Hits & Takes
John Lothian & JLN Staff
Without fanfare or amplification from its executives, the CME Group shut the books on most — but not all — of its floor trading history Tuesday afternoon with the announcement that it will not reopen its trading pits that were closed early last year. The CME closed its Chicago trading floor as of the close of business Friday, March 13, 2020, in response to the COVID-19 pandemic. The Eurodollar options pit, which was reopened in August 2020, will remain open and will trade both electronically and via open outcry. (Options, with their multiple strike prices, expirations and spreads, are generally viewed as more challenging to trade electronically, and euro options command healthy volumes.) CME Group also announced that, subject to regulatory review, it will delist its floor-based S&P 500 futures and options contracts following the expiration of its September 2021 contracts on September 17, 2021. Any remaining open interest in those contracts will be migrated into the E-mini S&P 500 futures and options on CME Globex, the exchange said.~SC
In fitting timing, yesterday before the CME floor closing announcement JLN released a video interview with former CME CIO Jim Krause for The Path to Electronic Trading series. Krause, who looks great since he retired, talks about his career, which featured development of the Globex project from the very start with the Reuters trading match engine system. Thank you Jim for participating in this video. There is some great history and stories he shares. — JLN
There have been whispers in recent weeks that the CME Group would be closing its floors. There were second- and third-hand reports that price reporting employees who work on the trading floor had been told they would not be returning to their jobs. Also, I expect a reduction in fine income from the CME, as the last of the floor-based shenanigans will cease. The saddest part is that Ceres is still closed for the pandemic so we can’t go there and toast the closing of the pits.~JJL
I can remember a prominent trader at the CBOT from 1999 proclaiming the floors would close in 2000 and traders should be aware. He was just a little off.~JJL
The TMX Group has pledged support to COVID-19 relief efforts in India. “Conditions continue to worsen in India, as the devastating outbreak of COVID-19 has overwhelmed hospitals and led to shortages of key medical supplies and resources needed to save lives,” said John McKenzie, Chief Executive Officer, TMX Group. “We salute the brave people working on the front lines during this crisis in India and around the world; including healthcare workers, first responders and volunteers providing essential services and crucial support.” — TMX
It would be great to see broad industry support for relief for India. They need our help.~JJL
Rachna Mathur, the head of equity and index derivatives sales Americas at Deutsche Börse, is running a Facebook fundraiser for GiveIndia to help those affected by COVID-19 there. — Facebook
Barchart is hiring a director of licensing to manage third-party content licensing and relationships and is looking for candidates with significant market data licensing experience. Their business is heavily focused on integrating, aggregating and distributing market data, as well as other content like news in support of global equity, commodity and currency markets. — LinkedIn
Eurex has a busy May planned. It started on May 1 with a VSTOXX future liquidity provider scheme change that will reduce the maturity range to the first three expiries and change the minimum quote size in FVS1 and FVS3. Also on May 1, in FX derivatives they will have amendments to ESU parameters, changing LP schemes to “around the world timezone” schemes that will lead to significantly lower ESU limits compensated by an increase of MM Base. For the whole list of events and necessary actions, click HERE.
The birthrate in the U.S. was down last year and dropped 8% in December, which would correlate with the beginning of the pandemic.~NY Times
We had an anonymous donation of $100 to the JLN MarketsWiki Education GoFundMe campaign yesterday. Thank you to Anonymous and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The founder of /r/WallStreetBets has announced that he is launching a new blockchain trading app with other members of the Reddit community to “combat market manipulation,” which is hilarious. The app will allow users to gain exposure to various ETPs and will run on a decentralized autonomous organization (DAO), which will be governed using a digital token called a $WSB token. This will allow users on the app to vote on important decisions within the community, including whether to adjust exposure to each ETP, which will be owned by the community.~MR
JIm Krause: The Path to Electronic Trading
Jim Krause came to the futures industry from a job in temperature control and HVAC at a company called MCC Powers. He followed Don Serpico, his supervisor at MCC Powers, who had been hired by the Chicago Mercantile Exchange, to the CME. His timing could not have been better. He was hired to develop the clearing system at the CME.
CME Group to Close Most of Its Chicago Trading Pits Permanently; Floor trading for agricultural commodities has existed in the Midwest hub since the mid-19th century
Alexander Osipovich – WSJ
The exchange operator CME Group Inc. CME 0.32% said it would permanently close most of its open-outcry trading pits in Chicago, ending one of the world’s last vestiges of old-fashioned floor trading. CME said Tuesday that a number of trading pits that it closed temporarily in March 2020 to prevent the spread of Covid-19 wouldn’t be reopened. Many U.S. workplaces are coming back to life as the pandemic eases.
*****My posts to several exchange-related Facebook groups showed responses from sadness to statements that open outcry trading ended 10 years ago.~JJL
LaSalle Street buildings go up for sale; The marketing of the two properties could reveal investor sentiment about Loop offices.
Danny Ecker – Crain’s Chicago Business
What will investors pay for LaSalle Street office buildings amid the COVID-19 pandemic? A pair of landlords on the high-profile Loop corridor want to find out. In the larger of two new offerings, a joint venture of New York-based Fortress Investment Group and Chicago-based Hearn has hired the Chicago office of Jones Lang LaSalle to market the 26-story building at 2 N. LaSalle St. for sale.
*****This will be an important test of the Chicago financial district’s real estate market.~JJL
If the Pentagon Takes UFOs Seriously, So Should Markets; The possibility of alien life on Earth has implications for the entire human race, including investors.
Tyler Cowen – Bloomberg
Now that the Pentagon takes UFOs seriously, it’s perhaps appropriate to consider some more mundane aspects of the phenomenon — namely, what it means for markets. UFO data will probably remain murky and unresolved, but if UFOs of alien origin become somewhat more likely (starting, to be clear, from a low base rate), which prices will change? Or, to put the question in market terms: Where is the alpha in Alpha Centauri?
*****If Thor shows up, I will take it seriously.~JJL
The Dogecoin Joke Is Turning Serious in Latest Crypto Binge
Justina Lee and Joanna Ossinger – Bloomberg
Digital token’s value soars overnight to $90 billion; Cryptomania popularity may be hurting gold, say analysts
For anyone who still thinks Dogecoin is a joke, there are 90 billion reasons that say it’s not. That’s how much the digital token is now worth in dollar terms after another 40% gain in the 24 hours through Wednesday. Useless or not, the coin has been swept up in the crypto mania that’s gripped markets awash in central bank largesse. It’s the latest milestone in a year of speculative excesses for a market Nouriel Roubini once described as “the mother of all bubbles.”
*****My college student, IT-studying son, Robby Lothian, bought $50 worth of Dogecoin at the beginning of the year. He was up over 600% at last reading a couple of days ago.~JJL
Tuesday’s Top Three
The top story on Tuesday was from the Financial Times about a Chicago-based company, Environmental derivatives firm IncubEx raises $12m in funding round. The second most read was JLN’s MarketsWiki page on IncubEx, http://www.marketswiki.com/mwiki/IncubEx. And the third was from Bloomberg, a particularly interesting story in light of the CME Group’s Tuesday announcement, NYSE Says More Staff Can Return to Trading Floor If Vaccinated.
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CME to permanently close most trading pits; They shut over a year ago because of COVID-19.
Steve Daniels – Crain’s Chicago Business
Most of the trading pits at CME Group, which closed last March due to the pandemic, won’t open again. The Chicago-based derivatives exchange said today that it is permanently ending “open outcry” trading for all products other than Eurodollar options. That trading pit reopened last August and will continue to trade those options both in person and electronically, the company said.
Galaxy Digital to Buy BitGo in Crypto Sector’s First $1 Billion Deal; Purchase coincides with a nearly yearlong rally in the sector, whose market value has surged to $2 trillion
Paul Vigna – WSJ
Bitcoin-focused firm Galaxy Digital GLXY -3.63% Holdings Ltd. has agreed to buy BitGo Inc. for $1.2 billion in cash and stock, the first $1 billion deal in the cryptocurrency industry. The deal coincides with a surge in interest and a nearly yearlong rally in the crypto sector whose market value has surged to $2 trillion.
The Side of Wall Street That Matters Most Is Begging for Infrastructure
Daniel Alpert – NY Times
Although political rancor can make it hard to detect, the smartest money on Wall Street is practically begging for a major infrastructure investment from Congress, one even larger and more sustained than what President Biden is proposing. Yes, the chief executives of some big financial institutions, like JPMorgan Chase’s Jamie Dimon, have begun hand-wringing about inflation risks stemming from more government spending — particularly if much of it ends up financed with debt, which could be more likely than the White House may wish to admit. But the financial markets themselves are sanguine.
Binance ‘stock token’ dispute with German markets regulator deepens; BaFin rebuffs call from crypto exchange to remove warning on securities rules
Olaf Storbeck and Adam Samson and Philip Stafford – FT
Germany’s markets regulator has rejected a request from crypto exchange Binance to remove a warning on possible securities rules violations, in a deepening dispute over trading in “tokens” linked to stocks.
Multinationals unite to respond to global coronavirus crises; India’s death toll raises concerns about pandemic threat to employees and economies
Andrew Edgecliffe-Johnson – FT
Dozens of leading companies are joining forces to co-ordinate the business and government response to future Covid-19 outbreaks around the world, as India’s growing death toll raises concerns about the pandemic threat to employees and economies.
How Covid Has Reshaped Real Estate From New York to Singapore
Emily Cadman, Jane Pong and Pablo Robles – Bloomberg
The retreat from major cities has been the pandemic’s big real-estate story — but that doesn’t mean metropolitan house prices have suddenly got cheap. From New York to London to Sydney, ultra-low interest rates and vast government fiscal support have limited distressed sales. Still, apartment rents have plummeted and suburban bidding wars have erupted as millions of workers have learned they can work from anywhere. “There’s been a spatial shock, whereby you don’t have to go to the city to earn money necessarily,” said Andrew Burrell, chief property economist at Capital Economics. “We think cities will change a lot.”
No Vaccine, No Desk: Firms Weigh Whether to Make Shots Mandatory
Ryan Beene – Bloomberg
Employers back immunization yet most reluctant to require it; Risk of losing workers, bad optics of mandate form strategies
Mondelez International Inc., the maker of Ritz Crackers and Trident gum, wants to start welcoming workers back to office this summer, though with a caveat — they must be fully vaccinated against Covid-19. It’s a thorny issue for many companies as some workers are hesitant about getting the shots, and Mondelez hasn’t finalized its plan. Yet for Chief Executive Officer Dirk Van De Put, vaccines are a way to ensure safety while restoring workplace culture and camaraderie.
Bankers, Please Return to Your Desks; Goldman Sachs is the latest to call an end to remote work.
Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
Goldman Sachs has joined JPMorgan Chase in telling its bankers that it’s almost time to come back to the office. David Solomon, Goldman’s C.E.O., sent a memo to employees advising them to “make plans to be in a position to return to the office” by June 14 in the U.S. and June 21 in Britain. JPMorgan plans to open its offices on May 17 on a voluntary basis and require that workers return to their desks in rotations starting in July.
Employers Brace for Covid’s Mental Health Fallout as Workers Return; Companies are slowly calling staff back to the office. They bring with them the emotional scars of a year filled with fear, isolation and sorrow.
Arianne Cohen – Bloomberg
From casual Fridays to after-work drinks, those weekly rituals once taken for granted are returning as Americans head back to the office. And while masks, plexiglass and empty conference rooms will alter the cubescape, employers are nevertheless invested in getting things back to normal—or at least as normal as possible.
WallStreetBets Launches Blockchain App to Fight Market Manipulation
Matthew De Saro – BeInCrypto
Despite starting as a grassroots movement that had no formal hierarchy or leadership, WallStreetBets continues to shake up the established financial industry.WallStreetBets announced their plans today to utilize blockchain tech in an app aimed at going head-to-head market manipulation. The group has gone from an offshoot of the Occupy movement to a Reddit page to a worldwide phenomenon seemingly overnight.
Can London reinvent itself after the pandemic? Businesses and residents want a coherent vision for the UK capital’s recovery, but no return to ‘business as usual’
William Wallis – FT
Chuks Ibe is catching up on a backlog of orders in the central London tailor’s shop where he works as an apprentice. Like many people, now that national lockdowns imposed during the pandemic are being lifted, he is pondering what the future holds for him and the UK’s capital city. For now, he and shop owner Paul Kitsaros, who emigrated from Cyprus in the 1960s, have their hands full assisting clients emerging from months of casualwear and tentatively heading back to the office. Yet in the longer term, if some form of working from home becomes the norm, demand for suits could dwindle.
London Emerges From Lockdown Harder Hit Than Much of the U.K.
Lizzy Burden and Andrew Atkinson – Bloomberg
Property market suggests people moving to the suburbs; Thousands of furloughed hospitality workers may not return
London is emerging from lockdown bruised by Brexit and a pandemic that hit the U.K. capital harder than other regions, raising questions about its ability to power the country’s economic recovery.
A Return to the Office Is a Great Chance to Make a Fresh Start; New habits must be nurtured, a Wharton professor says.
Peter Coy – Bloomberg
In her new book, How to Change: The Science of Getting From Where You Are to Where You Want to Be, Katy Milkman, a professor at the University of Pennsylvania’s Wharton School, talks about strategies for overcoming obstacles. Here are edited excerpts from a conversation about how workers and bosses can adopt better habits as they return to the office.
Berkshire Hathaway’s Stock Price Is Too Much for Computers; Warren Buffett won’t split shares, which are fast approaching Nasdaq’s limit
Alexander Osipovich – WSJ
Berkshire Hathaway Inc. is trading at more than $421,000 per Class A share, and the market is optimistic. That’s a problem. The price has grown so high, it has nearly hit the maximum number that can be stored in one common way exchange computers handle digits.
Coalition Greenwich expands market structure team with new senior analyst; Stephen Bruel joins Coalition Greenwich as a senior analyst from Brown Brothers Harriman where he was head of derivatives product management for 10 years.
Annabel Smith – The Trade
Coalition Greenwich has expanded its market structure and technology team with the appointment of a new senior analyst, Stephen Bruel. In his new role, Bruel will head up the derivatives and foreign exchange practices at Coalition Greenwich, with an added focus on market infrastructure.
Global Hunger Hits Highest in Years After Pandemic Hurts Incomes
Megan Durisin – Bloomberg
Number of hungry rose by 20 million to 155 million last year; Outlook for this year remains grim, agencies say in report
The world faced its worst hunger problem in at least five years in 2020 on the back of the coronavirus crisis, and the outlook remains grim again this year. Some 155 million people across 55 countries — more than the population of Russia — suffered from issues ranging from a food crisis to famine, according to a report with data from more than a dozen agencies. That’s up 20 million from 2019, with economic shocks overtaking extreme weather as the No. 2 cause.
World’s Most Vaccinated Nation Reintroduces Curbs as Cases Surge
Kamlesh Bhuckory and Antony Sguazzin – Bloomberg
Seychelles has fully vaccinated 62.2% of its population; Covid-19 has hammered island nation’s tourism economy
Seychelles, which has fully vaccinated more of its population against Covid-19 than any other country, has closed schools and canceled sporting activities for two weeks as infections surge. The measures, which include bans on the intermingling of households and the early closure of bars, come even as the country has fully vaccinated more than 60% of its adult population with two doses of coronavirus vaccines. The curbs are similar to those last imposed at the end of 2020.
CDC Still Getting Interference. This Time From Teachers; The politics may be different, but the conflicts with science are the same.
Joe Nocera – Bloomberg
In 1983, a scientist named Bill Foege resigned as the director of the Centers for Disease Control and Prevention. He did so, Michael Lewis tells us in his new book, “The Premonition,” because after CDC researchers had discovered a connection between aspirin and Reye’s syndrome 1 in children, the aspirin manufacturers complained to the White House. President Ronald Reagan’s administration responded by telling the CDC to “cease and desist,” according to Foege. So he quit.
Covid Forecasters Warn India Deaths May Double in Coming Weeks
Jeanette Rodrigues and Michelle Fay Cortez – Bloomberg
Some researcher models predict surge in deaths and cases; A dearth of tests could prolong the outbreak for over a month
The coronavirus wave that plunged India into the world’s biggest health crisis has the potential to worsen in the coming weeks, with some research models projecting that the death toll could more than double from current levels. A team at the Indian Institute of Science in Bangalore used a mathematical model to predict about 404,000 deaths will occur by June 11 if current trends continue. A model from the Institute for Health Metrics and Evaluation at the University of Washington forecast 1,018,879 deaths by the end of July.
Covid Death Record Ravages Hungary Population by Most Since 1918
Zoltan Simon – Bloomberg
Hungary’s population shrank by the most in more than a century last year, with the eastern European country notching the world’s highest death rate during the Covid-19 pandemic. The plunge of 48,667 was the highest since 1918, when the Spanish flu and World War I were the biggest contributing factors, data released Wednesday showed. The population has shrunk every year since 1982 and stood at 9.7 million at end-2020.
How to live with long Covid; As the novel post-viral syndrome claims millions of sufferers, we look at the best treatments to boost your overall health
Rebecca Newman – FT
“It’s a challenge, long Covid,” says Dr Toby Hillman, a consultant in respiratory and general medicine at University College London Hospitals (UCLH). “It is barely defined, and different groups of people have very different symptoms.” How best to treat those sufferers, of whom there are thought to be 1.1m in the UK alone, is a quandary of our times.
India’s ‘Oxygen Express’ Races to Supply Hospitals, but Covid Patients Die as Stocks Run Out; Country is using its railways and air force to speed it to hospitals, but crisis caught system ‘unprepared,’ say medical and industry experts
Suryatapa Bhattacharya – WSJ
As hospitals throughout India put out pleas on social media for more oxygen, the country has pressed its national railways and air force to speed distribution. International aid has flowed in. But it hasn’t been enough.
This New Covid Vaccine Could Bring Hope to the Unvaccinated World; The German company CureVac hopes its RNA vaccine will rival those made by Moderna and Pfizer-BioNTech. It could be ready next month.
Carl Zimmer – NY Times
In early 2020, dozens of scientific teams scrambled to make a vaccine for Covid-19. Some chose tried-and-true techniques, such as making vaccines from killed viruses. But a handful of companies bet on a riskier method, one that had never produced a licensed vaccine: deploying a genetic molecule called RNA.
Exchanges, OTC and Clearing
SET And SET Foundation Donate THB 5.8 Million To Help COVID-19-Ravaged People
The Stock Exchange of Thailand (SET) and the SET Foundation have stepped up effort to those affected by the COVID-19 pandemic by donating THB 5.8 million (approx. USD 184,895) to 10 hospitals and public health organizations to purchase medical equipment and supplies.
Miami International Holdings Reports April 2021 Trading Results, MIAX Exchange Group Sets New Monthly Market Share and Volume Records
Miami International Holdings, Inc. today reported April 2021 trading results for its U.S. exchange subsidiaries – MIAX, MIAX Pearl and MIAX Emerald (together, the MIAX Exchange Group) and the Minneapolis Grain Exchange (MGEX).
Ant’s Halted IPO Takes the Shine off China’s STAR Market; Route to a listing on Shanghai’s once-hot answer to Nasdaq has become harder, prompting some startups to favor offshore IPOs
Joanne Chiu – WSJ
The route to a listing on Shanghai’s once-hot STAR Market has become harder, prompting some startups to favor offshore IPOs over China’s answer to Nasdaq. The board was launched in 2019 with backing from President Xi Jinping, as a fundraising base for China’s homegrown technology champions. With a faster, more market-based process for launching and pricing initial public offerings, it has been host to dozens of hot tech IPOs.
CME Group to permanently shutter open outcry trading pits following pandemic; The open outcry trading pits, except for the Eurodollar options pit, will not reopen at CME following their closure in March last year at the height of the pandemic.
Annabel Smith – The Trade
US derivatives exchange CME Group has confirmed it will not reopen its physical open outcry trading pits following their closure last March due to restrictions imposed by the COVID-19 pandemic. All open outcry pits will remain closed permanently, except for the Eurodollar options pit which opened in August last year, meaning these contracts can continue to be traded in both open outcry and electronic venues.
Seco S.p.A. lists on Borsa Italiana’s STAR segment
First listing of 2021 on Borsa Italiana’s STAR segment; Seco brings to 78 the total number of companies listed on Borsa Italiana’s STAR segment; The company raised EUR140 million
Borsa Italiana, part of Euronext Group, today congratulates Seco S.p.A. on its listing on the Main Market, STAR segment, of Borsa Italiana.
Eurex Exchange Readiness Newsflash | Updates May 2021
With this Newsflash, we would like to draw your attention to the upcoming publications, events and necessary actions for the ongoing initiatives:
TMX Group Consolidated Trading Statistics – April 2021
TMX Group Limited today announced April 2021 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha) and Montréal Exchange (MX).
TMX Group pledges support to COVID-19 relief efforts in India
TMX Group has donated $25,000 to the Canadian Red Cross India COVID-19 Response Appeal, to provide emergency relief to help those affected by the COVID-19 crisis in India. “Conditions continue to worsen in India, as the devastating outbreak of COVID-19 has overwhelmed hospitals and led to shortages of key medical supplies and resources needed to save lives,” said John McKenzie, Chief Executive Officer, TMX Group. “We salute the brave people working on the front lines during this crisis in India and around the world; including healthcare workers, first responders and volunteers providing essential services and crucial support.”
Intercontinental Exchange Reports April 2021 Statistics
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology, and market infrastructure, today reported April 2021 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
April highlights include:
Total open interest (OI) up 7% y/y and up 15% compared to 4Q20
Total Oil OI up 11% vs. 4Q20
Brent OI up 7% vs. 4Q20
Other crude and refined products OI up 12% vs. 4Q20
Nasdaq April 2021 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for April 2021 on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics.
Varrlyn becomes 15th member of UnaVista’s Consulting Partner Programme
Amsterdam-based Varrlyn joins UnaVista’s Consulting Partner Programme; UnaVista’s Partner Programme helps clients with their EMIR, MiFIR and SFTR reporting obligations
UnaVista, part of LSEG (London Stock Exchange Group), is delighted to announce that Varrlyn has joined its Consulting Partner Programme, bringing the number of partners to 15. Based out of the Netherlands, Varrlyn was founded in 2010 to guide financial services clients through implementations and application of new systems.
Ag Economy Barometer remains strong; producers concerned about possible changes in estate tax policy
The Purdue University/CME Group Ag Economy Barometer was virtually unchanged in April, up one point from March to a reading of 178. Producers are becoming more optimistic about the future. The Index of Future Expectations continued its upward trend from last month, up 5 points to a reading of 169. However, their views on current conditions slipped. The Index of Current Conditions dropped 7 points in April, to a reading of 195. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from April 19-23, 2021.
CME Group to Permanently Close Most Open Outcry Trading Pits; Eurodollar Options Pit will Remain Open – Effective May 4, 2021
CME Group today announced it will not reopen its trading pits that were closed last March due to the outbreak of the COVID-19 pandemic. The Eurodollar Options pit, which was reopened last August, will remain open, allowing these contracts to continue to trade in both open outcry and electronic venues. The company also announced that, subject to regulatory review, it will delist its full-size, floor-based S&P 500 futures and options contracts following the expiration of the September 2021 contracts on September 17, 2021.
Product Modification Summary: Delisting of Iron Ore 58% Fe, Low Alumina, CFR China Futures
Delisting of Iron Ore 58% Fe, Low Alumina, CFR China Futures.
Product Modification Summary: Delisting of Three (3) Platts Petroleum Futures and Two (2) European Naphtha (Argus) Futures Contracts
Delisting of Three (3) Platts Petroleum Futures and Two (2) European Naphtha (Argus) Futures Contracts.
OCC April Volume Rises 29.7%
OCC April 2021 Total Volume Up 29.7 Percent from a Year Ago; Highest April volume on record and fifth highest month in OCC’s history
OCC, the world’s largest equity derivatives clearing organization, announced today that April 2021 total cleared contract volume was 715,606,410 contracts, up 29.7 percent compared to April 2020 and the highest April volume on record. Year-to-date average daily cleared contract volume through April was 40,143,253 contracts, up 44.1 percent compared to April 2020.
WhatsApp person-to-person payments return to Brazil; Facebook-owned messaging app relaunches a year after being blocked by regulators
Michael Pooler and Hannah Murphy – FT
WhatsApp has relaunched a feature in Brazil allowing users to send each other money after an initial attempt was blocked by regulators and is now pushing to launch business payments in the market as well.
SimCorp launches buy-side front office innovation webinar; On 27 May, the SimCorp webinar will examine buy-side front-office innovation including portfolio optimisation and responsible sourcing of sustainable investment solutions.
Annabel Smith – The Trade
Trading and investment management software provider SimCorp has teamed up with The TRADE to launch a webinar on 27 May to explore front office innovation for the buy-side.
Blockchain bond platform LedgerEdge begins software testing ahead of launch; Testing software provider Exactpro will offer functional testing capabilities on the LedgerEdge platform to ensure its operational resilience.
Wesley Bray – The Trade
Start-up corporate bond trading platform LedgerEdge has integrated the functional testing software from Exactpro to ensure its operational resiliency ahead of its launch later this year.
MTN Looks to Finalize Plan to Separate Fintech by Early 2022
Loni Prinsloo – Bloomberg
MTN Group Ltd. is making progress toward separating the company’s financial-technology business and dispose of South African towers as the continent’s largest wireless carrier works on slimming down. A plan to spin off the lucrative fintech unit, which includes mobile money, should be finalized by the end of March 2022, Johannesburg-based MTN said in a statement on Wednesday. A sale and leaseback of domestic telecom masts is slated for the third quarter of this year after more than 20 responses from interested parties, the company said.
United Fintech hires Goldman Sachs’ George Govier
George Govier has been appointed as Sales Executive at United Fintech, the firm launched by Christian Frahm in November 2020 to enable banks and financial institutions to accelerate access to innovative digital technology from a wide range of fintechs specialising in capital markets. George Govier joins United Fintech following five years at Goldman Sachs where he worked in Prime Brokerage, within the Global Markets Division, helping European hedge fund clients to launch new funds with the bank.
Goldman’s Former Head of Digital Asset Markets Joins Startup
Olga Kharif – Bloomberg
Justin Schmidt will help Talos expand internationally; Talos is a crypto technology provider based in New York
Goldman Sachs Group Inc.’s former Head of Digital Asset Markets, Justin Schmidt, just became head of strategy at crypto-trading engineering company Talos.
WallStreetBets Forum Members Targeted in Telegram Cryptocurrency Scam
Brandon Kochkodin – Bloomberg
More than $2 million Binance Coin likely sent for sham tokens; WallStreetBets moderators warned of frauds using forum’s name
Members of Reddit’s WallStreetBets forum were targeted in a probable cryptocurrency scam that could have left its victims with at least $2 million in losses. Using the Telegram messaging service, an account called “WallStreetBets – Crypto Pumps” offered users the chance to buy a new token known as WSB Finance before it was listed on crypto exchanges, in what is referred to as a pre-mine sale. The account isn’t affiliated with the infamous stock message board.
Unseen Digital Cash Will Stretch Your Money; Blockchain technology used between banks to settle claims could significantly lower the cut taken from customers.
Andy Mukherjee – Bloomberg
Away from the cryptocurrency craze, important changes are taking place in how financial institutions move funds. Unlike the upcoming digital yuan or the keenly awaited Britcoin and FedCoin, a wholesale version of electronic cash might never show up in retail consumers’ wallets. But these invisible blockchain tokens could still turbocharge our everyday money: by making it move faster and stretching its worth.
Two Ways That Dogecoin Is the GameStop of Cryptos
Joe Weisenthal – Bloomberg
Dogecoin is soaring today, reaching new all-time highs both in dollar terms and also relative to Bitcoin. Its rise is very similar to GameStop, both on a superficial level and on a deeper, structural level. On a superficial level, you know, Dogecoin is the original memecoin. And GameStop was the original memestock. And both are fun to talk about and laugh about. And people find buying them both to be fun. Everyone likes to be in on the joke and that makes the price go up. Pretty obvious.
Dogecoin really is man’s best friend; The dog-themed crypto coin hits $0.69 lolol roflmao.
Jemima Kelly – FT
Remember when people used to analyse markets like they were a Really Serious Thing with serious fundamental factors driving them? Remember when they tried to do that for crypto markets too? LOL!
Galaxy Digital to acquire crypto custodian BitGo for $1.2 billion
Yogita Khatri – The Block
Mike Novogratz’s crypto merchant bank Galaxy Digital is set to acquire crypto custodian BitGo for $1.2 billion. Announcing the news on Wednesday, Galaxy Digital said the deal is in a mix of stock and cash — $265 million in cash and the rest in 33.8 million newly issued shares of Galaxy Digital. Once completed, the acquisition will make BitGo shareholders own approximately 10% of Galaxy Digital. The deal is expected to close in the fourth quarter of 2021. Upon closing, BitGo co-founder and CEO Mike Belshe will join Galaxy Digital as deputy CEO and become a member of the company’s board of directors.
Blockchain.com Acquires AI Firm to Expand Institutional Offering
Jamie Crawley – Coindesk
Crypto exchange and wallet provider Blockchain.com has acquired Artificial Intelligence Exchange (AiX). Terms have not been disclosed for the acquisition of the London-based developer of an artificial intelligence (AI) negotiating and matching engine for over-the-counter (OTC) trading. The acquisition will help drive the rapid growth of Blockchain.com’s institutional offering, according to a blog post by Blockchain.com CEO Peter Smith on Wednesday. AiX’s team boasts employees with experience at firms such as JPMorgan and Goldman Sachs, Smith added.
New York Bill Would Freeze Bitcoin Miners Pending Environmental Review
Danny Nelson – Coindesk
A new bill in the New York state legislature seeks to place a three-year moratorium on crypto mining pending an environmental review by the state. The bill, from state Sen. Kevin S. Parker (D-Brooklyn), would lift the moratorium only for mining facilities that “will not adversely affect” New York’s carbon-cutting benchmarks. The legislation is in its earliest stages and was referred to the Senate’s environment committee Monday. If passed, the bill would empower state inspectors to evaluate the impact mining facilities have on water quality, air quality, carbon emissions and wildlife. Miners would be allowed back online only after they complete an environmental impact statement. Those deemed to be hurting New York’s carbon-cutting plans would be nixed.
France Threatens to Cut Power to Jersey Island Amid Brexit Row
Ania Nussbaum – Bloomberg
The French maritime minister suggested that her government could cut off electricity supplies to the isle of Jersey, amid a deepening row between France and the U.K. over post-Brexit fishing rights.
Treasury Secretary Janet Yellen calls estimated $7 trillion tax gap ‘shocking and distressing’
Denitsa Tsekova – Yahoo
Treasury Secretary Janet Yellen is calling on the wealthy to pay their fair share of taxes and to close the tax gap by improving tax compliance and audits. “It’s really shocking and distressing to see estimates suggesting that the gap between what we’re collecting in taxes on current tax and what we should be collecting — if everybody were paying for taxes that are due — that amounts to over $7 trillion over a decade,” Yellen said during the Atlantic’s Future Economy on Tuesday. “We’re trying to make meaningful steps to close that gap.”
Biden’s Capital-Gains Tax Increases Would Hit Few Americans, Study Says; One proposed change could affect 62% of capital gains but fewer than 3% of taxpayers
Rachel Louise Ensign – WSJ
Affluent Americans are worried about President Biden’s proposed tax changes on capital gains from stocks, bonds and other assets. But those proposals would hit a sliver of taxpayers, according to a new analysis.
Family Offices, Payments to Brokers Are in Democrats’ Crosshairs
Jeff Kearns – Bloomberg
House Democrats are starting to lay out a legislative wish list in response to two events that rocked financial markets this year: the implosion of Archegos Capital Management and wild trading in GameStop Corp.
Ted Cruz’s threat to ‘woke CEOs’ was ‘the most openly corrupt thing any Senator has said,’ ethics expert says
Thomas Colson – Insider
An expert in government ethics has described Ted Cruz’s newspaper column on “woke CEOs” as the “most openly corrupt thing any Senator has said.” The Texas senator, in a Wall Street Journal column published last week, expressed his anger at the decision by a number of corporations, including Coca-Cola, to object to Georgia’s controversial new voting law.
Buffett: It’s ‘corporate fiction’ to say higher business taxes hurt customers
Ethan Wolff-Mann – Yahoo Finance
When President Joe Biden unveiled plans to raise the corporate income tax (from 21% to 28%) last month, the usual chorus of business leaders and lawmakers spoke out against the proposal, saying it would put U.S. businesses at a competitive disadvantage.
U.S. Proposes G-7 Coordination to Counter China’s Might
Alberto Nardelli and Nick Wadhams – Bloomberg
U.K. hosting meeting of foreign ministers in person in London; How to contain the Asian superpower is key issue in the talks
The Group of Seven nations is considering a U.S. proposal to counter what the White House sees as China’s economic coercion. A paper was circulated before a two-day meeting of G-7 foreign ministers in London, according to officials, who were granted anonymity to discuss private talks. Officials meeting on Tuesday spent some 90 minutes discussing ways in which China tries to get nations and individuals to do what it wants via the Belt and Road initiative or by leveling economic threats, according to a senior State Department official who spoke on condition of anonymity.
Biden Finally Stops Lowballing Vaccine Goals; Starting with a promise to deliver 100 million shots in the first 100 days ensured an easy political win. The next steps will be riskier.
Jonathan Bernstein – Bloomberg
President Joe Biden received, and deserved, a fair amount of ridicule for his less-than-ambitious coronavirus vaccination goals during his first 100 days in office (I contributed on Twitter). Both his initial goal of delivering 100 million shots and his subsequent upward revisions only required existing trends to continue during a period in which more vaccine was becoming available. Biden and his administration deserve plenty of credit for the vaccine rollout, but the public goals were … sort of silly. Granted, it’s always smart for presidents to establish goals that they know they can meet, but this was a little too much underpromising.
Commissioner Stump to Participate on a Panel at ISDA’s 35th AGM
Commissioner Berkovitz to Participate on a Panel at ISDA’s 35th AGM
Westpac Probed by Regulator on Insider Trading Allegations
Nabila Ahmed – Bloomberg
ASIC alleges bank engaged in insider trading in October 2016; Westpac says it is considering its position, notes the claim
Australia’s securities regulator is probing Westpac Banking Corp. on allegations of insider trading, just months after the country’s second-biggest lender paid a record fine to settle a breach of anti-money laundering laws.
Australia’s Westpac sued by regulator for alleged insider trading; Case relates to A$12bn debt deal for privatisation of nation’s biggest electricity distributor
Jamie Smyth – FT
Australia’s corporate watchdog is suing Westpac for alleged insider trading and breach of licence over the lender’s role in an A$12bn ($9.3bn) debt deal linked to the privatisation of the nation’s biggest electricity distributor.
Firms offering debt management services require credit licence to operate
ASIC has today released an information sheet for providers of debt management services that explains their new regulatory obligations, including the requirement to be licensed.
Episode 64: Markets enforcement outcomes
In this episode, we discuss the work of ASIC’s Markets Enforcement team. We are joined by ASIC Senior Executive Leader, Molly Choucair, to discuss recent Court action against AGM Markets and Antares Energy as well as ASIC’s Immunity Policy.
ASIC commences civil proceedings against Westpac for insider trading
ASIC has today commenced proceedings in the Federal Court against Westpac Banking Corporation (Westpac) for insider trading, unconscionable conduct and breaches of its Australian financial services licensee obligations.
ESMA updates its Q&As relating to the Prospectus Regulation
The European Securities and Markets Authority (ESMA), the EU’s securities and markets regulator, has today updated its Questions and Answers (Q&As) on the Prospectus Regulation (PR) with three new Q&As.
PODCAST: Advanced Analytics: Transforming Advertising Regulation
A three-day employee hackathon event a few years ago resulted in an idea that has since transformed the way FINRA’s Advertising Regulation group does its work.
Investing and Trading
Thomson Reuters Reports First-Quarter 2021 Results
Thomson Reuters (TSX/NYSE: TRI) today reported results for the first quarter ended March 31, 2021, updated its revenue outlook for the full year and provided an outlook for the second quarter 2021.
The Ghost of ‘Volmageddon’ Is Back to Haunt New Volatility Funds
Yakob Peterseil and Katherine Greifeld – Bloomberg
New York court says Credit Suisse must face XIV allegations; At least three short-volatility products are in the pipeline
Forget a Bitcoin ETF. For many Wall Street stock traders the most eagerly awaited exchange-traded funds are just as speculative — and even more controversial. Known as short-volatility products, a fresh twist in a legal battle is bringing these strategies riding calm markets back into the limelight at a time when at least three issuers are trying to launch new funds.
We Can’t Hold Off the Bankruptcy Wave Forever; A cataclysm may yet be avoided, but insolvencies won’t stay this low.
Chris Bryant – Bloomberg
When Covid-19 first plunged Europe into lockdown last spring, there were plausible predictions of a tidal wave of corporate insolvencies. That hasn’t happened, at least not yet. The number of companies declaring bankruptcy declined by about a fifth in the euro area last year, even as economic output contracted more than 6%. Firms were saved by overwhelming government support, including hundreds of billions of euros of public loan guarantees, wage subsidies and loan forbearance by banks. Rules were relaxed on when businesses must file for insolvency.
Impact Investing Might Help Save the World But Can Get Messy Along the Way; A clean wastewater company backed by Laurene Powell Jobs weathers a financial fight among shareholders.
John Hechinger – Bloomberg
For a company in the unglamorous wastewater business, Cambrian Innovation Inc. has a high profile in Silicon Valley and Hollywood. Its technology uses electrically charged microbes to digest refuse, producing clean water and energy. Its customers include Domaine Chandon, a winery in Napa Valley, Calif. And its biggest investor is the billionaire Laurene Powell Jobs, widow of Apple Inc.’s co-founder.
Iron Ore’s Blistering Rally Sets Sights on $200 as Steel Booms
Annie Lee – Bloomberg
Mill margins spur steel output, miners face operational woes; Analysts expect some easing over 2021, prices to stay elevated
A surge in steel consumption as the world emerges from its pandemic-induced slump is set to drive iron ore to an unprecedented high as the biggest miners struggle to keep up with the frenzied pace of demand.
A tale of two airline markets; Warren Buffett lost out by selling US carriers last year but Europe may be a different story
Brooke Masters – FT
Warren Buffett doesn’t admit to many mistakes. Asked over the weekend about his decision to dump $4bn in US airline shares last May, the Berkshire Hathaway chief executive responded drily, “I do not consider it a great moment in Berkshire’s history.”
Environmental, Social and Corporate Governance
Shell Sells U.S. Refinery for $350 Million in Latest Divestment
Gerson Freitas Jr – Bloomberg
Company is shifting focus away from processing crude; HollyFrontier buys the refinery and hydrocarbon inventories
Royal Dutch Shell PLC reached an agreement to sell its Puget Sound Refinery to HollyFrontier Corp. for $350 million in the latest major divestment from the European oil giant that’s moving away from processing crude.
Replacing Coal Plants With Renewables Is Cheaper 80% of the Time; A new report shows that the economics may not even support running U.S. coal plants, let alone building them.
Leslie Kaufman – Bloomberg
About 80% of U.S. coal plants are now more expensive to keep running than to swap out for new wind and solar capacity, according to a report from Energy Innovation, a non-partisan climate and energy think tank.
Banks Earn Big on Green Bonds But Really Clean Up With Fossil Fuel; Wall Street is on pace to earn record fees from climate-conscious debt, but bankers make more money financing the companies behind global warming.
Tim Quinson – Bloomberg
While investment bankers are on pace to earn record fees this year from selling green bonds, they still make far more money arranging debt issues and loans for fossil-fuel companies.
Fund Managers Push Standard Bank on Climate-Change Resolution
Antony Sguazzin – Bloomberg
Standard Bank Group Ltd., Africa’s biggest bank by assets, has been asked by a group of fund managers to include a resolution on climate-change targets at its May 27 annual general meeting.
BlackRock Backed Climate Proposals, But Key Votes Are Yet to Come; The money manager’s first-quarter stewardship report shows that it’s been more willing to stand up to management, while activists are looking ahead.
Annie Massa – Bloomberg
BlackRock Inc. disclosed that over the first three months of the year, it voted for a majority of shareholder proposals advocating sustainability-related changes at the companies whose shares it holds. But with key votes looming at major polluters, including oil heavyweight Exxon Mobil Corp., activists say that the firm’s true climate commitments haven’t yet been tested.
BlackRock accused of ESG inconsistency over Indonesia palm oil; US fund manager invested in group facing allegations of land grabs and poor environmental standards
Primrose Riordan and Stefania Palma – FT
BlackRock has been accused of inconsistency for supporting a shareholder protest against Procter & Gamble’s sourcing of palm oil from an Indonesian company in which BlackRock itself holds a significant stake.
High metal prices could delay energy transition, says IEA; Paris agreement to ‘turbocharge’ demand for minerals amid lack of investment in mining
Henry Sanderson and David Sheppard – FT
The International Energy Agency has warned that high mineral prices could delay a transition to clean energy owing to the amount of metals needed for batteries, solar panels and wind turbines.
BNP Paribas Securities Services expands proprietary network with launch of local custody services in Chile
BNP Paribas Securities Services, a global custodian with USD 13.4 trillion in assets under custody, today announces the launch of local custody services in Chile, expanding the bank’s proprietary network to 27 markets. The move enables BNP Paribas Securities Services to provide international and regional investors with access to the Chilean market and adds to the bank’s presence in Latin America where it already offers local custody services in Brazil, Colombia and Peru.
UBS’s Weber Apologizes for Archegos Loss, Urges Transparency
Marion Halftermeyer and Francine Lacqua – Bloomberg
No specific person responsible for Archegos loss, Weber says; New normal includes flexibility and part-time work from home
UBS Group AG’s Chairman Axel Weber apologized for the loss the Swiss bank posted on its exposure to the collapse of Archegos Capital Management while also blaming a lack of regulation and transparency regarding family offices operating in financial markets.
BNY Mellon leads back-office race to secure US crypto ETF business; Regulators have not approved any bitcoin funds despite a growing list of proposals
Jackie Noblett – FT
Regulators are taking their time evaluating the growing number of bitcoin exchange traded fund proposals. But backers of such products are wasting no time to ensure they have the vendors in place to keep them humming if they are approved.
Banks in Archegos Aftermath Tighten Credit Lines, Scrutinize Swaps; Credit Suisse, Morgan Stanley are among firms reviewing their businesses that offer financing to hedge funds and family offices
Juliet Chung, Gregory Zuckerman and Julie Steinberg – WSJ
Banks across Wall Street are looking to tighten the lending terms of some of their hedge-fund clients on the heels of Archegos Capital Management’s collapse. Firms including Credit Suisse Group AG CS -1.54% , Morgan Stanley MS 0.22% and UBS Group AG UBS -2.34% are reviewing their businesses that offer financing to hedge funds and family offices for potential vulnerabilities to safeguard against another Archegos-style event, said bankers and hedge-fund managers.
BNP Paribas AM names Sandro Pierri new CEO; Frédéric Janbon to step down
BNP Paribas has appointed Sandro Pierri as CEO of BNP Paribas Asset Management with effect from 1 July, replacing Frédéric Janbon. Pierri is currently deputy CEO of BNP Paribas AM and head of its global client group. Based in Paris, he will report to Renaud Dumora, future deputy COO of BNP Paribas, in charge of the investment and protection services division of the group, which includes BNP Paribas AM, alongside BNP Paribas Cardif, BNP Paribas Wealth Management and BNP Paribas Real Estate.
SBI Terminates Ping An Joint Venture Over Data Fears; Japan’s largest online brokerage SBI has ended a joint venture with Ping An Insurance over concerns about data protection.
SBI terminated its joint venture with Ping An, according to a report by Japanese news agency «Kyodo», due to unexpectedly high fintech development costs.
ANZ CEO Not Ruling Out Purchase of Citi Australia Retail Assets
Nabila Ahmed and Shery Ahn – Bloomberg
‘We will take opportunity when it comes,’ CEO Elliott says; ANZ’s 1H profit rose as Australia’s economic rebound builds
Australia & New Zealand Banking Group Ltd. is in a strong position to make acquisitions, according to Chief Executive Officer Shayne Elliott. Elliott didn’t rule out the bank’s interest in Citigroup Inc.’s retail operations in Australia, saying ANZ has capital to grow. ANZ and National Australia Bank Ltd. are among contenders in discussions over the U.S. bank’s assets, Bloomberg News reported on Tuesday.
Saudi Arabia May Bar Overseas Hajj Pilgrims Again, Reuters Says
Dana Khraiche – Bloomberg
Saudi Arabia may bar overseas pilgrims from the annual hajj for the second year to contain the spread of coronavirus, Reuters reported, citing people familiar with the matter.
West African Cocoa Giants Report Progress in Deforestation Fight
Leanne de Bassompierre – Bloomberg
Ivory Coast and Ghana use initiatives to improve forest areas; Cocoa has been a key driver of deforestation since the 1960s
Cocoa giants Ivory Coast and Ghana reported progress in goals to end deforestation as they prepare for stricter European Union rules on production standards of the chocolate ingredient.
Silver Lake’s Deal for New Zealand All Blacks Stokes Players’ Concern
Tracy Withers – Bloomberg
New Zealand Rugby’s ambitious plans to sell a slice of revenue to a private equity investor could be stymied by the nation’s leading players, who fear control of the iconic All Blacks brand may be lost. Silver Lake Management LLC has pledged to invest NZ$387 million ($278 million) into the game by taking a 12.5% stake in a new entity that will own the commercial revenue from the All Blacks brand. Last week, the provincial unions that govern the game gave New Zealand Rugby officials clearance to finalize the Silver Lake deal. But it still needs the consent of the New Zealand Rugby Players Association, which has expressed grave concerns.
India’s Currency Market Roiled as Banks Protect Dollar Assets
Suvashree Ghosh and Subhadip Sircar – Bloomberg
State-run banks are staying away from receiving dollars; Forward premium on dollar-rupee doubles over the past week
India’s foreign-exchange market is getting roiled after the government told state-run banks to protect their dollar deposits due to a tax dispute. Banks were told by the authorities to protect their dollar deposits on concern that U.K.-based Cairn Energy Plc will move to seize India’s offshore assets after winning an arbitration ruling, according to people with knowledge of the matter.
Cigarette Vendors Are Currency Traders in Disguise in Caracas; Brands you’ve never heard of are excellent bolivar-laundering tools.
Alex Vasquez – Bloomberg
Ibiza! Costero! Malibu! The cigarette vendors jog up and down the sidewalks and weave in and out of traffic, yelling out their wares. They sell a lot of brands you’ve never heard of on El Comercio, which has for years been cheap-tobacco heaven. But these days, not every patron is here for the smokes. The serious side-business on El Comercio is changing money—U.S. dollars for bolivars, the country’s ridiculously hyper-inflated currency.
Dave Portnoy slams Nantucket mag as ‘spineless’ after cover story flap
Mara Siegler – NY Post
There’s a storm brewing in Nantucket over a local cover story on Barstool Sports founder Dave Portnoy — who tells Page Six that anyone who was offended by the piece can “go f – k themselves.” The exclusive enclave’s glossy N Magazine recently apologized for featuring Portnoy on its May cover — after receiving backlash from readers — in a move Portnoy calls “spineless.”