Europe digs in for a long battle with the virus

Oct 30, 2020

First Read

$12,791/$300,000 (4.3%)
Leticia Manos, Ray Mckenzie and Nils-Robert Persson

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Election 2020: Tight Races Set Stage for Continued Period of Volatility
By Suzanne Cosgrove – John Lothian News

Here’s how the presidential election 2020 is unfolding in its final days: A massive early voter turnout is outpacing that of 2016, an estimated 11 million more Democrats than Republicans have requested mail-in ballots, and both President Donald Trump and former Vice President Joe Biden spent Thursday barnstorming the state of Florida.

“We recognize this is a highly contested race,” said Nasdaq CEO Adena Friedman in a webcast interview on Thursday.

Speaking on a panel on “The Economics of the 2020 Election” sponsored by Nasdaq, Jim O’Sullivan, chief U.S. macro economist at TD Securities, noted the final outcome of the race offers a number of potential pros and cons for the economy.

To read the rest of this story, go here.

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FIA-Chicago Fed Panel Addresses the Lack of Diversity in U.S. Financial Markets
By Sarah Rudolph – John Lothian News

The low number of African Americans in high positions in the financial markets is shocking, but not surprising. And not much progress has been made, though not for lack of effort. What does the landscape look like, and what can be done about it?

One big problem is that African Americans are not represented in the agencies that regulate the financial industry. Chris Brummer, a law professor at Georgetown University, researched data on the number of Blacks who have served as federal regulators. He spoke on a panel Thursday on “Diversity in the financial markets” hosted by the FIA and the Chicago Federal Reserve.

“Financial regulation has a direct impact on the lives of African Americans,” Brummer said. “It determines how trillions of dollars in assets are regulated, as well as what companies should disclose, how investors are protected, plain language disclosures, and who gets financial assistance in times of distress.”

To read the rest of this story, go here.

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Hits & Takes
JLN Staff

In Scouting the slogan is “do a good turn daily.” I have a request for you to do a good turn today. David Fisher, the former Chicago Board of Trade vice chairman and longtime soybean pit trader is very ill with pancreatic cancer. He is weak, but very strong mentally. He is handling his situation with grace and realism, according to his officemate for more than 30 years, fellow CBOT member Bob Otter.

I would like to ask you to send David an email greeting to LettersforDavid@johnlothian.com. We all need cheering up during this pandemic, but David is facing even greater issues than most and there is nothing better to help lift someone’s spirit than to hear from old friends, colleagues and others sharing a message of care and concern.

Julie Ros of Profit & Loss announced in a letter on their website that P&L is closing as a result of the impact of the global pandemic on their events business. This is a perfect example of the pressures that are on the industry’s media companies. This is another reason to support the JLN MarketsWiki Education GoFundMe campaign to help John Lothian News continue its mission to provide you with news and commentary, and to capture the history of our industry.

Speaking of the JLN MarketsWiki Education GoFundMe campaign, we had a $1000 donation from Nils-Robert Persson, a donation from Leticia Manos and a second donation from Ray McKenzie. Nils-Robert is the former executive chairman of Cinnober who is now doing another fintech startup called Vermiculus Financial Technology. Nils-Robert is a longtime friend of JLN and Cinnober was a loyal sponsor. Leticia Manos is a talented communications and public relations executive with Eurex in Chicago. And Ray McKenzie is a rock and roll star and fruit company executive who has worked for the CME and ICE. He now works for Apple.

Last night I interviewed Andy Tan, Director at Synergy Link Capital, in Singapore over Zoom and conducted an Open Outcry Traders History Project interview. This was my first interview of a Singaporean trader. Andy worked for Merrill Lynch on the trading floor, moved to arb for them when floors closed and then in 2012 became an independent trader.

Forbes has reported that Zoom is worth more than ExxonMobil is now. Let that sink in for a minute about the future of the world.

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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Nasdaq Chief Economist Phil Mackintosh (who is quoted in Suzanne’s election story above) has a blog post of his own on “Election 2020: What to Expect From Markets” complete with graphs on sector performance after the 2016 election, implied volatility around elections, and more. You can read it here.~SR

Revolution Global CEO Mark de Souza has stepped down from his role after four years. He will continue to serve the company as a member of its advisory board, the Chicago-based company said, focusing on financing initiatives, Illinois dispensary expansion and public policy issues. Revolution COO Dusty Shroyer and CFO Tripp Murray will lead the company until a permanent CEO is named. A board member of the national legal cannabis advocacy group, the Marijuana Policy Project, de Souza also served on Illinois Gov. J.B. Pritzker’s transition team for agriculture that oversaw the state’s cannabis policy.~SC

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A Message from Julie Ros, Founder of Profit & Loss
Colin Lambert – Profit & Loss
Dear Readers,
Profit & Loss has weathered many storms over the past 21+ years, including the tech bubble burst in 2001-2002, the depressed market environment following 9-11, and the global financial crisis of 2008-2009, but the current and ongoing global pandemic has caused challenges to our international events business that are outlasting our ability to continue operations.
/bit.ly/2TDzjne

***** It is a sad message. Thank you to Julie, Michelle and Colin for all the great work.~JJL

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Record Planeloads of Live Hogs Flown Into China to Boost Herds
Bloomberg News
China is flying in record numbers of pigs to improve genetics and boost productivity while rapidly rebuilding the nation’s hog population after it was decimated by African swine fever. Some 15,346 live swine worth $32 million arrived by air in the first nine months of the year, customs data show. That’s an all-time high, according to Genesus Inc., an international genetics company. The value jumped from $3 million in all of 2019, $13 million in 2018 and $21 million in 2017, the customs data show. China has also imported a record volume of meat this year to ease pork shortages.
/bloom.bg/3jD9SMV

*****This is proof that pigs can fly!~JJL

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Welcome to the October issue of Focus
World Federation of Exchanges
For October’s issue, we are publishing a Special Edition in which we focus on the critical role of one section of our membership: central counterparties (CCP). CCPs are key to systemic stability and the WFE, as the global organisation and voice for the CCP community, is always seeking to deepen the debate and the thinking that surrounds them.
/bit.ly/2TGFgiU

*****Look directly into the lens. Are you getting sleepy?~JJL

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Letter from the Co-CEO: What Does the Future Look Like?
Lynette Lim – PhillipCapital
“We think too much and feel too little. More than machinery, we need humanity; more than cleverness, we need kindness and gentleness. Without these qualities, life will be violent and all will be lost.”
– Charlie Chaplin, The Great Dictator
Dear friends,
As election day draws closer in America and collective tension rises, those of us who work in the financial brokerage industry have to anticipate how the markets will behave in order to manage the risk of our customers who trade. It is always prudent to anticipate the worst, the largest possible move in the market, so that we are not caught with our pants down, figuratively speaking. If we expect large moves in the market, then we would take preventive measures such as asking for additional deposits from our customers and/or imposing some limits on their trading, as well as standing by for extra credit from banks.
/bit.ly/3emhCSJ

*****Lynette Lim will be on a panel during EXPO-V that I am moderating about micro contracts.~JJL

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Walmart Pulls Guns, Ammo Displays in U.S. Stores, Citing Civil Unrest; Retailer says move is a safety precaution but customers can still purchase firearms and ammunition
Sarah Nassauer – WSJ
Walmart Inc. WMT -0.09% has removed all guns and ammunition from the sales floors of its U.S. stores this week, aiming to head off any potential theft of firearms if stores are broken into amid social unrest. The retail giant, which sells firearms in about half of its 4,700 U.S. stores, said customers can still purchase guns and ammunition upon request even though they are no longer on display.
/on.wsj.com/3ea97tw

*****This is kind of like a curfew. If you have not gotten it done by 10 PM, it’s not going to happen. If you did not buy your guns and ammo until a week before the election, then you had better have a plan B. A good weedwacker can be very helpful.~JJL

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CryptoMarketsWiki Coin of the Week: Maker (MKR)
The security measures of the governance token Maker (MKR), the digital token used by users on the Maker platform to vote on decisions that affect the entire platform, is being called into question again after a user caused a flash crash to manipulate a vote on the platform. The Maker Foundation made a post on Maker’s forums warning users about the issue. Earlier this year, another flaw in the Maker protocol caused users to lose millions of dollars worth of cryptocurrency deposited in the platform.
/bit.ly/3cn9kc8

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Thursday’s Top Three
Our top story Thursday was GOP Sen. Kelly Loeffler: ‘Not familiar’ with Trump’s infamous 2005 ‘Access Hollywood’ tape, from Yahoo! News. I am not familiar with Sen. Loeffler…have we mentioned her in this newsletter before? Second was John Lothian’s remembrance, Peter Wind, Longtime Industry Colleague and Mentor, Passes Away, in John Lothian News. Third was The Guardian’s How does one of the world’s biggest pork firms go bust during a boom?

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MarketsWiki Stats
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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

Europe digs in for a long battle with the virus; UK should follow European neighbours’ lockdown approach
The Editorial Board – FT
In the warm summer months, coronavirus in Europe seemed in retreat. Economies were reopening and intensive care wards emptying. Though a second wave of pandemic in Europe’s winter was long feared, it has arrived with alarming force and speed. Germany’s federal and state governments agreed this week to shut parts of the economy and tighten controls on social contact; France announced a new national lockdown of a least a month. Pressure is growing on Downing Street for tougher nationwide measures in England — bringing it more into line with those in place elsewhere in the UK and among its European neighbours.
/on.ft.com/3e8xojT

Fed Has ‘Arsonist and Fireman’ Reputation Traders Can’t Ignore
Liz McCormick – Bloomberg
Zero rates for years to come risks financial stability strains; Investors search for yield as 60/40 stock-bond split seen dead
Many of the best-performing investment ideas in 2020 hinged on what the Federal Reserve was doing to fight the economic fallout from the coronavirus. As 2021 approaches, a new theme is emerging: Finding ways to profit from — or at least survive — the eventual unintended consequences of the central bank’s unprecedented monetary accommodation and heavy hand in debt markets.
/bloom.bg/3ebUfLo

Susquehanna Will Take Your Election Bets, Up to $100 Million; The quant trader, known for its interest in the statistics of gambling, is ready to be on the other side of big presidential wagers.
Annie Massa – Bloomberg
With the onset of an historic U.S. presidential election, a quantitative trading firm has been trying to pique hedge funds’ interest in casting big bets in political-prediction markets. Susquehanna International Group, based in Bala Cynwyd, Pa., is a big player in options and the exchange-traded fund market, but its founders have long had an interest in the statistical side of gambling. The firm runs its own blog on gaming and poker strategy tips and has been building up a sports-betting operation in Ireland. It’s recently gauged funds’ interest in bets on election outcomes. Although few have gotten involved, Susquehanna is willing to take the other side of wagers on the presidential race for up to $100 million per bet, says a person familiar with the firm, speaking on the condition of anonymity because the plans are not public.
/bloom.bg/3jI7hBe

Cboe Global Markets Reports Results for Third Quarter 2020
Cboe Global Markets
Third Quarter 2020 Highlights*
• Diluted EPS for the Quarter of $1.01, Up 7 Percent; Adjusted Diluted EPS¹ for the Quarter of $1.11, Down 14 Percent; Net Revenue for the Quarter of $292.0 Million, Down 1 Percent; EBITDA Margin for the Quarter of 72.6 Percent Compared to 65.2 Percent in 2019; Adjusted EBITDA Margin for the Quarter of 65.9 Percent Compared to 70.9 Percent in 2019; Returned $88 Million to Shareholders Through Share Repurchases and Dividends
CHICAGO, IL – October 30, 2020 – Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the third quarter of 2020. “Our third quarter results highlight continued robust engagement among retail customers offset by decreased trading among institutional investors as a result of ongoing uncertainty regarding the global macro-environment. We continued throughout the quarter to diversify our products and services for customers of every type by advancing key growth initiatives, including the expansion of our market data offering and the completion of our MATCHNow and EuroCCP acquisitions, which will enable us to further leverage our index product expertise and broaden our customer reach in new geographies. https://bit.ly/3oJ2Eus

Deutsche Boerse Quarterly Net Profit Down 9%, Misses Forecasts
Reuters
German exchange operator Deutsche Boerse on Wednesday posted a 9% fall in third-quarter net profit, a greater decline than expected, but left its guidance for the year unchanged. Net profit attributable to shareholders was 227.1 million euros ($268.4 million), down from 248.6 million a year ago, the company said. Revenue fell 4% to 707.5 million euros, also falling short of expectations.
/bit.ly/3mBaWCR

Bankers Always Get Paid, No Matter What; It’s hard to see how investment banks can avoid rewarding their top performers, even during a pandemic.
Marcus Ashworth and Elisa Martinuzzi – Bloomberg
Raising banker compensation in the midst of a pandemic isn’t the best look. But this is the dilemma facing Wall Street after a bumper year for performance. Pay too little and you lose your stars; pay too much and you infuriate the public.
/bloom.bg/34LxN8Z

Rich Buyers Seeking Open Spaces Fuel a Housing Boom in U.S. West
Prashant Gopal – Bloomberg
Out-of-state buyers push western Montana home prices up 17%; Local Montanans face New York-Style Affordability Crunch
David Park, a Manhattan-based investor planning his escape in case the resurgence of Covid-19 forces another New York City lockdown, is looking to join a great American tradition: a trek out west.
/bloom.bg/2GcPq87

Jack Ma’s Ant IPO Lures $3 Trillion of Bids in Retail Frenzy
Jeanny Yu and John Cheng – Bloomberg
Retail portion of Shanghai sale was 872 times oversubscribed; ‘Everyone is taking part, so I feel like I should too’
The biggest initial public offering of all time has unleashed an investor frenzy for the record books. Jack Ma’s Ant Group Co. attracted at least $3 trillion of orders from individual investors for its dual listing in Hong Kong and Shanghai, enough money to buy JPMorgan Chase & Co. 10 times over. Bidding was so intense in Hong Kong that one brokerage’s platform briefly shut down after becoming overwhelmed by orders. Demand for the retail portion in Shanghai exceeded initial supply by more than 870 times.
/bloom.bg/3kNMDBq

Kyle Bass’s Texas Feud Spotlights Short-Selling Tactics; Anonymous blog posts, a call to the FBI and a bold bet against a real estate investment trust led to lawsuits, investigations.
Tom Schoenberg, Matt Robinson, Katia Porzecanski – Bloomberg
Ernest Poole had been dead for more than 60 years when someone opened an account in his name at an online platform called Harvest Exchange. Poole, a Pulitzer Prize-winning reporter, was best known for his sympathetic pieces about the Russian Revolution. The platform was strictly for capitalists.
/bloom.bg/3kH291D

triReduce Completes First Benchmark Conversion with SONIA Risk Replacement Trades
CME Group
TriOptima, a leading infrastructure service that helps to lower costs and mitigate risk in OTC derivatives markets, announced the completion of the first triReduce enhanced compression cycle to include SONIA risk replacement trades. The cycle took place on October 22, 2020 at LCH SwapClear. The triReduce benchmark compression service allows swap market participants to reduce their gross and net exposure to legacy benchmarks while increasing their adoption of alternate benchmarks through risk replacement trades.
/bit.ly/31TyVp0

Biden, Iran, and Oil Prices: How the Puzzle Pieces Might Fit Together; If Biden wins and eases sanctions, Iranian oil could swamp the world market.
Peter Coy – Bloomberg
Oil prices have sunk back to their lowest levels since the novel coronavirus lockdown in the spring (when, bizarrely, the price of West Texas Intermediate crude briefly touched negative $37.63 a barrel). The pandemic is still weighing on the oil market, but now there seems to be an additional factor: the increasing likelihood that former Vice President Joe Biden will be elected U.S. president and ease sanctions on Iran.
/bloom.bg/31XtFk7

CFTC Announces Organizational Changes to Enhance Agency’s Operational Effectiveness; Dr. Tamara Roust Joins the CFTC as Chief Data Officer to Lead New Division of Data
CFTC
The Commodity Futures Trading Commission today announced it has completed negotiations to reorganize certain portions of the agency to enhance the CFTC’s operational effectiveness. The changes will take effect November 8, 2020.
/bit.ly/31UvaQc

SEC decision on leveraged ETFs sparks concern for retail investors; SEC commissioners reveal sharp disagreements on move to abandon proposed controls
Chris Flood – FT
New rules covering the use of derivatives by investment managers have triggered sharp disagreements among top US regulators after the Securities and Exchange Commission unexpectedly abandoned proposals for controls on the sale of leveraged exchange traded funds to retail investors.
/on.ft.com/3ea8r7s

Ant IPO Sets Off $3 Trillion Scramble Among Small Investors; More than 5 million individuals in mainland China have placed orders for shares; investors also piling on in Hong Kong
Joanne Chiu – WSJ
To Ant Group Co. ‘s set of staggering statistics—a billion users, more than $17 trillion in yearly payment volumes—add one more: trillions of dollars in stock orders from small investors.
/on.wsj.com/37QWti9

Money market funds brace for rules overhaul after Covid shock; Regulatory change could add pressure to sector struggling with low interest rates
Siobhan Riding – FT
As the coronavirus pandemic rocked capital markets in March, US policymakers were confronted with a rapidly escalating crisis in a crucial part of the financial system: money market funds. Huge investor outflows from prime money market funds — instruments that invest in corporate, agency and other short-term debt — left managers scrambling to sell assets, threatening a vital source of funding for businesses across America.
/on.ft.com/2HJ2UZA

ECB Prods Governments to Get on With Spending in Virus Fight
Jeff Black and John Ainger – Bloomberg
Bond yields are being held ultra low by ECB pandemic response; Governments are deadlocked over common spending plans
European Central Bank President Christine Lagarde has cleared the path for governments to do whatever is necessary to counter the economic blow from Covid-19’s second wave — just so long as they crank up the spending. With her unequivocal pledge Thursday to “recalibrate” monetary support by December at the latest — a phrase widely understood to mean more stimulus is coming — Lagarde in effect told leaders from Rome to Berlin that borrowing to battle the virus will be backstopped by her institution in Frankfurt.
/bloom.bg/34D5TvE

Coronavirus

Why Blue Places Have Been Hit Harder Economically Than Red Ones; The different mix of jobs is a big driver, but there are other factors, too.
Jed Kolko – NY Times
The coronavirus recession has been more severe in Democratic-leaning places than in Republican-leaning ones. Blue states like Massachusetts and California have had steeper job losses, higher unemployment and bigger drops in job postings than red states like Utah and Missouri. It turns out that most of this partisan gap in economic suffering is because of the different mix of jobs in red and blue places.
/nyti.ms/35O9vdr

United States Records Its Worst Week Yet for Virus Cases
Lauren Leatherby – NY Times
The outlook for the pandemic continues to worsen, and many areas of the United States are experiencing their worst weeks yet. The country reported a record of more than 500,000 new coronavirus cases in the past week. It’s not just a few areas driving the surge, as was the case early on. Half of U.S. counties saw new cases peak during the past month. Almost a third saw a record in the past week.
/nyti.ms/37TBNWI

U.S. Reports 90,000 New Daily Cases, the Equivalent of More Than One Per Second
NY Times
Voters in several swing states are casting their ballots at the same time the coronavirus reaches new peaks in their communities, creating more uncertainty about how they will vote — and for whom.
/nyti.ms/3oIUhiz

A one-size-fits-all Covid strategy is futile; But there are rules of thumb that can help policymakers with difficult lockdown decisions
Chris Giles – FT
How should we think about the costs and benefits of controlling coronavirus through tighter restrictions on our daily lives? The only reasonable answer to this question is, “it’s complicated”.
/on.ft.com/2TCwCCf

Vaccine bond sale raises $500m to fund immunisation programmes; Proceeds earmarked for vaccine procurement and access in world’s poorest countries
Tommy Stubbington – FT
A vaccine bond has raised $500m from investors in a sale that garnered strong demand to fund immunisation programmes in developing countries, including efforts to combat the coronavirus pandemic.
/on.ft.com/2TQ7acJ

City of London Staff Lose Faith in Government Pleas to Stay Home
By Neil Callanan – Bloomberg
The City of London is getting busier as increasing numbers of workers ignore the U.K. government’s advice to stay home. While the financial district emptied in March when the government first told people to work from home if they could, the reverse has been true since Prime Minister Boris Johnson issued the advice again last month, according to data compiled by Google. It adds to evidence of the public’s diminishing faith in the government’s handling of the pandemic as cases accelerate.
/bloom.bg/34DUfAB

From Spain to Italy, Europe Is Fed Up with Lockdowns; Are people going to accept stay-at-home orders this time around? Protests illustrate the challenge ahead for policy makers.
Ferdinando Giugliano – Bloomberg
After a summer of hope, Europe looks set for a tragic winter. The dream of keeping the pandemic in check with limited sacrifices is gone. Governments are readying themselves for a new round of tough containment measures.
/bloom.bg/34EtOec

Don’t Ignore the Good News On Covid-19 From Asia; There’s light at the end of the lockdown tunnel, provided the right lessons are learnt.
Lionel Laurent – Bloomberg
It’s easy to feel that there’s no light at the end of the Covid-19 tunnel. Europe’s intensive care wards are filling up again, pushing France and Germany into a fresh round of stay-at-home restrictions and lockdowns — albeit ones designed to be softer than the first. Even countries hit hard by the first wave, such as Italy and Sweden, are seeing rising cases, suggesting herd immunity is a long way off. The U.S. looks to have given up on controlling the pandemic until a vaccine arrives.
/bloom.bg/34I8GUl

Exchanges, OTC and Clearing

CME Globex Notices: October 26, 2020
CME Group
Critical System Updates
iLink 2 on MSGW Decommission – February 26, 2021
iLink 3 – IP Address Change for BrokerTec Order Entry Service Gateways – This Week
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
iLink Enhancements for Location ID and Displayed Quantity – November 15
iLink 3 SBE Schema Update – January 24, 2021
Phase 1 CME FX Link Enhancements – February 21, 2021
Phase 1 CME FX Link Enhancements: Drop Copy Impact – February 21, 2021
/bit.ly/31TmYQc

20201029
CME Group
Topics in this issue include:
CME STP
BrokerTec Stream on CME STP – December 7
CME STP Support of BrokerTec Markets – November 16
Update – CME STP FIXML API Connectivity Documentation UPDATE
/bit.ly/2TBO9ur

CME Inclusion of Options on Eurodollar Futures in Portfolio Margin Program with Interest Rate Swaps (IRS) Products – Effective October 29, 2020
CME Group
CME is expanding its portfolio margining offering for IRS Products to include Options on Eurodollar futures in addition to existing eligible futures products: Eurodollar Futures, Fed Funds Futures, Treasury Futures and Deliverable Swap (MAC) Futures. This extension is available in CME’s testing environment beginning October 28th, 2020 with a target Production date of December 7th, subject to regulatory approval.
/bit.ly/3edUd5Q

Performance Bond Requirements: Agriculture, Energy, FX and Metal Margins – Effective October 30, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/34EslEw

Performance Bond Requirements: Agriculture and Energy Margins – Effective October 30, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/3eceKYw

FCR Immobilien AG now in the General Standard
Deutsche Börse Group
FCR Immobilien AG (ISIN: DE000A1YC913 ) has been listed in the General Standard of the Frankfurt Stock Exchange since today . The company, headquartered in Pullach near Munich, was previously listed in the Scale segment.
/bit.ly/2HLdBuE

Airthings admitted to trading
Euronext
The air quality company Airthings has today been admitted to trading on Merkur Market (ticker code: AIRX-ME). “Airthings have technology to empower people around the world to breathe better, and our unique products and solutions are used in homes and buildings around the world.?I am very proud of today’s?listing of our shares, as it represents an opportunity for anyone to invest in us and join us on our journey towards better air for everyone”, says?Øyvind Birkenes, CEO of Airthings.
/bit.ly/2TCBMhB

SGX welcomes Nanofilm Technologies International Limited to Mainboard
SGX
Singapore Exchange (SGX) today welcomed the listing of Nanofilm Technologies International Limited on its Mainboard under the stock code “MZH”. Founded in 1999 as a high-tech spin-off from the Nanyang Technological University, Nanofilm Technologies International Limited is a leading provider of nanotechnology solutions in Asia. Their key business units comprise: (i) Advanced Materials – surface solution services based on their vacuum coating technologies and process; (ii) Nanofabrication – manufacture and supply of nanoproducts; and (iii) Industrial Equipment – manufacture and sale of turnkey equipment systems. The company’s technology-based solutions are utilised in a wide range of industries such as computer, communications and consumer electronics (3C), automotive, precision engineering, and printing and imaging.
/bit.ly/35GsE0Q

Nadex Product Schedule For The Japan Holiday On November 3, 2020
Mondovisione
Due to the Japan holiday on Tuesday, November 3, 2020, the Japan 225 contracts will have a modified trading schedule.
/bit.ly/3mwoMq0

MEMX Completes Rollout, Now Trading All NMS Symbols
Mondovisione
Members Exchange (MEMX), a market operator founded by members to benefit all investors, today announced the successful completion of its U.S. stock exchange rollout with the trading of all NMS symbols. The exchange launched with seven symbols on September 21, 2020 and has methodically added new symbols in four phases since then.
/bit.ly/3jIqyT6

Two New Members From Spain Join The SIX Board Of Directors
Mondovisione
At an Extraordinary General Meeting of SIX, shareholders elected Belén Romana García and David Jimenez-Blanco Carrillo de Albornoz to the Board of Directors. As of 1 November 2020, they will succeed Stefan Helfenstein and Shannon Klinger, who are both retiring on 31 October 2020.
/bit.ly/34Gcwx4

Nodal and IncubEx to Expand Environmental Markets with Seven New Renewable Contracts
IncubEX
Nodal Exchange and IncubEx today announced the upcoming launch of seven new Renewable Energy Certificate (REC) futures and options on November 17, 2020.
/bit.ly/37QacWv

Fintech

Barchart and PanXchange Announce Strategic Partnership
Barchart
Barchart, the leader in commodity data, jointly announces a new strategic partnership with PanXchange, the leading benchmark price provider in US Hemp and the defacto benchmark price provider for US Frac Sand (proppant). Under the terms of the agreement, PanXchange will join the cmdty Pricing Network and make their benchmark prices available through Barchart’s data services and cmdtyView – the leading analytic solution for physical commodities.
/bit.ly/3ebAK5y

Ant and Covid have made the humble QR code a hit; The cheap and flexible successor to the supermarket barcode has earned its second chance
John Gapper – FT
The name Masahiro Hara does not appear with Steve Jobs and Bill Gates on lists of great innovators of the communications age, but perhaps it should. For the Japanese engineer’s humble, unassuming invention, the Quick Response code, has finally found its moment.
/on.ft.com/3jICrZx

Jill Carlson: Crypto and Fintech Share Goals: They Should Talk
Jill Carlson – Coindesk
Everyone agrees: Financial infrastructure is broken. We need a way to make cash flows deterministic. We should be able to set rules around trades and transfers. We should be able to do this without bloated back offices performing manual reconciliations and without requiring developers to integrate across an entire fragmented universe of systems built on COBOL and teetering on top of mainframes.
/bit.ly/2HOKerc

Deutsche Bank announces 2020 female fintech competition winner
Finextra
The UK-based e-commerce payments and ID platform allows users to store their personal and payment details securely in the blockchain, so it is never shared online. According to Nuggets: “That means no more data breaches – because companies don’t have to store your data. So you can use services and make payments without worrying about your privacy and security.”
/bit.ly/2TBjayi

Fintech in Brief: OCC Finalizes True Lender Regulation
Nutter McClennen & Fish LLP – JDSupra
On October 27, 2020, the Office of the Comptroller of the Currency (the “OCC” or the “Agency”) adopted a final “true lender” rule governing loans made under third-party relationships with nonbank entities, including fintechs, OCC-supervised national banks, and federal savings associations (collectively, “OCC Banks”). The true lender regulation was initially proposed on July 20, 2020 and summarized in a Nutter Fintech in Brief.
/bit.ly/3e8TtyC

Sterling Trading Tech Announces Integration With Linear Investments
Sterling Trading Tech
Sterling Trading Tech (STT), a leader in compliance, risk and infrastructure solutions for equity, options and futures trading, announced today that it completed integration with Linear Investments, a global trading firm and full-service prime broker with offices in London, Hamburg and Dubai.
/bwnews.pr/3kJKiqP

Cryptocurrencies

Fidelity Digital Crypto Pact Aims at Rich Asians Wanting Bitcoin
Joanna Ossinger – Bloomberg
Stack Funds will make custody services available to customers; Bitcoin reached the highest level since 2018 this week
A new partnership for Fidelity Digital Asset Services aims to facilitate the growing interest in cryptocurrencies among Asian investors. Stack Funds, which is based in Singapore and provides access to crypto products, will make FDAS’s secure custody services available to its clients in a bid to meet increasing demand from Asia’s high-net-worth investors and family offices, according to a statement.
/bloom.bg/37Rxo6M

Bitcoin Rally Gets Added Boost From ‘Wrapped’ Crypto Tokens
Olga Kharif – Bloomberg
Bitcoin is being used as collateral on Ethereum network; WBTC can be used to speculate on Ethereum-based DeFi apps
As Bitcoin rallied to its highest level in almost three years, it was getting some unlikely support from advocates of its biggest rival. Fans of decentralized finance, or DeFi applications, which strive to let people lend and borrow without intermediaries, are using Bitcoin as collateral on the Ethereum blockchain. In so-called Wrapped Bitcoin, or WBTC, transactions users are placing the coin into popular apps like Compound that are generating returns even greater than the almost 90% gains posted this year by Bitcoin.
/bloom.bg/3ebhq8w

Leaked ‘Tai Chi’ Document Reveals Binance’s Elaborate Scheme To Evade Bitcoin Regulators
Michael del Castillo – Forbes
Binance Holdings Limited, the world’s largest cryptocurrency exchange conceived of an elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States, according to a document thought to be created by its senior executives and obtained by Forbes. Cayman Islands-based Binance is currently responsible for about $10 billion in total crypto trades per day and its founder and CEO Changpeng “CZ” Zhao is one of the few known cryptocurrency billionaires.
/bit.ly/3ebsuT6

Gemini Partners with TaxBit to Automate Crypto Tax Reports
Aziz Abdel-Qader – Finance Magnates
Cryptocurrency exchange and custodian, Gemini is deploying TaxBit’s technology to tackle a surge in tax audits that have targeted individuals trading cryptocurrency. The move aims to resolve tax dilemma since it produces a variety of tax filing formats that the IRS often requires.
/bit.ly/3edW5LU

OKEx, Still Paralyzed by Founder’s Arrest, Details Plans for Bitcoin Cash Hard Fork
Muyao Shen – Coindesk
Cryptocurrency deposit withdrawals are still suspended at the OKEx exchange following a founder’s recent arrest, but officials with the Malta-based company are moving ahead with other matters, including planning around an upcoming hard fork on the Bitcoin Cash blockchain.
/bit.ly/31XquJl

Coinbase is looking to hire someone to lead its internal diversity efforts
Frank Chaparro – The Block
Crypto exchange Coinbase is on the hunt for a new diversity executive — a move that follows a public backlash for a blog post penned by its CEO about its avowed apolitical mission. According to a job ad, the director-level position for belonging, diversity, and inclusion will “plan, execute and deliver experiences that foster belonging for all employees, and with a specific focus on creating equitable opportunity for underrepresented employee groups.”
/bit.ly/3jISM04

Bitcoin Traders Can Now Bet on $40K Price With New Deribit Options
Omkar Godbole – Coindesk
Crypto derivatives exchange Deribit has listed bitcoin options contracts that allow traders to bet on a potential price rally to $40,000 next year. Options at a $40,000 strike price expiring in March 2021 and June 2021 went live on Deribit early on Friday, as noted by research firm Skew. In effect, the new contracts will allow market participants to express a long-term bullish view on bitcoin. They will appeal to traders expecting a price rally to above $40,000 on or before the above expiries.
/bit.ly/34HeD3L

Average Bitcoin transaction fees rose to their highest level since 2018 this week
Michael McSweeney – The Block
Transaction fees on the bitcoin network are at their highest point since early 2018, according to available network data — a development that comes amid recent upward price action for the cryptocurrency. The latest movement in bitcoin network fees appears to have started on October 26, when bitcoin’s price was fluctuating around the $13,000 level. High fee activity peaked on October 28, with cost growth for October 29 appearing similar to what occurred on October 27. At press time, bitcoin is trading hands at around $13,439.
/bit.ly/3kUdE5S

Ripple Keeps Pumping Funds Into MoneyGram
Daniel Palmer – Coindesk
Remittance firm MoneyGram continues to receive millions in “market development fees” from its investor, blockchain payments firm Ripple. According to MoneyGram’s financial results for Q3 2020 posted Thursday, Ripple handed over $9.3 million over the period. After $0.4 million in “transaction and trading expenses,” MoneyGram saw a net benefit of $8.9 million. The payment is the latest since Ripple, which provides several payments products aimed at financial institutions, invested $50 million in the money sender in November 2019. In Q2 2020, MoneyGram received $15.1 million for the same stated purpose.
/bit.ly/3jF1bSb

Nearly 25% of ETH’s Circulating Supply Stored on Centralized Exchanges
Rachel McIntosh – Finance Magnates
Crypto analytics platform ViewBase has recently found that nearly one-fourth of the circulating supply of Ether (ETH) tokens are held on cryptocurrency exchanges. Specifically, CoinTelegraph reported that 26,768,260 ETH are on exchanges, which equates to roughly 23.6% of all circulating ETH tokens. At press time, this equated to $10.3 billion.
/bit.ly/3e8gxxH

Dutch Police Seize Over $30 Million in Bitcoin from Money Launderers
Scott Chipolina – Decrypt
A Dutch couple have been convicted on money laundering charges. Dutch authorities have seized Bitcoin worth approximately $33 million. The news follows a pivot by several regulators to money laundering risks in the crypto industry. Dutch police have reportedly seized over 2,500 Bitcoin worth approximately $33 million. The seizure follows the conviction of a Dutch couple by the Rotterdam District Court on money laundering charges.
/bit.ly/3jGQqit

Politics

Wisconsin Republican Party says hackers stole $2.3 million
Scott Bauer – Associated Press
Hackers have stolen $2.3 million from the Wisconsin Republican Party’s account that was being used to help reelect President Donald Trump in the key battleground state, the party’s chairman told The Associated Press on Thursday. The party noticed the suspicious activity on Oct. 22 and contacted the FBI on Friday, said Republican Party Chairman Andrew Hitt.
/bit.ly/3eaqT04

Lies, Damned Lies and Trump Rallies; Who you gonna believe, me or your own eyes?
Paul Krugman – NY Times
Donald Trump lies a lot. In fact, he lies so often that several media organizations try to keep a running tally, and even try to draw political inferences from fluctuations in the number of lies he tells in a given month (although the trend has been relentlessly upward). But we’ve crossed some kind of threshold in the past few weeks. It’s not so much that Trump is lying more as that the lies have become qualitatively different — even more blatant, and increasingly untethered to any plausible political strategy.
/nyti.ms/2JlT94o

Investors See Senate Races as Key to Election’s Market Impact; The prospects for many key policies hang on who controls the Senate
Sam Goldfarb – WSJ
For Wall Street, the coming election doesn’t hinge on just the presidency. The Senate matters almost as much. Many investors expect Joe Biden to win the White House. But the prospects for many key policy shifts—such as greater economic stimulus or Mr. Biden’s health-care policies—hang on who controls the Senate. That is harder to predict. Polls show a good chance that the Democrats could win unified control of Congress, but also that Republicans could hold the Senate majority even if they lose the presidency.
/on.wsj.com/2HOCAx0

‘Poll’: From Counting Cattle to Tallying the Vote; Once applied to livestock, a medieval term for ‘head’ now takes center stage in democratic politics
Ben Zimmer – WSJ
With Election Day around the corner, a short, multipurpose word has seemed inescapable in the national conversation, as it does every year around this time: “poll.” Those who are voting in person this year are making plans to go to the “polls,” or “polling stations,” to cast their ballots. But “polls” also refer to opinion surveys about the candidates leading up to the election. Joe Biden may be taking comfort in his overall polling advantage, while President Trump derides what he calls “fake polls” and insists, “You don’t see the real poll numbers.”
/on.wsj.com/2TGJ8QY

US presidential election 2020: what to watch out for on the night; Florida and other sunbelt states should offer early clues as counting delays expected in Midwest
Lauren Fedor and Christine Zhang – FT
In the hours between polls closing on election day and the first projections from news agencies and broadcasters, politicians and pundits always agree on one thing: “It’s going to be a long night”.
/on.ft.com/2TF14M8

Biden Win Would Hit Private Equity Deals, Add Scrutiny to M&A
Crystal Tse and Nabila Ahmed – Bloomberg
Buyout industry would take hit from hike to capital gains tax; Tech, health-care mergers would face high bar from regulators
A Joe Biden victory on Nov. 3 would have a sweeping impact on mergers and acquisitions as he sets his sights on a higher corporate tax rate, new regulation and increased antitrust scrutiny.
/bloom.bg/34HGj8K

Should Small Businesses Take a Stand on Biden vs. Trump? A passion for their favorite candidate raises the risk of alienating customers. But some wear their politics proudly anyway.
Bruce Horovitz – WSJ
Rebecca Tax isn’t shy about her politics—or making those beliefs clear at her business. At Lazy Mike’s Delicatessen, the Falls Church, Va., shop that she co-owns with brother, David Tax, Ms. Tax placed a 6-inch Biden-Harris sticker on an entrance and a second sticker inside near the menu board, despite misgivings about potentially antagonizing Republican-leaning patrons.
/on.wsj.com/35MFkUf

Warren will make case to be Biden’s Treasury secretary; Warren’s move could set up a marquee fight over what will be one of the most consequential Cabinet roles in a Biden administration.
Alex Thompson, Megan Cassella – Politico
Elizabeth Warren wants to be Joe Biden’s Treasury secretary and will make her case for it if he wins next week, according to three Democratic officials who have spoken with her inner circle.
/politi.co/3oF9uBl

How Trump Could Shock the World Again; The president’s campaign is behind in polls and fundraising, but could still pull out a victory.
Peter Nicholas – The Atlantic
It was late in the evening at Hillary Clinton’s victory party in 2016, and by that point, the guests understood there would be neither a victory nor a party. As Donald Trump’s upset sank in among the hordes at the Javits Center in Manhattan, I asked one Clinton supporter how he was feeling. “Like I want to kill myself,” he said.
/bit.ly/2HLhU9h

What a Trump or Biden Election Win Means For Your Money; The winner of the 2020 presidential race could shape the way millions of Americans save, spend and manage their finances for years.
Misyrlena Egkolfopoulou – Bloomberg
Two candidates with starkly different visions for the country’s future. A pandemic that’s not yet under control. And an economy still reeling as millions of people remain unemployed. There is a lot riding on the results of the U.S. elections on Nov. 3. Whether President Donald Trump or challenger Joe Biden triumphs could shape the way millions of Americans save, spend and manage their finances for years.
/bloom.bg/34DjAuy

The 10 People Most Likely to Influence the Economic Policy of a President Biden; Baron Public Affairs’ list includes Gene Sperling, Heather Boushey, and Jason Furman.
Peter Coy – Bloomberg
The fight for the soul of the Democratic Party is reflected in the diversity of the 10 people who have the most influence on economic policy in the circle surrounding Joe Biden, says a new analysis by the political-risk advisory firm Baron Public Affairs.
/bloom.bg/3jF75mj

This Republican senator is taking being pro-Trump to a whole other level
Chris Cillizza – CNN
Georgia Republican Sen. Kelly Loeffler was apparently on another planet or something during the 2016 presidential race. Asked Wednesday about her previous assertion that there was nothing — not. one. thing — on which she and President Donald Trump disagreed, Loeffler reiterated that fact. Pressed by reporters on whether her unanimous support for Trump included sexist and misogynistic comments he made about women that were caught on an “Access Hollywood” tape and released just before the 2016 election, Loeffler said this: “Look, what I agree with is the approach President Trump has taken since day one to put America First.”
/cnn.it/2TQpB0V

Regulation

CFTC’s Enforcement Division Issues Staff Guidance on Recognition of Self-Reporting, Cooperation, and Remediation
CFTC
The Commodity Futures Trading Commission today announced the Division of Enforcement (DOE) issued new guidance for enforcement staff when recommending the recognition of a respondent’s cooperation, self-reporting, or remediation in CFTC enforcement orders. The guidance, which will be published in the agency’s Enforcement Manual, follows recent updates of the manual’s civil monetary penalty guidance and compliance program evaluation guidance. [See CFTC Press Release Nos. 8165-20 and 8235-20]
/bit.ly/31RHxww

CBA ordered to pay $150,000 for credit limit increase provided to problem gambler: Royal Commission case study
ASIC
The Federal Court has ordered the Commonwealth Bank of Australia (CBA) to pay a $150,000 penalty after the Court found the bank breached the responsible lending provisions of the National Consumer Credit Protection Act 2009 (National Credit Act).
/bit.ly/2HRWebt

Supreme Court inquiry finds liquidator Peter Ivan Macks provided fabricated documents to ASIC
ASIC
Following a Court inquiry initiated by ASIC, the Supreme Court of South Australia has found that liquidator Peter Ivan Macks dishonestly provided fabricated memoranda to ASIC in response to a statutory notice.
/bit.ly/2TDBaZe

Sigma general manager charged with insider trading
ASIC
Mr Michael John Story, of Elwood, Victoria, a general manager employed by Sigma Healthcare Limited (Sigma), has been charged with two counts of insider trading. Sigma is a wholesale and distribution pharmaceutical business servicing pharmacies and hospitals throughout Australia and during 2018 was the main supplier to the Chemist Warehouse Group (CWG).
/bit.ly/3e78dhC

Steinhoff Ex-CEO Jooste Fined $9.9 Million for Insider Deals
Janice Kew and Loni Prinsloo – Bloomberg
Markus Jooste sent text messages warning friends to sell stock; Steinhoff almost collapsed in 2017 amid accounting scandal
Steinhoff International Holdings NV former Chief Executive Officer Markus Jooste has been fined more than 162 million rand ($9.9 million) by a South African regulator for insider trading ahead of the retailer’s near collapse almost three years ago.
/bloom.bg/3kIuqoJ

FINRA Adopts Rule to Limit a Registered Person From Being Named a Customer’s Beneficiary or Holding a Position of Trust for or on Behalf of a Customer
FINRA
FINRA adopted a new rule to limit any associated person of a member firm who is registered with FINRA (each a “registered person”) from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust for or on behalf of a customer.1 New FINRA Rule 3241 (Registered Person Being Named a Customer’s Beneficiary or Holding a Position of Trust for a Customer) protects investors by requiring all member firms to affirmatively address registered persons being named beneficiaries or holding positions of trusts for customers. The rule requires the member firm with which the registered person is associated, upon receiving required written notice from the registered person, to review and approve or disapprove the registered person assuming such status or acting in such capacity. The rule does not apply where the customer is a member of the registered person’s “immediate family.”2 Rule 3241 becomes effective February 15, 2021.
/bit.ly/3mv4sp4

New Research: Financial Literacy Is Significant Indicator of Positive Future Financial Outcomes and Behaviors; Varying Levels of Financial Knowledge Among Americans May Deepen Inequality
FINRA
Financial literacy is a strong indicator of positive financial outcomes for the future, but differing levels of financial literacy among Americans may contribute to widening inequality among different segments of the population, according to a new study by the FINRA Investor Education Foundation (FINRA Foundation), the University of Southern California’s Center for Economic and Social Research (CESR) and The George Washington University’s Global Financial Literacy Excellence Center (GFLEC).
/bit.ly/37WfTCe

Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend FINRA Rules to Reflect Name Changes to Two FINRA Departments: the Office of Dispute Resolution and the Department of Registration and Disclosure
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA rules to reflect name changes to two FINRA departments: (1) the Office of Dispute Resolution and (2) the Department of Registration and Disclosure. Specifically, the proposed rule change would amend the General Standards, the Code of Arbitration Procedure, the Code of Arbitration Procedure for Customer Disputes, the Code of Arbitration Procedure for Industry Disputes, and the Code of Mediation Procedure to replace any references to “Office of Dispute Resolution” with “FINRA Dispute Resolution Services.” The proposed rule change would also amend the Books, Records and Reports, the Code of Procedure, and the Funding Portal Rules to replace any references to “Department of Registration and Disclosure” (also referred to as “RAD” in FINRA rules) with “Credentialing, Registration, Education and Disclosure” (also referred to as “CRED” in FINRA rules). The proposed rule change would also replace any references to “RAD” with “CRED.”
/bit.ly/2JmlO9x

SEC Issues Agenda for Nov. 5 Special Meeting of the Asset Management Advisory Committee
SEC
The Securities and Exchange Commission today released the agenda for the Nov. 5, 2020, special meeting of the Asset Management Advisory Committee (AMAC). AMAC was formed to provide the Commission with diverse perspectives on asset management and related advice and recommendations.
/bit.ly/37TMgRX

Raquel Fox, Director of the Office of International Affairs, to Depart SEC
CFTC
The Securities and Exchange Commission today announced that Raquel Fox, Director of the Office of International Affairs, will leave the agency in November. The Office of International Affairs (OIA) advises the Commission on cross-border regulatory, supervisory and enforcement matters, and coordinates the SEC’s engagement with regulators and law enforcement authorities outside the United States.
/bit.ly/31YYaWZ

SEC Awards Over $10 Million to Whistleblower
SEC
The Securities and Exchange Commission today announced an award of over $10 million to a whistleblower whose information prompted the opening of an investigation and provided substantial, ongoing assistance to SEC staff throughout the investigation. In more than a dozen communications with the staff, the whistleblower provided key evidence, helped decipher communications, and distilled complex issues.
/bit.ly/2JcHN2q

CFTC Announces Organizational Changes to Enhance Agency’s Operational Effectiveness;lDr. Tamara Roust Joins the CFTC as Chief Data Officer to Lead New Division of Data
CFTC
The Commodity Futures Trading Commission today announced it has completed negotiations to reorganize certain portions of the agency to enhance the CFTC’s operational effectiveness. The changes will take effect November 8, 2020.
/bit.ly/31XrgGf

CFTC’s Enforcement Division Issues Staff Guidance on Recognition of Self-Reporting, Cooperation, and Remediation
CFTC
The Commodity Futures Trading Commission today announced the Division of Enforcement (DOE) issued new guidance for enforcement staff when recommending the recognition of a respondent’s cooperation, self-reporting, or remediation in CFTC enforcement orders. The guidance, which will be published in the agency’s Enforcement Manual, follows recent updates of the manual’s civil monetary penalty guidance and compliance program evaluation guidance. [See CFTC Press Release Nos. 8165-20 and 8235-20]
/bit.ly/31RHxww

FCA reminds insurance firms to review the value of their products in light of the impacts of coronavirus
UK FCA
Firms should complete their reviews by 3 December 2020. In addition, FCA confirms additional measures to help customers in financial difficulty.
/bit.ly/35RumwN

Ontario Securities Commission, Alberta Securities Commission And Autorité Des Marchés Financiers Invite Businesses To Participate In Cross-Border Testing
Mondovisione
The Ontario Securities Commission (OSC), Alberta Securities Commission (ASC) and Autorité des marchés financiers (AMF) are inviting businesses in their respective markets to apply to test innovative products, services and business models across international borders.
/bit.ly/34F1WXe

Canadian Securities Regulators Provide Guidance To Issuers On Reporting Impact Of Covid-19
Mondovisione
The Canadian Securities Administrators (CSA) published its biennial report on its continuous disclosure review program. Due to the ongoing impact of the COVID-19 pandemic, the report also includes guidance for issuers on reporting the impact of COVID-19.
/bit.ly/3jBHHOs

Investing and Trading

Gold in Worst Monthly Run Since 2019 as Investors Await Election
Ranjeetha Pakiam – Bloomberg
Dollar preferred over bullion as haven with pandemic resurgent; StanChart flags upside for prices if Biden wins the presidency
Gold headed for a third monthly drop, the longest run since 2019, as investors awaited next week’s presidential election amid the threat of rising coronavirus cases and lack of agreement on a U.S. stimulus plan.
/bloom.bg/3kK2n8j

ECB to gobble up more debt next year than governments can sell; Eurozone countries will be able to finance yawning deficits without investor contributions
Tommy Stubbington and Martin Arnold – FT
Investors will not have to contribute a single euro to finance the vast budget deficits of eurozone governments next year, according to analysts who forecast that the European Central Bank will buy a greater quantity of debt than all the new bonds hitting the market.
/on.ft.com/34DDmpH

Investors look to the ‘reflation trade’ after US election; The bet is Democrats will win big enough to allow the party to usher in substantial fiscal stimulus
Colby Smith – FT
As the US presidential election fast approaches, investors are betting on a so-called reflation trade that is expected to lift stocks and take the shine off Treasuries and the dollar.
/on.ft.com/3jBr2KU

A disturbing new signal from the CDS market; Falling prices at auctions suggest trouble ahead for lenders to beleaguered companies
Gillian Tett – FT
Back in 2008, investors and journalists obsessively tracked the price of credit default swaps, derivatives contracts that investors use to insure themselves against default.
/on.ft.com/34EMdHG

IMF urges UK to keep spending to tackle pandemic crisis; Output now expected to shrink 10.4% in 2020 and recover only partially next year
Delphine Strauss – FT
The UK government should continue to spend on support for workers and businesses to weather the economic shocks of the pandemic and Brexit, and wait to put the public finances back on an even keel, the head of the IMF said on Thursday.
/on.ft.com/3kHwWvp

The New Haven for Global Investors May Be Emerging-Market Stocks
Cormac Mullen – Bloomberg
EM stocks have outperformed developed peers this month; EM assets under-owned explains relative resiliency: Goldman
With Treasuries, the yen and gold failing to live up to their usual haven potential, it seems the traditional risk-on vehicle of choice — emerging-market stocks — has stepped in to take up the mantle. A benchmark of developing-nation shares has leaped higher as equity markets from Europe to the U.S. reel from the resurgent coronavirus and pre-election jitters. The MSCI Emerging Markets Index is up about 3.5% this month, compared with a 1.4% slump in the MSCI All-Country World Index. The former has even broken out of a 2 1/2-year relative downtrend.
/bloom.bg/3ec5aF2

A history lesson for 2020’s new traders
Joshua M Brown – The Reformed Broker
On this episode Josh explains why we’re facing three worst case scenarios all at once, how markets are reacting and why the vaccine is the only thing that matters. Plus, many of today’s new traders seem to not understand what has happened to prior generations of new traders. A brief history of daytrading – from the Turtle Traders to the SOES Bandits – seems to be in order.
/bit.ly/31WLzn6

What Beyonce Can Tell Us About M&A; For anyone wondering why a U.S. private equity firm might bid for Australia’s scandal-plagued AMP, just consider the value of its star assets.
David Fickling – Bloomberg
If you could have bought the future earnings of the members of Destiny’s Child in 2001, would you really have turned it down because you weren’t sure where Kelly Rowland’s career was headed? That’s a good analogy for Ares Management Corp.’s interest in AMP Ltd., the Australian asset manager that’s lost more than two-thirds of its value over the past three years amid an official investigation into misconduct in the financial sector, combined with boardroom turmoil and a sexual harassment scandal. While the focus has been on the problems of AMP’s retail divisions, it still has a Beyonce on its books that a bold investor can pick up on the cheap.
/bloom.bg/3kJeWk6

Survival Is What Matters in Next Week’s Tempest; Somebody somewhere is going to make an indecent amount of money, but the wise will emphasize capital preservation.
John Authers – Bloomberg
Be Careful Out There
This newsletter is normally about the long view. Tune out the noise, look to the long term, and things will be OK. The problem with this philosophy, usually a wise one, is that you have to survive the short term to get to the long term.
/bloom.bg/34IgO76

Environmental, Social and Corporate Governance

CEO Who Was Once a Man Brings Unique Gender-Equality Perspective
Rafaela Lindeberg – Bloomberg
Caroline Farberger, the chief executive of a Swedish insurance company, remembers how she conducted meetings when she was a man.
/bloom.bg/34GLOV9

BlackRock Pushes for Single Reporting Framework for ESG
Leslie P. Norton – Barron’s
BlackRock, the world’s largest asset manager, is pushing for a single global reporting framework for sustainability, which has bedeviled companies with a hodgepodge of standards. A standardized framework would allow investors to more accurately price securities, the firm said.
/bit.ly/2GbLPHg

Adviser calls for creation of ESG sector
Imogen Tew – FT Adviser
An adviser has called for the creation of a clearly defined investment sector for environmental, social and governance funds to help with financial planning firms’ due diligence.
Speaking on an FTAdviser webinar today, Minesh Patel, adviser and director at EA Financial Solutions, said he found the review and selection process of ESG funds a “very difficult area to navigate”.
/bit.ly/3eet8PJ

Why Bonds Good for the Earth Now Carry a ‘Greenium’
Lyubov Pronina and Tom Freke – Bloomberg
Green bonds are back: Issuance of the environmentally friendly securities reached a new high in September, totaling more than $50 billion, after the pandemic slowed sales in the first part of the year. Following Germany’s first green bond, the pace is set to increase further, thanks to the European Union’s plans to sell as much as 225 billion euros ($265 billion) of the securities. Meanwhile, the European Central Bank has announced that it will buy a new kind of environmentally targeted security called sustainability linked bonds. Signs are emerging of a tangible “greenium” for investors in bonds deemed green — while doubts persist over how much of a difference the designation actually makes in terms of environmental impact.
/bloom.bg/3jD7OEB

FSB Welcomes Task Force On Climate-Related Financial Disclosures Status Report
Mondovisione
The Financial Stability Board (FSB) welcomed the publication today of the 2020 status report by the industry-led Task Force on Climate-related Financial Disclosures (TCFD), which reports on the further growth in TCFD-aligned disclosures by firms.
/bit.ly/2TCMxR1

Institutions

Capitolis adds new staff amid plans to almost double headcount by year end; Evelina Rosenstein, Alex Dubost, Dr Petra Wikstrom and Meshi Peer have joined the Capitolis team as it looks to expand its headcount from 50 to 90.
Annabel Smith – The Trade
New York-based Capitolis has confirmed several senior new hires from major institutions such as BNP Paribas and CME Group, as it pledged to almost double its headcount by the end of this year.
/bit.ly/3jLH4BP

Somerset Capital is now more Beijing than Bath; Jacob Rees-Mogg’s old firm beefs up Asia expertise in quest for growth
Matthew Vincent – FT
Calling a fund management firm ‘Somerset Capital’ can invite misconceptions. It conjures up a rather provincial image. Of, literally, Taunton. Or perhaps of its co-founder Jacob Rees-Mogg touring his family seat in the Mendips, in one of his vintage Bentleys accompanied by his much-photographed FT-reading teddy bears. These days, however — with Rees-Mogg stepped back from the business to spend more time as “MP for the 18th century” as he is jokingly known — the reality of Somerset as a dynamic emerging-markets stockpicker can shine through.
/on.ft.com/2TBaRCC

Amundi accelerates Asia push with China wealth venture; Europe’s largest fund house aims to build EUR500bn Asian business by 2025
Chris Flood – FT
Amundi predicted an acceleration in growth from Asia as Europe’s biggest asset manager reported robust investor inflows and a modest increase in profits in the third quarter.
/on.ft.com/2Gcr8Lr

NatWest returns to profit following drop in bad debt provisions; Chief executive Alison Rose cautious on outlook and says ‘challenging times lie ahead’
Nicholas Megaw – FT
NatWest unexpectedly returned to profit in the third quarter thanks to a sharp drop in new provisions for bad debt, completing a clean sweep of better than forecast results among the UK’s largest banks.
/on.ft.com/2HOzNnw

JPMorgan’s Normand Picks Hedges for Divided U.S. Government
Joanna Ossinger – Bloomberg
Strategists consider post-election scenarios, impact on assets; JPM’s Normand says high-grade credit may also be a buffer
Investors may want to hedge against the risk of the U.S. election resulting in a divided government that can’t pass a meaningful fiscal package anytime soon, according to JPMorgan Chase & Co. Enacting consequential stimulus could be challenging if either the Senate or the House is controlled by a political party opposed to the next president, strategist John Normand said on a podcast released Thursday. That could dent both the economy and the markets, he said.
/bloom.bg/2TB7jAi

Leon Black Calls Relationship With Jeffrey Epstein a ‘Terrible Mistake’; Mr. Black, the billionaire chief executive of Apollo Global Management, said others’ continued association with Mr. Epstein had given him “misplaced comfort” in doing business with him.
Matthew Goldstein – NY Times
Leon Black, the billionaire private equity executive whose financial ties to Jeffrey Epstein have sparked questions from his powerful clients, said Thursday that it had been a “terrible mistake” to give Mr. Epstein a second chance after his sex-crimes conviction in 2009.
/nyti.ms/3kVoo4l

BlackRock Defies Stock Chaos With Small-Cap Value ETF Launch
Katherine Greifeld – Bloomberg
New fund will screen Russell 2000 Index to find cheap shares; Small-cap stocks, value strategies have been hammered in 2020
Few things divide opinion on Wall Street like the outlook for small-cap stocks or the fate of the value strategy. Yet most market players would probably agree it’s a tough time to launch a product combining the two.
/bloom.bg/2HS6osD

Regions

New Zealand turns down cannabis but says yes to euthanasia; Prime minister and a former leader backed the campaign to legalise pot
Jamie Smyth – FT
New Zealanders may have elected their most progressive government since the 1970s and voted to introduce euthanasia but preliminary referendum results show the Pacific nation has drawn the line at legalising pot.
/on.ft.com/2HQgCcZ

Georgia Billionaire Seeks Third Election Win Amid Currency Woe
Helena Bedwell – Bloomberg
Ivanishvili’s party faces opponents in parliamentary elections; Georgia holds Oct. 31 vote with Covid-19 infections rising
Georgians will elect a new parliament Saturday with the ruling party founded by billionaire Bidzina Ivanishvili seeking a third successive victory even as it contends with a slump in the currency and a resurgent coronavirus epidemic.
/bloom.bg/2GfurS4

New Zealand Voters Say No to Legalizing Recreational Weed
Matthew Brockett – Bloomberg
South Pacific nation does agree to legalize assisted dying; Electoral Commission releases referendum results in Wellington
New Zealand has decided against legalizing the recreational use of cannabis, bucking a trend toward liberalization among some of its western peers. In a referendum on whether to allow the use and sale of cannabis, 53% of voters said no and 46% were in favor, according to preliminary results released by the Electoral Commission Friday in Wellington. In a separate referendum, New Zealanders agreed to legalize euthanasia with 65% voting yes.
/bloom.bg/34DAqcF

Norway’s $1.1 Trillion Fund Says Infrastructure Looks Pricey
Jonas Cho Walsgard – Bloomberg
The chief executive officer of Norway’s $1.1 trillion sovereign wealth fund said infrastructure assets that it was cleared to start buying last year are starting to look too pricey to be of interest. “In our experience so far, there are many investors looking for these investments and pricing is thus not always as attractive for us,” Nicolai Tangen, who started as CEO in September, said at a hearing in parliament on Friday, according to a statement with his prepared remarks.
/bloom.bg/2HIYy

Singapore Overtakes Thailand to Become Asia’s Worst Stock Market
Ishika Mookerjee – Bloomberg
Straits Times Index has lost about 25% so far this year; Resurgence in virus, slow recovery affecting market: IG’s Pan
Singapore stocks took a beating this week amid the twin uncertainties of the U.S. election and the worsening pandemic in the West, overtaking Thailand to become Asia’s worst equity market this year.
/bloom.bg/3kJiH9g

China’s Mega Banks Pare Profit Drops as Economy Recovers
Bloomberg News
China’s largest state-owned banks trimmed their profit declines in the third quarter after the nation’s economy bounced back and the government eased pressure on its $45 trillion banking system.
/bloom.bg/3kLltef

Brexit

In Pandemic U.K., Brexit Is an Afterthought, as Is Trump
Mark Landler – NY Times
When President Trump called the pro-Brexit politician Nigel Farage to the stage during his rally in Goodyear, Ariz., on Wednesday, it was a reminder that Britain’s bombshell vote to leave the European Union in June 2016 was seen as a harbinger of Mr. Trump’s victory in the United States that fall.
/nyti.ms/2TGRic4

Brexit goes down to the line: Deal, no-deal or fudge?
Gabriela Baczynska – Reuters
After nearly five years of Brexit crisis, the European Union and Britain are making a last ditch attempt to clinch a thin trade deal that would govern nearly a trillion dollars in annual imports and exports from 2021.
/reut.rs/2HLhgIU

Brexit talks making good progress, says Ursula Von der Leyen
Daniel Boffey – The Guardian
Trade and security negotiations between the UK and the EU are making good progress, Ursula von der Leyen has said in the most optimistic comments to date on the state of the Brexit talks.
As the negotiations moved to Brussels after seven days in London, the European commission president said: “We’re making good progress but [there are] two critical issues: level playing field and the fisheries, [where] we would like to see more progress.
/bit.ly/3jGRwea

Miscellaneous

Can the Bike Boom Keep Going? In the U.S., the coronavirus pandemic has driven a surge in bicycle sales and use. A more supportive federal policy toward non-car mobility could help it roll on.
David Zipper – Bloomberg
“Millions of Americans have been swept up in the adult cycling craze that has emptied bicycle dealers’ showrooms across the nation and swamped manufacturers with a backlog of orders,” a newspaper story reported. In it, one New York City bike dealer says, “Three years ago 80 percent of the bikes were for children. Now it’s just the opposite.”
/bloom.bg/2GfeWcS

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