace Nifty Gateway with his brother Cameron, NFTs were still a long way from going mainstream. To popularize the site, which sells digital artwork tied to non-fungible tokens (essentially digital certificates of authenticity), “Our feeling was great content and great creators was what would make the difference,” Tyler says in a phone interview. So the Winklevoss twins drew up a wishlist of artists they wanted to work with and began to send them direct messages on Twitter and Instagram.

Crypto, Picassos Headline Strangest Auction Week in Memory; The bellwether evening auctions at Christie’s and Sotheby’s are unprecedented.
James Tarmy – Bloomberg
For the first time in 14 months, the auction calendar is behaving as it used to before Covid-19, as rivals Christie’s and Sotheby’s gear up for a week of marquee evening and day sales in New York. The events will begin on May 11 and end on May 14. The phrases “masterpiece” and “museum-quality” are once again straining from overuse by auction specialists, and Sotheby’s will even allow in-person bidders, though in a highly limited capacity. In other words, it should be a return to normal.

Elon Musk Runs Twitter Poll on Whether Tesla Should Accept Dogecoin
Jamie Crawley – Coindesk
Elon Musk has started a Twitter poll asking whether or not Tesla should accept dogecoin. The poll had received more than 500,000 votes within 20 minutes of its posting, with the overwhelming majority (~75%) replying “Yes.” The Tesla CEO appeared on “Saturday Night Live” on May 8 in which some jokes about DOGE triggered a downturn in the meme-based crypto’s price. Elon Musk has been known previously to discuss crypto on his Twitter page, first announcing via a tweet in March that Tesla vehicles could be purchased with bitcoin.

NY lawmaker behind proposed crypto mining moratorium wants to study renewable energy alternatives
Kollen Post – The Block
A New York lawmaker has proposed a new bill that aims to study using renewable energy at crypto mines in the state. On May 7, State Senator Kevin Parker introduced Senate Bill S6584. The bill calls on New York’s energy authority “to conduct a study on powering cryptocurrency mining facilities with renewable energy.” The bill notes that “cryptocurrency mining centers are an expanding industry in the State of New York,” a trend that has proved controversial due to the energy needs of proof-of-work blockchains like bitcoin and public perceptions about the network’s carbon footprint.

What Is An NFT? How Investors Can Profit From This New Digital Asset Trend
With so much buzz around non-fungible tokens right now, many investors are asking: what is an NFT? Loup Ventures managing partner Doug Clinton breaks down the allure of the NFT craze, how seriously investors should be taking this new trend and how they can get exposure to these digital assets in the stock market.


Robinhood deserves ‘close look’ from SEC: Elizabeth Warren
Max Zahn with Andy Serwer – Yahoo Finance
SEC Chair Gary Gensler in House testimony on Thursday criticized apps that “gamify” stock trading and the potential conflict of interest for market makers that profit from the execution of high-volume trades, hinting at potential new rules that would apply to the popular trading app Robinhood and market maker Citadel Securities.

If You Think Taxes Will Go Up, Consider Rothifying Your Money; Conversion of a traditional IRA into a Roth IRA can be a smart move for some people.
Peter Coy – Bloomberg
The appeal of a traditional Individual Retirement Account is that you put money into it tax-free and don’t pay tax until you take money out and you’re presumably in a lower bracket. But your tax bracket in retirement could be higher than anticipated. Maybe you’ll have more income than you thought (great!), or maybe Congress will raise rates (not so great!).

Rahm Emanuel to be appointed US ambassador to Japan; Former Chicago mayor will boost Washington’s alliance with Tokyo as China’s influence grows
Demetri Sevastopulo – FT
Joe Biden has chosen Rahm Emanuel, a former congressman and Chicago mayor, to be US ambassador to Japan, according to eight people familiar with personnel discussions inside the White House. The US president will name Emanuel, who was chief of staff to Barack Obama and has close ties to Biden, this month in a big package of ambassadorship nominations, several of the people said.

Europe’s phantom political centre risks fuelling populism; New coalitions and electoral strategies disguise opportunism and an absence of ideological substance
Catherine Fieschi – FT
In Europe, the idea of the political centre has never been so fashionable. Centrism seems to be the balm of choice to soothe the populist wounds of European democracies.


Commissioner Quintenz to Participate on a Panel at ISDA’s 35th AGM

SEC Approves DTCC’s GTR as SBSDR.; DTCC’s Global Trade Repository (GTR) service to offer new trade reporting capabilities in support of forthcoming SEC rules, providing the industry with a single reporting platform across asset classes and markets
The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today announced that the U.S. Securities and Exchange Commission (SEC) has approved the DTCC Data Repository (U.S.) LLC (DDR) application to operate as a registered security-based swap data repository (SBSDR).

F.B.I. Asking Questions After a Pension Fund Aimed High and Fell Short; The Pennsylvania teachers’ retirement fund put more than half its assets into risky alternative investments. The math didn’t work out, spurring an investigation.
Mary Williams Walsh – NY Times
The search for high returns takes many pension funds far and wide, but the Pennsylvania teachers’ fund went farther than most. It invested in trailer park chains, pistachio farms, pay phone systems for prison inmates — and, in a particularly bizarre twist, loans to Kurds trying to carve out their own homeland in northern Iraq.

Suspicious website alert:
ASIC is alerting investors about a suspicious site, The site falsely claims it is associated with Limestone FX Pty Ltd, an authorised representative of Baileyhenry Capital Group Pty Limited, an Australian financial services (AFS) licensee. The licensee and authorised representative have advised ASIC that they do not have any connection to the website.

SEC Awards $22 Million to Two Whistleblowers
The Securities and Exchange Commission today announced awards totaling approximately $22 million to two whistleblowers whose information and assistance were of crucial importance to successful SEC enforcement actions brought against a financial services firm.

Webinar Series: Registration System Changes
As FINRA’s industry technology developments continue, the systems and work processes used by firms — and industry professionals — to manage registration-related information are also changing. Join us during this webinar series as we discuss topics related to the following areas:

Australian Financial Markets Association Welcomes Prospect Of More Efficient Cross Border Financial Regulation
The Australian Financial Markets Association (AFMA) has welcomed the Government’s announcement in the Budget that it will consult on options to restore the previous regulatory relief for Foreign Financial Service Providers (FFSPs) who are licensed and regulated in jurisdictions with comparable financial service rules and obligations, or have limited connection to Australia.

ASEAN Capital Markets Connectivity To Be Enhanced With The Philippines’ Entry Into The ASEAN Collective Investment Schemes Framework
The Securities Commission Malaysia (SC), the Monetary Authority of Singapore (MAS), and the Securities and Exchange Commission, Thailand (SEC Thailand) have signed a supplemental Memorandum of Understanding (Supplemental MoU) with the Securities and Exchange Commission Philippines (SEC Philippines) to admit SEC Philippines as a new signatory to the ASEAN Collective Investment Schemes (CIS) Framework. The entry of the Philippines into the Framework is the latest step towards enhancing capital market connectivity in the region.

Investing and Trading

Markets Are In for an Interest-Rate Surprise; A 4.5% peak in the Fed’s target rate isn’t out of the question.
Bill Dudley – Bloomberg
When Treasury Secretary Janet Yellen recently made the innocuous observation that the Federal Reserve might at some point have to increase interest rates to keep inflation in check, financial markets became so flustered that she had to revise her comments. She was right the first time. I would go even further: Not only will the Fed have to raise rates, but rates are likely to go much higher than investors anticipate.

Markets Threatened by Clowns With Rotating Planks; There may be more whacks around the head for investors after a counterintuitive response to disappointing jobs data.
John Authers – Bloomberg
Friday’s U.S. unemployment data, which were far, far worse than had been expected, are still having an impact. Their effect was like that slapstick comedy moment when a clown holding a plank turns and inadvertently whacks his friend on the side of the head. Just as the “straight man” gets back on his feet, the clown turns again and whacks him on the other side.

A MoMA Trustee’s $40 Million Art Complex Shifts Focus to Brooklyn; In industrial East Williamsburg, the Amant Foundation will have public exhibitions and unrestricted residencies that reconsider the artist-patron relationship.
James Tarmy – Bloomberg
Arts patron Lonti Ebers has announced that her sprawling 21,000-square-foot compound in Brooklyn, N.Y.’s East Williamsburg section will open as an arts destination and cultural hub on June 5. The Amant Foundation, which covers four buildings on Grand and Maujer streets, was designed by the architecture firm SO-IL, and includes art galleries, a bookstore and cafe, offices, art studios, and a performance space. It’s about a 20-minute subway ride on the L train from Manhattan’s Chelsea gallery district.

Global Scramble for Commodities Sends Shipping Prices Soaring
Thomas Biesheuvel, Prejula Prem, and Annie Lee – Bloomberg
Baltic Exchange’s dry index near highest since June 2010; Iron ore has surged above $200 a ton amid accelerating demand
The super-charged rally in commodity prices has made shipping more expensive than any time in the past decade, reviving the fortunes of an industry that was on its knees just a year ago. The scale of the boom, with red-hot demand almost everywhere on the back of a broad economic recovery and vast stimulus programs, has stretched global shipping as products such as soybeans and logs compete with traditional cargo mainstays of coal and iron ore. The surge also highlights the pressures the commodities industry is under to meet that growth.

Environmental, Social and Corporate Governance

Reputation fears propel surge of ESG investment in Brazil
Michael Stott – FT
When Brazilian president Jair Bolsonaro committed to ending illegal deforestation in the Amazon by 2030, the sceptics had a field day. Some noted that his pledge, made at a US-sponsored climate summit last month, was an old one: first made by his predecessor Dilma Rousseff in 2015 (and derided even then for its lack of ambition). Others joked that Bolsonaro would achieve the target by completing the destruction of the entire rainforest by 2029. Critics pointed out that, despite promising to double resources for the enforcement of environmental laws, Bolsonaro approved a budget for 2021 which slashed enforcement funding by more than a third.

Hair-raising territory: Is ESG investment across emerging markets like walking a tightrope?
Pedro Gonçalves – Investment Week
The destruction Covid-19 wrought upon markets has given ESG investing across emerging markets a new lease of life, according to investment professionals, who acknowledge the market area is not a typical hunting ground for environmentally and socially conscious investors. Funds that follow ESG principles captured record amounts of inflows last year, with asset managers pulling in $51.1bn of new assets – more than doubling 2019’s take -according to the latest figures from Morningstar.

The ESG Category Is Shooting for $1 Trillion
ETF Trends via Nasdaq
Socially responsible investments that track factors like environmental, social, and governance principles have been drawing a lot of attention lately, and the category could begin to rival some other mainstream investments. BlackRock’s head of iShares Americas, Armando Senra, argued that ESG investmets could grow to $1 trillion in assets by 2030, CNBC reports.

Japan Urged to Push Pension Funds to Adopt ESG Principles
Ayai Tomisawa and Rie Morita – Bloomberg
The world’s biggest industry body for sustainable investing wants pension funds to help pick up the slack for Japan, which is lagging in integrating environmental, social and governance factors into investment decision-making. Michiyo MorisawaSource: Michiyo Morisawa Such investors, whose behaviour is likely to influence other money managers, have been slow to adopt the United Nations-backed Principles for Responsible Investment, according to Michiyo Morisawa, the PRI’s Japan head. The government needs to push public pension funds to commit to ESG in order to spur a wholesale shift toward sustainable investing in the country, she said.

Goldman Laments ‘Noise’ of ESG Data Barrage Amid New Rules
Frances Schwartzkopff – Bloomberg
The head of sustainable finance at Goldman Sachs Group Inc. says companies are starting to provide more data on their climate and social metrics than is useful for investors. John Goldstein, who’s been running the Wall Street firm’s sustainable finance group since it was created in 2019, says the risk is that asset managers lose track of what’s important, and businesses buckle under the paperwork as they try to demonstrate their commitment to environmental, social and governance goals. “My mantra tends to be: if we could have better data on fewer things that matter more,” Goldstein said in an interview.

Letter: Millennials are using their tech tools to make money
Mark Zashin – FT
Your article, “Millennials may forever change investing”, (Opinion, May 7) somehow misses the mark despite the great Churchill quote. Millennials are still concerned, like many other investors, with their return on investment and how much money they have added to their portfolios. As active investors, they have roamed into areas like GameStop and Bitcoin while using Reddit and social media to get their information. On that tune, they follow investor Peter Lynch, but instead of going to the malls, they get their information online and using various websites. Their technological acumen is a sharp contrast to the old line world of investors—well at least most of them.

Why the US Is the Top Destination for Renewable Investments
ETF Trends via Nasdaq
In application and as an investment theme, renewable energy is an international concept. However, some markets are more attractive than others. The U.S. is one of the best clean energy investment environment, making a strong case for asset like the First Trust NASDAQ Clean Edge Green Energy Index Fund (NasdaqGM: QCLN).

Wallflowers of the Green Energy Boom; Energy-efficiency projects may lack the excitement of wind turbines or hydrogen but offer solid paybacks for building owners based on existing technology
Rochelle Toplensky – WSJ
Low-energy lightbulbs and rooftop solar panels can cut homeowners’ power bills. Investors can likewise benefit from the green retrofit of public and commercial buildings as governments and companies set ambitious decarbonization targets.


SocGen to Expand Corporate Banking After Trading Losses
Alexandre Rajbhandari – Bloomberg
Lender joins peers in seeking ways to reduce volatility; CEO Oudea stops short of more radical cuts to equities trading
Societe Generale SA plans to rely less on trading as Chief Executive Officer Frederic Oudea attempts to turn the firm’s investment bank around following steep trading losses on complex derivatives last year. The Paris-based lender on Monday said the business will focus more on corporate banking, allocating more capital to financing, advisory and transaction banking. The firm expects revenue growth from those areas to help lift returns at the investment bank above 10% by 2023.

Ark Invest’s flagship fund sinks to lowest level since November; Cathie Wood’s vehicle hit hard as air comes out of speculative tech stocks
Michael Mackenzie, Aziza Kasumov and Eric Platt – FT
Cathie Wood’s flagship investment fund of technology stocks has fallen to its lowest level since November, with some of its biggest holdings including Tesla down a tenth or more already this month.

TPG makes ex-Goldman banker Jon Winkelried sole chief executive; Co-founder James Coulter becomes executive chair in latest transition of power in the private equity industry
Mark Vandevelde – FT
TPG co-founder James Coulter has relinquished his role as co-chief executive of the investment manager, leaving Jon Winkelried, the former Goldman Sachs banker who has shared the top job since 2015, in sole charge of the $91bn group.

UK hedge fund Gladstone wrongfooted by powerful market rotations; Bets against a clutch of European stocks disrupted by improving global outlook
Laurence Fletcher – FT
Gladstone Capital, one of Europe’s top-performing hedge funds of recent years, has been hit by a rebound in stocks that suffered early in the pandemic, the latest sign of how many managers are struggling to navigate 2021’s market swings.

UBS dangles $40,000 bonuses to slow exodus of overworked junior bankers
Lydia Moynihan – NY Post
Swiss bank UBS will offer its junior banking analysts a $40,000 bonus when they are promoted to the associate level — the latest bid by financial giants to retain younger workers amid an explosion in dealmaking.

Commerzbank outsources equities trading and research to ODDO BHF; ODDO BHF will be used by Commerzbank across its equity brokerage and equity research divisions following plans to exit the market.
Annabel Smith – The Trade
Commerzbank has outsourced its equity research and brokerage divisions to Franco-German financial services firm ODDO BHF under its radical restructure plans. Under terms of the agreement, OBBO BHF will be the sole partner of Commerzbank for its equity brokerage and research, which the investment bank confirmed it would no longer be providing in-house.


Norway to Spend Record $50 Billion of Oil Wealth on Recovery
Ott Ummelas – Bloomberg
Norway is relying on its $1.3 trillion sovereign wealth fund more than ever, as the country ratchets up spending without turning to bond markets to provide economic relief from the pandemic. The government of Prime Minister Erna Solberg, facing an election in September, is raising this year’s so-called structural non-oil fiscal deficit by more than 9% to 403 billion kroner, or almost $50 billion, it said on Tuesday. Government withdrawals, as a share of the world’s biggest wealth fund, will reach 3.7%, compared with the central bank’s estimate of 3.3%.

A 1,100-Year-Old Poem Cost Meituan’s Outspoken CEO $2.5 Billion
Coco Liu, Yoojung Lee, and Ishika Mookerjee – Bloomberg
Wang Xing’s ill-timed post ignites a frenzy of speculation; Episode shows depth of market uncertainty about tech crackdown
It took just 28 Chinese characters on an obscure social media platform to ignite a controversy that’s rattled the country’s tech industry. Meituan CEO Wang Xing lost $2.5 billion of his wealth after he posted verses from a millennium-old poem about the misguided attempts of China’s first emperor to quash dissent. Wang, a usually plain-speaking engineer who enjoys literary classics, later scrubbed his post and explained he was really calling out the short-sightedness of his own industry, trying to clarify there was no implied criticism of the government. But the damage was done: Meituan shed $26 billion over two days, the biggest loser in a broader tech rout.

What Can China Do to Control Record Commodity Prices?
Bloomberg News
Efforts complicated by policies to cut output and emissions; Nation’s fiscal and monetary policy help determine demand
The surging cost of commodities to industries and households is a threat to China’s economic growth and the purchasing power of its citizenry. As prices soar for everything from the copper and steel used in construction, to the coal that heats homes and powers factories, to the corn that feeds animals, what can Beijing do to control the record-breaking rally?

China’s Coal Futures Hit Record as Exchange Tries to Cool Rally With Fee Hike
Krystal Chia – Bloomberg
Supply disruptions, stockpiling ahead of summer fuel rally; Thermal coal has surged 34% this year, reaching fresh records
Thermal coal futures in China surged to a record high as a severe supply crunch overpowered the exchange’s effort to cool down the breakneck price rally. Prices have rallied 34% so far this year as miners struggle to meet robust demand from the nation’s economic rebound. Safety and environmental inspections, mining accidents and an unofficial ban on Australia coal has disrupted supply and tightened the market. A recent worsening in diplomatic relations with Australia has also given the raw material another boost.

It’s Becoming Easier to Back S. Africa’s World-Beating Rand
Colleen Goko and Vassilis Karamanis – Bloomberg
Currency rallied more than 30% in past year, leading peers; Commodity prices, dollar surplus support further gains
The rand’s 30% gain against the dollar since the height of the pandemic has outstripped emerging-market peers — and the rally may not be over yet. South Africa’s currency has recovered all its losses since it slumped to a record in April last year, and then some. Strong commodity prices and the global search for yield should support the narrative for further gains in coming months. Domestic fiscal metrics — though still far from healthy — are improving along with terms of trade, while the government’s crackdown on corruption is also fueling positive sentiment.

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