Could shutting exchanges stop the markets rot? SEC chief says ‘markets should continue to function’ but global staffing has been hit by virus

Mar 17, 2020

First Read

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Ceres Hit Hard By Restaurant Ban
Thom Thompson – JLN

The popular restaurant in the Chicago Board of Trade’s Jackson Street Lobby closed Monday afternoon in response to the Illinois governor’s restrictions on restaurants and bars serving the public. The restaurant plans to be closed for at least two weeks, Ceres manager Billy Assimos said that business had already fallen by about 95% on Monday.

The picture above was taken at around 2:00 on Monday afternoon. While there were about a dozen customers inside Ceres – not all of them at the bar – the building lobby was empty of office occupants and visitors.

To read the rest of this article, go here.

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Hits & Takes
By John Lothian and JLN Staff

We are in new territory for the markets and for worldwide civilization.The markets and our political leaders are telling us to prepare for the unexpected, even for a wartime like footing. In the U.S., the White House said to limit gatherings to groups of 10 or fewer, which is really hard to do when you are standing in line for something in short supply or being rationed. G7 leaders and the U.S. President Donald Trump pledged to do “whatever is necessary” to fight the virus and its impact.

At JLN we are now in the work at home mode, and yesterday published a video interview we conducted remotely with FIA CEO Walt Lukken. Walt is also now working from an undisclosed bunker in Washington, DC that may be his basement. This was the first interview from our Industry Leader Series we are producing even though the FIA Boca conference was cancelled. FIA has created a dedicated Coronavirus (COVID-19) webpage on their website at https://fia.org/covid-19. This page contains important FIA staff contact information and is currently being updated regularly with guidance from global exchanges, CCPs and regulators. This site also contains information and updates on upcoming FIA events and conferences to help with member planning. And, the rest of the FIA staff globally is also working from home.

The markets took a big hit yesterday, with the Dow down 13% and nearly 3000 points, the biggest point loss ever and the biggest percentage since the 1987 crash. The Russell 2000 had its worst day ever, registering a 14% loss. There were 16 stocks in the S&P 500 down more than 25% and another 3 down more than 30%. The question was raised should the markets be shut down, which is a really stupid idea. Among those who chimed in to oppose this idea were SEC Chairman Jay Clayton, NYSE President Stacey Cunningham and the FT Editorial Board. The Philippines did close their stock market

Forget about traders and fund managers not ever seeing a bear market; this is different. This is society seeing turmoil not seen perhaps since the Great Depression.

In the U.S., the latest sign of panic was people in some locations lined up outside gun stores to buy weapons and ammunition. This is a uniquely American response and is probably tied to protecting toilet paper stockpiles. For good news, Amazon is hiring 100K new employees to help with the spike in demand.

The U.S.’s polite friends to the north, the Canadians, closed their borders to foreigners, except those from the U.S. Europe is doing the same.

My church has moved to video worship services for the next three weeks, and Easter Sunday worship is a question mark. In Washington, DC, the White House cancelled the Annual Easter Egg Roll

I was recently reminded that Disciples did not go to Golgotha, the site of the crucifixion of Jesus, and still became saints, so missing going to church for a few weeks will not prevent anyone from getting to heaven.

All NYSE Group markets, including the NYSE Equities, NYSE American Options, and NYSE Arca Options Trading Floors will continue to operate normally today, according to an NYSE bulletin.

Michael Casey of Coindesk is going into a solo-quarantine and writing a blog about each day.

Steve Tucker, formerly CEO of Ffastfill, is now CEO of an online learning company called Itslearning. He posted to LInkedIn that “as schools across Europe closed this morning we saw over 10,000 new logins every ten minutes.” He just joined the company in January. Talk about being in the right spot at the right time.~JJL

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The top ten largest daily percentage losses in the Dow Jones Industrial Average: ~JB
1) 1987-10-19: -22.61
2) 2020-03-16: -12.93
3) 1929-10-28: -12.82
4) 1929-10-29: -11.73
5) 2020-03-12: -9.99
6) 1929-11-06: -9.92
7) 1899-12-18: -8.72
8) 1932-08-12: -8.40
9) 1907-03-14: -8.29
10) 1987-10-26: -8.04

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Walt Lukken: FIA Moves Forward After Boca Cancellation
JohnLothianNews.com

After FIA Boca 2020 was cancelled because of the Coronavirus, JLN found some alternative ways to put together the video interviews we had scheduled. In this one, with Walt Lukken, we spoke via phone with Walt and the FIA taped their side of the interview in his office. Lukken talked about the FIA’s decision to cancel the conference and the impact of the Coronavirus on the futures and options industry. He also discussed the results of the recent FIA survey in conjunction with Greenwich Associates and how the FIA is addressing market concerns. He also spoke about FIA Tech’s response to the attack on its systems by a hacker and how it is using the incident as a teaching tool, FIA’s efforts around diversity in the workplace, and regulation of foreign CCPs.

Watch the video »

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Dow drops nearly 3,000 points, as coronavirus collapse continues; worst day since ’87
Fred Imbert – CNBC
Stocks fell sharply Monday — with the Dow suffering its worst day since the “Black Monday” market crash in 1987 and its third-worst day ever — even after the Federal Reserve embarked on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak. The Dow Jones Industrial Average closed 2,997.10 points lower, or 12.9%, at 20,188.52. The 30-stock Dow was briefly down more than 3,000 points in the final minutes of trading. The S&P 500 dropped 12% to 2,386.13 — hitting its lowest level since December 2018 — while the Nasdaq Composite closed 12.3% lower at 6,904.59 in its worst day ever.
/cnb.cx/2QmDXo9

*****I was always told that when stocks crash like this, shares of companies return to their rightful owners, old money.~JJL

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Closing markets is not the way to stop the slide; Sharp falls in asset prices reflect deep concerns about coronavirus
The editorial board – FT
Even after central banks launched a co-ordinated economic support package on Sunday, markets plunged again hours later. The way to prevent a further slide, now being discussed, would be to close financial markets temporarily, as Franklin Delano Roosevelt did with US banks in 1933. Despite the magnitude of the falls, however, it is better that they remain open.
/on.ft.com/3aYmcDq

*****Close the markets and price discovery and liquidity move somewhere else. Risk does not stop just because markets are closed.~JJL

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CFTC to Give Work-From-Home Relief to Traders; Regulator to tell market participants it won’t enforce certain record-keeping rules
Paul Kiernan – WSJ
Regulators are preparing for the likelihood that trillions of dollars of financial-market activity may soon move from high-tech exchanges and corporate offices to homes across America.
/on.wsj.com/2whMaDp

*****NFA has also issued a statement for branch office registrants who need to work from home.~JJL

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Distilleries Are the Newest Players in the Hand Sanitizer Game; Scents include piña colada and margarita.
Kate Krader – Bloomberg
Some unexpected sources already have stepped up to fill the shortage of hand sanitizer. In France the luxury goods conglomerate LVMH is now using its perfume factories to make the product for hospitals. In the U.S. the Food and Drug Administration is now encouraging pharmacists to make their own.
/bloom.bg/39XPdiv

*****At least we still have Tito’s to drink.~JJL

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Monday’s Top Three
In what may be a sign of hope that humanity has a chance, our top story Monday was With the aquarium closed to humans, penguins take opportunity to explore and visit other animals, from CNN. It contains a video of a penguin named Wellington at the Shedd Aquarium in Chicago that is very, very cute. Second was the LinkedIn post from Nasdaq President Adena Friedman, A Message to our Community, regarding the impact of the coronavirus on trading and people. Third was The Atlantic’s opinion piece, The Trump Presidency Is Over, about the President’s response to the coronavirus. The headline seems a bit hyperbolic to me, but we will see.

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Lead Stories

Could shutting exchanges stop the markets rot? SEC chief says ‘markets should continue to function’ but global staffing has been hit by virus
Philip Stafford – FT
As worries over coronavirus sweep through markets, generating sharp bouts of volatility, some regulators are beginning to push for trading to be curtailed, fearing swings in prices have become disorderly and institutions with depleted workforces cannot cope with heavy volumes.
/on.ft.com/2UetaO8

SEC Chief Rejects Speculation Markets Should Be Shuttered
Benjamin Bain – Bloomberg
Jay Clayton discusses coronavirus response in CNBC interview; Markets should function through times like these, Clayton says
U.S. Securities and Exchange Commission Chairman Jay Clayton said Monday that stock markets should continue to operate when asked in a CNBC television interview whether exchanges should suspend trading because of volatility triggered by the spreading coronavirus.
/bloom.bg/2UbYc9h

Coronavirus to cause global recession, surge in defaults: S&P Global
Reuters
The sudden economic stop caused by coronavirus containment measures will cause a global recession this year and could see U.S. corporate default rates spike above 10% in the next 12 months, ratings agency S&P Global warned on Tuesday.
/reut.rs/3b1Rqtt

Britain’s FCA to keep stock markets open in face of volatility
Huw Jones – Reuters
Britain’s markets watchdog said on Tuesday it wants to keep stock markets open despite the extreme sell-offs in recent sessions, which have prompted some European countries to introduce trading curbs.
/reut.rs/3d4wQKR

Get Ready, A Bigger Disruption Is Coming; The Covid-19 pandemic reflects a systemic crisis akin to the seminal crashes of the 20th century.
Pankaj Mishra – Bloomberg
As global supply chains break, airlines slash flights, borders rise within nation-states, stock exchanges convulse with fear, and recession looms over economies, from China to Germany, Australia to the United States, we can no longer doubt that we are living through extraordinary times.
/bloom.bg/33ptXjp

Why Citadel Securities may not be cheering all these retail brokerage mergers; The combos of Morgan Stanley and E-Trade, plus Schwab and TD Ameritrade, could squeeze an important revenue stream.
Lynne Marek – Crain’s Chicago Business
The recent parade of retail brokerage firms headed for the M&A altar—Morgan Stanley’s proposed purchase of E-Trade and Schwab’s acquisition of TD Ameritrade—may have set the investment world’s heart aflutter, but it could mean heartache for market-makers like Citadel Securities.
bit.ly/39ZE0Os

Government Is Broadening Investigations of Spoofing-Like Practices; JPMorgan is being probed for market manipulation of Treasury securities
Dave Michaels – WSJ
Authorities are investigating whether traders at JPMorgan Chase & Co. manipulated the market for Treasury securities and futures contracts, according to regulatory disclosures and people familiar with the matter.
/on.wsj.com/2UcaRcl

The Philippines Did It. Now Smaller Markets May Follow Shutdown
Abhishek Vishnoi – Bloomberg
Smaller EM countries most likely to suffer similar fate: Oanda; Philippines shuts finanical markets from Tuesday to Thursday
In their war against the coronavirus and foreigners’ exodus, smaller markets might follow the Philippines in shutting down their bourses, market participants say. The nation’s move to close its $188 billion equity market until Thursday has already been followed by Sri Lanka. In both cases, the reason given for the closure is to help contain the spread of the coronavirus, which has already infected more than 174,000 globally and killed 7,000.
/bloom.bg/2Qm42Uw

Renaissance tripped up by coronavirus-induced market turmoil; Secretive quant hedge fund endures one of its worst months in more than a decade
Ortenca Aliaj, Robin Wigglesworth and Miles Kruppa – FT
Renaissance Technologies, one of the world’s biggest hedge funds, has been tripped up by the market turmoil unleashed by the coronavirus outbreak, underscoring how even the industry’s brightest names are struggling to navigate the financial chaos
/on.ft.com/3b2no8T

Humility Lands on Street Pros Who Thought They’d Seen It All
Sarah Ponczek and Vildana Hajric – Bloomberg
Stocks plummet again, setting off market-wide circuit breakers; Investors find it hard to make predictions or comparisons
Down 10% one day, up 9% the next, a 12% crash the next with halts going off everywhere. Investors are at a total loss. It’s been a lesson in humility. No historical comparison works, no model, no chart of valuations or profits. The coronavirus shuts down more cities, countries and businesses each day, you think you’ve seen the worst, then the Dow tacks on a 3,000-point plunge. Who knows what’s next?
/bloom.bg/38U2VBY

Trump, G7 Leaders Pledge ‘Whatever Is Necessary’ to Fight Virus
Justin Sink – Bloomberg
Leaders of the Group of Seven said they will do “whatever is necessary” to ensure a globally coordinated response to the coronavirus pandemic and its economic fallout.
/bloom.bg/2IQAIRZ

Huge fiscal spending is needed to fight the coronavirus downturn; Far more is required than during the global financial crisis
Martin Sandbu – FT
As the enormity of Covid-19’s probable economic fallout dawns, governments should prepare themselves for equally yawning gaps in public finances. That should not be a cause for alarm. On the contrary, unless government deficits widen to a scale unprecedented even in the global financial crisis then policy may well be seen to have failed to do its job.
/on.ft.com/3b40vlK

Europe, Canada, U.K. Limit Travel in Attempt to Seal Out Virus
Nikos Chrysoloras, Viktoria Dendrinou, and Milda Seputyte – Bloomberg
Internal border controls are gumming up European commerce; EU Commission admits move may not slow the spread of the virus
The European Union proposed a temporary halt to non-essential travel, while Canada and the U.K. placed restrictions on who can enter the country, further steps to firm up the world’s borders to prevent the spread of Covid-19.
/bloom.bg/2TVDyva

The IMF should inject liquidity through SDRs, and fast; Emerging markets are in no position to enact fiscal or monetary stimulus on the scale of 2009
Marcos Buscaglia – FT
Central banks around the developed world are using expansionary monetary policy and co-ordinated liquidity actions to alleviate the impact of the coronavirus outbreak on the global economy. While these are welcome, we think they are insufficient, as they leave out most emerging and low-income countries.
/on.ft.com/3d6wOSH

Macron Invokes War as Europe Goes Dark in Coronavirus Fight
Ania Nussbaum, Arne Delfs, and Ruben Munsterman – Bloomberg
Schools, restaurants – and borders close across the continent; All non-essential travel to the EU to be halted for 30 days
European leaders attempted to prepare their electorates for the unprecedented trials ahead as comprehensive curbs on national life came into force in a bid to control the spread of the deadly coronavirus.
/bloom.bg/2UcvPHZ

Robinhood Outages Show Perils of Move Fast and Break Things
Annie Massa, John Gittelsohn, and Jennifer Surane – Bloomberg
Platform failures vexed customers, some pulled their accounts; Silicon Valley startup apologized, called outages unacceptable
“Move fast and break things” is synonymous with Silicon Valley’s freewheeling tech culture. But one finance startup is learning the hard way that customers don’t like it when things actually break. As the coronavirus set off violent swings in global stocks, Robinhood Financial Inc.’s trading platform kept failing. A series of major outages left millions of clients in the dark. Some pulled their accounts and went to competitors. Many vented frustrations online as Robinhood worked on fixes.
/bloom.bg/2TWazYf

Strains Build in Funding Markets Despite a Barrage of Liquidity
Alex Harris – Bloomberg
Rates on overnight Treasury collateral spiked above 2%; Commercial paper spreads still near widest levels since 2009
Over the past week, the Federal Reserve has hit the U.S. dollar funding markets with a barrage of liquidity and tools to ensure they remain lubricated. Yet indicators of funding stress are still showing pressure.
/bloom.bg/2ISXetm

Strains Build in Funding Markets Despite a Barrage of Liquidity
Alex Harris – Bloomberg
Rates on overnight Treasury collateral spiked above 2%; Commercial paper spreads still near widest levels since 2009
Over the past week, the Federal Reserve has hit the U.S. dollar funding markets with a barrage of liquidity and tools to ensure they remain lubricated. Yet indicators of funding stress are still showing pressure.
/bloom.bg/2ISXetm

Short selling restricted across Europe due to coronavirus pandemic; Regulators in the UK, Italy, Spain and France have all restricted short selling activity amid massive equity market declines.
Hayley McDowell – The Trade
Financial regulators across Europe have made moves to temporarily restrict short selling of certain stocks for the second time in less than a week, as the coronavirus pandemic continues to grip markets.
bit.ly/2Ub0B49

Exchanges, OTC and Clearing

Philippine Stock Exchange will halt trading tomorrow until further notice
Yilun Cheng – The Block
The Philippine Stock Exchange will suspend trading starting Tuesday, March 17, until further notice, following the central government’s decision to imposes home quarantine measures on the entirety of Luzon.
bit.ly/33ltZc4

‘These are unprecedented levels of activity’: Nasdaq Executive Vice President
Yahoo Finance Video
Tal Cohen, Executive Vice President at Nasdaq, joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss his views on the markets amid the COVID-19 outbreak.
/yhoo.it/2IPekrR

Why Financial-Market Pioneer Richard Sandor Is Building “the Most Boring Benchmark in America”; A conversation with the creator of AMERIBOR about interest-rate benchmarks in a post-LIBOR world.
QRIUS
Over the past half century, Sandor has been prescient and present at key moments in the creation and evolution of financial futures contracts, catastrophe insurance, and a climate exchange. Most recently, he has developed a new interbank lending market, the American Financial Exchange, which gave rise to a new interest rate index, AMERIBOR.
bit.ly/38RTSkZ

Euronext names JP Morgan veteran new operating chief; After more than 20 years with JP Morgan, Georges Lauchard, joined Euronext as chief operating officer.
Kiays Khalil – The Trade
JP Morgan veteran, Georges Lauchard, has been hired by Euronext and will act as the pan-European exchange group’s new chief operating officer.
bit.ly/3b3R71n

LSEG gains US approval for $27 billion Refinitiv takeover; The Committee on Foreign Investment in the United States has given LSEG the green light for its landmark acquisition of Refinitiv.
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) bid to acquire Refinitiv for $27 billion has moved forward after the exchange operator confirmed it had received approval in the US.
bit.ly/3d0ydu9

Oslo Børs migration to Euronext Optiq platform set to complete by end of year; Migration of Oslo Børs markets to the Euronext trading technology platform Optiq is due to be completed in November.
Hayley McDowell – The Trade
Euronext has moved forward with plans to migrate Oslo Børs to its proprietary trading technology platform Optiq, and expects the project to be completed by the end of this year.
bit.ly/3dahQeG

Traders content with market innovation vs global uncertainty in 2020
Tony Shaw, Executive Director, London Office and Head Sales UK & Ireland at the Swiss Stock Exchange via The Trade
One of the clearest findings from our research was the continued enthusiasm for digital assets.
bit.ly/2Wrqbol

COVID-19: How we handle the situation
Eurex
We at Deutsche Börse create trust in the markets of today and tomorrow. As reliable market infrastructure provider, trusted partner and caring employer, we take the global COVID-19 situation very seriously.
bit.ly/2IyNzbi

Fixed Income Highlights – March 2020 edition
Eurex
February saw the tailwind of safe haven flows from the coronavirus outbreak as investors rotated out of equities and into bonds. The first tentative signs of the virus spreading in Europe saw volumes in our core benchmark futures spike. Volumes were strong across the curve, with Buxl futures the outperformer in the German benchmarks, up 86% month-on-month (M-o-M). The Italian and French segments continued to see robust M-o-M growth (+31%, +19% and +16.9%).
bit.ly/3b73REf

Equity Index Highlights – March 2020 edition
Eurex
Markets never liked uncertainty and the fear of an epidemic turning into a pandemic is felt by all. Despite the exceptional bout of volatility, the Eurex market infrastructure and liquidity pools in our benchmark products have proven to be robust.
bit.ly/3aYjjmg

FundsDLT: Financial institutions are jointly developing a blockchain-based platform for the investment fund industry
Deutsche Börse Group
Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange and Natixis Investment Managers are jointly developing FundsDLT, a blockchain-based technology platform for the investment fund industry. Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange and Natixis Investment Managers today announced Series A funding to further develop FundsDLT, a novel, decentralized technology platform based on distributed ledger technology (DLT) to support fund sales. This is an important milestone for FundsDLT, which was originally launched by the Luxembourg Stock Exchange and its subsidiary Fundsquare.
bit.ly/2WmDwhI

Further Guidance on the Joint Statement in relation to Results Announcements in light of the COVID-19 Pandemic
HKEX
The Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Limited (the Exchange) are releasing further guidance for listed issuers with 31 December financial year end on the publication of their preliminary results and annual reports.
bit.ly/2voyQfW

MEMX Goes with Nasdaq for Market Surveillance; The Members Exchange plans to be live with the platform by its launch date of July 24, despite market volatility.
Anthony Malakian – Waters Technology
While the Members Exchange (MEMX) and Nasdaq will look to potentially start competing this summer, that doesn’t mean that they can’t also partner.
bit.ly/2Wrtyvv

Fintech

ING makes EUR4.5 million investment in London-based NLP FinTech; Eigen Technologies’ natural language processing technology has already deployed at ING to facilitate Libor transition and loan operations.
Hayley McDowell – The Trade
Dutch investment bank ING has backed a London-based natural language processing (NLP) FinTech firm which counts BlackRock and Goldman Sachs among its client base.
bit.ly/2QhKyQT

TradeTech Europe 2020 conference postponed; Due to take place next month, TradeTech Europe is the latest industry event to be postponed due to concerns around coronavirus.
Hayley McDowell – The Trade
Worldwide Business Research (WBR) has confirmed that its TradeTech Europe conference due to take place in Paris next month will be postponed until further notice.
bit.ly/3b0hCEQ

Cryptocurrencies

DBL Digital Unveils Bitcoin Managed Account Program, Offers New Cryptocurrency Investment Option; The Managed Account Program (MAP) empowers investors to capture Crypto returns through the safety and convenience of exchange-traded futures and options.
DrawBridge Lending
DBL Digital, a division of DrawBridge Lending, a CPO and CTA with a market and credit based approach to digital asset investing and lending, announced the release of its Bitcoin Managed Account Program (MAP) for individual and institutional investors.
bit.ly/2WwgEMP

If Bitcoin is a ‘safe haven’ why does it tank in times of trouble?
Robert Hackett – Fortune
When the going gets rough—stocks falling, interest rates in decline, debts mounting—investors look to “safe haven” assets, like gold, that are supposed to retain value while the rest of the world burns up. Cryptocurrency investors argue Bitcoin should hold a similar place in the financial firmament: a reliable fallback in times of crisis. It’s digital gold, they say.
bit.ly/2QnB2vH

Ethereum Community Grapples With Coronavirus as EthCC Cases Tick Upward
Leigh Cuen – Coindesk
Over a dozen Ethereum fans who participated in the EthCC conference in Paris during the first week of March have since tested positive for coronavirus, according to public lists compiled by attendees. At least six hospitalized attendees have used these lists to alert the community so far. The lists, including real names and symptoms, have not been confirmed in full by CoinDesk. “This instinctive and dutiful radical transparency may change behaviours (sic) and save lives,” list creator Justin Drake tweeted.
bit.ly/2IU2pJG

Opera Browser Adds Apple Pay, Debit Card Cryptocurrency Purchase Options
Danny Nelson – Coindesk
The Opera browser app has partnered with e-payments startup Wyre to expand its built-in wallet’s crypto buying power, the Norwegian web developer announced Tuesday. In a deal that primarily caters to mobile crypto buyers in the U.S., the Opera-Wyre partnership brings Apple Pay functionality to iOS and debit card integration to Android. It lets users of either system purchase up to $250 in bitcoin or ether daily, for a 30 cent fee plus a 2.9 percent transaction commission, Opera’s Head of Crypto Charles Hamel told CoinDesk.
bit.ly/2vt2UXX

Bitcoin: What Just Happened
Chris Bendikesen – Trader’s Magazine
Over the previous month, global markets have taken an absolute beating with broad drops across multiple sectors from commodities – – led by oil – – to equities. This week, even corporate bonds and US Treasuries have seen sell-offs. The magnitude of the drops have been substantial, with several markets seeing their largest single-day drops in decades. In a field of losers, the strongest performers thus far have been gold and US Treasuries, and even those venerable safe havens have faltered somewhat over the course of this week. This all begs the question: What about Bitcoin? Bitcoin: the digital gold; the new safe haven; the most uncorrelated asset in the market – – how is it performing during this global financial calamity?
bit.ly/3b47g76

Why Bitcoin’s Safe-Haven Narrative Has Flown Out the Window
Noelle Acheson – Coindesk
Noelle Acheson is a veteran of company analysis and CoinDesk’s director of research. The opinions expressed in this article are the author’s own. Listen. That whooshing sound you hear is not just the bitcoin (BTC) price. It’s also the sound of the safe-haven narrative flying out the window, probably for ever. March 12 was not bitcoin’s worst 24-hour price crash ever. That honor belongs to April 11, 2013, when bitcoin fell by almost 50 percent. Comparing the two crashes helps to understand what happened this week. It also helps to form a picture of what this sector could look like going forward.
bit.ly/3b6jf46

Crypto lender BlockFi is raising interest rates on bitcoin and ether
Yogita Khatri – The Block
Crypto lender BlockFi is raising interest rates on bitcoin (BTC) and ether (ETH), effective April 1. Users holding up to 5 bitcoins now will earn 6% Annual Percentage Yield (APY) as compared to 3.6% APY currently. Ether holders, on the other hand, will earn 4.5% APY for up to 500 ETHs as compared to 2%-3.6% currently. The move appears to be unusual, given that interest rates are down in traditional financial markets amid coronavirus risks.
bit.ly/3b3L50O

Top 10 ways to keep your cryptocurrency safe
Vikas Shukla – ValueWalk
If you have invested in cryptocurrencies such as Bitcoin, Ethereum, and others, you are pretty much on your own to ensure the safety of your coin. The government or bank is not going to reverse a fraudulent transaction. Since cryptocurrencies are still unregulated in most countries, you have no legal options to get back your lost crypto asset. In the last few years, there have been dozens of instances of crypto exchanges being hacked. Digital currencies and people who own digital currencies have been popular targets of hackers and scammers. Here we take a look at the top 10 best ways to keep your cryptocurrency safe.
bit.ly/3d2Nqe6

Retail Investors Are Buying the Bitcoin Institutions Are Selling, Traders Say
Leigh Cuen – Coindesk
As institutions unload bitcoin (BTC) along with stocks as part of the coronavirus-driven global sell-off, cryptocurrency’s traditional base – retail investors – is doing most of the buying, market participants said. And while pricing screens may still be flashing red, business is brisk at many trading platforms. “We’ve already done more volume in March than all cumulative volume previously,” said River Financial CEO Alex Leishman, head of a bitcoin-centric brokerage in San Francisco that launched three months ago. “About 20 percent of all of our clients have signed up this month. … We’re seeing record interest from first-time bitcoin buyers.”
bit.ly/3936o1b

Coinbase’s Visa debit card can now be linked with Google Pay to spend crypto
Yogita Khatri – The Block
Coinbase Card, the Visa debit card that allows users to spend cryptocurrency directly from their Coinbase accounts, can now be linked with Google Pay. Announcing the news on Tuesday, Coinbase said Google Pay gives users a quick way to pay for everything – ranging from daily travel to end-of-year getaways – using their crypto “in the safest possible way.” Coinbase claims to be the first company to let users make mobile payments with crypto.
bit.ly/2QlqD3o

Binance, WazirX launch $50M token fund to invest in Indian blockchain startups
Yogita Khatri – The Block
Cryptocurrency exchanges Binance and WazirX have jointly set up a $50 million token fund to invest in Indian blockchain startups. The fund, dubbed “Blockchain for India,” is backed by Binance’s native tokens BNB and BUSD, and WazirX’s WRX token. It’s a token fund, meaning it would not invest in startups via cash, WazirX founder and CEO Nischal Shetty told The Block. WazirX is owned by Binance, since their million-dollar deal last November. The fund comes weeks after the Supreme Court of India struck down a circular issued by the Reserve Bank of India (RBI), which banned banks from dealing in crypto transactions.
bit.ly/3b1Zoml

Fintech Think Tank Takes Legal Action Against Cardano Foundation
Paddy Baker – Coindesk
A London-based think tank has brought legal action against the Cardano Foundation for allegedly terminating a 2017 agreement. The Switzerland-based group supporting the blockchain and cryptocurrency project confirmed in a blog post Monday that Z/Yen had initiated legal proceedings against it. “It is our obligation to inform the Cardano community of legal proceedings recently initiated by the Z/Yen Group Limited (UK) against the Cardano Foundation (Switzerland),” the foundation said. The dispute revolves around a reported agreement between the two organizations that the foundation allegedly terminated or voided for reasons that are not disclosed in the blog post.
bit.ly/3d0D2nf

Russia’s Central Bank Seeks to Ban Crypto Issuance and Circulation
Helen Partz – Cointelegraph
After years of uncertainty about its cryptocurrency regulation, Russia is further confusing its proposed crypto law as the country’s central bank made yet another statement on the issue. According to a legal executive at the Bank of Russia, the country’s major but still unfinalized cryptocurrency legislation — a bill “On Digital Financial Assets” — will ban the issuance and circulation of cryptocurrencies. Alexey Guznov, head of the legal department at Russia’s central bank, revealed the news in an interview with local news agency Interfax on March 16.
bit.ly/2IPKp30

U.S. Office of the Comptroller of the Currency names Coinbase exec as its chief operating officer
Yilun Cheng – The Block
The U.S. Office of the Comptroller of the Currency (OCC) has named Coinbase chief legal officer Brian Brooks as its next Chief Operating Officer and First Deputy Comptroller, starting April 1, 2020. Brooks has been working as Coinbase’s CLO since September 2018, leading its legal, compliance, and government relations efforts. According to a Monday announcement by the OCC, he is set to resign from Coinbase and replace Morris Morgan as the OCC’s Chief Operating Officer.
bit.ly/2QkmEnB

Politics

Trudeau Closes Canada’s Borders to Foreigners, U.S. Exempted
Kait Bolongaro
PM cites integration of economies as reason for exception; Trade and commerce won’t be impacted by the ban, he says
Prime Minister Justin Trudeau’s government is significantly restricting the entry of non-residents into Canada to combat the spread of the coronavirus.
/bloom.bg/2Ql4MsW

Trump can’t save us from the coronavirus. But governors and mayors can; The most important actions in the fight will be taken at the state and local levels
Daniel Hemel and Anup Malani – Washington Post
President Trump promised Friday to “unleash the full power of the federal government” against the novel coronavirus, officially declaring the outbreak a “national emergency” — “two very big words,” as he put it. But although this announcement drew headlines, the reality is that the president’s legal authorities in a pandemic are limited. Trump will continue to capture an outsize share of media coverage, but the most important actions in the fight against the virus probably won’t come from the president — they will come from governors and mayors.
/wapo.st/2xEySRz

Trump’s rage at the media takes a dangerous new turn
Greg Sargent – Washington Post
It’s bad enough that President Trump has relentlessly minimized the coronavirus threat for nakedly political reasons, disastrously hampering the federal government response to the crisis, with untold consequences to come.
/wapo.st/2w4X4fM

Trump projects confidence, but markets aren’t listening
John Harwood, CNN
(CNN) President Donald Trump opened his coronavirus press conference Sunday hailing “phenomenal news”: an emergency Federal Reserve interest rate cut to near zero to protect the economy as coronavirus brings activity to a near-halt.
/cnn.it/2TXQlxk

India Could be Next Virus Hotspot With an ‘Avalanche’ of Cases
Muneeza Naqvi, Archana Chaudhary, and Bibhudatta Pradhan – Bloomberg
Social distancing untenable in densely packed conditions; India using its limited health resources in a strategic way
India could become the next global hotspot for virus cases, with experts warning containment measures that proved successful elsewhere in Asia may not work in the world’s second-most populous country.
/bloom.bg/2UbKUJP

France Ready to Nationalize Big Firms in Radical Virus Response
William Horobin and Ania Nussbaum – Bloomberg
Finance minister says he’ll use all means to protect companies; Government to spend 45 billion euros on emergency measures
France is ready to use the ultimate weapon to protect its biggest companies from the market turmoil set in motion by the coronavirus: nationalization.
/bloom.bg/2QmETsB

Regulation

Spain Bans Short Selling for A Month on Coronavirus Plunge
Rodrigo Orihuela – Bloomberg
Spain’s securities regulator banned short selling for a month in an attempt to shield local stocks from the volatility caused by the coronavirus outbreak.
/bloom.bg/3b2nKMK

New accounting rules pose threat to banks amid coronavirus crisis; IFRS 9 said to make lenders more susceptible to highs and lows of economic cycles
Laura Noonan, Stephen Morris and Martin Arnold – FT
New accounting rules could cripple parts of the banking sector by forcing earlier recognition of loan losses, as the coronavirus pandemic threatens to push the world into recession.
/on.ft.com/3d5YQxJ

BoE’s guv Andrew Bailey has to prove he knows what’s what; New governor needs to quickly instil confidence that he knows how to fix problems
Cat Rutter Pooley and Kate Burgess – FT
“Behold the turtle. He only makes progress when he sticks his neck out,” said James B Conant, former president of Harvard. Andrew Bailey’s first day in the job as governor of the Bank of England, will test him and the knitted tortoise that sits on his desk, as never before. He will have to stick his neck out — and quickly.
/on.ft.com/2Ql9Q0g

Coronavirus Update—NFA Branch Office Requirements
NFA
NFA Interpretive Notice 9002 – Registration Requirements; Branch Offices requires a Member firm (other than a swap dealer) to list as a branch office on its Form 7-R any location other than the Member’s main business address from which APs are engaged in activities requiring registration. The Interpretive Notice further requires that each branch office location must have a branch office manager, who under Compliance Rule 2-7, must have successfully completed the Branch Manager Examination (Series 30).
bit.ly/2TSHzAm

AMP Life and AMP Capital pay penalties in relation to trade reporting rules
ASIC
AMP Life Limited (AMP Life) has paid a penalty of $275,500 and AMP Capital Investors Limited (AMP Capital) has paid a penalty of $250,500 to comply with infringement notices issued by ASIC.
bit.ly/2xLxT2e

ASIC commenced proceedings against Colonial First State over dealings with MySuper accounts
ASIC
On 16 March 2020, ASIC commenced civil penalty proceedings in the Federal Court against Colonial First State Investments Limited (CFSIL) in its own capacity, and as the trustee for the Colonial First State FirstChoice Superannuation Trust (FirstChoice Fund). ASIC commenced proceedings for alleged breaches of the ASIC Act and the Corporations Act regarding alleged misleading or deceptive communications with members of the FirstChoice Fund.
bit.ly/2UcjZxE

Jury Finds Investment Adviser and its Owner Liable for Fraud
SEC
Today, jurors in New Haven, Connecticut, federal court returned a verdict in the Securities and Exchange Commission’s favor against an investment adviser and its owner. The jury found that Westport Capital Markets, LLC, a Connecticut-based investment advisory firm, and its owner, Christopher E. McClure, defrauded their advisory clients by repeatedly purchasing securities that generated significant undisclosed compensation, enriching themselves at their clients’ expense.
bit.ly/3b3Jw2W

CFTC Cancels March 19 Open Meeting
CFTC
Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the open meeting scheduled for March 19 has been cancelled in response to recently issued guidance from the Office of Management and Budget and the President’s emergency declaration regarding COVID-19.
bit.ly/2WrKBgC

Temporary prohibition of short selling – 17 March
UK FCA
The FCA notifies that it temporarily prohibits short selling in the following instruments under Articles 23 (1) and 26 (4) of Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012. This follows a decision made by another EU Competent Authority.
bit.ly/3d2OH4S

Priorities in asset management for the FCA’s new CEO; Standardisation and waning competition in the way mutual funds are sold to investors are issues for the regulator’s new leadership to look at
Colin McLean – Financial News
Could UK financial regulation be at a turning point? The imminent arrival of a new interim chief executive at the Financial Conduct Authority gives an opportunity to change direction.
bit.ly/2UemAHh

FCA enforces short-selling ban on Belgian and Italian stocks; It is the second time in a week that European regulators have issued one-day bans on the shorting of particular stocks
Mark Cobley – Financial News
The UK’s Financial Conduct Authority has issued a temporary ban on the short-selling of 37 Belgian and Italian stocks, following another day of collapsing share prices across Europe.
bit.ly/3b8Ul3P

Investing and Trading

Southwest Airlines to Cut Capacity as Virus Spread Erodes Demand
Mary Schlangenstein – Bloomberg
Discount carrier follows other reductions as disease spreads; Airline secures $1 billion term loan to boost liquidity
Southwest Airlines Co. will shave at least 20% of its flight capacity, freeze hiring and offer leaves to workers as the spread of coronavirus erodes demand for travel.
/bloom.bg/2Uaufqa

Porsche Eyes Deeper Overhaul as Virus Outbreak Shatters Industry
Christoph Rauwald – Bloomberg
CFO Meschke wants quicker response time when markets change; Virus outbreak adds to challenges for industrial manufacturers
Porsche AG is looking to expand a 6 billion-euro ($6.9 billion) efficiency drive to help shoulder record investment and make Volkswagen AG’s most profitable brand more resilient to market slumps.
/bloom.bg/33mBQGl

Stock Market Volatility Tops Financial Crisis With VIX at Record
Luke Kawa – Bloomberg
Equity ‘Fear Gauge’ closes at 82 after S&P 500 sinks 12%; Spreading coronavirus threatens to tip economy into recession
Volatility in U.S. stocks surged to a record after benchmark indexes suffered the biggest rout since 1987. The Cboe Volatility Index ended Monday at 82.69 as the S&P 500 Index tumbled 12%. The fear gauge’s prior closing high was 80.86 on Nov. 20, 2008, when lawmakers postponed a vote on a plan to save the auto industry. The gauge’s rose as high as 83.56 during the session, short of its intraday record of 89.53 reached on Oct. 24, 2008.
/bloom.bg/39UhqH2

Supply Chain Concerns Spark Rush Orders on Canadian Maple Syrup
Jen Skerritt – Bloomberg
Customers want their maple syrup orders ASAP amid pandemic; Canada’s Quebec is world’s largest maple syrup producer
Toilet paper isn’t the only item that shoppers are stocking up on during the coronavirus pandemic. Maple syrup buyers such as supermarkets are requesting rush shipments of their orders from Quebec, the world’s largest producer. The accelerated delivery is being fueled by concerns that shipping could become difficult in the coming months, said Daniel Dufour, head of the Maple Industry Council.
/bloom.bg/39XvW0G

Rich People Are Raising Cash From Their Art Collections
Katya Kazakina and Tom Metcalf – Bloomberg
Lenders say some clients want to free up cash for investment; Others are seeking to lower margin call risk, banker says
Last Monday, as oil prices dropped 30% and equities plummeted, a New York client of Fine Art Group requested financing against a $10 million painting by Jean-Michel Basquiat.
/bloom.bg/2ITL0Ax

Morgan Stanley Economists Say Global Recession Now ‘Base Case’
Simon Kennedy – Bloomberg
Slump likely to be worse than 2001, though not as deep as 2009; Risks include virus lingering and markets freezing up
Morgan Stanley economists declared a global recession is now their “base case” although the slump won’t be as deep as during the financial crisis more than a decade ago.
/bloom.bg/3b4aZl2

Treasury Futures Domino That Helped Drive Fed’s $5 Trillion Repo
Stephen Spratt – Bloomberg
Liquidity preference lifted futures, crushing basis trades; Futures-cash spread led to reallocation from funding markets
It is said that liquidity is a coward, it disappears at the first sign of trouble. What happened in Treasuries last week was one example of this, as problems in one small corner of the bond market helped spark a liquidity crisis in another that lead to a $5 trillion Federal Reserve promise to calm markets.
/bloom.bg/2Qo8r9j

Upside-Down World of Negative Rates Is Coming for U.S. Savers
Emily Barrett – Bloomberg
Monetary policy now loosest since wake of the 2008 crisis; Europe’s vicious cycle of low yields, low growth may beckon
Mattresses full of money, getting paid to take out a mortgage, surging demand for safe-deposit boxes — these are some of the ideas people have about what happens when interest rates turn negative.
/bloom.bg/2WiHmYS

How Bad Could Markets Get? History Says Much Worse; This bear market is already deep and was quick to take hold. But it hasn’t gone on for long.
James Mackintosh – WSJ
The past few weeks may have felt like a market apocalypse, but the lesson of past downturns is that this could get a whole lot worse. Think about the fall in terms of the number of years of gains given back, and this would be the briefest period of loss of any recession since the 1960s. This bear market is already deep and was quick to take hold, but hasn’t gone on for long. A recession now looks inevitable.
/on.wsj.com/2QkFXgU

Institutions

Danske Says Virus Will Hit Profits as Bank Abandons Guidance
Mikael Holter
Danske Bank A/S became the latest firm to abandon its financial guidance for the year as the extreme uncertainty caused by the spread of the coronavirus threatens to pummel economic growth.
/bloom.bg/2U9bF1H

U.S. Banks May Be Downgraded by Moody’s on Pandemic, Fed Move
Dan Reichl – Bloomberg
U.S. banks may be downgraded by Moody’s Investors Service in the wake of the Federal Reserve’s rate cut and as the worldwide coronavirus pandemic rattles markets.
/bloom.bg/2wcI27E

Volatility Q&A: Jim Nevotti, Sterling Trading Tech
MarketsMedia
Markets Media recently caught up with Jim Nevotti, President of Sterling Trading Tech, to discuss the market’s extreme recent volatility and the logistical challenges presented by the Covid-19 virus.
bit.ly/3dbPssD

U.S. Banking Giants Tap Fed’s Discount Window to Ease Stigma
Yalman Onaran – Bloomberg
Eight giant U.S. banks said they would access the Federal Reserve’s discount window, in a move meant to remove the longstanding stigma of using it, as the financial system comes under mounting pressure from the coronavirus pandemic.
/bloom.bg/3dgoQXo

Regions

Johnson Tells All U.K. Citizens to Stay at Home in Virus Fight
Tim Ross and Kitty Donaldson – Bloomberg
Premier urges public to avoid theaters, pubs and restaurants; Public isolation measures will likely be needed for months
U.K. Prime Minister Boris Johnson urged the public to avoid all “non-essential” contact with other people in an effort to fight the fast-spreading coronavirus pandemic.
/bloom.bg/39XsVNU

Finland Invokes Emergency Powers to Slow Coronavirus Spread
Kati Pohjanpalo – Bloomberg
Finland’s government is preparing to invoke emergency powers to combat the spread of the novel coronavirus and has unveiled 5 billion euros ($5.6 billion) worth of measures to help its economy.
/bloom.bg/2Qmw0iN

China’s Resistance to the Global Equity Rout Is Now Crumbling
Bloomberg News
Nation’s economy remains vulnerable to global demand shocks; Stock market among few that’s yet to dip into bear territory
One of the only shelters from the volatility convulsing global equities is looking increasingly vulnerable.
/bloom.bg/38W1ser

Europe Weighs Repurposing Bailout Fund Bazooka for a New Crisis
Nikos Chrysoloras and Viktoria Dendrinou – Bloomberg
European Stability Mechanism has $458 billion unused firepower; EU finance chiefs mull use of ESM funds amid looming recession
The euro area’s gigantic bailout fund is exploring how it can use its reserves to cushion the impact of a virus-induced recession, in a move that could help calm markets after a spike in borrowing costs for the region’s most vulnerable economies.
/bloom.bg/2wZX0hh

Currency Crash Scars Make Mexican Peso Slump a Risk for AMLO
Michael O’Boyle – Bloomberg
Peso is world’s worst performing currency over the last month; Flight from risky assets cuts investor demand for the currency
The crash in the Mexican peso this month risks dragging the government’s popularity down with it, in a nation with painful memories of currency crises in its recent history.
/bloom.bg/2Wgnu8W

All the Chinese Assets Loved by World’s Biggest Money Managers
Bloomberg News
China’s government bonds seen to offer attractive yields; Yuan expected to be stable versus emerging market currencies
As the world struggles to price the economic impact of the coronavirus, Chinese assets have offered a spot of relative calm for foreign investors looking to escape volatility elsewhere.
/bloom.bg/2QCQ8O3

Coronavirus shows the value of Japan Inc’s cash piles; Companies have been hit hard but should use rainy day funds to reward shareholders post-crisis
Leo Lewis – FT
In a cash crisis, one of the straightest lines a global investor can draw tracks the expanding cash piles of corporate Japan at the end of each fiscal year. For four decades, this line of retained earnings has advanced relentlessly to its record-breaking level at about 130 per cent of gross domestic product at the end of 2019.
/on.ft.com/2Ud7pOv

INTL FCStone Financial adds industry veteran Drew Doscher as Head of Distressed Debt
INTL FCStone Inc.
INTL FCStone Inc. (NASDAQ: INTL) today announced that the Fixed Income Division of its wholly owned subsidiary, INTL FCStone Financial Inc. (“the Company”), has hired Drew Doscher as Head of Distressed Debt Sales and Trading. Doscher will build INTL FCStone Financial’s distressed debt trading capabilities and lead the Company’s strategy for distressed loans and debt, private credit, private equity, trade claims and litigation stubs. He will be reporting to Robert LaForte and Anthony DiCiollo, Co-Heads of Global Fixed Income.
(NO LINK)

Brexit

Brexit ‘Not sad to do this job’: the Merkel ally leading EU’s Brexit team
Jennifer Rankin – The Guardian
He is the son of a Normandy beaches veteran from Glasgow, and grew up watching Top of the Pops and reading the Beano. That makes David McAllister an unusual member of the EU’s Brexit team. The German MEP with Scottish roots even puts milk in his tea and says he would rather have a slice of British white bread than traditional German schwarzbrot.
bit.ly/2x86ffh

Boris Johnson’s dilemma over EU coronavirus help
David Bond – FT
With Europe now the centre of the coronavirus outbreak and countries such as Germany, Poland and Denmark closing their borders to try to contain the spread of the disease, EU leaders have introduced a package of measures to help its 27 member states cope with the crisis. On Sunday European Commission president Ursula von der Leyen announced an export authorisation scheme to prevent vital medical equipment leaving the bloc’s single market and an accelerated procurement process to help member states secure ventilators and testing kits.
/on.ft.com/2TWGUOv

Letter: Pandemic response should liberate flawed investment policy
Andrew Smithers – FT
It has been said that you can make a parrot into an economist by teaching it two words: supply and demand. Twice in recent years most economic comment has failed to appreciate the distinction which suggests that today a parrot that understands the difference would be an unusually competent economist. The drop in demand set off by the financial crisis did not cause the weak growth that followed. This was a supply problem caused by the bonus culture which discouraged business investment for nearly a decade before the crisis arrived. Brexit will hit supply but has barely done so yet and the forecasts of its impact on demand have damaged several reputations.
/on.ft.com/2WlQTyE

Miscellaneous

Opinion: Don’t mock people for buying extra toilet paper — they’re doing the best they can with inconsistent and sometimes wrong advice
Tricia Wachtendorf – MarketWatch
News of COVID-19 cases across the U.S. has spiked. Fears around the pandemic have increased. And the family down the street is hauling a few extra bulk-sized packs of bathroom necessities from their SUV.
/on.mktw.net/3a0JdWo

Remote learning usage peaks as schools around the world close; 10,000 new logins every 10 mins – itslearning scales up efforts to boost capacity due to the extraordinary number of logins today
Itslearning.com
This Monday schools around the world switched to full remote learning, which has led to an unusually high number of remote learning users logging in simultaneously onto the itslearning platform. This has resulted in the platform pages loading more slowly than usual.
bit.ly/2wdV70t

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