Citadel Looms as a Future Fed Primary Dealer; World’s Rich Run to Cash as Trade War Simmers

May 8, 2019

First Read

RCG Weathers Record Cold, Becoming RCG Division of Marex Spectron
Sarah Rudolph – John Lothian News

Rosenthal Collins Group (RCG), the well known Chicago FCM, was recently acquired by London-based Marex Spectron. After a transition that took place over one freezing Chicago weekend, it has been fully integrated into the company and is now the RCG Division of Marex Spectron.

The transition of RCG’s FCM customer business into Marex took place over the weekend of the Super Bowl and, perhaps more notably, during the “polar vortex” that hit Chicago in the beginning of February, sending temperatures down to minus 21 degrees (nearing minus 50 at times with the wind chill factor).

To read the rest of this story, go here.

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Adding More Flexibility and Choice – Andrew Whyte, FIS
JohnLothianNews.com
It was a big year for FIS as the company brought two of its business lines together. In this video, FIS Group President of Post Trade Services Andrew Whyte talks about client trends and the firm’s roadmap for 2019.
Watch the video »

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Hits & Takes
JLN Staff

Free after work and in Chicago today? Oranj’s May After-Hours Fundraiser and Cocktail event benefiting A Leg To Stand On (ALTSO) will take place today from 6:00 p.m. to 9:00 p.m. at Oranj’s Offices. Event sponsors include: Anchor Capital Management Group, Frost Bank, Invesco US, Natixis, Oppenheimer Funds, Redtail Technology and Vestmark. Rally around a great cause in anticipation of ALTSO’s 8th Annual Rocktoberfest – Chicago. Register for free here.

The Micro equity complex of the CME Group continues to blow the doors off new contract volume records with over 486K contracts traded yesterday. By 7:00 this morning, the Micro E-Mini S&P had traded over 37K contracts, which is more than twice as much as yesterday at the same time. And yesterday, the Micro E-Mini S&P and the whole complex exploded with more volume, with the Micro E-Mini S&P trading 100K contracts more than the first day, with a total of 246,945 contracts traded. Open Interest in the Micro E-mini S&P stood at 22,970.~JJL

The Micro E-mini Nasdaq traded 159,366 contracts yesterday and open interest is 4,880. The Micro E-mini Russell had volume of 19,612 and open interest of 18,693. And the Micro E-mini Dow traded 61,858 contracts and had open interest of 12, 276.~JJL

The following comes from a Barron’s story on misconceptions about millennials: “‘There won’t be a generational divide’ when Gen Z passes the millennials to become the largest adult U.S. generation in a few years, ‘suggesting no hiccups in positive economic fundamentals,’ according to a recent report by Morgan Stanley. It all adds up to a ‘youth boom’ that should lift consumption for decades.'”~SD

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Donald Trump Pretended to Be a Corporate Raider, Talking up Stock Prices Before Quietly Selling His Shares: Report
Shane Croucher – Newsweek
During his business career, President Donald Trump pretended to be a corporate raider, using debt to buy shares in a company while suggesting he might soon become a majority owner to boost its value before he sold the holdings quietly to pocket the gains, it is claimed.
bit.ly/2vJN6MS

***** I wonder if the the SEC would consider this manipulation?~JJL

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Financial Marketing and Technology Agency Gate 39 Media Appoints New Director of Technology
Gate39 Media
Gate 39 Media, a full-service financial marketing and technology agency servicing the financial industry, has announced the appointment of Sean Hayes as Director of Technology. In this new role, Hayes will oversee the Chicago-based agency’s WordPress and .NET development teams and serve as the technology liaison for a range of global clients.
/jlne.ws/2VPKXhp

****** Isn’t Sean Hayes an actor from the TV show Will & Grace? Does this Sean Hayes do a “Just Jack” impersonation?~JJL

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‘One-Stop Shop’ for Crypto Mining and Trading to Launch Spot Market May 23
Anna Baydakova – Coindesk
UPDATE: This article was updated to note that Bcause is operating under bankruptcy protection.
Cryptocurrency exchange and mining startup Bcause LLC says it’s a few weeks away from launching its spot market, despite operating under bankruptcy protection.
Story here.

***SR: This story was updated from yesterday’s Coindesk story, which a.) Had a dire warning pop up in front of it that suggested it might contain a virus or malware and b.) Failed to mention the Bcause bankruptcy.

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What Do Bankers Do Online? Edit Wikipedia; A Twitter bot has been tweeting when Wikipedia edits are made from the IP addresses of major banks
Mike Bird – WSJ
Financial journalists would love to get a look inside banks to see what their employees are up to online. For now, we’ll have to make do with their Wikipedia editing history.
/on.wsj.com/2J8cBjQ

***** Can I suggest the bankers become MarketsWiki editors too?~JJL

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Tuesday’s Top Three
Our top story of the day was John Lothian’s column A Great Day to Start Trading Micro E-Mini Futures. Second was the Vanity Fair piece about Zuck v the Winklevoss twins in How Mark Zuckerberg Battled the Winklevoss Twins Over a $65 Million Facebook Settlement. Third was the FT’s London clearing house shift heads off UK-EU regulatory battle

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MarketsWiki Stats
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CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

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Lead Stories

Citadel Looms Large as a Future Fed Primary Dealer; The market-making arm of billionaire Ken Griffin’s firm has been eyeing entry into Wall Street’s exclusive club for years.
Brian Chappatta – Bloomberg
The bond market’s most elite club added a new member this week. Just not the one that’s loomed large over Wall Street for years.
/bloom.bg/2vNrkrM

World’s Rich Put a Third of Funds Into Cash as Trade War Simmers
Joanna Ossinger – Bloomberg
High-net-worth portfolios have 32% liquid, bank’s survey shows; Top concern in LatAm is inflation, in Asia it’s trade war
Wealthy investors around the world are holding a relatively high level of cash, and perhaps they’ve become too cautious, according to UBS Group AG.
/bloom.bg/2J9U5ro

Hackers Swipe More Than $40 Million of Bitcoin From Cryptocurrency Exchange; Price of bitcoin and other digital currencies barely budged after the robbery was disclosed
Steven Russolillo – WSJ
Binance, one of the world’s largest cryptocurrency exchanges, said hackers stole more than $40 million worth of bitcoin from its platform in what it called a “large scale security breach.”
/on.wsj.com/2J7Oqll

Decade in the Red: Trump Tax Figures Show Over $1 Billion in Business Losses; Newly obtained tax information reveals that from 1985 to 1994, Donald J. Trump’s businesses were in far bleaker condition than was previously known.
Russ Buettner and Susanne Craig – NY Times
By the time his master-of-the-universe memoir “Trump: The Art of the Deal” hit bookstores in 1987, Donald J. Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals, according to previously unrevealed figures from his federal income tax returns.
/nyti.ms/2Jdd703

Citi closes CitiCross ‘dark pool’ amid equities unit review
John McCrank – Reuters
A unit of Citigroup Inc has shut down one of its private stock trading venues, often referred to as dark pools, as part of a broader review of the bank’s equities business, the bank said on Monday.
/reut.rs/2vNtTKq

Jefferies helped a rogue hedge fund partner trade with tons of leverage that bankrupted his fund, a new ruling finds
Bradley Saacks – Business Insider
An arbitrator found that Jefferies helped a hedge fund trader create side accounts invisible to the hedge fund’s other partners and take massive positions that violated the bank’s internal risk limits.
bit.ly/2vHNMm2

The battle between Tencent and Ant Financial over digital wallets may never be won
John Detrixhe and Echo Huang for Ant Financial – Quartz
Tencent and AlibabaóChina’s tech superpowers, with a combined market value of almost $1 trillionóhave clashed repeatedly since they were created in the earliest days of the country’s internet economy. Some 20 years later, one of the most important pieces of turf is still up for grabs: Control of the Chinese digital wallet.
bit.ly/2vHXtAX

Deutsche Bank Leaders Face Investors’ Ire Over Scandals, Shares
Steven Arons – Bloomberg
Glass Lewis, ISS advise to vote against backing management; Shareholder advisory firms point to large share price decline
Deutsche Bank AG’s next challenge after the breakdown of merger talks with Commerzbank AG may be its own angry shareholders. ISS and Glass Lewis — the world’s biggest shareholder advisory firms — are recommending investors vote against backing Deutsche Bank’s management and supervisory board at its annual general meeting on May 23. The firms pointed to the shares, which lost about 40 percent over the past year, as well as the bank’s continued legal and business challenges.
/bloom.bg/2J7MQ2T

Investor advisor ISS urges no-confidence vote in Deutsche Bank
Hans Seidenstuecker, Arno Schuetze – Reuters
Deutsche Bank faces a possible public rebuke from shareholders after two influential investor advisory groups urged them to issue a vote of no confidence in the lender’s management.
/reut.rs/2vUezf7

Nasdaq Names Bj¯rn Sibbern President, European Markets
Nasdaq
Nasdaq today announced two changes to its executive leadership team. Bj¯rn Sibbern, currently Executive Vice President for Global Information Services, will assume the newly established role of President, European Markets, based in Stockholm. In his new role Sibbern will lead Nasdaq’s markets across the Nordic and Baltic region.
bit.ly/2VPUcOu

Nasdaq Names Lauren Dillard Executive Vice President for Global Information Services
Nasdaq
Dillard, most recently Head of Investment Solutions at The Carlyle Group, will oversee Nasdaq’s second largest business segment
Nasdaq today announced an update to its executive leadership team. Lauren Dillard, most recently Head of Investment Solutions at The Carlyle Group, will join Nasdaq as Head of Global Information Services (GIS).
bit.ly/2vT6RSt

Alleged Multibillion-Dollar Pyramid Scheme OneCoin Sued by Former Investor
Yogita Khatri – Coindesk
The notorious cryptocurrency investment scheme OneCoin, widely claimed to be a fraud, is being sued by a former investor over her losses.
bit.ly/2vHTRPp

Morgan Stanley Paris Bonus Case May Change Banker Pay in Europe
Hugo Miller – Bloomberg
Dealmaker Mourad says he’s owed $1.5 million in deferred pay; Morgan Stanley says Frenchman knew rules and U.S. law applies
It’s a case that will go all the way to France’s Supreme Court whoever wins and is set to become an important precedent for banker pay across the country, if not the European Union.
/bloom.bg/2J7Pnu3

Sleepy equity options jolted by renewed U.S.-China trade tensions
Saqib Iqbal Ahmed – Reuters
Months of calm in U.S. stocks gave way to a surge in activity in the options market on Tuesday as investors spooked by escalating trade tensions between the United States and China boosted Wall Street’s so-called fear gauge to the highest level in three months.
/reut.rs/303jiZK

China Is Dawdling on Carbon Trading
Bloomberg News
Top polluter hasn’t finalized carbon trading rules and system; Delay due to reshaping of ministries to protect environment
A bureaucratic reshuffle has left China months behind in its preparation to launch a national carbon market, potentially slowing efforts to restrain greenhouse gas emissions by the world’s biggest polluter.
/bloom.bg/302zslX

Why Mifid spoiled the business of matchmaking; New EU transparency rules have radically altered investor-company introductions
Ben McLannahan – FT
In hindsight, an emerging markets conference put together by Deutsche Bank in New York in September 2017 was something of a high-water mark.
/on.ft.com/2J5A0m1

Former SEC commissioner joins board of directors at IEX; Kara Stein to join IEX board of directors after completion of term as SEC commissioner in January.
John Brazier – The Trade
Investors Exchange (IEX) has announced that Kara Stein, the former commissioner of the Securities and Exchange Commission (SEC), has joined its board of directors.
bit.ly/2J7JOLY

Exchanges, OTC and Clearing

ICE Data Services Launches New Service with Credit Benchmark Data to Provide a Comprehensive, Daily Market View of Credit Risk
iCE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Data Services has launched ICE Credit Risk, an innovative new suite of analytics. These analytics measure credit risk by combining daily market credit risk analytics with monthly fundamental credit views from financial institutions. Consensus estimates will be provided on an exclusive basis by Credit Benchmark, a leader in consensus-based credit analytics.
bit.ly/2vLuPPm

DTCC proposes several enhancements to increase US Treasury clearing; The proposals aim to shift trading activity away from bilateral markets and towards central clearing.
Joe Parsons – The Trade
DTCC has made a number of proposed changes to its US fixed income clearing house in order to stem the flow of US Treasury trading away from the bilateral market.
bit.ly/2J7Rlur

DTCC Provides Vision for Central Clearing in the U.S. Treasury Cash Market; New paper proposes central clearing solutions to enhance resiliency and mitigate risks associated with bilateral clearing
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the release of a new white paper that explores the current structure of the U.S. Treasury securities market, highlighting potential risk and resiliency issues, and describing initiatives that could promote greater use of central clearing.
bit.ly/306YKPI

Publication of JPX Working Paper, Vol.31 “Examination of Machine Translation in Corporate Governance Reports”
JPX
Japan Exchange Group, Inc. (JPX) today published JPX Working Paper, Vol.31 “Examination of Machine Translation in Corporate Governance Reports”.
bit.ly/2vJLL8O

Micro E-mini Futures Make Big Impression on First Day of Trading
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, announced that more than 310,000 Micro E-mini futures contracts traded yesterday across all four indices – the S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average indexes. Total cumulative volume included more than 75 firms facilitating trading – making Micro E-minis the most successful new product launch in CME Group’s history.

Producer sentiment plummets; trade dispute and weak financial performance wear on farmers
CME Group
In April, agricultural producer sentiment plunged as the Purdue University/CME Group Ag Economy Barometer declined 18 points to a reading of 115, down from 133 in March. The barometer, a sentiment index, is based on a monthly survey of 400 agricultural producers across the U.S. This marks the fourth largest one-month drop since data collection began in October 2015.
bit.ly/2vJizyN

CME Group Declares Quarterly Dividend
CME Group
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a second-quarter dividend of $0.75 per share, payable June 25, 2019, to shareholders of record as of June 10, 2019.
bit.ly/2vJpDLX

HKEX 2019 First Quarter Results
HKEX
bit.ly/2J9LiFy

HKEX to extend trading hours for 27 derivs contracts
James Thursfield – Global Investor Group
Hong Kong Exchanges and Clearing detailed plans for its upcoming trading hour extension as it presented Q1 results
bit.ly/302Ni7U

Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and MontrÈal Exchange Closed for Victoria Day
TMX
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and MontrÈal Exchange will be closed on Monday, May 20, 2019 for the Victoria Day holiday.
bit.ly/2J6uXSd

Euronext announces volumes for April 2019
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for April 2019. Cash trading – In April 2019, the average daily transaction value on the Euronext cash order book stood at EUR7,413 million, down -5.9% compared to April 2018 and down -4.0% from the previous month. Derivatives trading – In April 2019, the overall average daily volume on derivatives reached 585,386 contracts, up +2.0% compared to April 2018 and down -2.0% compared to the previous month. In detail:
bit.ly/2J43IYk

Amendments to the Clearing Conditions: Refinement to the repayment of cash collateral provided in a non-clearing currency
Eurex
This circular contains information about changes and amendments to the Clearing Conditions of Eurex Clearing AG with respect to the following topic:
bit.ly/2J7pcDI

Fintech

Mariana UFP chooses TORA’s cloud-based OEMS for multi-region pairs trading
GlobeNewswire
TORA, provider of the industry’s most advanced cloud-based order and execution management system (OEMS), today announced that Mariana UFP, a leading global broker, has selected TORA for pairs trading in London, New York and Melbourne.
bit.ly/300aEek

Investor Cash Management Launches Patent-Pending, White-Label Cash Management Accounts Powered by DriveWealth; Novice and Experienced Investors Can Earn 35X More on Assets with SEC-Registered Securities in Account
Investor Cash Management
Investor Cash Management (ICM) today announced the launch of its patent-pending cash management accounts linked directly to specified SEC-registered securities such as government money market and ultra-short bond funds. The company has partnered with DriveWealth, LLC, a leader in global digital trading technology, to provide technology, brokerage and clearing services for the new white-label accounts.
/prn.to/2VXLVIE

Thomson Reuters Reports First-Quarter 2019
Mondovisione
Thomson Reuters (TSX/NYSE: TRI) today reported results for the first quarter ended March 31, 2019 and reaffirmed its full-year Outlook for 2019 and 2020.
bit.ly/306uXqH

Facebook Plans To Build New WhatsApp Payments Feature In London
Sam Shead – Forbes
Facebook is planning to use London as a key hub for the development of a new WhatsApp mobile payment feature.
bit.ly/2vHKI9w

Cryptocurrencies

Hackers Steal $40 Million Worth of Bitcoin From Binance Exchange
Eric Lam – Bloomberg
Deposits and withdrawals suspended pending security review; Binance says hackers may still control some user accounts
Binance, one of the world’s largest cryptocurrency exchanges, said hackers withdrew 7,000 Bitcoins worth about $40 million via a single transaction in a “large scale security breach,” the latest in a long line of thefts in the digital currency space.
/bloom.bg/2J9IW9G

****FT here.

Bitcoin Bounds Toward $6,000 as More Institutions Embrace Tokens
Todd White and Eric Lam – Bloomberg
Digital coin climbs as much as 4.7 percent to reach 2019 high; Institutional involvement ‘stronger and stronger’: Kenetic
Bitcoin climbed to a fresh 2019 high, approaching the $6,000 level for the first time since November on most cryptocurrency exchanges.
/bloom.bg/2J9UDNY

Privacy Cryptocurrency Grin Receives Mysterious $300K Bitcoin Donation
Christine Kim – Coindesk
The developers behind the cryptocurrency project Grin have reportedly received an anonymous donation of 50 BTC – worth an estimated $300,000. The news, shared during a weekly meeting of developers, is notable, as Grin came to market touting what it called a “fair launch,” meaning project leaders did not raise any funds via an initial coin offering (ICO) or a private sale of the tokens that would power the technology.
bit.ly/2VnEAlO

Should You Be Worried About Cryptocurrency In Your Enterprise Billing?
Nathan Shinn – Forbes
Cryptocurrencies are changing how consumers pay for goods and services. All over the world, companies are beginning to accept digital currencies in place of government-backed tender. Even traditional banking systems are getting into the game and piloting their own digital coins. In February, JPMorgan launched a digital token backed by U.S. dollars. Bank of America has filed over 50 blockchain- or cryptocurrency-related patents since 2014.
bit.ly/302RB37

Staking, Ethereum’s Mining Alternative, Will Be Profitable – But Barely
Christine Kim – Coindesk
Computer operators helping to validate transactions in a forthcoming version of ethereum – dubbed ethereum 2.0 – will see positive returns on their investment but not much, according to new data.
bit.ly/2vNRJ8w

Bitstamp Hires Ex-Coinbase Trading Head to Court Wall Street Money
Anna Baydakova – Coindesk
Bitstamp, one of the longest-running cryptocurrency exchanges, has hired a former Coinbase executive and Wall Street veteran as its new head of U.S. operations.
bit.ly/2vKD8Lp

Cryptocurrency Firm OneCoin Sued Over Multibillion-Dollar Fraud
Bob Van Voris – Bloomberg
The company that allegedly ran a multibillion-dollar international pyramid scheme based on the cryptocurrency OneCoin was sued by an investor who’s seeking to represent others who claim they were defrauded.
/bloom.bg/2J6NkGL

Why are cryptocurrency entrepreneurs flocking to the CBD industry?
Madeleine Taylor – Health Europa
With the ever-changing cannabis space, entrepreneurs are exploring innovative ways to enter the CBD industry – But could cryptocurrency be the next innovation for cannabis? The CBD industry has hit the mainstream media and is sweeping the nation’s shelves, as well as the Internet. There are now a vast array of companies both online and offline who are releasing products from CBD-infused gummies to healing balms and creams. CBD oil is legal in almost every state in the US and since the UK legalised it last year, the market is booming bigger than ever.
bit.ly/2Vnn4hQ

Bitfinex Releases Official White Paper for $1 Billion Exchange Token Offering
Wolfie Zhao – Coindesk
Cryptocurrency exchange Bitfinex has released the official white paper for its $1 billion exchange token sale, revealing it will also launch a dedicated platform for projects to raise funds via similar initial exchange offerings (IEOs) starting from next month.
bit.ly/2vMGoWu

Liquid.com unveils Liquid Pro, a mobile app for pro crypto traders
PRNewswire
Global cryptocurrency platform Liquid.com (“Liquid”) today announced the launch of the company’s new mobile app, Liquid Pro, available on Android and iOS. The mobile app is free to download globally, subject to country or region availability by Google Play Store and App Store. Liquid Pro features a first-of-its-kind complete set of tools for margin traders, who can open and manage positions all within the app, trading with up to 25x leverage on markets such as BTC/USD and BTC/JPY. In Japan, Liquid users are able to use a Japan-only mobile app version called Liquid Lite.
/yhoo.it/2H7eUBi

Feds Seize News Site Deepdotweb as Darknet Crackdown Intensifies
Kai Sedgwick – Bitcoin.com News
The FBI, working in conjunction with its European partners, has struck another blow against darknet markets (DNMs). On this occasion, it’s a particularly low blow, as news website Deepdotweb has become the latest victim of its interminable war on drugs. On May 7, both its clearnet and darknet domains were seized, and the operators arrested and slapped with money laundering charges.
bit.ly/2JqIeUX

Blockchain Adoption Accelerates, Finds New Deloitte Research
Diana Ngo – Coin Journal
Blockchain investment and implementation continue to increase in financial services but also across multiple other sectors including technology, life sciences, media, telecommunications and government. More organizations are expanding and diversifying their blockchain initiatives, recognizing the larger, transformational importance of the technology, and indicating that the industry is maturing, according to a new survey by Deloitte.
bit.ly/2H7uOeT

Politics

Each Word of Trump’s Tariff Tweets Wiped $13 Billion Off Stocks
Divya Balji and Matthew Burgess – Bloomberg
It was a total of 102 words that erased about $1.36 trillion from global stocks this week. Equity markets across the world were roiled by President Donald Trump’s tweets Sunday that he would boost tariffs on Chinese goods. Not only did they spark losses, but volatility came roaring back with a vengeance, with the Cboe Volatility Index rising 50 percent in two days to breach 20 for the first time since January.
/bloom.bg/2J89HeM

Who Gets to Define Fake News? In Singapore, a Debated Question
Derek Wallbank – Bloomberg
Singapore’s ruling party defended its planned bill to combat “fake news” amid continued debate about who gets to define what’s true and false.
/bloom.bg/2J5zIvr

Trump Used Same Tax Breaks as Amazon to Obliterate His IRS Bill
Laura Davison – Bloomberg
Trump lost $1.17 billion in 80s, 90s, New York Times reports; Trump has complained Amazon uses tax quirks to avoid paying
President Donald Trump complains that large corporations, such as Amazon.com Inc., are shirking their tax responsibilities. Yet for at least a decade, Trump paid none or very little in federal income taxes by exploiting some of the same generous tax breaks that the online retail giant and others have used to reduce IRS bills.
/bloom.bg/2JarTEH

Trump Spoils for Impeachment Row With Democrats to Fuel 2020 Bid
Shannon Pettypiece – Bloomberg
President’s aides are pushing him to defy Democrats’ subpoenas; House Judiciary panel set to vote on holding Barr in contempt
President Donald Trump’s advisers are pushing him to defy congressional investigations in hopes of luring Democrats into escalating a fight that they say will turn voters against the party in the 2020 elections.
/bloom.bg/2vMzb8M

Exclusive: China backtracked on nearly all aspects of U.S. trade deal – sources
David Lawder, Jeff Mason, Michael Martina – Reuters
The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.
/reut.rs/2vMVxqE

China’s gag on Trump tweets raises doubts about its global market ambitions
Reuters
A global stock rout earlier this week reminded investors about the power of the U.S. President’s Twitter account, but in China, where selling was heaviest, a ban on media coverage of his comments has raised questions about Beijing’s push to internationalize its capital markets.
/reut.rs/2vJrHUd

Regulation

Rollback of Hong Kong’s masking relief to impact FIs
Rebekah Tunstead – bobsguide
European market participants will feel the impact of Hong Kong’s proposal to remove 17 jurisdictions from the masking relief of its reporting obligations. “A lot of European financial institutions would have clients or counterparties in Asia or Australia, so it may be a small number of transactions, but it would affect most counterparties,” says Quinn Perrott, co-CEO of TRAction Fintech.
bit.ly/303PeNp

Revised TRACE for Treasuries User Guide
FINRA
FINRA has updated the TRACE for Treasuries User Guide to coincide with the addition of an “All-In Price” field. This field will be located in the Matched and Unmatched Screens on the TRAQS website beginning Monday, June 3, 2019. The new field will display the All-In Price of the matched or unmatched transaction; this price is inclusive of commission, and the field is view-only. No direct input is required by any user.
bit.ly/2vIC0ru

Fed Readying Financial System for Climate-Change Shocks; Central bank working to bolster banks’ resilience amid economic disruptions caused by extreme weather, Powell says
Michael S. Derby – WSJ
The Federal Reserve stands ready to respond to climate-change related weather disruptions to the economy and is working to ensure banks’ resilience from unexpected shocks tied to a warming global environment, Fed Chairman Jerome Powell told Congress in an April letter.
/on.wsj.com/2J6u8J7

SEC Charges Nevada Man Who Traded on Confidential Information Taken From Lifelong Friend
SEC
The Securities and Exchange Commission today announced settled insider trading charges against a Nevada man who obtained confidential information about a pending corporate merger from a lifelong friend and used it to generate more than $250,000 in illicit trading profits.
bit.ly/2vHSIr5

UKRN encourages policy makers to use Power of Attorney guide
UK FCA
The Power of Attorney guide (link is external) aims to help organisations understand what the law requires of them when dealing with powers of attorney.
bit.ly/2vHJtXU

Financial conduct regulation in a restless world
UK FCA
Speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA, delivered at the Deloitte conduct risk roadshow 2019, London.
bit.ly/2vKm7kf

SEC Amended Rule 606: A Stay of Implementation
Christopher Bok – Traders Magazine
On November 2, 2018, the Securities and Exchange Commission (“SEC”) adopted Amended SEC Rule 606. The Amended Rule is the product of the SEC’s longstanding mandate of providing investors (and entities acting on their behalf) with increased transparency into the securities markets to allow for more informed decision-making and the protection of the individual investor.
bit.ly/301HoUt

Investing and Trading

Traders Obsessed With S&P 500 Should Be Watching Another Number
Sarah Ponczek – Bloomberg
It’s earnings estimates, which UBS sees as exposed to trade; Profit sentiment improved after a strong first quarter season
It’s hard not to be transfixed by price screens amid the S&P 500’s worst stretch of the year. For insight on the longer-term health of equities, a different number will tell.
/bloom.bg/3034lqh

Grains trading group Bunge swings to first-quarter profit; US-based company to revamp structure and shake up management
Emiko Terazono – FT
Bunge, a leading international grains and oilseeds trader, reported a first-quarter profit thanks to higher soyabean crushing margins compared with a loss a year before, as it announced a widespread reorganisation and reshuffle of executives.
/on.ft.com/2J7hwRT

Markets Have More to Worry About Than Tariffs; A litany of market risks lead financial commentary. Plus, Bitcoin’s blast-off, a sagging Swiss franc and more.
By Robert Burgess – Bloomberg
Stocks around the world tumbled the most since December on Tuesday. The general sense was that investors remained on edge over President Donald Trump’s threat to increase tariffs on billions of dollars of imports from China, and China’s likely retaliation with more tariffs of its own. No doubt trade jitters were a factor, but focusing solely on that issue risks missing the bigger picture.
/bloom.bg/2vUeU1n

Institutions

Barclays Bets on Electronic Trading to Boost Investment Bank
Viren Vaghela and Jennifer Surane – Bloomberg
BARX platform combines equities with FX, futures, fixed income; New trading platform expected to help Barclays lower prices
Barclays Plc is betting on a new electronic trading platform to boost returns at its investment bank just as clients are expected to increase trading via machines.
/bloom.bg/306DMAI

Fund industry can flush out the closet trackers; Disclosure of the true cost of active management will help both investors and society
Alex Edmans and Tom Gosling – FT
Active management is under pressure. Asset managers face “feemageddon” as they cut prices to compete with close-to-free index-tracking funds. At the same time, critics of active managers claim there are too many closet trackers ó funds that charge active fees (typically five to 10 times higher than an index fund) but simply hug an index.
/on.ft.com/2J8mIFj

JPMorgan poised to take control of Chinese asset manager; Move would be first time a foreign group had taken majority stake in a domestic fund manager
Hudson Lockett – FT
JPMorgan’s fund arm is a share purchase away from becoming the first foreign group to take control of an asset manager in China, after its joint venture partner in the country put 2 per cent of their business up for sale.
/on.ft.com/2J9KosE

Former GAM fund manager Tim Haywood blocked from annual meeting; Asset manager had fired the executive for alleged gross misconduct
Laurence Fletcher and Jennifer Thompson – FT
Tim Haywood, the fund manager sacked from GAM for alleged gross misconduct, was blocked from entering the firm’s annual meeting on Wednesday.
/on.ft.com/2J6tvzf

Citadel’s Flagship Hedge Funds Return 10% So Far This Year
By Alexandra Stratton – Bloomberg
Citadel, the hedge fund firm run by billionaire Ken Griffin, made 3.3 percent last month in its flagship funds, according to a person with knowledge of the firm.
/bloom.bg/2J8JGMh

By Alex Harris, Elizabeth Stanton, and Nick Baker – Bloomberg
New York Fed adds 24th member to its list of primary dealers; Pierpont government bond business only dates back to 2010
As middle names go in finance, it doesn’t get much more prestigious than the one Amherst Pierpont Securities LLC picked.
/bloom.bg/2J8VQVs

Commerzbank Keeps Adding Clients, But Not Making Much Money
By Steven Arons – Bloomberg
Bank posts higher net interest income after gaining clients; CEO Zielke has promised to update on strategy after the summer
Commerzbank AG investors got more of the same after the breakdown of merger talks with Deutsche Bank AG.
/bloom.bg/2J6MNEL

Deutsche Bank defends risk controls after proxy adviser ISS calls for shareholder revolt
Elliot Smith – CNBC
Deutsche Bank has defended its risk and control system after proxy adviser Institutional Shareholder Services (ISS) called for shareholders to vote against the board.
/cnb.cx/2vKmNGj

Regions

Krona’s Plunge Shows How 2008 Crisis Is Only Just Hitting Sweden
Rafaela Lindeberg – Bloomberg
A decade ago, Sweden did better than most as the global financial crisis ripped through markets everywhere. But its strength back then may actually be hurting it now.
/bloom.bg/305bEhq

Global meat-eating is on the rise, bringing surprising benefits
The Economist
Things were different 28 years ago, when Zhou Xueyu and her husband moved from the coastal province of Shandong to Beijing and began selling fresh pork. The Xinfadi agricultural market where they opened their stall was then a small outpost of the capital. Only at the busiest times of year, around holidays, might the couple sell more than 100kg of meat in a day. With China’s economic boom just beginning, pork was still a luxury for most people.
/econ.st/2Ydhmfu

U.S. Cotton Production Expected to Reach Highest in 14 Years
Shruti Singh and Dominic Carey – Bloomberg
Analysts on average forecast 21.8 million bales in 2019-2020; Cotton may attract acres due to prices, wet weather: Texas A&M
U.S. cotton output may swing back to the highest since 2005. The 2019-2020 U.S. crop will expand to 21.8 million bales from 18.4 million the previous season, according to the average estimate among analysts surveyed by Bloomberg ahead of the U.S. World Agricultural Supply and Demand Estimates report. The USDA is scheduled to release the report Friday at noon in Washington.
/bloom.bg/301bZBE

UK to lose £1.1bn in carbon-credit revenue in event of no-deal Brexit; Dropping out of European Trading System would afford polluters almost a year without paying levy
Anna Gross – FT
The UK will lose more than £1.1bn in revenue as carbon-emitting companies escape paying for the pollution they cause if the country crashes out of the EU without a withdrawal agreement in October, according to Sandbag, a climate policy think-tank.
/on.ft.com/2J7J2yy

China to Seal Deal With ‘Rationally Crazy’ Trump Soon as Friday
Bloomberg News
Former PBOC adviser Li comments in interview with Bloomberg; Weekend tweets from Trump are an attempt to sweeten deal: Li
China will seal a trade deal with “rationally crazy” Donald Trump as early as Friday, or soon after, because both sides want a resolution to their dispute, according to Li Daokui, a former adviser to China’s central bank.
/bloom.bg/2J8K4ud

China Defaults Hit Record in 2018. 2019 Pace Is Triple That
Bloomberg News
Neoglory has the inglorious title of biggest 2019 defaulter; A state-linked issuer is among the five biggest in year so far
This year is shaping up to be the biggest by far for defaults in China’s $13 trillion bond market, highlighting the widening fallout from the government’s campaign to rein in leverage.
/bloom.bg/2J40P9W

Brexit

A new Brexit divide is driving the UK to a second vote; Intransigent purists on both sides are going to force the issue back to the electorate
Robert Shrimsley – FT
There is a new division in British politics. The key split may no longer be between Remainers and Leavers. It is now between the purists and the pragmatists; between those who believe Brexit is going to change everything and those who are still trying to get back to business as usual; between those who still believe there is some kind of Brexit fix and those who do not want to find one.
/on.ft.com/2J6cMMp

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Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffThe CFTC Kraft/Mondelez Global announcement is not worth two bits. Claiming to win the case, without clarity of the specific actions that were manipulative,...

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