First Read

Cinnober Going Big On Clearing
JLN
The Cinnober recap of its annual meeting revealed just how serious the company is about developing and investing in a new back office, real time clearing business.

This space is ripe for change and competition, and Cinnober reported that it aims to raise about $20 million via a stock sale for the new entity. Over the next two years, Cinnober will launch a new realtime back office clearing system which will be spun off from the company.

It’s a bold move from Cinnober’s CEO Veronica Augustsson and another indication that the back office clearing space is about to get a dose of new technology and competition.

See the full release in FinTech.

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Dear Readers
John Lothian News
Please help us out on our annual check up with you. This 3-minute survey helps us learn a bit more about our readers as well as what you like and what you don’t like about our publications and websites. It’s also a great place to leave us comments and suggestions for future content and services. If you fill it out, you could win an Amazon Echo, which answers just about everything but cannot take our survey. Here’s the link to the survey. Thanks!

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Announcement from CTA EXPO
CTA EXPO UPDATE
Research shows that 89% of Emerging Managers never reach $100m in AUM. Emerging Manager Forum / CTA EXPO will focus on helping managers be in the 11% that exceed AUM of $100m and how the 50% of attendees who are investors can focus in on these managers. The New York event on April 27, 2017 is a combination of Emerging Manager Forum and CTA Expo. We have reserved a limited room block at the Stewart Hotel at a discounted rate for attendees. For full information contact Frank Pusateri 1-518-656-9348 or Bucky Isaacson 1-650-851-8507. You can also find full details on the website, emergingmanagerforum.com.
/goo.gl/OkNha5

**JK: If anyone can help CTAs hit the $100 million mark, it’s Frank and Bucky.

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FXPA Elects New Officers, Board Members
Mondovisione
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the results of its elections, which took place last week, and resulted in a slate of new Board members, as well as four officers to serve on the FXPA’s Executive Committee (ExCom).
/goo.gl/QnUXxn

**JK: FXPA has some reputational work to do.

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Singapore to Consider Giving Traders Their Lunch Break Back
Andrea Tan – Bloomberg
Singapore Exchange said to have public consultation in weeks; Pilot proposed to test effectiveness of tick size move
Singapore stock traders may finally get their lunch break back. Singapore Exchange Ltd., which runs the city’s equity market, is considering reinstating the midday intermission, according to people familiar with the matter. SGX in 2011 scrapped the break, which lasted from 12:30 p.m. to 2 p.m. every day, in an effort to boost trading.
/goo.gl/5z5M4n

**JK: I’m now long on Singapore duck.

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Thursday’s Top Three
Thursday’s top read story looked a lot like Wednesday’s top read story. That’s because people really wanted to read FOW’s piece on Bob Zagotta and Umesh Gajria in CME to part ways with two senior US directors. Second went to the big bet on passive vs active investing, in the Wall Street Journal article Only a Market Crash Can Stop Warren Buffett From Winning This $1 Million Bet. Third went to the Tribune’s obituary on Bill Hagerty

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MarketsWiki Stats
94,395,478 pages viewed; 22,360 pages; 203,934 edits
MarketsWiki Statistics

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Lead Stories

Data centres help London retain cachet
Philip Stafford – Financial Times
Banks may be contemplating moving staff and operations out of London after the Brexit vote, but there is no sign of the City losing its edge as the home for data centres that help high-speed trading companies based in the US and Asia. Interxion, a Dutch operator of data centres, said on Thursday that it plans to spend EUR35m (£30m) to add a third more capacity to its main site on the edge of the City, as requests for computer space from banks and high-frequency traders in the US and Asia increase.
on.ft.com/2mqfoW0

Theresa May and Mark Carney urged by leading City executives to halt London Stock Exchange merger; Among the 40 signatories of the letter are Peter Cruddas, the chief executive of CMC Markets and former Tory treasurer
Josie Cox – Independent
More than three dozen well-known financiers, executives and other City figures have asked Theresa May and Bank of England Governor Mark Carney to delay the planned merger of the London Stock Exchange with Deutsche Bˆrse, saying that a tie-up
/goo.gl/lJd2UG

CME Group Interest Rate Contracts Shatter Records On Feb. 22
Mondovisione
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that its Fed Fund futures contracts reached an all-time daily high of 658,700 contracts traded on Feb. 22, 2017, surpassing the previous record achieved on Nov. 9, 2016, following the U.S. presidential election. Also on Feb. 22, Ultra 10-Year Treasury Futures reached a record high of 315,730 contracts traded, surpassing the previous high reached on Nov. 28, 2016. Both contracts also achieved record open interest on Feb. 22 of 1.6 million and 342,000 contracts, respectively.
/goo.gl/tpTOs6

Reinstitute Choice and Civility: ‘Tis Time for Retail FX in the U.S. to Have a Regulator, Not an Executioner
Javier Paz – Aite Group
With the departure of Forex Capital Markets (FXCM) from the U.S., leadership change, etc., financial reporters far and wide are asking for perspective on these events. Some go as far as probing whether this is the end for the U.S. retail foreign exchange (FX) industryóto which I say, no, it isn’t the death of retail FX in the U.S. since there are still three authorized brokers (Gain Capital, Oanda, and TD Ameritrade/thinkorswim). But why are there merely three viable U.S. brokers for FX when Japanese traders have a good dozen brokers (with 150,000 and more than 500,000 traders each) and another dozen brokers of smaller brokers behind that? https://goo.gl/izQPty

Treasury eyeing issuance of 100-year US government debt
Joe Rennison – Financial Times
Steven Mnuchin, US Treasury secretary, said on Thursday that his staff have begun to look into issuing US government debt with maturities of as long as 50 or 100 years. Mr Mnuchin said he was not making any “formal announcement” on whether the Treasury would issue longer-dated bonds but he had “already begun to talk to staff” about it. This builds on earlier comments made before he took office that he was open to the idea.
on.ft.com/2mq8yQx

Rogue Algos Blamed Again for Havoc on Turkey’s Stock Exchange
Asli Kandemir and Tugce Ozsoy – Bloomberg
Sudden plunges in Koc and Turkcell algo-driven, Borsa CEO says; ‘Like putting a Ferrari engine in a Murat 131’: fund manager
Algorithmic trading was to blame for the sudden plunges in the shares of two of Turkey’s largest companies near the close of trading earlier this week, Borsa Istanbul Chairman and Chief Executive Officer Himmet Karadag told Bloomberg on Friday.
/goo.gl/shfl1A

Economists in Denial
Robert Skidelsky – Project Syndicate
Early last month, Andy Haldane, Chief Economist at the Bank of England, blamed “irrational behavior” for the failure of the BoE’s recent forecasting models. The failure to spot this irrationality had led policymakers to forecast that the British economy would slow in the wake of last June’s Brexit referendum. Instead, British consumers have been on a heedless spending spree since the vote to leave the European Union; and, no less illogically, construction, manufacturing, and services have recovered.
/goo.gl/Kr7s9T

Bankers Told No Fly-In, Fly-Out Hub in Frankfurt After Brexit
Gavin Finch, Nicholas Comfort and John Glover – Bloomberg
Banks choosing Frankfurt for their licensed European Union hub after Brexit will have to set up full-scale operations in the country, not brass-plate offices with bankers commuting from London, according to German central bank Executive Board member Andreas Dombret.
/goo.gl/IdkZnJ

Wall Street’s Humans Notch a Win Against the Computers; Traders of corporate loans have shaved more than 20% off the average time it takes to settle trades
Telis Demos – WSJ
As the bot armies gobble up jobs across Wall Street, humans occasionally fight the technological onslaught. Sometimes they even win.
/goo.gl/IQ3b8u

We need to talk about the London Metal Exchange: Andy Home
Andy Home – Reuters
It’s time to talk about the London Metal Exchange (LME). The venerable old institution that sets the global reference price for metals such as aluminum and copper seems to be lurching from crisis to crisis.
/goo.gl/ITJt7a

A Response to The LME Issue; In response to Andy Home’s article
Ross Norman – Sharps Pixley
Visualize the scene – a man in the open seas and struggling. His fate is inevitable and the only uncertainty is whether he dies by drowning or is taken out by the increasing number of sharks that are circling. In the scheme of things it is immaterial, nature will take its course. He spies a small swimmer moving confidently past and he declares “if I can stand on his shoulders I will be saved”. That insanity, in a nutshell, is the position that the LME finds itself in, if Andy Home’s article is accurate.
/goo.gl/kNRTDJ

Ex-Goldman programmer appeals court conviction
Kevin Dugan – NY Post
Former Goldman Sachs computer programmer Sergey Aleynikov is fighting to keep his case alive.
/goo.gl/WlvRs8

Banking Industry Addresses Diversity, Adding Women to Boards
Elizabeth Olson – NY Times
Banking and capital markets, often viewed as dominated by men, achieved high scores in a newly released survey measuring the diversity in their director ranks.
/goo.gl/6h7t0A

Exchanges, OTC and Clearing

Top City grandees and politicians come out against London Stock Exchange merger
Mark Sands and William Turvill – City AM
Forty top eurosceptics from the worlds of business and politics have come out against the London Stock Exchange’s proposed £21bn mega-merger with Deutsche Boerse, calling for the deal to be blocked until after Brexit negotiations.
/goo.gl/ia2TXG

London Metal Exchange cuts deal with banks to propel gold futures
By Peter Hobson – Reuters
The London Metal Exchange has reached a 50:50 revenue-sharing deal with a company founded by a group of banks to promote trade in its new gold futures contracts, sources said, aiming to overcome market scepticism surrounding their launch in June.
/goo.gl/qxyzeM

NYSE plans trial run for Snap IPO
By Chuck Mikolajczak and Lauren Hirsch – Reuters
The New York Stock Exchange will conduct a trial run of Snap Inc’s initial public offering on Saturday, according to a notice given last week to stock traders, in anticipation of what is expected to be the biggest U.S. technology IPO in nearly five years
/goo.gl/kZF1FI

CME set for Monday launch of Chicago monthlies
Futures & Options World
CME is set to launch Monday, monthly currency futures contracts in Chicago.
/goo.gl/tbfWrn

TSX Venture Exchange Announces the 2017 TSX Venture 50
TMX
TSX Venture Exchange (TSXV) today announced the 2017 TSX Venture 50, an annual ranking of top performing companies from five industry sectors: Clean Technology and Life Sciences, Diversified Industries, Mining, Oil & Gas, and Technology. Representatives of TSX Venture 50 companies will join TMX Group executives at a market open ceremony on Friday, February 24 at 9:30 a.m. ET to celebrate their achievement.
/goo.gl/0lxbap

BSX Launches Investor Education Programme
Mondovisione
The Bermuda Stock Exchange (BSX) today announced the launch of its new Investor Education Programme ‘Own your share of Bermuda’.
/goo.gl/zcG6y8

Fintech

Cinnober’s Board of Directors has resolved on a directed share issue of up to SEK 180 million
Cinnober
The Board of Directors of Cinnober Financial Technology Aktiebolag (publ) (“Cinnober” or the “Company”) has resolved, subject to the approval of the Extraordinary General Meeting, on a directed share issue of 692,307 shares, which is expected to raise proceeds to the Company of up to SEK 180 million before issue costs.
/goo.gl/V47eAK

PTAB Follows Fed. Circ. Lead, Upholds Trading Patent
By Matthew Bultman – www.law360.com
A split Patent Trial and Appeal Board on Friday followed the lead of the Federal Circuit and upheld a Trading Technologies International Inc. electronic trading patent, finding it was not invalid under the U.S. Supreme Court’s Alice ruling.
In a 2-1 decision, the PTAB said TradeStation Group Inc. and IBG LLC had not shown why it should break from the appellate court’s Jan. 18 decision, when the court ruled that a judge correctly found this and another Trading Technologies patent covered technological improvements, not abstract ideas.
/goo.gl/HhIqnn

Sino concludes co-operation agreement with Trading Technologies International Inc.
Reuters
reut.rs/2lzRwSn

British, Canadian regulators agree to assist fintechs
Reuters
British and Canadian regulators have signed an agreement to make it easier for financial technology companies to expand in each other’s markets, they said on Wednesday.
/goo.gl/ReBjoI

A leading economist explains why bitcoin isn’t money
Joe Daunt – Business Insider
Ann Pettifor, leading economist and author of “The Production of Money” told Business Insider that bitcoin is flawed as money because it is a “finite asset.”
/goo.gl/Wni3xo

IBM Deploys 400 Blockchain Projects, But Perspectives Are Unclear
cointelegraph.com
At the NASSCOM India Leadership Forum (NILF) held earlier this month, Rometty stated that Blockchain technology will transform the financial industry as the Internet did for information.
/goo.gl/tkVRG2

Singapore fintech investment down 65% in 2016: KPMG, Banking & Finance
Businesstimes.com.sg
IN 2016, there was a 65 per cent drop in overall investment in Singapore-based fintech companies, down from US$605 million to US$214 million, according to a KPMG International study Pulse Of Fintech.
/goo.gl/rdKDXb

CQG Connects to Warsaw Stock Exchange for Futures Trading
CQG News
CQG will provide direct market access to GPW through all of its platforms, including its flagship, CQG Integrated Client, which offers global market data and innovative interfaces for electronic trading and order management. The new connection will enable CQG customers to build effective correlation dashboards to compare GPW contracts with other exchanges and access additional trading strategies not previously available.
/goo.gl/jbYRwS

Data Center REIT Equinix Is Investing For Future Growth
Bill Stoller – Seeking Alpha
Equinix, Inc. (NASDAQ: EQIX) makes investments with an eye toward the future, as well as today’s bottom line. CEO Steve Smith recently explained it this way: “We are operating at the intersection of some of the greatest technology trends in our lifetime, and the digital transformation driven by cloud services is shifting compute, storage and networking to the edge, which plays into our dense ecosystems and global scale.”
/goo.gl/0pMzOB

Fintech, Governance and Data Feeds
By Matt Levine
Fintech.
Here is a blog post from Carlypso about Beepi. What? I don’t know what those things are either.
/goo.gl/bo29bi

Swift gpi looks to set new global payments standard
Kimberley Long – Euromoney Magazine
After a successful year-long pilot phase, the new Swift global payments innovation (gpi) messaging platform is now live, but it still has some way to go before meeting Swift’s aspiration of it being adopted as the global standard.
/goo.gl/qQVmoJ

Fintech, the Buzzword Finance Loves and Hates: QuickTake Q&A
Edward Robinson – Bloomberg
You’ve heard it at conferences, in meetings and maybe even bandied about at dinner parties. Ever since a wave of financial technology startups emerged after the 2008 subprime mortgage crack-up, “fintech” has become shorthand for a digital revolution that could sweep away antiquated banking practices. But its definition has become so elastic that it’s hard to know precisely what it is, let alone what it augurs for a global financial industry in dire need of innovation. Here’s a primer.
/goo.gl/SXrDkk

Politics

Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation
Steve Holland and David Lawder – Reuters
President Donald Trump declared China the “grand champions” of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing’s foreign exchange practices.
/goo.gl/Qujqt9

US retreats from Trump pledge on China currency manipulation; Mnuchin yet to make ‘judgments’ on renminbi’s strength
Sam Fleming, Demetri Sevastopulo and Adam Samson – FT
The US administration has staged a retreat from another of Donald Trump’s aggressive policy pledges after Steven Mnuchin, the new US Treasury secretary, dismissed the president’s promise to fast track the branding of China as a currency manipulator.
/goo.gl/CIXkxp

Mnuchin Says He Won’t Label China a Currency Manipulator…Yet
Kevin Cirilli and Saleha Mohsin – Bloomberg
Treasury Secretary Steven Mnuchin signaled no urgency to designate China a currency manipulator, saying he wants to use a regular review of foreign-exchange markets to determine if the U.S.’s largest trading partner is cheating.
bloom.bg/2mpZgE6

Trump Considering U.S. Bancorp’s Davis for Fed Board Seat, Source Says
Elizabeth Dexheimer and Robert Schmidt – Bloomberg
Donald Trump is considering nominating U.S. Bancorp Chief Executive Officer Richard Davis for the Federal Reserve Board, said people familiar with the matter, as the president prepares to start reshaping the central bank’s approach to monetary policy and Wall Street oversight.
bloom.bg/2mqdyEP

Trump says he can’t find any country the US has a trade surplus with ó here they are
Elena Holodny, Bob Bryan and Andy Kiersz – Business Insider
On Thursday, President Donald Trump is holding a “listening session” with 24 manufacturing CEOs.
read.bi/2mqo7Ys

Mnuchin Tells Carney to Expect America-First Push on Regulation
Craig Stirling – Bloomberg
U.S. Treasury Secretary says meeting with FSB chair productive; G-20 leaders to hold regulation talks in Germany next month
Treasury Secretary Steven Mnuchin told Mark Carney that Donald Trump’s administration will promote U.S. national interests in global talks on financial regulation.
/goo.gl/b1qmV8

Regulation

EU experts reviewing MiFID II bond rules, says Commissioner
Hayley McDowell – The Trade
Any changes or alterations to MiFID II’s fixed income pre-trade transparency rules lay in the hands of the European Commission’s corporate bonds expert group.
/goo.gl/aBG4IV

RBC battles former executive after dropping Volcker strategy
Olivia Oran and Nate Raymond – Reuters
Royal Bank of Canada is in a court battle with a former executive it dismissed after moving him to the Bahamas, where it could continue a lucrative trading business hindered by U.S. regulations by using a little-known exception for foreign banks.
reut.rs/2mqsN0c

FCA Statement on EMIR 1 March 2017 variation margin deadline
FCA
The FCA welcomes the statements made by the European Supervisory Authorities (link is external) and the International Organization of Securities Commissions (link is external) on 23 February 2017.
/goo.gl/1hyUHl

SEC Announces Agenda for March 9 Investor Advisory Committee Meeting
SEC.gov
The Securities and Exchange Commission today announced the agenda for the March 9 meeting of its Investor Advisory Committee. The meeting will commence at 9:30 a.m. in the Multipurpose Room at SEC headquarters at 100 F Street, N.E., Washington, D.C. and is open to the public. The meeting will be webcast live and archived on the committee’s website for later viewing.
/goo.gl/Lx8a3j

Former I.M.F. Leader Sentenced for Embezzlement
Raphael Minder – NY Times
Rodrigo Rato, a former managing director of the International Monetary Fund, was convicted on Thursday on charges of misusing the funds of a Spanish bank that he led to near-collapse. He was sentenced to four and a half years in jail.
nyti.ms/2mq8akX

Commission Statement Regarding Decision In Bartko v. SEC
Mondovisione
In its January 17, 2017 decision in Bartko v. SEC (No. 14-1070), the United States Court of Appeals for the D.C. Circuit granted in part a petition for review of a Commission order imposing sanctions for violations of the securities laws. The court vacated the portion of the order imposing collateral bars against Bartko, who was associated only with a broker-dealer at the time of his securities law violations, from association with investment advisers, municipal securities dealers, transfer agents, municipal advisors, and nationally recognized statistical ratings organizations.
/goo.gl/rCUWbm

Ex-Comverse CEO who fled to Namibia gets 2-1/2 years prison in U.S.
Nate Raymond – Reuters
The former chief executive officer of Comverse Technology Inc, who returned to the United States last year after spending a decade in Namibia to avoid prosecution, was sentenced to 2-1/2 years in prison on Thursday for engaging in securities fraud. Jacob “Kobi” Alexander, the Woodbury, New York-based software developer’s founder, was sentenced by U.S. District Judge Nicholas Garaufis in Brooklyn, who criticized the former executive for trying to avoid justice for so long.
reut.rs/2mqwR0x

EC: regulators could adapt rules to protect bond liquidity; Official recognises regulatory hit to corporate bond and repo markets, but rejects Mifid delay
Catherine Contiguglia – Risk.net
The European Commission will continue to weigh the impact of regulations on secondary corporate bond market liquidity and could adapt the rules further, according to a top European legislator, who said robust corporate bond markets are viewed as a necessary step for a European capital markets union. “Clearly, corporate bonds and repos were identified as markets where the cumulative weight of the regulation had led to a change in dynamics, and had led to a change in the capacity of the market
/goo.gl/4isRhH

Proposed Rule Change to Amend FINRA Rule 6191 to Modify the Date of Appendix B Website Data Publication Pursuant to the Regulation NMS Plan to Implement a Tick Size Pilot Program\
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Rule 6191 to modify the date of Appendix B website data publication pursuant to the Regulation NMS Plan to Implement a Tick Size Pilot Program (“Plan”).
/goo.gl/wv3lzx

Investment consultants in joint response to FCA review, quiet on details
Reuters
Investment consultants Mercer, Aon Hewitt and Willis Towers Watson said they had banded together to propose market changes that help them avoid a competition review by Britain’s regulator, but released no details.
/goo.gl/lTRSZH

SEC will not appeal ruling preventing certain retroactive penalties
By Sarah N. Lynch- Reuters
The U.S. Securities and Exchange Commission has decided not to appeal a court ruling that limited its ability to punish bad actors for misconduct that predated the 2010 Dodd-Frank Wall Street reforms, the agency announced Thursday.
/goo.gl/t7IAi4

Investing and Trading

Buffett expected to tout passive investing in Berkshire annual letter
Jonathan Stempel – Reuters
Warren Buffett, widely considered one of the world’s best investors, is likely to tout the merits of passive investing this weekend to readers of his annual letter to Berkshire Hathaway Inc (BRKa.N) shareholders.
reut.rs/2mqjDkh

Against the tide: The return of the euro?
David Roche – Euromoney Magazine
President Donald Trump’s unpredictability accounts for a lot and I don’t think that US protectionist measures – tariffs or some form of border tax – would be good for the US dollar. Sure, they ‘improve’ the US trade account and would heft inflation. So the Fed must tighten more, but Fed tightening (more than other central banks) is a tired story – even if the market still lags the dots. Protectionism might hurt the US capital account more than it helps the US trade account.
/goo.gl/gxBuBz

Can You Make Money in a Euro Collapse?
James Mackintosh – WSJ
As Europe is roiled by fears of a breakup of its currency, investors and lawyers have begun digging through bond documentation in the hope of finding ways to protect themselves against the possible return of the franc, lire and deutsche mark.
on.wsj.com/2mq08Zo

I might just be holding gold forever; With Europe and the US beset by uncertainty, Russia and Japan are worth another look
by: Merryn Somerset Webb – FT
Should you really cash in your defined benefit pension? Is Japan still a good buy? Should everyone still be holding gold? Is it time to get out of Russia? Isn’t paying someone to buy a car for you just the same as paying a fund manager to look after your money? And if so, how come you think it’s OK to pay 5 per cent to a car agent but get semi-hysterical at the idea that a fund manager should have anything over 1 per cent?
/goo.gl/WLZ9py

Bitcoin hits 3-year peak, nears record high on U.S. ETF approval talk
Jemima Kelly – Reuters
Digital currency bitcoin hit its highest levels in more than three years on Thursday and came within $3 of an all-time peak, on speculation that the first bitcoin exchange-traded fund (ETF) is set to receive approval from the U.S. financial regulator.
reut.rs/2mpuOK3

Exxon’s New Chief Endorses Carbon Tax to Combat Climate Change
Joe Carroll – Bloomberg
Darren Woods makes first blog post since succeeding Tillerson; Comment mirror’s former CEO’s long-standing position on levy
In his first blog post since succeeding Rex Tillerson, the new head of Exxon Mobil Corp. focused on climate change, calling for a carbon tax to discourage use of polluting fuels.
/goo.gl/rNWLcC

World’s Best Returns Since 1900 Came From These Markets: Chart
Selcuk Gokoluk – Bloomberg
Between 1900 and 2016, the world economy moved from telegraphy to smartphones, horse-drawn carriages to supercars and from letter press to Internet. But throughout this period, a few countries produced the highest average returns for investors in stocks and bonds. According to a study by Credit Suisse Group AG and the London Business School, the best equity markets over the past 117 years were commodity-rich nations such as South Africa, Australia, the U.S. and Canada, while Denmark and Sweden yielded the highest bond returns.
/goo.gl/H800wE

Institutions

Barclays surprise capital boost triggers pension concerns
Lawrence White and Andrew MacAskill – Reuters
A surprise boost to Barclays’ (BARC.L) capital reserves failed to convince some analysts and investors on Thursday, with the British bank’s shares falling nearly three percent as the market digested the figures, reversing earlier gains.
reut.rs/2mpD7Wd

Credit Suisse Sees $750 Million Revenue at Risk in ‘Hard’ Brexit
Jan-Henrik Foerster and Jeffrey Voegeli – Bloomberg
Loss of access would imperil up to 15% of U.K. units’ revenue; CFO says 1,500 more job cuts planned in London this year
Credit Suisse Group AG may need to find new ways to serve clients who generate as much as $750 million of revenue at its U.K. subsidiaries after Britain leaves the European Union, Chief Financial Officer David Mathers said.
/goo.gl/ZEkL5z

Le Pen Aides Met UBS, BlackRock, Barclays to Explain Euro Exit
Helene Fouquet – Bloomberg
National Front aides likened to Varoufakis by one analyst; Meetings show Le Pen victory seen as increasingly realistic
Top advisers to French presidential candidate Marine Le Pen have met with strategists and analysts from BlackRock Inc, Barclays Plc and UBS Group AG, among other firms to explain their economic program and plans to withdraw France from the euro.
/goo.gl/xRPy7H

RBS annual losses deepen to £7bn after mis-selling scandal; UK bank unveils fresh cost-cutting plan in attempt to return to profit in 2018
Emma Dunkley – FT
Royal Bank of Scotland has reported a £7bn loss after taking a huge hit from mis-selling and conduct charges, as it unveiled a fresh cost-cutting plan in an attempt to return to profit in 2018.
/goo.gl/2ClzmG

RBS Losing Streak Hits Nine Years but Sees End in Sight; British bank’s management hopes 2017 will mark end of decadelong restructuring
By MAX COLCHESTER – WSJ
Royal Bank of Scotland Group PLC reported its ninth straight annual loss but pledged an extra £750 million ($951.6 million) of costs cuts this year and said it hoped 2017 would mark the end of its decadelong restructuring.
/goo.gl/w7KUAk

Trump appointee Gary Cohn to stay clear of Goldman matters; Former executive spearheaded US bank’s push for rules reform last year
by: Barney Jopson in Washington and Ben McLannahan in New York
Gary Cohn, the former Goldman Sachs executive emerging as a powerful influence over economic policy in Donald Trump’s administration, will recuse himself from any matters directly involving his former employer, the White House has told the Financial Times.
/goo.gl/R6VKpO

Merrill Lynch Cuts Maximum Advisory Fee for Smaller Clients; Nearly 20% reduction expected to save some smaller investors thousands of dollars
By MICHAEL WURSTHORN – WSJ
Merrill Lynch is cutting account fees by about 20% for some customers who pay for advice, as the brokerage industry continues to put more emphasis on charging investors level fees versus commissions.
/goo.gl/1N4SMy

Regions

U.S. beef exports to China, GMO approval key: ambassador nominee
Mark Weinraub – Reuters
Iowa Governor Terry Branstad, whom U.S. President Donald Trump has tipped to become ambassador to China, said on Thursday that he would work to open that market to U.S. beef exports when he begins his term.
reut.rs/2mpK9dK

Negative interest rates make people behave in weird and wonderful ways
Gwynn Guilford – Quartz
Swedes face one the world’s highest tax rates. And apparently, they want to pay even more than they owe. Last year, Sweden’s budget surplus totaled 85 billion kronor ($9.5 billion), around half of which came from people and companies overpaying tax, reports the Financial Times (paywall). It’s not that Swedes are unusually generous. Rather, this peculiar habit stems from the weird ways negative interest rates warp incentivesóin this case, making it more beneficial to overpay taxes than keep cash in a bank or savings account.
/goo.gl/fvNae5

Citigroup Sees German Two-Year Yields Below -1% as Rally Extends
Marton Eder – Bloomberg
Securites set for best week since debt crisis on haven demand; ECB seen buying $85 billion of short-term German notes in 2017
The rally in German two-year notes gathered steam on Friday, with Citigroup Inc. predicting yields could drop to minus 1 percent and beyond.
bloom.bg/2kU4fAD

Why Chinese Men Are Dying; Mortality rates among Chinese men aged 41 to 60 have increased by 12% over the past decade
Anjani Trivedi – WSJ
During one of the greatest economic booms in the history of the world, working-age men had trouble staying alive.
/goo.gl/agL4kS

China Names Guo Shuqing, a Rapid-Fire Regulator, to Oversee Troubled Banks
Keith Bradsher – NY Times
Less than four years ago, Guo Shuqing seemed like yet another economic reformer who had tried to bring market-oriented changes to China’s fraud-ridden and heavily politicized financial system only to see his career sidetracked.
/goo.gl/euwTeY

Exclusive: China considers faster IPO approval to lure large tech deals – sources
By Julie Zhu and Elzio Barreto – Reuters
China’s securities regulator is considering offering a shortcut for some of the country’s largest technology companies to list their shares, allowing them to jump a long line of applicants and boost domestic bourses, according to six people with knowledge of the proposals.
/goo.gl/V97Ysm

Brexit

Scottish government believes it can call, win new independence vote: sources
John Geddie and Elisabeth O’Leary – Reuters
The Scottish government is increasingly confident it can win a new independence referendum and is considering calling one next year as Britain exits the European Union, sources close to the Edinburgh administration say.
reut.rs/2mpHPmU

Germany and Italy back European Commission on Brexit; Support for Barnier on Britain’s EUR60bn exit bill will be blow to Downing Street
by: Stefan Wagstyl in Berlin, James Politi in Rome and Alex Barker in Brussels – FT
Berlin and Rome are backing the European Commission’s plan to rule out starting trade talks with Britain until the UK gives assurances on a multibillion-euro Brexit bill and citizens’ rights.
/goo.gl/5HhJZE

Miscellaneous

Do we need a new kind of economics?; For critics, the discipline is beset by flawed models, obscure jargon and undeclared ideology ó but it doesn’t have to be that way
Martin Sandbu – FT
The widespread public suspicion of economics and economists should be obvious to anyone who cares to notice. It is a disenchantment captured well in the opening pages of The Econocracy: “The authors of this book are of the generation that came of age in the maelstrom of the 2008 global financial crisis?.?.?.?We felt that to understand and shape the world we needed to speak [economists’] language?.?.?.?[but] we are all keenly aware that our economics education has not equipped us with the knowledge or skills to justify any authority we are given.”
/goo.gl/8o52p0

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