Crypto Scammers Pose as Journalists, NFT Projects on Twitter; A New Prediction Market Lets Investors Bet Big on Almost Anything

May 27, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Yesterday we published an interview with Blue Ocean Technology CEO Bryan Hyndman about the firm and the role they play in offering electronic access to U.S. National Market System equities during overnight hours to Asian clients. We also shot an interview with Bryan at the same time for The Path to Electronic Trading video series from MarketsWiki Education.

Bryan has seen his career move from early days at Waterhouse Securities to an innovator in electronic trading, to an early ECN that was eventually acquired by Nasdaq. We cover all of it in the video to be released soon.

Also, yesterday I believe we published the last of the 30 videos we shot at FIA Boca 2022, this one of Rob Hocking of Cboe Global Markets. Hocking was talking up the new nanos contract that Cboe launched during the Boca week.

Covid is rearing its ugly head in Chicago again and health officials declared Chicago in the “high-risk” category and strongly recommended residents “wear masks in public indoor settings,” Crain’s Chicago Business reported. The test positive rate for Chicago was 6% on Thursday, which is probably understated because of people testing at home and not reporting.

TMX Group CEO John McKenzie was the co-chair of the Women in Governance’s Annual Parity Recognition Gala with Jaqui Parchment, CEO of Mercer Canada. TMX Group was recognized as a Women in Governance parity-certified organization, and promoted to Silver Status for 2021. McKenzie acknowledges TMX has more work to do to promote gender equality across TMX and corporate Canada, “TMX is committed to developing, supporting and promoting women across our organization and creating the conditions for women to excel.”

Today is publication day for former FT reporter and Executive Director and Adjunct Associate Professor at The University of Chicago Booth School of Business Hal Weitzman‘s book “What’s the Matter with Delaware?: How the First State Has Favored the Rich, Powerful, and Criminal—and How It Costs Us All.” It is available on Amazon and all your favorite book stores.

JLN friend Debbie Carlson has a story in MarketWatch titled “This pacifist, faith-based fund-management company is fighting gun violence in its own way; Advocacy has some success, but legislation is what’s really needed to curb mass shootings.”

CFTC Commissioner Caroline D. Pham and SEC Commissioner Hester M. Peirce collaborated on an op-ed piece in The Hill titled “Making progress on decentralized regulation — It’s time to talk about crypto together.”

TT CEO Keith Todd appeared on May 24th on Youtube on the show “IPO-VID In Patrick’s Opinion” by Patrick Young in a video interview titled “Delivering SaaS Through TT.” We published our most recent video interview with Keith Todd from Boca on May 17.

FIA’s Walt Lukken is encouraging all interested firms, and you should be interested, to join the FIA’s new operations and standards initiative, now the Derivatives Market Institute for Standards (DMIST). DMIST has launched its membership application and associated documents. And if you sign up soon, Walt will be very grateful.

Stephen T. Gannon, Lisa Weingarten Richards and Maggie Sklar of McGonigle have a paper titled “Terra/Luna – Valuable Lessons About What Stablecoins Are and Aren’t.”

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

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Cboe’s Rob Hocking Talks Nanos and New Tools for the Retail Investor
JohnLothianNews.com

Rob Hocking, senior vice president, head of derivatives strategy at Cboe Global Markets, met with John Lothian News at FIA Boca 2022 to discuss the explosive growth of retail investors and the launch of Nanos, a lower-stakes option that Cboe has created to open the world of options trading to a wider audience.

Watch the video »

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Did a major financial institution kinda maybe slightly default in March 2020? Iceman says so
Robin Wigglesworth and Philip Stafford – FT
On Wednesday the Commodity Futures Trading Commission hosted an industry roundtable to discuss FTX’s proposal for a new derivatives risk management framework. Inadvertently, someone dropped a bombshell about the market turmoil of March 2020 that has triggered a spasm of speculation at FTAV Towers.
/jlne.ws/3lPHM4A

***** Here is a mystery for you, and a good reason human reasoning is an important part of the margin call process.~JJL

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Merits of real-time clearing
Alan Burr – CISI.org
In modern markets, particularly in derivatives, clearing houses, now commonly referred to as central counterparty clearing (CCP) houses, sit at the heart of the post-trade infrastructure between the trading environment and the settlement arena. Their essential task is to manage counterparty risk. They are the archetypal ‘risk controllers’ and vitally important participants in the complex world of wholesale financial markets.
/jlne.ws/3NFnzud

***** Faster, better, smarter. All good.~JJL

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Why Steve Kerr’s comments on Uvalde should stop you in your tracks
Chris Cillizza – CNN
Sometimes it takes someone not in politics to point out the insanity that dominates our current political moment. On Tuesday night — in the wake of a school shooting in Texas that left 19 children and two adults dead — that person was Steve Kerr, the head coach of the NBA’s Golden State Warriors. He was openly emotional, angry and frustrated.
/jlne.ws/3z7ML8R

***** I have always listened to people with the last name Kerr, as the head of the Kerr clan in Scotland holds the title of Lord Lothian. Regardless, Steve Kerr, whose father was president of American University in Beirut and was killed by a gunman there, knows tragedy and should be listened to.~JJL

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Gamification Took Over the Gig Economy. Who’s Really Winning? Ride-share drivers say that the pandemic has exacerbated the imbalance with their overlords.
Jackie Davalos and Drake Bennett – Bloomberg
In 2008, University of Chicago economist Richard Thaler and Harvard Law School professor Cass Sunstein published Nudge: Improving Decisions About Health, Wealth, and Happiness. It’s a breezy tour through behavioral science, especially the ways in which decision-making can be shaped by what the authors call “choice architecture.” When a store puts sugary snacks at eye level so a customer is enticed to buy them, that’s choice architecture, and when credit card companies set low minimum payments to get people to pay interest, that’s choice architecture, too. The book’s argument is that we should enlist so-called nudges to socially beneficial ends, such as automatically enrolling workers in 401(k) plans. In the years since the book’s release, policymakers have occasionally adopted the ideas, with mixed results.
/jlne.ws/3wTZj1K

****Anyone want to play a game of Uber?~JJL

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ESG Haters Think Climate Investors Are Controlling Everything. If Only; Ignore the culture wars. The clean energy transition isn’t woke. It’s just an inevitability.
Kate Mackenzie – Bloomberg
There’s an idea going around that climate investing has gone too far. Call it a vibe. Most of it is political opportunism: The US Republican party has declared war on environmental, social and governance-themed investing, or ESG, blaming it for pushing up prices and creating inflation. The story goes that climate-minded investors have worsened the energy crisis created by Russia’s invasion of Ukraine. Fossil-fuel companies outside of Russia would have been ready to meet the world’s energy needs, according to the narrative, if it wasn’t for the feckless investors with wishy-washy green agendas that deprived the industry of capital.
/jlne.ws/3a0nJh6

***** This political assault on investors is one of the stupidest things I have seen in a long time. Money talks and BS walks. ~JJL

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Thursday’s Top Three
Our top story Thursday was Bloomberg’s Wall Street Traditionalists Spar With FTX Over Crypto Derivatives. Second was our MarketsWiki page for the late Carl Gilmore, for whom a gathering was held yesterday afternoon at Ceres in the CBOT building. Third was CQG Joins FIA Tech’s Databank Network As First ISV, from FIA Tech. (CQG was also our MarketsWiki Page of the Day Thursday.)

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MarketsWiki Stats
26,844 pages; 238,632 edits
MarketsWiki Statistics

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Lead Stories

Crypto Scammers Pose as Journalists, NFT Projects on Twitter; Thieves rely on profiles that appear legitimate to dupe users; Americans reported $1.6 billion in stolen crypto last year
Jeff Stone – Bloomberg
Internet scammers are using hijacked accounts on Twitter Inc. to promote dubious cryptocurrency platforms that, once installed, enable them to compromise victims’ sensitive data, according to new findings provided exclusively to Bloomberg News. Since March, fraudsters have impersonated journalists, crypto apps and a variety of nonfungible token (NFT) projects on Twitter in order to steal users’ virtual currency, usernames and password credentials, according to research from Satnam Narang, a staff research engineer at the cybersecurity firm Tenable Inc. Many of the targeted accounts are verified, an indication to investigators that scammers are either hacking specific pages, paying for illicit access, or both.
/jlne.ws/3aegOkz

A New Prediction Market Lets Investors Bet Big on Almost Anything; Recently approved by the CFTC, Kalshi lets people place five-figure wagers on the outcome of the Grammys, the next Covid wave, and future SEC commissioners. What could go wrong?
Liam Vaughan and Benjamin Bain – Bloomberg
On Nov. 3, 2020, Election Day, two young entrepreneurs received a call from the chairman of the Commodity Futures Trading Commission with some important news. Luana Lopes Lara and Tarek Mansour had spent the past 18 months trying to get permission to start an ambitious and controversial new type of financial exchange—one where, rather than betting on equity prices or commodity futures, people could trade instruments tied to the outcomes of real-world events, such as the passage of legislation, the weather on a particular day, or the winner of best actor at the Oscars.
/jlne.ws/3wTebxI

The SEC’s Power to Police Markets Is Under Attack in Court; A Fifth Circuit ruling limits one of the watchdog’s enforcement tools. The same theory might make it harder to address new issues such as crypto.
Lydia Beyoud – Bloomberg
The US Securities and Exchange Commission has a lot of complicated new issues on its plate, from crypto to the aftermath of the meme-stock explosion. Now add this: A movement to cut back on regulators’ legal authority is making headway in court. Hedge fund manager George Jarkesy spent almost a decade battling an SEC in-house judge’s ruling against him for allegedly misleading investors in two of his funds. On May 18 two judges with the US Court of Appeals for the Fifth Circuit agreed that the SEC violated his constitutional right to a jury trial when it put its case before what’s known as an administrative law judge.
/jlne.ws/3lPjw2D

SPACs Are Warning They May Go Bust; More than two dozen companies say they may not survive much longer
Eliot Brown. WSJ
The SPAC boom brought a wave of companies to the public markets promising years of rapid growth and profits to investors. Two years since the boom began, many of these companies are already warning they may go bust. At least 25 companies that merged with special-purpose acquisition companies between 2020 and 2021 have issued so-called going-concern warnings in recent months, according to research firm Audit Analytics.
/jlne.ws/3LNORx3

Glencore Said It Revamped Its Compliance Program Following Guilty Pleas; The Anglo-Swiss commodities company published a 13-page investor update about its ethics and compliance program, which coincided with settlements it reached with various regulators
Mengqi Sun – WSJ
Glencore PLC said it has revamped its ethics and compliance program, including boosting its annual compliance spending and hiring more full-time compliance staff, as the global mining and trading company settles corruption and bribery charges in the U.S., U.K. and Brazil.
/jlne.ws/38nLuiM

Little-Known Commodity Traders Help Russia Sell Oil; Off-radar middlemen make big profits as giants Trafigura, Glencore retreat
Anna Hirtenstein, Joe Wallace – WSJ
A group of under-the-radar commodity traders are cashing in on Russian oil, stepping in to buy and transport crude to customers as their bigger rivals retreat from the market. Little-known merchants including Paramount Energy & Commodities SA and Coral Energy Pte. Ltd. are buying unwanted Russian oil at deep discounts. For taking on the risk, the companies can make $20 million or more on one cargo depending on the size of the tanker, according to traders. That is up from $600,000 before the war. The traders aren’t violating sanctions imposed by the West on Russia. The European Union has blocked its companies from doing most business with state-aligned producer Rosneft ROSN 2.86% Oil Co. Switzerland has also enacted some restrictions. That pushed big traders such as Trafigura Group, Vitol, Glencore PLC and Gunvor Group to head for the exit.
/jlne.ws/3GpcStf

Ethereum Founder Buterin Blasts DeFi Model in Terra Critique; High-profile developer Buterin analyzes Terra’s implosion; No genuine investment has a 20% return each year, he said
Jialiang David Pan – Bloomberg
Ethereum founder Vitalik Buterin said there is no genuine investment that can get anywhere close to 20% returns per year while analyzing the implosion of the Terra blockchain which sent the crypto market into freefall earlier this month. The algorithmic stablecoin TerraUSD and its sister coin LUNA have been the major catalysts for the bear market, dropping to nearly zero dollars over the course of a few days and wiping out $60 billion in Terra coins alone. One of the stablecoin’s main attractions for investors had been its promised interest rate, set as high as 20% for UST deposits in the Terra blockchain-based lending project Anchor.
/jlne.ws/3arPkYY

SEC Planned Crackdown on ‘Misleading’ Funds Goes Far Beyond ESG; Proposal to toughen rules on fund labels may have a big impact; Many more products may need 80% of assets to match their name
Sam Potter – Bloomberg
New proposals from the US Securities and Exchange Commission to crack down on money managers using misleading or deceptive fund names threaten to impact investing strategies of all stripes — not just those focused on ESG issues. The Wall Street watchdog floated tighter rules Wednesday to ensure a product’s name is squarely focused on its actual strategy, with most observers fixating on what the restrictions mean for socially responsible investing. Yet the proposals could hit thousands more funds trading everything from value and growth stocks to bonds and emerging markets.
/jlne.ws/3lQXDQk

This pacifist, faith-based fund-management company is fighting gun violence in its own way; Advocacy has some success, but legislation is what’s really needed to curb mass shootings
Debbie Carlson – MarketWatch
A mass shooting at an elementary school this week left 19 students and two teachers dead, renewing a debate over gun control. The Uvalde, Texas, massacre was the 27th school shooting this year, according to Gun Violence Archive, an independent data-collection organization. Faith-based investment funds have long tried to reduce gun violence through advocacy, with some success. One fund family, Praxis Mutual Funds, has worked on this issue in conjunction with other faith-based groups for at least 20 years. The fund manager follows pacifist values, so it has no weapons investments in its $2 billion asset pool. One fund family, Praxis Mutual Funds, has worked on this issue in conjunction with other faith-based groups for at least 20 years. The fund manager follows pacifist values, so it has no weapons investments in its $2 billion asset pool.
/jlne.ws/3GnbxTT

Huobi Acquires Latin American Crypto Exchange Bitex
Andrés Engler – CoinDesk
Chinese crypto exchange Huobi acquired Latin American crypto exchange Bitex to expand its presence in the region, Huobi said Thursday. Huobi plans to integrate Bitex’s exchange platform with its global platform, the company said in a statement. Bitex will continue operating under its current name and management team in Latin America, Bitex CEO Francisco Buero told CoinDesk.
/jlne.ws/3PKMQVA

China Opens Exchange Bond Markets to Overseas Investors
Bloomberg News
China will allow foreign institutional investors to buy bonds traded on its smaller exchange market in the latest step to widen global access to its financial markets, as calls grow for the government to sell more debt to pay for extra stimulus to boost a flagging economy. Qualified foreign institutional investors ranging from central banks and sovereign funds to commercial banks and pension funds will be allowed to invest in bonds on the exchange market, the People’s Bank of China said in a statement published on its website on Friday.
/jlne.ws/3wQWLBC

Forget ESG. Bring on the BS Index; We have worked out how to make money from an infinite resource
Tom Braithwaite – FT
The jig is up for ESG. Regulators are swarming. Investor enthusiasm is waning. Executives are revolting. For the armies of asset managers, data providers, consultants and advisers that have sprung up in the past 10 years this is an existential threat. Here is our solution: pivot to bullshit.
/jlne.ws/3Gs9cH7

Hard lessons from the crypto crash; Can anything challenge the belief that investing in digital assets is a guaranteed route to riches?
Claer Barrett – FT
We deal with all kinds of financial problems on the Money Clinic podcast, but after speaking to young traders who lost their shirts in the $40bn wipeout of crypto token luna, I found it hard to offer them any solutions. Subbaiah, 29, got into crypto last year after seeing his friends make money. The IT worker in Bangalore watched tutorials by online influencers, started trading in and out of various coins and made enough to dream about quitting his day job and trading full-time.
/jlne.ws/3yZhHb1

G7 urges Opec to raise output to cool oil market; Call for ‘responsible’ action after war in Ukraine fuels surging crude prices
Guy Chazan, Leslie Hook – FT
G7 energy ministers have called on the Opec group of oil producing countries to pump more oil as Russia’s war in Ukraine pushes crude prices to their highest levels in a decade. The call was contained in the final communique of a meeting of G7 energy and environment ministers in Germany, which holds the rotating presidency of the group of advanced industrial economies.
/jlne.ws/3PNXnj5

TerraUSD Crash Led to Vanished Savings, Shattered Dreams; Investors swept up in the mania for the high-yielding stablecoin thought it would be safe
Alexander Osipovich, Caitlin Ostroff – WSJ
TerraUSD was touted as a blue-chip cryptocurrency. Now its investors are reeling from painful losses and asking if it was all a get-rich-quick scheme. A surgeon in Massachusetts can’t stop thinking about how he lost his family’s nest egg. A young Ukrainian considered suicide after losing 90% of his savings. Other investors have given up dreams of starting new businesses or quitting their day jobs.
/jlne.ws/3NHbMLM

Davos Elite Can’t Agree About the Economy and Neither Can Markets; The problem as many executives describe it: Current business is great, but the difficulties ahead are obvious
James Mackintosh – WSJ
Usually the Davos crowd herds together on markets and the economy at the World Economic Forum in Switzerland. The “Davos consensus” can be a useful contrarian indicator since it is often entirely wrong. But there isn’t a consensus this year, which helps explain the jumbled state of markets.
/jlne.ws/3arOj38

CFTC roundtable on non-intermediation focuses on FCM benefits and default waterfalls
Wide-ranging discussion touches on customer protection, product suitability, self-certification, margin and liquidation issues
Jeff Reeves – FIA MarketVoice
The US Commodity Futures Trading Commission hosted a wide-ranging and at times contentious discussion on issues related to intermediation in derivatives trading and clearing on 25 May. The roundtable event was more than six hours long, and included representatives from CFTC-registered derivatives clearing organizations (DCOs) and futures commission merchants (FCMs) as well as trading firms, asset managers, agricultural industry representatives, academics, public interest groups, and others.
/jlne.ws/3lL1jTO

Chicago now in high-risk COVID category; Health officials strongly recommend residents wear masks in public indoor settings.
Katherine Davis – Crain’s Chicago Business
Chicago and Cook County are now at high risk for COVID-19 transmission, health officials say. The region crossed into the high-risk category this evening after COVID cases and hospitalizations have kept rising in recent weeks. The Chicago Department of Public Health now strongly recommends people wear masks in public indoor settings, the agency said Thursday night. CDPH says individual businesses are welcome to set their own requirements. Chicago’s test positivity rate was 6% on Thursday. See the latest city and state COVID figures in the charts below.
/jlne.ws/3PFawed

EDF Nuclear Failures Undermine Europe’s Push to Exit Russian Gas; France may need to import power from its neighbors this winter; That may drive up regional demand for gas to feed power plants
Rachel Morison and Francois De Beaupuy – Bloomberg
Electricite de France SA’s nuclear failures are sending ripples through European energy markets, threatening to undermine the continent’s plan to turn its back on Russian gas. Europe’s biggest producer of atomic energy, which usually exports cheap power during the winter, may be forced to import this year after cutting its output forecast a third time. A fleet hobbled by faults is not just a problem for France but for countries such as neighboring Germany, which may have to burn more gas to keep the lights on despite pledging to cut its reliance on Moscow.
/jlne.ws/3MZg2GH

APAs and ARMs partner to launch new trade association; New association aims to represent the views of its members in relation to regulations and laws impacting APA and ARM businesses.
Wesley Bray – The Trade
Six Approved Publication Arrangements (APAs) and Approved Reporting Mechanisms (ARMs) have partnered together to launch the APAs and ARMs Association (APARMA). APARMA was founded by affiliates of Bloomberg, Cboe Europe, Euronext, London Stock Exchange, MarketAxess and Tradeweb Markets to represent the interests of companies who operate APAs and ARMs in the EU and the UK.
/jlne.ws/3lNrrgH

Ukraine Invasion

Russia’s Economy Is Tanking but the Ruble Soared. Here’s Why.; Russia’s central bank lowers interest rates, making holding rubles less attractive
Caitlin McCabe – WSJ
Sanctions against Russia have pushed its economy into what could be the biggest decline in decades, but the country’s currency has gone the other way. The ruble strengthened this week to levels not seen since 2018, making the currency the second-best performer against the dollar this year, based on a Dow Jones Market Data analysis of 56 currencies, trailing only the Brazilian real. The ruble has risen 16% against the greenback in 2022 and is up nearly 150% since it bottomed out days after Russia’s invasion of Ukraine three months ago.
/jlne.ws/3GmMpg6

Ukraine savages idea of concessions to end war, evokes appeasement of Nazis
Reuters
Ukrainian President Volodymyr Zelenskiy on Wednesday savaged suggestions that Kyiv give up territory and make concessions to end the war with Russia, saying the idea smacked of attempts to appease Nazi Germany in 1938. The angry comments by Zelenskiy and a senior aide come as Ukrainian troops are facing a renewed offensive in two eastern regions that Russian-speaking separatists seized part of in 2014.
/jlne.ws/3MWGv7G

Brussels says about $24 billion of Russian central bank assets frozen in EU, less than expected
Reuters
European Union states have reported the freezing of about 23 billion euros ($24.5 billion) of assets of the Russian Central Bank, a top EU official said on Wednesday, revealing for the first time a figure that was expected to be much higher. Russia has publicly said that Western sanctions led to the freezing of about $300 billion of its central bank’s assets globally.
/jlne.ws/3z36YfR

Putin says he’ll open up grain and fertilizer exports if the West agrees to lift sanctions
Huileng Tan – Business Insider
Vladimir Putin said he’ll open up grain and fertilizer exports if sanctions against Russia are lifted. The Russian president made the offer in a phone call to Italian Prime Minister Mario Draghi on Thursday, according to an official statement from the Kremlin. Putin said Russia “is ready to make a significant contribution to overcoming the food crisis through the export of grain and fertilizers, provided that politically motivated restrictions from the West are lifted.” He didn’t say if the exports would be from Russia or Ukraine.
/jlne.ws/3MVZpeT

Ukraine’s Zelenskiy complains about EU divisions over new Russia sanctions
Reuters
Ukrainian President Volodymyr Zelenskiy on Thursday complained about divisions inside the European Union over more sanctions against Russia and asked why some nations were being allowed to block the plan.
/jlne.ws/3PJbyFX

In the last week, Putin became a one-man wage-price spiral and held the world’s food supply to ransom
Tristan Bove – Fortune
Russia’s inflation problem is getting out of hand, and the world’s food supply problem is also worsening, as the war in Ukraine rumbles on for a third month. Vladimir Putin has plans to fix both of them, plans that overlook his role in worsening each.
/jlne.ws/3lMCGpZ

German chancellor says world at ‘turning point’ amid war in Ukraine
Zach Schonfeld – The Hill
German Chancellor Olaf Scholz called Russia’s invasion of Ukraine a “turning point” for the world on Thursday, accusing Russian Vladimir Putin of trying to upend the system of international cooperation. Scholz’s remarks were made at the World Economic Forum in Davos, Switzerland, where he referenced the book “The Magic Mountain.” In the work, the protagonist is awakened from a seven-year stay at a Swiss sanatorium to the thunderbolt of World War I.
/jlne.ws/3lOzSbL

The White House says ‘pariah’ Russia is poised to default on its bonds, as a hefty $100 million payment falls due and its options run out
Harry Robertson – Business Insider
The White House has said Russia is likely to default on its foreign bonds in a sign of the country’s “pariah” status, with the Kremlin facing a major $100 million test on Friday. Russia has two bond coupon payments due in dollars and euros Friday, but the fate of that money is highly uncertain after the US Treasury this week closed a key loophole that allowed cash to get around sanctions and into investors’ accounts.
/jlne.ws/3PJ53TF

Johnson Urges Missiles for Ukraine to Hit ‘Crocodile’ Putin; UK prime minister speaks in Bloomberg Television interview; Pushes back at calls for negotiations with Russian leader
Kitty Donaldson – Bloomberg
Boris Johnson urged more military support for Ukraine as it battles Russian forces, including sending advanced weapons such as Multiple Launch Rocket Systems that can strike targets from a far longer distance. The British prime minister aired his support for more arms for Ukraine as he pushed back against the idea that, with the war now in its fourth month, President Volodymyr Zelenskiy should focus instead on reaching a peace deal with Russia that could see Ukraine cede territory.
/jlne.ws/39ZeJsG

Exchanges, OTC and Clearing

The 18th Medcap Forum ends with more than 1,000 meetings being held between SMEs and investors
BME-X
Miogroup, EiDF, LLYC and Ecoener, nominated as candidates for the European Small and Midcap Awards given each year by the Federation of European Stock Exchanges (FESE).
Around 800 people attended the event and over 350 followed the different panels of the Forum via streaming
/bit.ly/3wUmf1b

CME Registration Requirement – Legal Entity Identifier (LEI)
Requirements for Parties to OTC Trades for Use in SDR Reporting
CME Group
Under 17 CFR part 45 and part 43 regulations, swap trades (including CME-cleared OTC
Interest Rate Swaps, OTC FX, and OTC Commodity Swaps) must be reported by CME Clearing
to a Swap Data Repository using valid identifiers to refer to all parties to the trade. For Legal
entities (as opposed to private individuals), this identifier must take the form of a Legal Entity
Identifier (‘LEI’) that is verifiable in the Global Legal Entity Identifier Foundation (GLEIF)
database at www.gleif.org.
/bit.ly/3lNsDAL

CME Globex Notices
CME Group
Topics in this issue include: Critical System Updates;
Product Launches; Product Changes.
/bit.ly/3PLbfKG

CME STP Notices: May 26, 2022
CME Group
Topics in this issue include:
CME STP; CME STP FIX’ Contacts
/bit.ly/3akbnAB

EBS Market on CME Globex Notice
CME Group
Topics in this issue include: Critical Information; Product Changes; Announcements and Additional Resources.
/bit.ly/3wPaNTg

Equity Derivatives: Introduction of Single Stock Futures and Single Stock Dividend Futures
Eurex Circular 058/22 Equity Derivatives: Introduction of Single Stock Futures and Single Stock Dividend Futures
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 13 June 2022: Introduction of five Single Stock Futures and three Single Stock Dividend Futures pursuant to Annexes A and D to the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland (hereafter: Contract Specifications) in Attachment 2.
/bit.ly/3GpOd80

Intercontinental Exchange Chair & CEO Jeffrey C. Sprecher to Present at the Piper Sandler Global Exchange and FinTech Conference on June 9
ICE press release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, announced today that Jeffrey C. Sprecher, Chair and CEO, will present at the Piper Sandler Global Exchange and FinTech Conference. The presentation will take place on Thursday, June 9 at 10:00 a.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE’s website at http://ir.theice.com/.
/jlne.ws/3wSwiE0

Hong Kong Securities Market Holiday Schedule for Year 2023
HKEX
Exchange Participants are advised that the Hong Kong securities market holiday schedule for Year 2023 has been prepared in the following table according to the general holidays for Year 2023 as announced by the Government of the Hong Kong Special Administrative Region.
/bit.ly/3LWICai

Risk Management Arrangements in respect of the Tuen Ng Festival
HKEX
All markets operated by the Hong Kong Futures Exchange will be closed for business on 3 June
2022, except MSCI Futures and Options.
/bit.ly/3PMqG5h

Fast Interface for New Issuance (FINI): Update on Implementation Plan, Information Pack, and Publication of Interface Guides
HKEX
Since the announcement of FINI in 2021, HKEX has been actively engaging relevant stakeholders to support the platform development process, taking into consideration the needs and preferences of a range of market participants and factoring into its planning other recent market enhancements, such as the introduction of a SPAC regime. The implementation plan will help ensure market readiness and a smooth transition for all IPO market participants, as HKEX works in partnership with its stakeholders to build the Marketplace of the Future.
/bit.ly/3wZ5il4

Publication of JPX Working Paper, Special Report “How does standardization work in derivative markets? Evidence from the options on JGB Futures”
JPX
Japan Exchange Group, Inc. (JPX) today published JPX Working Paper, Special Report “How does standardization work in derivative markets? Evidence from the options on JGB Futures”.
/bit.ly/3wPnai9

SGX RegCo to further extend suspension of entry into issuers’ watch-list
SGX
Further to our announcement on 21 May 2021, Singapore Exchange Regulation (“SGX RegCo”) in consultation with the Monetary Authority of Singapore (“MAS”) will continue to suspend its half-yearly review to place issuers on the Financial Watch-List until 1 June 2023.
/bit.ly/3wMUCH1

Fintech

Eventus Wins Best Trade Surveillance Solution at RegTech Insight Awards Europe 2022
Eventus press release
Eventus, a leading global provider of multi-asset class trade surveillance and market risk solutions, today received the award for Best Trade Surveillance Solution at the RegTech Insight Awards Europe 2022. The award is the second this month for the firm’s Validus platform and recognizes the company’s continued growth and expansion within the European region.
/jlne.ws/3LKWwMI

CMG launches new ECM platform connecting the buy- and sell-side; New platform looks to eliminate inefficiencies associated with analogue communications which have been used in the past.
Wesley Bray – The Trade
Fintech company Capital Markets Gateway (CMG) has launched an end-to-end equity capital markets (ECM) platform, CMG XC, which digitally connects the buy-side and the sell-side. The XC platform transforms ECM, CMG said, by providing connected infrastructure across industry participants and streamlining the entire new issue lifecycle – essentially improving the way ECM deals are managed
/jlne.ws/3wPa5Xh

JPMorgan Finds New Use for Blockchain in Trading and Lending; Bank eyes tokenizing equities, fixed income and other assets; Platform may eventually serve as bridge to DeFi protocols
Yueqi Yang – Bloomberg
JPMorgan Chase & Co is using blockchain for collateral settlements, the latest Wall Street experimentation with the technology in the trading of traditional financial assets. The bank’s first such transaction came on May 20, when two of its entities transferred the token representation of BlackRock Inc. money market fund shares as collateral on its private blockchain. The effort will allow investors to pledge a wider range of assets as collateral and use them outside of market operating hours, according to New York-based JPMorgan.
/jlne.ws/3LSh9qp

Google Cloud Chief Says Work With Aramco Doesn’t Involve Oil
Mark Bergen and Emily Chang – Bloomberg
Thomas Kurian, the head of Google’s cloud division, said the company’s work with oil giant Saudi Aramco doesn’t include oil production, offering some of his first public comments on the controversial deal. “We work with Aramco system integration division, not with the oil-and-gas division,” Kurian told Bloomberg TV on Thursday. “We have said that again and again.” In 2020, Alphabet Inc.’s Google announced plans to expand its cloud business into Saudi Arabia with a new cloud data center. Saudi Aramco, the state-owned energy conglomerate, would re-sell Google’s cloud services to customers in the country, the companies said then.
/jlne.ws/3PLF5Ph

Cybersecurity

Cybersecurity threat extends to utility credit ratings: Fitch
Robert Walton – Cybersecurity Dive
Electric utilities, up against growing cyberthreats and poor security practices, “could result in negative rating actions,” Fitch Ratings said.
Claroty’s latest risk assessment of ICS environments found vulnerability disclosures grew 25% in the second half of 2021, and have more than doubled over the last four years.
That increase underscores the “broad cyber risks in OT assets,” Grant Geyer, chief product officer at Claroty, said in an email.
/jlne.ws/3sVYhAb

In The Case Of Cybersecurity, The Best Defense Is Education
Sean Hogan – Business West
In a recent study, Stanford University and a top cyber security organization found that more than 85% of all data breaches are caused by human error. The standard practice for prevention of breaches is enabling tools to detect and prevent breach attempts.
Most breaches are prevented with tools such as anti-virus, spam filtering, and edge protection. But what about the attempts that slip through these defense systems? That’s where education comes in to play.
/jlne.ws/3NDKA0v

What does it mean for cybersecurity to “align with the business”? (opinion)
Pete Lindstrom – CSO Online
Showing how security helps business achieve its objectives is a two-step process: Speak the language of business and do cost-benefit analyses that prove value returned.
It is a common refrain among senior folks in enterprise cybersecurity: “We have to learn to align with the business.” Unfortunately, it seems like we spend most of our time trying to get the business to “align with cybersecurity” and become frustrated when they don’t or can’t. Part of the reason is that we often don’t want to (or can’t) speak like the business. The reality is that cybersecurity is a cost center in organizations. Not only that, it is a cost center where it can be extremely difficult to recognize the value, of which there is plenty. (See my previous article on board-level cybersecurity metrics.)
/jlne.ws/3POFocg

Cryptocurrencies

Bitcoin Options Show Investors Becoming Anxious About Declines; Spike in put-to-call ratio signals cynicism, says Olszewicz; Spike in ratio in April last year preceded plunge in Bitcoin
Vildana Hajric – Bloomberg
Bitcoin might be registering tepid moves as of late but that doesn’t mean investors have become less anxious about the largest cryptocurrency’s prospect for further declines. The put-to-call ratio on the coin hit a 12-month high at 0.72, meaning that many traders are loading up on hedges in the event it embarks on another leg lower and its losses deepen. The ratio hit a high of 0.96 April last year before prices plunged roughly 50% the following month, according to option Skew data compiled by Babel Finance.
/jlne.ws/3sUlfrp

Ether and Altcoins Lead Crypto Rout as Terra DeFi Fallout Deepens
Emily Nicolle – Bloomberg
It’s an all-round sea of red for nearly everything in crypto, with altcoins such as Ether, Solana and Avalanche taking a beating. Traders are partially stumped, but for Ethereum, the signs of a lack of demand have been building for quite some time. The impact of the collapse of Terra, a blockchain ecosystem that supported one of the biggest experiments in decentralized finance, knocked an already bearish market into wild contagion this month. While Terra’s operators had passed a revival plan to start afresh on a totally new blockchain on Wednesday, investors in the rest of DeFi were less than convinced. A glitch in the process to make the Ethereum network less energy intensive added to the concern.
/jlne.ws/3lM4ZEO

How Influencers Hype Crypto, Without Disclosing Their Financial Ties
Logan Paul, Paul Pierce and other celebrities have promoted risky and obscure digital currencies, sometimes failing to mention their conflicts of interest.
David Yaffe-Bellany – NY Times
Logan Paul had a message for his six million Twitter followers: He was “all in” on a new cryptocurrency called Dink Doink.
According to the project’s creator, Dink Doink investors would receive shares of a cartoon character, entitling them to a portion of the proceeds if the googly-eyed figure ever appeared in a TV show or movie. Last June, Mr. Paul, a 27-year-old boxer and social-media influencer, praised Dink Doink on Twitter and in a public Telegram chat, before endorsing it again on his podcast, “Impaulsive.”
/jlne.ws/3wS9cxe

Coinbase at Center of Court Crypto Security Dispute
Martin Young – FX Empire
With no clear regulatory framework for the industry in the U.S., cryptocurrencies are still in a grey area when it comes to investment status. Investors are increasingly asking courts whether digital assets are treated as commodities such as gold or securities such as stocks and shares. Earlier this month, a group of Coinbase users took the company to court demanding compensation for losses on crypto assets they claimed were securities.
/jlne.ws/3LT6E60

Bitcoin’s Crypto Dominance Is Strongest Since Bull Market Highs; Bitcoin’s 44% share of market cap is highest since October; ‘Whales’ shifting Bitcoin to exchanges could spark declines
Sidhartha Shukla – Bloomberg
Bitcoin is regaining its dominance of the cryptocurrency universe. It now accounts for 44% of total crypto market value, the most since October, just before the latest bull market peaked, based on data from CoinGecko. Bitcoin’s renewed hegemony is a reflection of how the collapse of the TerraUSD stablecoin earlier this month has ravaged smaller tokens like Avalanche and Solana.
/jlne.ws/3PM6lNv

Making progress on decentralized regulation — It’s time to talk about crypto together
Caroline D. Pham, Hester M. Peirce – The Hill
Decentralization is a frequent theme in crypto conversations. Usually the term refers to the actual or aspirational elimination of intermediaries from finance, social media, or other human enterprises. But “decentralized” is also an apt description of the regulatory landscape for crypto. Crypto has many actual and aspirational regulators. Regulatory decentralization can have benefits, but, if not properly managed, also can aggravate the already confusing lack of regulatory clarity over crypto. Cooperation among regulators is essential to strong, effective, pragmatic crypto regulation.
/jlne.ws/3t4pz7p

Brace for Crypto Market to ‘Get Weird’ Over Memorial Day; Farrell warns about low volume during US’s Memorial Day period; Firm suggests reducing exposure to more speculative altcoins
Joanna Ossinger – Bloomberg
Cryptocurrencies are probably headed for more bouts of downside volatility and investors should consider reining in their risk, according to Fundstrat. Buying put protection on long-crypto positions and cutting exposure to more speculative altcoins are a couple of safeguards, Sean Farrell, head of digital-asset strategy at the financial research firm, wrote in a note on Thursday.
/jlne.ws/3wPUzsZ

Crypto and sports bet on winning combination to woo fans; Exchanges are undeterred by market jitters as sponsorship splurge draws scrutiny
Scott Chipolina, Samuel Agini and Joshua Oliver and Sara Germano – FT
When Crypto.com stamped its name on Los Angeles’ main sports arena, the crypto exchange’s boss Kris Marszalek said the $700mn deal marked “the moment that cryptocurrencies . . . crossed the chasm into the mainstream”. Renaming the home of the LA Lakers National Basketball Association team in November opened the floodgates to a series of multimillion-dollar marketing deals and partnerships between digital asset companies flush with cash and sports franchises that can deliver millions of potential customers.
/jlne.ws/38pzkG9

How Influencers Hype Crypto, Without Disclosing Their Financial Ties; Logan Paul, Paul Pierce and other celebrities have promoted risky and obscure digital currencies, sometimes failing to mention their conflicts of interest.
David Yaffe-Bellany – NY Times
Logan Paul had a message for his six million Twitter followers: He was “all in” on a new cryptocurrency called Dink Doink. According to the project’s creator, Dink Doink investors would receive shares of a cartoon character, entitling them to a portion of the proceeds if the googly-eyed figure ever appeared in a TV show or movie. Last June, Mr. Paul, a 27-year-old boxer and social-media influencer, praised Dink Doink on Twitter and in a public Telegram chat, before endorsing it again on his podcast, “Impaulsive.”
/jlne.ws/39XupwA

Politics

‘That is not capitalism, that is abusing the market:’ Sen. Ted Cruz blasts BlackRock’s Larry Fink’s ‘woke’ ESG policies
Dan Mangan – CNBC
Sen. Ted Cruz blasted BlackRock CEO Larry Fink on Tuesday for so-called “woke” investment decisions — and suggested money managers like Fink be barred from voting on behalf of other investors “to advance their own political interests.” “Because that is not capitalism, that is abusing the market,” Cruz, R-Texas, charged during an interview with CNBC’s “Squawk Box.” During much of the interview, Cruz blamed the White House’s policies for the surge in gas prices since President Joe Biden took office in January 2021.
/jlne.ws/3GmwkH8

US Plans Economic Talks With Taiwan in Latest Challenge to China; Taiwan wasn’t included in Biden’s new regional initiative; Bilateral economic talks to be announced in the coming weeks
Jenny Leonard – Bloomberg
The US and Taiwan are planning to announce negotiations to deepen economic ties, people familiar with the matter said, in a fresh challenge to Beijing, which has cautioned Washington on its relationship with the island. The talks would focus on enhancing economic cooperation and supply-chain resiliency, falling short of a traditional free-trade agreement, according to the people. The deal is likely to include areas of trade facilitation, supply-chain work and trade in agricultural products, they said, speaking on condition of anonymity ahead of a public announcement.
/jlne.ws/3PLqofa

White House Eyes Restarting Idle Refineries to Tame Fuel Prices
Ari Natter – Bloomberg
The Biden administration is reaching out to the oil industry to inquire about restarting shuttered refineries, as the White House scrambles to address record high-gasoline prices that are setting off political alarm bells ahead of the midterm elections.
/jlne.ws/3sZqs10

Rishi Sunak’s Helicopter Drop Makes the Bank of England’s Life Easier; By adding fiscal support to the economy, the UK government has freed the central bank to focus on curbing inflation.
Marcus Ashworth – Bloomberg
A difficult task has just become slightly easier for the Bank of England, following Chancellor of the Exchequer Rishi Sunak’s 15 billion-pound ($19 billion) relief package announced Thursday. The measures, including energy bill subsidies for every UK household plus one-off grants to pensioners and welfare recipients, mark a spectacular U-turn by the government as the cost-of living crisis worsens. But the arrival of the fiscal cavalry eases the potential impact on growth, freeing the central bank to focus on curbing a surge in consumer prices that threatens to savage the financial health of the most needy.
/jlne.ws/3t0VyVX

EU Leans Toward Delaying a Pipeline Ban to Clinch Oil Deal; Shipments via Druzhba oil pipeline could be spared from ban; Nations aiming for a deal before leaders meet next week
Alberto Nardelli and Ewa Krukowska – Bloomberg
Some European Union leaders are leaning toward a deal that would ban seaborne oil while temporarily sparing deliveries through a key pipeline to give landlocked Hungary more time, as the bloc tries to reach an agreement on a new sanctions package targeting Russia for its war in Ukraine.
/jlne.ws/38nBdTI

Russia Faces Biggest Debt Test Yet After US Ban on Payments; Putin’s government owes about $100 million in interest Friday; US investors no longer allowed to accept Russian bond payments
Sydney Maki, Libby Cherry, and Laura Benitez – Bloomberg
The path for Russia to keep sidestepping its first foreign default in a century is turning more onerous as another coupon comes due on the warring nation’s debt. Investors are supposed to receive about $100 million of interest on Russian foreign debt in their accounts by Friday, payments President Vladimir Putin’s government says it has already made. That’s unlikely to satiate concerned bondholders who are itching to see the cash after the US Treasury closed a loophole that previously allowed American banks and individuals to accept such payments.
/jlne.ws/3wOmvi7

Regulation

The SEC’s latest climate crackdown won’t help Elon Musk
Tim McDonnell – Quartz
Financial regulators in the US are cracking down on investment funds that are marketed as climate-friendly but frequently hold shares in high-carbon fossil fuel companies, and have only marginally lower emissions per dollar of revenue than the economy average. The proposed rules by the Securities and Exchange Commission will require purveyors of exchange-traded funds and other retail investment products labeled as “ESG” to disclose more information about what kinds of companies are included in those funds and the rationale for their inclusion. Today that information is frequently withheld or buried in technical documents that leave average retail investors susceptible to greenwashing. And ESG funds are allowed to hold up to 20% of their shares in non-ESG stocks, so that even funds labeled “fossil fuel-free” can, and do, hold fossil fuel companies. The new rules won’t necessarily close that loophole, but will at least make it easier to spot.
/jlne.ws/3lOkWKF

The European Regulator Who Loves Tech
Jillian Deutsch – Bloomberg
Mariya Gabriel is tired of hearing about startups leaving Europe. How do you attract talent to the continent, “if always we’re talking about the brain drain or the lack of support?”
/jlne.ws/3t3dH5M

ASIC acts against SMSF auditors who failed to lodge annual statements
ASIC
ASIC has cancelled the registration of 10 auditors of self-managed superannuation funds (SMSFs) who failed to lodge their annual statements. This follows reinstatement of their SMSF auditor registrations after ASIC’s previous cancellation for not lodging annual statements.
/bit.ly/3GpIuiw

ASIC cancels AFS licence of Metal Alpha Pty Ltd
ASIC
ASIC has cancelled the Australian Financial Services (AFS) licence of NSW-based financial services provider Metal Alpha Pty Ltd, effective 19 May 2022.
/bit.ly/3lRvZTi

Joint consultation paper on sustainability disclosures for STS securitisations
From 02 May 2022 to 02 July 2022
ESMA
The European Supervisory Authorities (ESAs) welcome comments on this consultation paper setting out the proposed Regulatory Technical Standards (hereinafter “RTS”) on content, methodologies and presentation of disclosures pursuant to Article 22(4) and 26d(4) of Regulation (EU) 2017/2402.
/bit.ly/3tnWsML

Publication of “Progress Report on Enhancing the Asset Management Business 2022”
FSA
“Progress Report on Enhancing the Asset Management Business 2022” was published by the Financial Services Agency in Japan (FSA), on 27th May this year. This report outlines the key challenges in the asset management industry in Japan, as well as our analysis on them and the courses of our potential actions going forward, identified through dialogues with asset managers.
/bit.ly/3zjjAQj

Welcome Remarks by Mr Edward S. Robinson, Deputy Managing Director (Economic Policy) & Chief Economist, Monetary Authority of Singapore, at the 9th Asian Monetary Policy Forum on 27 May 2022
MAS
Good morning, MD MAS Mr Ravi Menon, President NUS and Chairman of the ABFER Council, Professor Tan Eng Chye, fellow central bankers, distinguished speakers, ladies and gentlemen. Together with my co-organisers, Professor Bernard Yeung and Professor Steve Davis, I am pleased to welcome you to the 2022 Asian Monetary Policy Forum.
/bit.ly/3lQkpIg

MAS Launches 2022 Global FinTech Hackcelerator on Web 3.0 and Green Finance
MAS
The Monetary Authority of Singapore (MAS) announced today the launch of the 7th edition of the Global FinTech Hackcelerator, with the theme “Accelerating A Greener Digital Future”. The competition, powered by Oliver Wyman, seeks to leverage the potential of FinTech in accelerating the development of Web 3.0 and Green Finance, in Singapore and the region.
/bit.ly/3PJ4Srt

New speech by Ashley Alder: Keynote speech at PRI China Conference: Investing for Net Zero and SDGs
SFC
A speech entitled “Sustainable investment: regulatory priorities” delivered by Mr Ashley Alder at the PRI China Conference: Investing for Net Zero and SDGs was posted on the SFC website.
/bit.ly/38TswRs

Investing and Trading

It’s Going to Get Harder for UK Stocks to Keep Outperforming; FTSE 100 Index has beaten US and European gauges this year; Strategist survey suggests blue-chip index has no more upside
Michael Msika – Bloomberg
UK stocks are having an unusually good year. But with headwinds including stalling commodities prices, a windfall tax on major companies and a cost-of-living crisis, the outperformance may not last. After being unpopular among investors for years, the FTSE 100 Index has solidly outperformed peers this year with a 2.4% gain. The euro-area’s Euro Stoxx 50 has dropped 13%, while the S&P 500 is down 15%.
/jlne.ws/3sZO8Cv

UK Stock Market’s Valuation Discount Is Shrinking Quickly
Michael Msika – Bloomberg
Converging valuations in the UK and the euro area are making the FTSE 100 Index less attractive compared to last year. Spurred by commodities sectors, the FTSE 100 has solidly outperformed peers this year with a 2% gain, compared with a 14% drop for the more domestically focused FTSE 250 and a 13% decline in the euro-area gauge Euro Stoxx 50. Strategists surveyed by Bloomberg see no more upside left this year for the index, while they forecast 9% gains for the Euro Stoxx 50.
/jlne.ws/3GpVXXN

I knew Paul Volcker (who slew the Great Inflation), and Jerome Powell is no Paul Volcker; Volcker stopped inflation in the 1980s by raising real interest rates high enough to squeeze, but real rates are still very accommodative under Powell
Stephen S. Roach – MarketWatch
Poor Jerome Powell. With U.S. inflation close to a 40-year high, the Federal Reserve chair knows what he needs to do. He has professed great admiration for Paul Volcker, his 1980s-era predecessor, as a role model. But, to paraphrase Sen. Lloyd Bentsen’s famous 1988 quip about his vice-presidential rival, Sen. Dan Quayle, I knew Paul Volcker very well, and Powell is no Paul Volcker. Volcker was the quintessential U.S. public servant. He smoked cheap cigars, wore rumpled off-the-rack suits, and had a strong distaste for the glitz of Washington power circles. His legacy was a single-minded discipline in attacking a pernicious Great Inflation.
/jlne.ws/3sZNzbR

The Psychology Behind the Market Selloff; Stocks and bonds have been sinking together so far this year, but ETFs are doing just fine. So what’s going on?
Joel Weber and Eric Balchunas – Bloomberg
Unlike most declines, stocks and bonds have been sinking together so far this year. Rising inflation and a hawkish U.S. Federal Reserve are providing little comfort to investors. And yet exchange-traded funds continue to see massive flows.
/jlne.ws/38oQnYV

Why Chickens Are Getting More Pricey From Manhattan to Malaysia
Low De Wei and Anuradha Raghu – Bloomberg
Chicken is the most consumed meat in the world, but from the US to Singapore, consumers are finding that it’s more expensive than before to get their hands on one. While it’s not the only food product seeing a surge in prices, it means more pain for consumers as the costs of their favorite dishes like fried chicken and buffalo wings are jumping as well.
/jlne.ws/3LR1Y0z

Commodities Will Be the Next Market to Succumb; The bulls may soon regret their enthusiasm as both demand and supply forces look as if they will soon start to depress prices.
Gary Shilling – Bloomberg
Stocks have fallen to near-bear market territory. Bonds have suffered big price declines. Foreign currencies have nosedived against the US dollar. Cryptocurrencies, SPACs and other speculations have collapsed. But commodities have been on a tear. The Bloomberg Commodity Spot Index has surged 33% this year, with energy, metals and agriculture prices all showing big gains.
/jlne.ws/3wVn9Jx

Markets have become a minefield; Investors are in an extremely unforgiving mood if companies disappoint on earnings
Katie Martin – FT
When I was at university, a depressingly long time ago, students had different ways of marking the end of exams season. Most of us did the sensible thing and drank tequila in the garden, but a certain group engaged in a game that involved soaking each other with water pistols or balloons full of water. The aim seemed to be to drench other players and emerge as the only one left.
/jlne.ws/3POxNdK

Environmental, Social and Corporate Governance

Supreme Court Allows Greenhouse Gas Cost Estimates; Louisiana and other Republican-led states challenged a federal working group’s efforts to develop standards for agencies to use in quantifying the harms caused by emissions.
Adam Liptak – NY Times
The Supreme Court said on Thursday that it would allow the Biden administration to continue to take account of the costs of greenhouse gas emissions in regulatory actions, rejecting an emergency application from Louisiana and other Republican-led states to block the use of a formula that assigns a monetary value to changes in emissions.
/jlne.ws/3wWpuDM

Amazon investors nuke proposed ethics overhaul and say yes to $212m CEO pay
Workplace safety, labor organizing, sustainability and, um, wage ‘fairness’ all struck down in vote
Brandon Vigliarolo – The Register
Amazon CEO Andy Jassy’s first shareholder meeting was a rousing success for Amazon leadership and Jassy’s bank account. But for activist investors intent on making Amazon more open and transparent, it was nothing short of a disaster.While actual voting results haven’t been released yet, Amazon general counsel David Zapolsky told Reuters that stock owners voted down fifteen shareholder resolutions addressing topics including workplace safety, labor organizing, sustainability, and pay fairness. Amazon’s board recommended voting no on all of the proposals.
/jlne.ws/3wRqDOc

Institutions

3 Low-Volatility ETFs to Protect Your Portfolio from Wild Swings in the Market
Dipanjan Banchur – Entrepreneur
The stock market has been under tremendous pressure over the past few weeks due to investors’ concerns about macroeconomic and geopolitical issues. However, the Dow Jones Industrial Average (DJIA) gained 191.66 points yesterday to close at 32,120.28, while the S&P 500 and the Nasdaq Composite jumped 0.9% and 1.5% to close at 3,978.73 and 11,434.74, respectively. But although the market ended with gains yesterday, overall market sentiment is expected to remain bearish. Investors’ concerns over the Federal Reserve’s aggressive interest rate increases to tackle 40-year high inflation, supply disruptions due to the Ukraine-Russia war, the surprising decline in GDP in the first quarter, rising energy and commodity prices, and COVID-19 restrictions in China are the primary factors driving market volatility of late.
/jlne.ws/3t0DCuK

Wellness Exchange

Why the Air at the Gym May Be More Likely to Spread Covid
A new study found exercisers expel a shocking number of tiny aerosol particles when they are working hard.
Gretchen Reynolds – NY Times
Many gyms and health clubs seem to be filling up again with people eager to return to their old routines and communities or get in shape for summer, at the same time that new Omicron variants are pushing Covid infections up. So, how safe is it to go back to the gym?
Put another way, how many microscopic aerosol particles are the other cyclists in your spin class breathing out into the room? How many is the runner on the nearby treadmill spewing forth? A small study about respiration and exercise published Monday in the Proceedings of the National Academy of Sciences provides some rather startling answers.
/jlne.ws/38OHIPU

Covid Lockdown Costs Shanghai Its China Currency Trading Crown; City’s foreign-currency trades slumped 30% from March: SAFE; Lockdowns had profound impact on economic activities: NatWest
Bloomberg News
The fallout of China’s Covid Zero policy is starting to show in Shanghai’s financial markets, with the city losing its top currency trading hub title for the first time. Shanghai handled fewer currency deals than Beijing in April, to rank second among China’s 36 provinces and municipalities, according to the State Administration of Foreign Exchange. The decline points to another consequence of strict lockdowns and may serve as a case study for the possible implications of movement curbs in major Chinese cities, including Beijing, as Covid cases climb.
/jlne.ws/3GpSLvh

China Finds New Covid Cases in Cities on North Korea Border; Health officials warn virus risks spreading in mainland China; North Korea’s outbreak of ‘fever’ cases has infected millions
Bloomberg News
China warned that Covid-19 infections risk spreading through the mainland after at least 16 cases were found in cities bordering North Korea, which is struggling to contain one of its worst health crises in years. Authorities found seven infections in northeastern Jilin province, as well as nine cases in neighboring Liaoning, on Thursday. National Health Commission officials on Friday said the source of the infections in Jilin, which has a long and often porous border with North Korea, is unclear and there’s a risk that the virus could spread further. Measures to prevent imported cases will be strengthened they said, without giving details.
/jlne.ws/3sVP4YD

China Eases Covid Rules for Students to Avoid Tiananmen Linkages
Bloomberg News
Chinese officials eased Covid restrictions at Beijing universities in recent days to avoid the possibility any protests over virus measures would be linked to the anniversary of the Tiananmen Square massacre on June 4, people familiar with the matter said.
/jlne.ws/3wRcb7K

It’s Still Covid’s World. We’re Just Living In It.
Farhad Manjoo – NY Times
There are days, now, when you can almost forget about the virus. Hundreds of thousands of people around the world are still being infected with Covid-19 daily — an average of about 361 Americans died from it every day in the last week — but after more than two years and millions of lost lives, the pandemic has given way in headlines and breaking-news crawls to older and more familiar atrocities.
/jlne.ws/3arOuvk

Regions

How Australia Is Transforming Grids Away From Coal Power; Plans to retire creaking fossil fuel electricity infrastructure are being accelerated as cheap and abundant renewables transform Australia’s energy mix.
Georgina McKay and David Stringer – Bloomberg
The air is hot, gritty and tastes metallic inside Australia’s largest coal-fired electricity plant, the aging Eraring Power Station that’s into its fourth decade of operations. At the site’s cavernous turbine hall as much as 6 million tons of coal a year is crushed and loaded into furnaces which reach temperatures of 1,480 degrees Celsius (2,696 Fahrenheit) — about enough to melt steel — to heat 24-story high water-filled boilers. The process creates enough steam to spin giant turbines that generate almost 2.9 gigawatts of electricity annually, a quarter of power demand in Australia’s most populous state. For now, there’s the same thunderous roar from the process that’s continued since Eraring became fully operational in 1984. But, as soon as August 2025, the plant north of Sydney is scheduled to fall silent.
/jlne.ws/3wSMHXB

First SPAC in the Middle East Surges in Abu Dhabi Trading Debut; ADC Acquisition Corp.’s shares jump as much as 30% at the open; Blank-check listings are starting to gather steam in the Gulf
Farah Elbahrawy and Julia Fioretti – Bloomberg
The first special purpose acquisition company to list in the Middle East soared in its Abu Dhabi trading debut as the region’s blank-check market gains traction.
/jlne.ws/3wSEp3f

China’s Top Oil Trader Hires More Tankers to Ship Russian Crude; Unipec hires at least 10 ships to transport ESPO from Far East; That’s a fivefold gain on vessels booked last month: Vortexa
Sharon Cho – Bloomberg
China’s oil trading giant Unipec has significantly increased the number of hired tankers to ship a key crude from eastern Russia. China International United Petroleum & Chemical Co., better known as Unipec, has chartered at least 10 tankers so far this month to transport Russian ESPO crude that’s loaded from Kozmino port, according to traders and a shipbroker. That would be a fivefold increase on the number of vessels booked for the trade a month earlier, data from shipping analytics firm Vortexa show.
/jlne.ws/3PO4Hee

Hungary Fights ‘Petrol Tourism’ With Foreigner Price Cap Ban
Zoltan Simon and Marton Kasnyik – Bloomberg
Hungary will ban foreigners from a program capping fuel prices to stop so-called “petrol tourism” in which people are coming from neighboring countries to take advantage of the European Union’s cheapest gas stations. Fuel prices capped at 480 forint per liter ($1.32) will be available only to drivers with Hungarian license plates as of Friday, Cabinet Minister Gergely Gulyas told reporters on Thursday. Foreign motorists will have to pay a different, higher price, he said.
/jlne.ws/3yYT4vj

UK imposes 25% energy windfall tax to help households as bills surge
William James and Andy Bruce – Reuters
Britain announced a 25% windfall tax on oil and gas producers’ profits on Thursday, alongside a 15 billion pound ($18.9 billion) package of support for households struggling to meet soaring energy bills. The move, which will give each UK household a 400 pound discount on their energy bill and more for lowest-income households, marks a change of heart for Prime Minister Boris Johnson’s government, which had previously resisted windfall taxes, calling them a deterrent to investment. It is the second emergency policy intervention to help with rising bills this year.
/jlne.ws/3t0aBzv

I Watched Russia Join The World’s Markets. Now It All Feels Like an Illusion; In the 1990s, it was thrilling to cover Eastern European countries as they embraced free markets. Moscow always seemed a bit different.
Laura Zelenko – Bloomberg
To open Bloomberg’s first news bureau in Eastern Europe—and the fourth for the company in all of Europe—the directions were simple: Identify a space that was suitable for a big international financial firm but had something “wrong” with it. In other words, not too perfect. As a young company, we didn’t want to come off as arrogant. So in Prague, in 1993, we found an office with a fabulous view directly onto Old Town Square’s famous clock tower, with just one catch: It could only be reached by walking up five flights of steep, worn, stone stairs. We rapidly hired local staff in Prague, and then expanded to Warsaw and Budapest, working from apartments or hotel rooms until we secured new offices. Moscow was the inevitable next step.
/jlne.ws/3NEMwWJ

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The Spread

Bears Picked Right Stocks to Short With Declines Twice the S&P’s

Observations & Insight Editor's Note: The JLN Options Newsletter will not be published on Monday, July 4 in observation of the Independence Day holiday. Have a great weekend! Lead Stories Bears Picked Right Stocks to Short With Declines Twice the S&P's Lu Wang...

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First Read Hits & Takes John Lothian & JLN Staff Today we have two videos from my coverage of FIA's IDX in London, which I conducted in the Eurex branded lounge area outside The Brewery's doors. The first is with FIA Europe Head Bruce Savage, whom I literally...

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