CME Group to reopen Eurodollar options trading floor in August; The U.S. Fed Has Stamped All Over Volatility

Jun 10, 2020

First Read

Barchart Survey Provides Customer Insights
By Thom Thompson – John Lothian News

Barchart published its futures market survey What Drives Futures Market Participants Tuesday. The report resulted from a survey of more than 400 people, from the general online population to active investors, listed derivatives audience members and business professionals. The report provides insights into the current attitudes of traders, and a few non-traders, toward futures markets. The survey drew from responses from four distinct audiences: Facebook, LinkedIn,, and the John Lothian Newsletter (yes, maybe even you, dear Reader!). The Facebook crowd represents the general online population.

As the report says on its first page, “These cohorts allowed us to understand how each group interacts with the futures markets, on which platforms, and for what purposes.” The folks at Barchart do not make any claim about the statistical reliability of the results. That is a good thing, since more than one in ten of the Facebook respondents said that they trade futures – certainly not representative of the Facebook-user base.

The respondents’ accounts are pretty well funded. Thirty-six percent said they have more than $100,000 in their futures accounts.

To read the rest of this commentary, go HERE.


Hits & Takes
By JLN Staff

The European Commission has issued a final report of the high level forum on the capital markets union. Here is the final report. Here is a press release about it.

And here is a statement from Stephan Leithner, executive board member of Deutsche Börse AG, who is a member of the High Level Forum on the Capital Market Union of the European Commission:

“The past has shown that Europe has always been strongest when we were working together to secure and promote peace, prosperity and progress for all member states. In the most serious economic crisis since the Second World War and 70 years after the founding of the European Union, we now have the opportunity to act in this spirit once again. The gigantic undertaking to secure the social and economic future of Europe can only be tackled together: National approaches to solving the pandemic made perfect sense, but after Corona we can no longer afford them, at least not economically.”

The NYSE held 8-minute and 46-seconds of silence yesterday in honor of George Floyd, the 46-year-old African American who died on May 25 after a white police officer knelt on his neck.

If you missed the excellent quarterly NFA Board Update yesterday, HERE it is.

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


Supercritical LLC, a branding and business development consultant for the legal cannabis industry, announced Tuesday that it has been named to the Olive-Harvey College Cannabis Advisory Council. One of the seven City Colleges of Chicago, Olive-Harvey is piloting a cannabis dispensary operations curriculum. Olive-Harvey spokeswoman Amanda Gettes said other advisory council members include Local 881-UFCW, Chicago NRML, Grow Greater Englewood, Cabrini Green Legal Aid, Minority Cannabis Business Association, Illinois Equity Staffing, Grassroots and Cresco Labs. ~SC ~Thom Thompson

While Deutsche Börse has been talking about offering bitcoin futures on Eurex for years (literally, years), a company called HANetf announced yesterday that it will list a USD-priced #ETP (exchange traded product) on DB’s electronic spot market, Xetra. HANetf, a European market maker, calls this new instrument an exchange traded crypto (ETC). Really, it is an instrument that simply “gives the holder a claim on a predefined amount of bitcoin.” according to HANetf, a market maker in the new product. The issuer is ETC Group. Whatever they call it, this looks like it will provide the good, clean bitcoin-ETF fun that the U.S. crypto crowd has been clamoring about for years: dollar-priced, regulated, retail-friendly, electronically traded. Glückwünsche! ~Thom Thompson

The OCC tweeted that the rate of cleared volumes yesterday was more than 29 percent higher than the year-to-date daily average. They say being busy makes time fly – but time passes differently during a quarantine; folks who work at the OCC must feel like their days are passing at the speed of light.~MR


Capital markets union: Final report by High-Level Forum pushes for the completion of the CMU; The High-Level Forum (HLF) on capital markets union (CMU) published today its final report on the EU’s capital markets union.
European Commission
It sets out a series of clear recommendations aimed at moving the EU’s capital markets forward. Completing the CMU has now become particularly urgent in order to speed up the EU’s recovery from the coronavirus pandemic. A fully-fledged CMU would help rebuild the EU’s economy, by providing new funding sources for businesses and investment opportunities for Europeans. It will be vital for mobilising much-needed long-term investments in new technologies and infrastructure, to tackle climate change and to deliver Europe’s New Green Deal and Digital Agenda.

*****Here is the final report.~JJL


NYSE holds nearly 9-minute silence in honor of George Floyd
John McCrank – Reuters
The New York Stock Exchange and other U.S. financial market operators held nearly nine minutes of silence on Tuesday in honor of George Floyd, a 46-year-old African American who died on May 25 after a white police officer knelt on his neck.

****Hats off to NYSE for this classy move.~JJL


Baseball blew it: MLB could have been the first sport back, but instead it’s arguing over how to divide up billions of dollars
Jared Diamond – MarketWatch
With the sports world reeling from the coronavirus-induced shutdown, baseball had a priceless opportunity: a Grand Canyon-sized window to return to the field before its major competitors and stage a triumphant return around the Fourth of July. But baseball has squandered that chance and is now struggling to reach any kind of deal at all. Team owners and the players’ union remain deadlocked in a bitter labor standoff over how to appropriately divide billions of dollars in a pandemic-shortened season. The possibility of playing on Independence Day is gone.

*****The longer I go without it, the less I miss it.~JJL


Warren Buffett is ‘an idiot,’ says investor who claims daytrading is ‘the easiest game I’ve ever played’
Shawn Langlois – MarketWatch
Did we just witness “an epic signal of a blow-off top”… ? Yes, says Gary Evans of the Global Macro Monitor blog, who pointed to the recent action on Barstool Sports founder Dave Portnoy’s Twitter feed as the reason why. On Monday, Portnoy slammed Berkshire Hathaway’s Warren Buffett for unloading airline stocks as the coronavirus epidemic took its toll. He also went off on how he made almost $300,000 on the day but missed out on an even bigger number by getting out too soon.

*****Warren Buffett has a few billion reasons why this day trader is wrong.~JJL



Tuesday’s Top Three
Our top story Tuesday was the Houston Business Journal’s Charles Schwab takes big steps toward buying rival, moving HQ from California to Texas. Second was
Hackers for hire ‘targeted hundreds of institutions, from the Financial Times. Third was the New York Times’ As Diners Flock to Delivery Apps, Restaurants Fear for Their Future.


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Lead Stories

CME Group to reopen Eurodollar options trading floor in August; The Eurodollar options trading floor at CME Group in Chicago is scheduled to reopen on 10 August, and traders will be required to sign a waiver before access.
Hayley McDowell – The Trade
US derivatives exchange CME Group has confirmed it will reopen its Eurodollar options trading pit in two months, following the closure of trading floors globally amid the coronavirus pandemic. CME Group said that while the Eurodollar options trading pit is scheduled to reopen on 10 August, all other open outcry trading pits will remain closed until authorities in Chicago and Illinois reach ‘phase 5’ of their reopening plans.

*****Here is the Reuters version of this story.~JJL

The U.S. Fed Has Stamped All Over Volatility; For the Fed, dampening down volatility in the financial markets has been key to bringing things back under control. The battle isn’t quite over yet.
Marcus Ashworth – Bloomberg
The U.S. Federal Reserve must be rather pleased with how it has contained the financial fallout from the pandemic. The S&P 500 index turned positive for the year this week and the Nasdaq reached a new high. The world is no longer clamoring for the dollar as a safe haven, and Treasury bond yields and corporate credit spreads are substantially lower than they were at the start of the Covid-19 crisis.

Anthony Fauci warns pandemic has further to run; US virus expert says there is ‘no way’ Covid-19 will disappear until a vaccine is found
Hannah Kuchler – FT
Anthony Fauci, one of the doctors in charge of the US government’s coronavirus response, has warned that the outbreak is far from over, even as some of the worst-hit states start reopening their economies.

HSBC wobbles on a geopolitical tightrope; Bank’s mantra of ‘guests in every country’ under pressure after backing China’s Hong Kong security law
Stephen Morris, Henny Sender and Laura Noonan – FT
There was no fanfare or press release. Instead, HSBC last week posted a photo on the social media platform WeChat of its top executive in Asia signing a petition in support of Beijing’s new security law for Hong Kong.

IOSCO Board elects Chair and Vice Chairs for the term 2020-2022
Following its inaugural meeting today, the new IOSCO Board elected its leadership for the term 2020-2022. The Board re-elected Ashley Alder, CEO of SFC Hong Kong, as its Chair and Jean-Paul Servais, Chairman of FSMA Belgium, as a Vice Chair. It also elected Heath P. Tarbert, Chairman of the US CFTC, as a new Vice Chair. They join Obaid Al Zaabi, CEO of SCA
UAE, who is Vice Chair of the Board in his ex-officio capacity as Chair of the IOSCO Growth
and Emerging Markets (GEM) Committee.

U.S. charges firm president, trader in COVID-19 fraud schemes
U.S. authorities on Tuesday said they have charged the head of California medical technology firm Arrayit Corp and an investor in the company, alleging that they had roles in schemes related to COVID-19 claims.

SEC Charges California Trader Engaged in Manipulative Trading Scheme Involving COVID-19 Claims
The Securities and Exchange Commission today charged a penny stock trader in Santa Cruz, California, with conducting a fraudulent pump-and-dump scheme in the stock of a biotechnology company by making hundreds of misleading statements in an online investment forum, including a false assertion that the company had developed an “approved” COVID-19 blood test.

Hundreds of Thousands of Tiny Buyers Swarm to Insolvency Stocks
Sarah Ponczek and Vildana Hajric – Bloomberg
Hertz, Whiting Petroleum, Chesapeake Energy shares surge; Number of Robinhood users holding these stocks also swells
Just in the last week, 96,000 people on the Robinhood investing app opened a position in Hertz Global Holdings Inc. The number of users holding Whiting Petroleum Corp. grew roughly 10,000 in the last 24 hours. Two things the companies have in common: They’ve filed for bankruptcy protection. And each saw their shares double to start the week.

CFTC Announces $6 Million Whistleblower Award; Latest Award Marks Milestone of $110 Million Awards Granted
The Commodity Futures Trading Commission today announced it will award more than $6 million to a whistleblower who voluntarily provided original information that led the CFTC to bring a successful enforcement action. The CFTC opened its investigation upon receiving the whistleblower’s information, which was specific, credible and timely. With this award, the CFTC has now granted over $110 million in whistleblower awards since issuing its first award in 2014.

FESE: ‘A New Vision For Europe’s Capital Markets’
‘A new vision for Europe’s capital markets’ has long been required and is needed now more than ever. FESE welcomes the recommendations published today by the High-Level Forum on capital markets union (HLF) in their synonymously named report.

Virtu Financial sets new value traded record for POSIT Alert Europe; POSIT Alert Europe saw a new record of trading activity in June after Virtu Financial made several upgrades to the system earlier this year.
Hayley McDowell – The Trade
Market maker Virtu Financial has confirmed it saw a record day of trading activity on its POSIT Alert Europe block indications network in June. POSIT Alert Europe saw more than £1.256 billion in notional value traded on 5 June this year, surpassing the previous record set in Europe in October 2018. The new record follows sweeping changes to the block indications system, which Virtu inherited following its $1 billion acquisition of agency broker ITG.

LMAX launches weekend currency trading service for institutional investors; David Mercer, CEO of LMAX Group, says spot FX trading could move to 24/7 trading within five years as the venue launches weekend currency trading service.
Hayley McDowell – The Trade
Foreign exchange and cryptocurrency trading venue operator LMAX Group has confirmed the launch of an institutional weekend FX trading service, which will allow clients to trade outside of market hours.

Natural Gas Heads for Record Drop in Global Demand
Anna Shiryaevskaya and Vanessa Dezem – Bloomberg
Global natural gas use set for record downturn this year; Annual demand growth to shrink to 1.5% over next five years
The global natural gas market is poised for the biggest-ever drop in demand as a result of the Coronavirus crisis, an event that’s likely to hamper the industry’s growth for years to come. Consumption is set to slump by 4% this year, or twice the amount lost after the 2008 financial crisis, according to the International Energy Agency’s Gas 2020 report. Global demand is expected to rise by just 1.5% annually to 2025, compared with a previous forecast of 1.8%.

Universal Basic Income Is Key to U.K. Recovery, Think Tank Says
Lucy Meakin – Bloomberg
The U.K. should introduce a universal basic income to get cash to struggling Britons along with a raft of other measures, according to proposals by the Royal Society for Arts. The government should initially pilot a 2,500 pound ($3,000) direct cash payment through the existing tax infrastructure, the RSA’s Future Work Centre said in a report published Wednesday. This could be expanded to a 5,000-pound universal basic income over time and combined with other benefits, it said.

Exchange takes cue from crypto investors with weekend FX trading; LMAX Digital sees hundreds of millions of dollars in crypto traded each week, without any downtime
Ryan Weeks – Financial News
Part of bitcoin and other cryptocurrencies’ appeal to investors is that they can be traded anywhere, anytime, instantaneously.

RJ O’Brien takes on team of softs brokers
Wendy Lisney – FOW
Futures broker RJ O’Brien has moved aggressively into the soft commodities market by hiring three brokers including the former heads of softs at BGC Partners. The softs team, Gary Papier, James Hunt and David Cutler, will provide global coverage, supporting RJO’s plans to grow in softs to complement its agricultural business and diversify its brokerage products and services.

Ex-Goldman Banker Gets Home Confinement in Insider Case
Bob Van Voris – Bloomberg
A Goldman Sachs Group Inc. investment banker was sentenced to a year of home confinement, avoiding prosecutors’ request that he get three years in prison for providing stolen client information to a global insider-trading ring that generated tens of millions of dollars in illegal profit.

High-Profile Investor Calls Out HSBC, Standard Chartered on Hong Kong Stance; Aviva Investors says it is uneasy about U.K. banks backing China’s proposed national security law
Simon Clark – WSJ
A high-profile investor in HSBC Holdings HSBC -3.45% PLC and Standard Chartered STAN 2.57% PLC has criticized the London-based banks for supporting China’s plan to impose a new national security law on Hong Kong, calling on them to speak out if it results in abuse of democratic freedoms.

Pompeo chides HSBC for ‘corporate kowtow’ to Beijing
U.S. Secretary of State Mike Pompeo on Tuesday chided British bank HSBC for backing moves by China to end Hong Kong’s autonomy, saying such “corporate kowtows” got little in return from Beijing.

Brokers, or Just Broken? What China’s Reforms Won’t Fix; Fiddling with financial ratios can’t make Beijing’s capital markets more appealing.
Anjani Trivedi – Bloomberg
Beijing is loosening the reins on its large brokerages as the financial system looks ever creakier. Previous attempts to build a Chinese version of Goldman Sachs Group Inc. haven’t had much luck. This time may be no different.


Financial Crimes, Trends and Responses – In the Midst of the Pandemic
COVID-19 has altered the world as we know it. While some have responded to it as an incident or singular event, in the world of countering criminal threats we are seeing the need to treat it as a sustained campaign. This panel will discuss the multitude of threats across the financial crimes’ spectrum perpetrated by an aggressive yet flexible adversary. The shift in tactics needed as well as the increase in known vectors of attack in the midst this pandemic will be examined. Our panelists will dive into the trends being used by criminals as they adapt to the current events arising from the pandemic to include market fluctuations, unemployment, and relief payments. Join FINRA staff, law enforcement, and industry panelists as they provide essential controls, new tactics, and helpful tools their firms have put into place to detect, monitor, and respond to the financial crimes we are experiencing in this current environment.

COVID-19 Task Force: Staying Innovative and Collaborative Through Crisis
The COVID-19 pandemic is unlike any other crisis in recent history, and that presents an opportunity to criminals who are flexible and adaptable. That means firms and regulators must be flexible and adaptable too.

Anthony Fauci warns that ‘nightmare’ pandemic isn’t close to over
Vincent Barone – NY Post
President Trump’s infectious disease expert Dr. Anthony Fauci on Tuesday called the coronavirus his “worst nightmare” and warned that the fight against its spread is far from over.

Older staff most likely to benefit from work from home; Almost half of workforce over 55 can operate remotely but also more likely to lose jobs
Madison Darbyshire – FT
Older workers are the most likely to have jobs that can be performed remotely, making them the demographic most likely to be able to continue working during coronavirus lockdowns, a new US study finds.

Israel to Struggle for Years to Get People Back to Work
Ivan Levingston – Bloomberg
May take six years to reach pre-virus levels, official says; Jobless claims have surged worldwide, with varying protection
It’s going to take up to six years for Israel’s unemployment rate to fall to pre-coronavirus levels, according to a top Employment Service official. Government restrictions including a near-total economic shutdown between mid-March and late April sent jobless figures skyrocketing near 28% from 3.4%. As people trickle back to their jobs, the current rate has dropped to around 22%, with 88% of the unemployed on unpaid leave, Ofir Pinto, the agency’s deputy chief for research and planning, said in a phone interview Monday.

Danske Chairman Says Covid-19 Work Habits Can’t Be Prolonged
Frances Schwartzkopff – Bloomberg
The chairman of Danske Bank A/S said it would be wrong to expect that work habits formed during the Covid-19 era will continue once the crisis is over. “You must not just try to prolong this, because we can also see that people need to be working together with people,” Chairman Karsten Dybvad said in an interview in Copenhagen late on Tuesday.

Virus Splinters Global Economy, Exposing Inequality Fault Lines
William Horobin – Bloomberg
OECD forecasts that world economy will shrink 6% in 2020; Sees risk of more bankruptcies, sustained unemployment
The coronavirus pandemic is splintering the world economy, and the extraordinary action needed means policy makers cannot risk a premature withdrawal of lifelines to businesses and the most vulnerable people, the OECD warned.

Virus Highlights Need to Change How Food Is Produced, UN Says
Agnieszka de Sousa – Bloomberg
UN says crisis can be turning point to transform food systems; Policy makers need to balance supply and environment needs
The coronavirus pandemic has signaled an urgent need to change the way food is produced to help contain hunger and develop environmentally sustainable supplies, according to the United Nations.

Flying Was Once Routine. During the Pandemic, It’s a Feat; Masks, health checks, even worse food. Long-distance travel may never be the same.
Jack Ewing – NY Times
Last week I stepped aboard the subway in Frankfurt for the first time since February, the start of a 4,000-mile trans-Atlantic journey to rejoin my wife after a three-month separation.

Coronavirus Obliterated Best African-American Job Market on Record; The economic situation for black workers was fragile even before the downturn, which means recovery might be slower
Eric Morath and Amara Omeokwe – WSJ
Near the end of a decadelong economic expansion, African-Americans were finally finding some financial stability. Unemployment had reached record lows, and their wages had begun rising modestly.

Pandemic Threatens to Upend a Thriving Real Estate Model; Safety concerns have forced developers to rethink mixed-use projects combining retail, residences and offices, which have helped define the live-work-play ethos that many younger professionals seek.
Tom Acitelli – NY Times
“Is water wet?” Will Gilson is blunt when asked whether it’s particularly challenging to open three restaurants in the middle of a pandemic.

Singapore’s migrant workers fear financial ruin after virus ordeal
John Geddie, Joe Brock, Koustav Samanta – Reuters
As Sharif Uddin contemplates leaving the cramped Singapore dormitory where he has spent weeks under coronavirus quarantine, fears about his future creep in.

Exchanges, OTC and Clearing

CME Group to Reopen Eurodollar Options Trading Pit on August 10; Open outcry trading for all other pits to resume when Chicago and Illinois reach Phase 5 of their reopening plans
CME Group
CME Group today announced that it will reopen its Eurodollar options trading pit on August 10. Over the next few weeks, the company will reconfigure the pit to meet social distancing standards and put additional safety measures in place. All other open outcry trading pits will remain closed until the City of Chicago and the State of Illinois reach Phase 5 of their reopening plans.

Nasdaq Announces End-of-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date May 29, 2020
At the end of the settlement date of May 29, 2020, short interest in 2,420 Nasdaq Global MarketSM securities totaled 7,896,860,004 shares compared with 7,989,729,389 shares in 2,423 Global Market issues reported for the prior settlement date of May 15, 2020. The end-of-May short interest represent 2.74 days average daily Nasdaq Global Market share volume for the reporting period, compared with 2.90 days for the prior reporting period.

Nasdaq Basic Canada Launches on the Cloud; Cost-saving product available via Nasdaq Cloud Data Service; free trial available through Q3 2020
Nasdaq (Nasdaq: NDAQ) today announced it launched Nasdaq Basic Canada—a feed that provides investors around the globe with access to real-time quote and trade data for the full range of Canadian listed equities—on Nasdaq Cloud Data Services (NCDS), which provides clients access to real-time equities, options, news, index, and fund data through cloud-based technology.

The Canadian Depository for Securities Celebrates 50th Anniversary with Virtual Market Open Today
The Canadian Depository for Securities (CDS), Canada’s equities and fixed income clearing house, today celebrates its 50th anniversary. To mark the occasion, John McKenzie, Interim CEO, TMX Group, will join CDS employees, including Jay Rajarathinam, President, CDCC and CDS, Chief Technology and Operations Officer, TMX Group, and Wayne Ralph, Chief Operating Officer, CDS, in a virtual market open ceremony this morning at 9:30 a.m. ET.

Equity Index Highlights – June 2020 edition
Equity market strength continued in May on the back of aggressive central bank stimulus. Also, a lack of choice -between negative yielding German government debt and equity risk premiums- remains when it comes to asset allocation. This left investors in a quandary; while not wanting to miss out on positive momentum, they also question the divergence and disconnect to economic fundamentals. Despite markets posting another positive month, implied volatility remained comparatively well supported. A likely driver is the net short positioning by some hedge funds either through outright short index futures or long put options.

Fixed Income Highlights – June 2020 edition
Overall the month of May was very quiet across the Eurex Fixed Income (FIC) derivatives portfolio, with the only positive rays of light being the weekly bund options volume seeing an increase of 1.5% and FIC ETF options 543% respectively. Risk sentiment was low for the month and we saw a reduction in both volumes and open interest (OI). Having said this, we have started to see a pick up in volumes and OI at the beginning of June as the EUR curve steepened. This has been primarily driven by the excess flatteness and the apparent lack of appetite by the ECB to further flatten core curves as markets are biased towards further steepening. At the front end of the curve, we have seen a further pick up in Schatz volumes, both in futures and options, mainly driven by moves witnessed in the swaption space (swaption vol versus cap/floor vol). In recent weeks, we have seen bund vol increase from 2.5% to 4.5% as futures sold off on the back of a strong rally in stocks. However, low levels of delivered over the long term could suppress volatility levels.

Euronext announces quarterly review results for the PSI 20
Euronext today announced the results of the quarterly review for the PSI 20. The changes due to the review will be effective from Monday 22nd June 2020.

Euronext announces quarterly review results of the AEX, AMX, AScX
Euronext today announced the results of the quarterly review for the AEX, AMX and AScX indices. The changes due to the review will be effective from Monday, 22 June.


IBM to exit facial recognition biz, cites racial profiling
Associated Press
IBM says it is getting out of the facial recognition business over concern about how it can be used for mass surveillance and racial profiling. A letter to US lawmakers Monday from new IBM CEO Arvind Krishna said the tech giant “has sunset its general purpose facial recognition and analysis software products.”

Congressional task force on fintech set to delve into the ‘digital dollar’ concept this week
Mike Orcutt – Yahoo Finance
On Thursday, the House Financial Services Committee’s Task Force on Financial Technology is set to hold a hearing on how to better deliver stimulus money during emergencies like the COVID-19 pandemic — and one can expect the idea of a digital dollar to be a major discussion topic.
The title of the House task force hearing is “Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments.”

New York Offers Fintech Innovation Program for Post-Covid World
New York’s financial regulator is launching a program to help banks, fintechs, and startups launch new products and services that respond to consumer and small business needs in the wake of the Covid-19 pandemic.
Companies can get guidance from New York Department of Financial Services staff about how state regulations may apply to their product under the new program, called DFS FastForward.

Fintech in Brief: New Acting OCC Comptroller Continues to Prioritize Innovation as OCC Proposes Rules on Digitizing Banking
Nutter McClennen & Fish LLP – JDSupra
On May 29, 2020, Joseph Otting stepped down as Comptroller of the Currency, and Brian Brooks was named Acting Comptroller. In his opening remarks, Acting Comptroller Brooks outlined his priorities, the first of which emphasized “responsible innovation to help the banking system keep up with changes in the way American consumers and businesses manage their finances.” As part of his “personal passion” for innovation, Acting Comptroller Brooks noted that banks will rely on the Office of the Comptroller of the Currency (the “OCC”) for both regulatory certainty and a flexible oversight framework that is able to reduce risk and allow regulated entities to adopt new technologies.

Legal, Fintech Collaborations Point to Future for Highly Specialized Partnerships
Frank Ready –
Two heads are better than one—a sentiment that may doubly apply to the combination of legal and technology needs that are continuing to arise in the financial services industry. But the variety of institutional knowledge and process-oriented skills required to solve challenges facing the financial industry may be too great for firms, even ones developing innovative technology, to handle alone.

Banks Say They’re Gaining Against Fintechs During the Pandemic
Hannah Levitt – Bloomberg
Morgan Stanley benefiting from competitors’ glitches: Gorman; ‘You can’t not access your account for several days,’ he says
Fintech startups chipped away at U.S. banks’ customer base for years, in everything from wealth management to consumer lending and beyond. Now banks says they’re taking some market share back.


New OCC Chief Cashed $4.6 Million in Coinbase Stock for U.S. Job
Jesse Hamilton – Bloomberg
The new chief regulator of U.S. national banks liquidated $4.6 million in Coinbase Inc. stock options when he left the cryptocurrency exchange earlier this year to join the government, according to financial disclosures he was required to file. Brian Brooks, who became interim head of the Office of the Comptroller of the Currency last month, has said he intends to leverage the experience he gained at San Francisco-based Coinbase and other tech firms to push a financial technology agenda at the 157-year-old agency, including opening up banking charters for tech firms.

Deutsche Borse Exchange to List New Bitcoin Exchange-Traded Product
Jaspreet Kalra – Coindesk
London-based investment firm ETC Group plans to list a bitcoin-backed security on the German electronic trading market later this month. The firm announced Tuesday the exchange-traded product (ETP), called the Bitcoin Exchange Traded Crypto (BTCE), is the world’s first centrally cleared derivative crypto asset, and would be listed on Deutsche Borse’s Xetra market based in Frankfurt, Germany.

Crypto Rating Council Adds CrossTower as its Newest Member to Help Ensure the Responsible Growth and Maturation of Crypto Asset Markets
CrossTower, a new exchange operator on a mission to mainstream digital asset investing and trading, today announced it has been selected to join the Crypto Rating Council (CRC) as its newest member. The CRC is a member-owned and operated organization committed to the responsible growth and maturation of cryptocurrency markets and related financial infrastructure and trading services.

‘Whale’ Just Sent $130 in Cryptocurrency With a $2.6M Transaction Fee
Paddy Baker – Coindesk
Slip of the finger? Sadist? It’s not yet known. But at just before 10:00 UTC Wednesday, an unknown wallet holder sent 0.55 ether (around $133) with a 10,666 ETH transaction fee – currently worth just under $2.6 million. The fee went to Chinese mining group Spark Pool, which processed the transaction and may distribute the millions to its members. A normal transaction fee would likely be up to $0.50 or so, but can be manually set higher by a sender if they want to push a transaction through more quickly.

Fidelity Says a Third of Big Institutions Own Crypto Assets
Olga Kharif – Bloomberg
About a third of large institutional investors own digital assets such as Bitcoin, according to a survey from Fidelity Investments. Across the U.S. and Europe, 36% of the survey’s 774 respondents said they own cryptocurrencies or derivatives. In the U.S., 27% of institutions — including pension funds, family offices, investment advisers and digital and traditional hedge funds — said they own digital assets, up from 22% about a year ago, when Fidelity surveyed 441 institutions just in the U.S. In Europe, 45% of respondents are invested in digital assets.

Crypto-enabled solar leasing platform Sun Exchange raises $3 million for expansion
Yogita Khatri – The Block
Sun Exchange, the South African peer-to-peer, crypto-enabled solar leasing platform, has raised $3 million in fresh funding. London-based private equity firm ARCH Emerging Markets Partners’ Africa Renewable Energy Fund invested the amount, marking the close of a $4 million Series A by Sun Exchange.

Congressional task force on fintech set to delve into the ‘digital dollar’ concept this week
Mike Orcutt – The Block
On Thursday, the House Financial Services Committee’s Task Force on Financial Technology is set to hold a hearing on how to better deliver stimulus money during emergencies like the COVID-19 pandemic — and one can expect the idea of a digital dollar to be a major discussion topic. The title of the House task force hearing is “Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments.”

Bitfury Launches Digital Currency Fund in Japan
Julia Bahr – Finance Magnates
Blockchain infrastructure provider Bitfury and the Nippon Angel Investment Company (NAIC) today announced the launch of a digital currency infrastructure fund. The firm said that the fund will enable individual and institutional investors to diversify their portfolios into digital currency infrastructure. NAIC is a licensed fund manager in Japan, regulated by the Japan Financial Services Agency.

Crypto Payroll Startup Bitwage Lets Earners Sidestep Volatility With Stablecoin Payments
Sebastian Sinclair – Coindesk
Bitcoin payroll provider Bitwage has begun offering employees a way of receiving wages paid in cryptocurrency, but without the volatility. Announced Wednesday, company clients can now sign up to the Bitwage platform in order to pay their workers using the USD Coin (USDC) stablecoin, which is linked to the price of the U.S. dollar. Salaried workers or freelancers can also sign up to receive wages from employers in the coin. The move comes at a time when global markets have been in turmoil resulting from the ongoing uncertainty relating to the recovery from coronavirus-affected communities, and many national currencies have lost value against the dollar.

Bitcoin miners made $366.4 million in revenue during May, despite halving
Yogita Khatri – The Block
Bitcoin miners across the world generated an estimated $366.4 million in revenue during May, despite the halving, which reduced mining rewards per block from 12.5 BTC to 6.25 BTC. The May revenue is just 11% down from April revenue of $412.5 million, as noted by The Block’s Larry Cermak in his May by-the-numbers report. The figures are based on the assumption that miners sell their bitcoin holdings immediately and are drawn from the daily close price of bitcoin.

Alchemy Notify Wants to Simplify Blockchain UX With a Single Push
Sebastian Sinclair – Coindesk
Alchemy has built a new push notification system for blockchain developers. Announced Monday, Alchemy Notify is a product designed to enhance the user experience (UX) of various crypto platforms by providing real-time notifications for transactions and events. Blockchain UX often relies on constant attention from the user, which can be off-putting for those who want to engage in a seamless transaction process. Alchemy Notify is hoping to change that through push notifications to smart devices.

BidFX Enhances Mobile App To Boost Remote Trading
BidFX, the leading cloud-based provider of electronic foreign exchange (FX) trading solutions, today announced a major upgrade to its mobile app to meet growing demand from market participants to securely manage and trade their spot FX, forward and NDF positions when working remotely.


Twitter, Square to Make Juneteenth a Company Holiday; Juneteenth, which is celebrated annually on June 19, is a day commemorating the end of slavery in the U.S.
Kimberly Chin – WSJ
Twitter Inc. TWTR -1.97% and Square Inc. Chief Executive Jack Dorsey said the companies will honor Juneteenth as a holiday in the U.S., as American corporations grapple with ways to show support for black employees and celebrate racial diversity.

U.S. companies vow to fight racism but face critics on diversity
Ross Kerber, Helen Coster, Arriana McLymore – Reuters
In the past, U.S. corporations have largely remained silent as protests erupted over killings of African-Americans by police officers. That changed with the May 25 death of George Floyd in Minneapolis, which has set off a flurry of corporate statements of solidarity with the black community – along with pledges of more than $1.7 billion to advance racial justice and equity.

National Guard troops test positive for coronavirus amid warnings of protest spike
Tamar Lapin – NY Post
Some D.C. National Guard troops deployed to protests in Washington have tested positive for COVID-19, officials said Tuesday — as top White House Coronavirus Task Force members warned governors of a possible spike in infections tied to the nationwide demonstrations. The service members were among 1,300 D.C. National Guard members called to assist law enforcement in responding to anti-police brutality protests in the nation’s capital beginning on May 31, a spokeswoman confirmed to McClatchy DC.

Trump rages at protesters as George Floyd is laid to rest; President suggests 75-year-old man assaulted by Buffalo police was anti-fascist ‘provocateur’
Demetri Sevastopulo – FT
Donald Trump renewed his attacks on antiracism protesters on Tuesday, suggesting that a 75-year-old man assaulted by police in Buffalo, New York, was a “provocateur” working for a radical anti-fascist group.

Trump Falsely Targets Buffalo Protester, 75, as ‘Antifa Provocateur’; The president attacked Martin Gugino even as the activist was in the hospital recovering from a head wound sustained when the police shoved him to the ground.
Alan Feuer – NY Times
It is true, his friends admitted: Martin Gugino is an activist, a seasoned peacenik who in a lifetime of protest has taken part in demonstrations against military drones, climate change, nuclear weapons and police brutality. But Mr. Gugino is also a football fan, they said, a mild-mannered bachelor and a Buffalo native who returned to his hometown some years ago to care for his ailing mother.

CrossFit C.E.O. Greg Glassman Steps Down in Chaos; Greg Glassman, who started a fitness movement that’s grown for decades, spun CrossFit into a disaster in just days.
Katherine Rosman – WSJ
Greg Glassman, the founder and chief executive of CrossFit, announced on Tuesday evening he would step down from his role. The resignation comes after days of turmoil for the company.

Presidents Lose When There’s an Election-Year Recession; But Trump could be poised to break the trend.
Joshua Green – Bloomberg
On Monday, the National Bureau of Economic Research—the official government arbiter of recessions—formalized what most people already assumed: The U.S. economy entered a recession in February. The timing could hardly be worse for President Trump, who’s up for reelection in less than five months.

Jack Dorsey’s Stand Against Trump Marks a Long-Debated Red Line; The Twitter CEO’s addition of mild disclaimers on certain presidential tweets stands in stark contrast to Facebook’s persistent laissez-faire approach.
Kurt Wagner – Bloomberg
Jack Dorsey eats around 6:30 p.m. each night, a meal typically consisting of meat or fish, greens, berries, chocolate, and a multivitamin, with red wine. For breakfast, he drinks 28 ounces of water. For lunch, he has more water. He’s been known to go entire weekends on water alone.


Police warn of investment fraudsters targeting the elderly
Rachel Mortimer – FT Adviser
Surrey Police have warned of increasingly common investment fraud after victims lost hundreds of thousands of pounds to scammers last month. The force recorded six cases of investment fraud involving vulnerable people in May, with total losses of more than £365,000.

FCA pledges rapid response to market failure
Imogen Tew – FT Adviser
The City watchdog’s interim chief executive has vowed to shorten the time it takes it to assess a market or firms to a “matter of hours”. Speaking on an Inside FCA podcast, published today (June 10), Chris Woolard, the Financial Conduct Authority’s interim CEO, said the FCA had learned some “big lessons” from its handling of the coronavirus crisis, primarily around data collection and timely responses.

Chris Woolard discusses emergency regulation and learning from the coronavirus crisis
In his first Inside FCA podcast interview, Interim Chief Executive Chris Woolard discusses how the FCA has rapidly reprioritised work in light of the coronavirus (Covid-19) pandemic, and talks about future business planning

Former financial adviser and Royal Commission witness, Sam Henderson charged with dishonesty and defective disclosure offences
Following an ASIC investigation, former Sydney financial adviser Sam Maxwell Henderson has been charged with three counts of dishonest conduct and two counts of giving a disclosure document knowing it to be defective. The charges relate to alleged false representations made by Mr Henderson that he had a Master of Commerce.

Ex-Goldman banker avoids prison time in insider trading case; Bryan Cohen sentenced to 12 months of home detention by federal judge in New York
Laura Noonan in New York and Kadhim Shubber – FT
A former Goldman Sachs banker avoided prison time on Tuesday for his role in a global insider trading ring that generated tens of millions of dollars in profits using confidential information about multibillion-dollar takeovers.

Denmark Toughens Demands for Banks’ Anti-Money Laundering Teams
Frances Schwartzkopff – Bloomberg
Denmark is proposing greater independence and tougher qualifications for bankers hired to prevent money laundering as part of efforts to prevent a repeat of the Danske Bank A/S scandal.

Federal Reserve Board announces that results from both its Dodd-Frank Act stress tests and the related Comprehensive Capital Analysis and Review will be released on Thursday, June 25, at 4:30 p.m. EDT
US Federal Reserve
The Federal Reserve Board announced on Tuesday that results from both its Dodd-Frank Act stress tests and the related Comprehensive Capital Analysis and Review, or CCAR, will be released on Thursday, June 25, at 4:30 p.m. EDT.

Investing and Trading

Rice Prices Spike to Highest Level Since 2011; Surging demand from coronavirus lockdowns and global weather issues have dented rice availability
Kirk Maltais – WSJ
Rice futures spiked to their highest level in nearly nine years after the global pandemic boosted shoppers’ demand for the grain. One measure of prices has soared 47% in the last two weeks to touch its highest level since November 2011, making rice one of the fastest-climbing major commodities in the recent market rally. Front-month rough rice futures on the CME traded as high as 23.565 cents per hundredweight Friday before giving up some of that gain in recent sessions. The front-month contract closed at 17.57 cents per cwt Tuesday.

Norway’s $1tn oil fund to sharpen focus on corporate governance; ‘Strong boards’ needed in wake of coronavirus crisis, says Carine Smith Ihenacho
Richard Milne- FT
The world’s largest sovereign wealth fund is sharpening its focus on corporate governance and the role of the board during the coronavirus pandemic but has postponed several sustainability projects.


DWS executive reshuffle results in departure of Americas chief; German asset manager focuses on cost-cutting drive after investor outflows
Chris Flood – FT
The head of the underperforming Americas division of DWS has left the German asset manager as part of a leadership reshuffle aimed at driving down costs after coronavirus triggered large investor outflows in the first quarter.

Tudor Jones Says Time for ‘Humble Pie’ About Stock Market
Melissa Karsh and Hema Parmar – Bloomberg
Hedge fund legend is among those who voiced doubts on stocks; Tudor Investment CEO sees inflation as an issue down the road
Legendary hedge fund manager Paul Tudor Jones said investors who have been cautious around the stock market have been confounded by the recent rally. “If there was a franchise for humble pie, oh my lord they’d be a mile long to own that, because we all had huge gulps of it — me included,” Jones, the founder and chief executive officer of Tudor Investment Corp., said Tuesday during a webcast held by The Economic Club of New York. He spoke via video conference in front of a background of the night sky.

Mizuho Ready to Deploy Billions of Dollars for Riskier Financing
Taiga Uranaka and Yuki Hagiwara – Bloomberg
CEO expects corporate clients to bolster capital amid pandemic; Japan faces worse slump than during Lehman shock, Sakai says
Mizuho Financial Group Inc. is ready to deploy “several billion dollars” in riskier funding to companies that need more capital to cope with the fallout from the coronavirus outbreak, its chief executive said.

Deutsche Bank Says Loan Provisions to Hit Eleven-Year High
Steven Arons – Bloomberg
CFO sees provisions peaking at 800 million euros this quarter; Confirms outlook for medium-term capital strength target
Deutsche Bank AG will set aside the most money in more than a decade to cover the cost of loans souring as Germany’s largest lender grapples with the economic collapse in the wake of the coronavirus pandemic.

Kyle Bass Makes Audacious Bet on Hong Kong’s Currency Peg Collapsing
Nishant Kumar – Bloomberg
Hayman Capital founder says the city’s currency peg is doomed; His fund will make all-or-nothing wagers using HKD options
Kyle Bass is going for broke on a currency trade that has burned bearish speculators for more than three decades. The Dallas-based founder of Hayman Capital Management is starting a new fund that will make all-or-nothing wagers on a collapse in Hong Kong’s currency peg, people with knowledge of the matter said.

Credit Suisse Gives Upbeat Market Update as Clients Boost Trades
Patrick Winters – Bloomberg
CFO Mathers sees significant capital markets activity pick up; CEO Gottstein says bank is seeing higher client engagement
Credit Suisse Group AG gave a positive assessment of the second quarter to date, pointing to the recent boom in refinancing and clients seeking to trade and invest again after the easing of the coronavirus pandemic.

Goldman Traders Reap $1 Billion in Commodities After Oil Tumult
Sridhar Natarajan and Jack Farchy – Bloomberg
Oil-price collapse drives the desk’s best start in a decade; Commodities trading unit faced uncertain future under new CEO
Goldman Sachs Group Inc.’s commodities business, once the crown jewel of its trading operation, is rediscovering its old touch in turbulent markets. The commodities unit generated more than $1 billion in revenue this year through May, pouncing on wild swings for its best start in a decade, according to people with knowledge of the matter. Much of the boost came from oil trading overseen by Anthony Dewell and Qin Xiao, who correctly positioned their desks for the collapse in prices, the people said, asking not to be identified discussing confidential information.

Barclays labels Staveley lawsuit ‘distorted and exaggerated’
Kirstin Ridley – Reuters
Barclays (BARC.L) has dismissed as “distorted and exaggerated” legal arguments by financier Amanda Staveley, who is claiming up to 1.5 billion pounds in damages for alleged deceit over a financial crisis-era fundraising in a high-profile London trial.

UBS Starts Regional Private Markets Groups to Boost Alternatives
Marion Halftermeyer and Patrick Winters – Bloomberg
Firm seeks to offer more investments in unlisted assets; Announcement follows similar setup in the U.S. market
UBS Group AG is setting up European and Asian teams to bring more private market deals to its wealthy clients as part of a global push to boost its offering beyond regular securities.

Exclusive: Savings surge forces Goldman to shut Marcus to new UK clients
Sinead Cruise – Reuters
Goldman Sachs (GS.N) is closing its easy access savings business to new customers in Britain from Wednesday after deposits surged near to regulatory limits during the coronavirus lockdown.


Germany should make provisions to ensure banks have sufficient capital: OECD
Germany should make provisions to ensure banks have sufficient capital in case of a wave of bankruptcies in Europe’s largest economy caused by the coronavirus crisis, a senior OECD economist said on Wednesday.

SBI general meeting to go virtual on June 17, shareholders to cast e-votes; The general meeting can be conducted via a video conference or Other Audio-Visual Means (OAVM) as per Sebi order
Abhijit Lele – Business Standard
The country’s largest lender, State Bank of India, will conduct a virtual meeting of shareholders on June 17, to enable them to elect four directors to its central board.

China’s Companies Find Ways to Avoid Bond Blowups; Some methods include asking creditors to wait longer for repayment or forgo the right to redeem bonds early
Xie Yu – WSJ
Chinese companies are avoiding or minimizing bond defaults, even as the economy shrinks for the first time in decades. China’s domestic corporate-bond market is one of the world’s largest, with a total face value of about $5.1 trillion, according to Wind. Yet while there have been defaults recently, the shock of the coronavirus pandemic hasn’t produced anything to rival high-profile U.S. collapses such as Hertz Global Holdings Inc.

South Korea’s Largest IPO Since 2017 Starts Taking Orders
Julia Fioretti – Bloomberg
SK Biopharmaceuticals Co. has started taking investor orders for what is set to be South Korea’s largest initial public offering in three years. The company could raise as much as 959 billion won ($805 million) at the top of its price range. The sale comes as IPOs globally rebound, with last week being the biggest of the year for listings.

How London Transport Is Preparing for Life After Lockdown
Hayley Warren – Bloomberg
The U.K. may be emerging from lockdown but the national requirement for 2-meter social distancing has urban planners in London straining to find alternatives for millions of people who depend on the city’s often crowded public transportation. Temporary measures popping up all over the city will make completing short journeys by cycling or walking easier for some, but for people accustomed to using trains and busses, staying local might be the only viable option.

Tide Turning for Hong Kong Stocks at 50% Discount to S&P 500
Jeanny Yu and Sofia Horta e Costa – Bloomberg
Hang Seng price-to-earnings ratio lowest versus U.S. since ’05; Global investors have started to move cash into risk assets
Amid all the doubt surrounding Hong Kong’s future as a global financial hub, one thing is certain: the city’s stock market is an enticing target for the wave of cash that’s returning to the world’s equities.


EU states warn Brussels of hard Brexit risk to coronavirus plans; Ireland and Belgium urge bloc to prepare for double blow from UK no-deal exit and pandemic
Sam Fleming and Mehreen Khan – FT
EU member states including Ireland are urging Brussels to take into account the shock of a hard Brexit in addition to the pandemic in its response to the bloc’s gravest postwar economic slump.

Here’s How a No-Deal Brexit Would Shock Virus-Hit U.K. Companies
Joe Mayes, Deirdre Hipwell, and Suzi Ring – Bloomberg
Trade talks between the EU and U.K. have struggled in recent weeks, increasing the prospect that Britain departs the bloc without a deal and that businesses face an extreme shock when the divorce takes effect. It’s a scenario that would deepen the economic pain inflicted by the coronavirus pandemic, with companies already reeling from the damage of the national lockdown and the economy heading for its deepest recession in centuries.

Brexit: EU may veto UK trade deal lacking safeguards, leaked report reveals
Jennifer Rankin – The Guardian
The European parliament could veto any trade deal between the UK and the European Union that lacks “robust” safeguards to ensure fair competition and strong standards on the environment and workers’ rights, according to a leaked document. A draft resolution, seen by the Guardian, which will be put to a vote on Friday, underlines the implicit threat to block the EU-UK trade deal. Urging the British government to “revise its negotiation position”, the text states that a level playing field is the “necessary condition for the European parliament to give its consent to a trade agreement with the UK”.

Pandemic and Brexit make deeper EU capital market urgent, report says
Huw Jones – Reuters
Deepening the European Union’s capital market has become a priority to help the economy recover from COVID-19 and reduce reliance on the City of London, a report for the EU said on Wednesday. The EU has long sought to encourage companies to issue stocks and bonds to grow, as in the United States. But they still rely on banks for funding after efforts to build a capital markets union (CMU) failed to make significant headway.

Extending Brexit Talks Would Be ‘Crazy’, U.K. Minister Says
Joe Mayes – Bloomberg
Boris Johnson’s government reiterated its opposition to extending trade talks with the European Union beyond the end of 2020, even as the deadlock in the negotiations increases the threat of a disruptive split. “It would be crazy to extend it,” Cabinet Office minister Penny Mordaunt said in the House of Commons on Tuesday, repeatedly saying the government won’t delay Britain’s final break with the EU. “We want to conclude the negotiations to give people time to prepare for the end of the year.”

UK looks to wean itself off Chinese imports
George Parker and Daniel Thomas – FT
Boris Johnson’s government is drawing up a strategy to reduce the UK’s reliance on China for key imported goods, as ministers acknowledge that a combination of the coronavirus pandemic and Brexit will force a big shake-up of the country’s supply chains. The planned overhaul will aim to implement the results of “Project Defend” — an internal exercise to ensure Britain retains access to critical goods while diversifying the country’s trading relationships.

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