SGX Execs See Return to Macro Trades; COVID-Led Push Toward Digitalization
Suzanne Cosgrove – John Lothian News
In a press briefing, Singapore Exchange Limited (SGX) CEO Loh Boon Chye Thursday said the pandemic has created both challenges and extreme market moves, and the resulting economic damages are just now beginning to unfold.
However, since Asia was pushed into the COVID cycle earlier than other regions, Loh said Asia is expected to recover from the COVID fallout more quickly.
Some pre-COVID-19 trends accelerated as the virus continued, Loh said. For example, while interest rates were low to start, the more fragile post-COVID economy clearly ensures they will remain low for some time.
To read the rest of this story, go here.
Hemp Prices Stagnate; Hempcrete Gets Debunked
Thom Thompson – John Lothian News
PanXchange’s July hemp benchmark report was published on Wednesday. If you have been following this space you will not be surprised to learn that hemp prices remain depressed. Low prices for biomass and hemp-derived products reflect the overhang from last year’s harvests and processing. With reliable or official information about this year’s crop largely unavailable, the industry has to just wait and see what materializes.
Some of the cannabinoids contained in biomass are somewhat unstable and deteriorate the longer they are held before being extracted. Biomass on farms or stored elsewhere needs to come to be sold and processed soon “before,” as PanXchange notes, “cannabinoid profiles degrade to the point where it is no longer suitable for marketing.”
To read the rest of this commentary, go here.
Hits & Takes
By John Lothian & JLN Staff
JLN has published its first Open Outcry Traders History Project video that is not of a Chicago trader. David Greenberg bleeds NYMEX colors, though he was a member of all four New York exchanges through his family’s clearing firm Sterling Commodities. He even started his career in Chicago as a runner for Jimmy Kaulentis. He gave a great interview about his career and NYMEX which we shot remotely, with the help of some friends of Greenberg’s.
If you are a former open outcry trader and interested in participating in our series, please reach out to me at email@example.com.
Later today, JLN will post the first video from our MarketsWiki Education World of Opportunity virtual event held on July 22. We will publish the keynote address by Jennifer Just of Peak6. Look for it on www.johnlothiannews.com.
Congratulations to the FIA on their decision to hold virtual versions of FIA EXPO and FIA Asia this fall. These are important events for the FIA and big revenue generators for the organization, but they put the interests of the people of the industry – its workers, customers and suppliers – first, before the economic interests of the organization. Actually, this was in the economic interests of the organization. Putting people first gives life to your organization. Thank you to the leadership of the FIA, the board and staff, for this decision. All of us in the industry value your wisdom.
The FIA has a timely webinar with Charlie Cook, editor and publisher of The Cook Political Report – an independent, non-partisan newsletter that analyzes American political trends. Cook previewed the 2020 US election season and how it may shape the political landscape in the coming years. Following Cook’s presentation, FIA president and CEO Walt Lukken hosted a panel of Washington insiders to discuss the practical implications of the election season on our markets. The video can be found here. However, it is only available to FIA members.
Katten has an advisory out titled “Louisiana Serves Up New Virtual Currency Business Law Cajun Style,” written by Gary DeWaal, Special Counsel and Chair, Distributed Ledger Products, Services and Technology; Futures and Derivatives and Cathy J. Yoon, Special Counsel.
Nasdaq has a commentary out by Phil Mackintosh titled, “What is the Value of Market Fragmentation?” It looks at how, with 13 exchanges currently and three more on the way, it’s an interesting time to ask, “How much does fragmentation benefit investors?”
The World Federation of Exchanges has published the July edition of the Focus magazine.
Today would be a great day for the CFTC Commissioners to decide to drop the charges against Jitesh Thakkar. Yes, it would be a great day to do exactly that.
Have a great weekend and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
David Greenberg – MarketsWiki Education Open Outcry Traders History Project
David Greenberg started his career in Chicago as a runner making $3.75 an hour. HIs father was a COMEX trader who later served as chairman of COMEX. So Greenberg took his Chicago experience to New York and started working for his father’s company on COMEX. But he begged to go over to NYMEX and finally got his wish. Once he moved to NYMEX, he never came back. In this John Lothian News interview for the MarketsWiki Education Open Outcry Traders History Project video, Greenberg tells the story of his days trading in the open outcry pits in New York.
The US missed a chance to control outbreak. Now it’s ‘impossible to predict’ how long the pandemic will last, Fauci says
Madeline Holcombe, CNN
Without a national effort to adhere to preventative measures, the nation’s top infectious disease doctor said, it will be impossible to predict how much longer the Covid-19 pandemic will last in the United States. The US is seeing a resurgence of coronavirus infections after states began reopening their economies, with the number of cases now at more than 4.4 million and the death toll at 152,070, according to data from Johns Hopkins University. The Institute for Health Metrics and Evaluation increased its forecast to 219,864 total deaths by November, in part because the nation continues to debate measures like wearing masks and social distancing.
*****Be prepared for this pandemic to go on a lot longer than expected. Be smart, stay safe!~JJL
Don’t Let the Stock Market Rally Mask Reality; Maybe investors are suddenly showing foresight like never before, and are looking past the pandemic to an eventual recovery. But probably not.
Justin Lahart – WSJ
The stock market is back, baby! After falling over 30% from late February to late March, the S&P 500 has fought its way back to within about 5% of its all-time high. The tech-heavy Nasdaq Composite has done even better, reaching new records in recent weeks. It all seems a bit incongruous with the damage the Covid-19 crisis has visited on corporate profits, but one interpretation is that investors are looking through the bad times to the return to normal. There actually is some sense to this explanation, but investors never exhibited so much foresight in past recessions.
*****The stock market is not the economy. The stock market is not the economy. Repeat, repeat.~JJL
The Roles and Responsibilities of Exchanges, Custodians and Clearinghouses in Crypto
We are avid listeners of Castle Island Venture’s On the Brink podcast and welcomed the recent discussion on the July 13th episode with Caitlin Long. We agreed with most of the conversation; that cryptocurrencies are still a young asset class and that bringing experts in market structure, risk, and technology from the established capital markets to crypto is important. We also see similarities in the gold market compared to cryptocurrencies and have written about it in an earlier post. We also agree that crypto is not going to be solely for institutional traders or exclusively for individuals.
*****ErisX gives a full-throated defense of the value of regulated entities to trade on and hold assets. I like the way ErisX is emerging as a thought leader. We need leadership.~JJL
CryptoMarketsWiki Coin of the Week: Ether (ETH)
Ethereum, the second-biggest cryptocurrency by market cap, turned five years old yesterday. The digital asset developed by technological wunderkind Vitalik Buterin has maintained an enthusiastic community of developers and miners, whose income from mining recently increased by over 60 percent in a month thanks to higher than average network transaction fees.
Thursday’s Top Three
Our top story Thursday was CNN’s As US passes 150,000 coronavirus deaths, experts at Johns Hopkins call for reset in national response. “The country’s coronavirus death toll was 150,676 as of Wednesday evening — more than a fifth of the world’s recorded deaths, according to Johns Hopkins,” the article says. Second was another coronavirus story – Yes, the Coronavirus Is in the Air, an op-ed from The New York Times. The virus “is airborne and it can be carried by tiny aerosols,” the article says. Third was the Financial Times’ FCA raps brokers over ‘inappropriate’ use of clients’ assets, part of the UK regulator’s scrutiny of the conduct of wholesale brokers.
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|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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FIA Expo, Asia conferences go virtual for 2020
In light of the ongoing COVID-19 coronavirus pandemic globally, FIA is shifting its Expo and Asia conferences to a 100% virtual platform for the rest of 2020. Building on our efforts this June with IDX Virtual, FIA has invested in a virtual conferences platform that brings our members, attendees, sponsors and exhibitors an enhanced environment fostering networking, interactive sessions and a robust trade show experience.
LSE in Talks to Sell Borsa Italiana to Close Refinitiv Deal
Viren Vaghela – Bloomberg
London-based group exploring sale of some or all of Milan unit; No certainty any transaction will go ahead, LSE says
London Stock Exchange Group Plc has started discussions to sell part or potentially all of its Borsa Italiana unit to satisfy European regulators examining its blockbuster deal for Refinitiv. LSE has commenced exploratory discussions which may result in a sale of MTS SpA, which operates fixed income trading platforms, or potentially the whole Italian group, according to a statement Friday. There’s no certainty that any transaction will go ahead, the group noted. It expects to close the Refinitiv deal by early next year.
SGX shows momentum in bid to diversify from equity-trading core; Net profit for the year to end-June came to S$472m, up more than one-fifth
Mercedes Ruehl and Stefania Palma – FT
SGX, the operator of Singapore’s stock exchange, has reported solid revenue growth across all of its units for the year to the end of June, showing progress in its efforts to diversify from its core equity operations.
Coronavirus plunges eurozone economy into historic recession;France, Spain and Italy report double-digit quarterly contractions in economic output
Delphine Strauss, Federica Cocco and Chelsea Bruce-Lockhart – FT
The coronavirus pandemic has plunged the eurozone economy into a historic recession with Spain suffering the biggest hit, figures published on Friday showed.
Tradeweb Faces Flatter Curve With More Bond Sales, CEO Says
Felice Maranz – Bloomberg
Shares drop as much as 3.8% after quarterly results reported; Will have hard time matching 1Q without volatility: Larry Tabb
Tradeweb Markets Inc.’s rates business is facing a “mixed macro background,” according to Chief Executive Officer Lee Olesky. The electronic trading firm is grappling with headwinds from low volatility and a flatter yield curve. Yet, it’s also benefiting from tailwinds of a “huge” amount of issuance in the government bond market in Europe, the U.S. and Asia, “all the way to China,” Olesky said in a phone interview. Tradeweb’s mortgage business is also “doing quite well,” with elevated refinancings, he added.
Cboe Global Markets Reports Results for Second Quarter 2020
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the second quarter of 2020.
“I am pleased to report solid financial results for the quarter, clearly highlighting the strength of the diversification of our revenues from multiple asset classes and non-transactional services. We achieved record trading volumes in U.S. cash equities and multi-listed options, fueled by growth in retail trading activity.
Kitchen Table Tops Office With 335,000 Bankers Working From Home
Stefania Spezzati and Harry Wilson – Bloomberg
Working arrangements at European lenders attract attention; CEOs say they’d like an eventual return to company premises
Bank chiefs are revealing another closely-watched metric this earnings season: Work-from-home levels. With many of the largest European lenders reporting second-quarter results this month, how their workforces adapted to life in a pandemic became a regular topic of conference calls.
BNP Paribas Outshines Rivals as Trading Prospers; Shares jump as the French lender’s profit beats analysts’ expectations
Simon Clark and Noemie Bisserbe – WSJ
BNP Paribas SA BNPQY -4.31% shares rose as much as 6% Friday as the French lender’s earnings suggested it is navigating the coronavirus pandemic better than several other European banks, driven by a boom in its trading businesses.
Private Equity Looters? Academics Aren’t Convinced; Two decades of research shows shows buyouts do improve productivity, and not just by cutting jobs.
John Authers – Bloomberg
Few industries have an image problem like private equity. Thoroughly in the sights of late-night comedy liberals, private equity is seen as the ultimate expression of all that is wrong with the concept of shareholder value. The popular narrative is that leveraged buyouts allow private equity operators to strip assets, cut staff and move on having pocketed the value. One recent headline in satirical website The Onion proclaimed: “Protesters Criticized For Looting Businesses Without Forming Private Equity Firm First.”
Frackers Are in Crisis, Endangering America’s Energy Renaissance; Even before the pandemic, West Texas was reeling and Wall Street was running out of patience with the industry.
Bryan Gruley, Kevin Crowley, Rachel Adams-Heard, David Wethe – Bloomberg
Twenty years ago, before the U.S. oil industry became a global energy power that strikes fear into Saudi Arabia, brothers Dan and Farris Wilks started Frac Tech Services LLC in tiny Cisco, Texas. The company provided equipment for hydraulic fracturing, aka fracking, the breaking up of tight sedimentary rock by blasting water, sand, and assorted chemicals through horizontal bores at fantastically high pressure.
When Tesla Hits the S&P 500, It’ll Spark the Wildest Passive Trade Ever; Elon Musk’s company would be the largest ever added to the index, and its inclusion would spark an “all-hands” trading moment.
Sarah Ponczek – Bloomberg
Beating the S&P 500 is notoriously difficult for fund managers. But simply replicating it as closely as possible isn’t always a picnic, either—and Tesla Inc. has found a way to make it a little harder. The market value of the electric car company currently stands at about $277 billion. That would make it one of the biggest companies in the S&P 500, except that it isn’t a part of the index yet. The keepers of that list, S&P Dow Jones Indices, have a rule that new companies must have been profitable in their most recent quarter and over the past year before being added. With its latest earnings, Tesla just crossed that line.
Europe’s Markets Are Having a Moment; European stocks have been unloved by investors for years. Now, as the euro soars, they offer an alternative to the S&P 500.
Eshe Nelson – NY Times
Scott Thiel can’t remember the last time BlackRock Investment Institute had a positive view on European stocks. It’s been that long. At the end of June, the research arm of the world’s largest asset manager upgraded its view on European equities to overweight, from underweight, recommending that investors buy more of these stocks. “It’s been a very long time,” said Mr. Thiel, the institute’s chief fixed income strategist.
Coronavirus Is the Crisis Some Bank Investors Have Been Waiting For; Bank results and stocks are getting hammered. But some investors see proof they are good investments.
David Benoit – WSJ
Profits at U.S. banks are tumbling, their stocks are underperforming and their executives sound grim. Their long-term investors are thrilled. Value investors seek underappreciated companies, and they have spent a decade betting that the banks are stronger than they were going into the 2008 financial crisis. The market hasn’t agreed. While bank share prices were rallying through last year, sometimes hitting record highs, they were broadly unloved.
SocGen Shuts Singapore Trade Commodity Desk After Hin Leong
Alexandre Rajbhandari – Bloomberg
Bank intends to keep its local middle and back office teams; Big Asian trading clients now handled from Hong Kong office
Societe Generale SA is closing its trade commodity finance unit in Singapore after the collapse of Hin Leong Trading (Pte) Ltd. prompted the bank to halt fresh funding to such firms in the region.
U.S. Dollar Suffers Its Worst Month in a Decade
Olivia Konotey-Ahulu – Bloomberg
All major currencies advance against the greenback in July; Dollar demand wanes as Treasury yields drop, economy stumbles
The euro rose the most in a decade this month, the British pound is headed for its best July since 1990, and for the first time this year, every major currency in the world rose against the greenback.
Money Markets Seek Treasury Reply to $1.8 Trillion Question
Emily Barrett – Bloomberg
Record cash hoard, stimulus doubts cloud bill supply outlook; Sharp Treasury cash drawdown could drive funding rates lower
The U.S. Treasury will soon provide some clues on what’s about to happen with the pile of cash towering over money markets. The Treasury’s cash hoard at the Federal Reserve — known as the Treasury General Account — is close to a record $1.8 trillion. On Monday, officials will offer estimates of where they see it in three months’ time, and how much more short-term cash they expect to raise to help people and businesses through the pandemic. Trouble is, the Treasury’s numbers are riddled with uncertainties, starting with the timing of the hotly-debated stimulus package in Congress.
Trading on Zimbabwe Bourse Resumes Monday Without Old Mutual
Ray Ndlovu – Bloomberg
Trading on the Zimbabwe Stock Exchange will resume on Monday, without three companies that have listings on foreign bourses. Old Mutual Ltd., PPC Ltd. and Seed Co. International said in separate emailed statements that they would comply with an order issued by Finance Minister Mthuli Ncube that they suspend trading “pending finalization of the modalities for their resumption to trade.”
Monzo gambles on new products to survive coronavirus crisis; New chief of digital bank looks to premium and business accounts after ‘going concern’ warning
Nicholas Megaw – FT
Monzo’s new chief executive said the company was banking on new products to help it to profitability as it warned the coronavirus pandemic had threatened its ability to continue operating.
Big Oil Companies Lose Billions, Prepare for Prolonged Pandemic; Exxon, Chevron join procession of oil giants reporting dismal second quarter results as the coronavirus continues to reduce the world’s thirst for oil and gas
Christopher M. Matthews – WSJ
Big oil companies endured one of their worst second quarters ever and are positioning themselves for prolonged pain as the coronavirus pandemic continues to sap global demand for fossil fuels. Exxon XOM -4.91% Mobil Corp. posted its second consecutive quarterly loss for the first time this century on Friday, reporting a loss of $1.1 billion, compared with a profit of $3.1 billion a year ago. Exxon, the largest U.S. oil company, had not reported back-to-back losses for at least 22 years, according to Dow Jones Market Data, whose figures extend to 1998.
U.S. records nearly 25,000 coronavirus deaths in July
Christine Chan, Lisa Shumaker – Reuters
U.S. coronavirus deaths rose by almost 25,000 in July and cases doubled in at least 18 states during the month, according to a Reuters tally, dealing a crushing blow to hopes of quickly reopening the economy.
Understanding the Risks Versus the Myths of Vaccines
Michelle Fay Cortez and James Paton – Bloomberg
The anti-vaccine movement that first took hold in the U.S. and spread globally has undermined advances against preventable infectious diseases such as measles and whooping cough. Now, so-called vaccine hesitancy is seen as a threat to the effective roll out of shots to prevent Covid-19, in the event they are developed. Certainly there are risks with new vaccines. But the belief among some people that well-established immunizations against childhood diseases are more dangerous than beneficial is based on a fraud.
Millions of Britons Banned from Meeting Indoors in New Lockdown
Alex Morales and Libby Cherry – Bloomberg
Cases spike after northern districts broke distancing rules; Parts of Lancashire, Yorkshire subject to tighter restrictions
More than 4 million people across a large part of northern England must comply with tighter lockdown rules after Boris Johnson’s government rushed to tackle a new spike in coronavirus cases. Residents in Greater Manchester, and parts of East Lancashire and West Yorkshire will no longer be able to meet indoors with members of other households, Health Secretary Matt Hancock said.
Tobacco-Based Covid Vaccine May Start Clinical Trials in Weeks
Corinne Gretler – Bloomberg
Vaccine developed by Lucky Strike maker uses tobacco plants; Tobacco plants provide way to produce vaccines more quickly
An experimental Covid-19 vaccine that’s produced in tobacco plants may start clinical trials within weeks as the race for immunization intensifies. British American Tobacco Plc, the maker of Lucky Strike cigarettes, expects a response from the U.S. Food and Drug Administration any day now, Chief Marketing Officer Kingsley Wheaton said in an interview.
School Closings in March Likely Prevented 1 Million Coronavirus Cases and Saved 40,000 Lives; The study authors noted, however, that these numbers are based on classes without masks or social distancing, which is expected if schools reopen
Julie Mazziotta – People
Closing schools across most of the U.S. in March, at the start of the COVID-19 pandemic, likely reduced infections by 1 million and saved more than 40,000 people from dying due to the virus, a new study found.
Boris Johnson’s Desperate Change of Direction on Coronavirus; England has had the highest excess mortality rate in Europe during the pandemic. No wonder Boris Johnson is desperate to do things differently.
Therese Raphael – Bloomberg
Back in April, Britain’s Deputy Chief Medical Officer Jonathan Van-Tam told a news conference that the U.K.’s relative performance in combating the coronavirus would become clear only once there were comparative figures on excess mortality (deaths above a five-year average). Shortly afterward, the government stopped showing charts with comparative death rates altogether.
Fewer Americans say they would resume daily activities as coronavirus cases increase, survey finds
Rebecca Morin – USA TODAY
A couple of months ago, some Americans began to participate in everyday activities like going to restaurants and eating with friends after states began loosening social distancing restrictions for the coronavirus pandemic.
What You Should Do About Work If You Come Down With Coronavirus; Seven professionals who contracted Covid-19 share their experiences—and regrets.
Arianne Cohen – Bloomberg
How should you handle work if you feel the effects of the coronavirus? We talked to seven people who got ill for advice on how to manage professional obligations after a Covid-19 diagnosis. Here’s what they suggest you do—and not do.
Exchanges, OTC and Clearing
Wall Street’s Next Big Stock Exchange Has Gender-Balanced Board
Lananh Nguyen – Bloomberg
Memx directors appointed ahead of planned debut on Sept. 4; Board members have experience in hedge funds, technology, law
Members Exchange, the new trading venue founded by some of the biggest players in U.S. stocks, appointed a gender-balanced board of directors. The five women and five men who’ll oversee the company were named in a document ahead of the exchange’s planned debut on Sept. 4. Chairman and Chief Executive Officer Jonathan Kellner said he prioritized the selection of a diverse board with a range of expertise to help launch in an economy that’s been upended by the Covid-19 pandemic.
BME appoints Jos Dijsselhof as new Chairman
David Jiménez-Blanco, former Lead Independent director of the company, is appointed new non-executive Deputy Chairman of BME and incoming non-executive Chairman of the Madrid Stock Exchange
All agenda items were approved at the Extraordinary General Meeting of BME, held today in Madrid; The number of directors is reduced to 6; Eduardo Ansaldo to be appointed Chairman of the Barcelona Stock Exchange and Jorge Yzaguirre Chairman of Sociedad de Bolsas
BME today held its Extraordinary General Meeting in Madrid, during which all agenda items were approved. The Meeting was held remotely. In addition, the Board of Directors of BME appointed Jos Dijsselhof, CEO of SIX Group, as non-executive Chairman of the company, and David Jiménez-Blanco, former Lead Independent Director, as non-executive Deputy Chairman.
BOX Exchange: Regulatory Coordination Concerning CAT Reporting Compliance
Please refer to the following FINRA Regulatory Notice providing an update on coordination between the national securities exchanges and FINRA on the Consolidated Audit Trail (“CAT”) compliance rules (the “CAT Compliance Rules”), available at FINRA Regulatory Notice 20-20.
BOX Exchange: Adoption Of Changes To Minor Rule Violation Plan Adding CAT Reporting Compliance Rules http://
BOX Exchange (“BOX” or “Exchange”) has adopted changes to its Minor Rule Violation Plan (“MRVP”) to make Participants’ violations of the Consolidated Audit Trail (“CAT”) compliance rules (“CAT Compliance Rules”)1 eligible for disposition with a minor rule violation fine, when warranted.
London Stock Exchange Group PLC Interim Results for the 6 Months Ended 30 June 2020
London Stock Exchange Group
Unless otherwise stated, all figures below refer to continuing operations for the six months ended 30 June 2020 (H1 or H1 2020). Comparative figures are for continuing operations for the six months ended 30 June 2019 (H1 2019).
DAX®, Mini-DAX® and (EURO) STOXX® Banks Sector Index Futures: Change of the smallest price change (tick) for futures outright and calendar spreads
The Management Board of Eurex Deutschland decided on several measures to increase the efficiency in DAX® (FDAX), Mini-DAX® (FDXM) and (EURO) STOXX® Banks Sector Index Futures (FESB/FSTB).
From niche to mainstream – the growing market demand for listed derivatives (Part I)
In response to market demand, listed derivatives are getting more and more versatile in terms of products and functionality. We sat down for a two-piece interview with Megan Morgan, Global Head of Equity and Index Sales at Eurex, to get the background on the increasing diversity of products, users and applications.
Initial Listing of the UAN FOB NOLA Futures Contract
Increase of Spot Month Position Limits of Four (4) Palladium Futures and Option Contracts
Effective at the close of trading August 28, 2020 for the September 2020 contract month and beyond, the New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will increase the spot month position limits for four (4) Palladium futures and option contracts from 25 to 50 futures contract equivalents as noted below and in Exhibit A of NYMEX Submission No 20-345. Please note that the spot month limits in the August 2020 contract month are unchanged.
Increase of the Spot Month Position Limit for one (1) Aluminum Futures Contract
Effective at the close of trading August 28, 2020 for the September 2020 contract month and beyond, the Commodity Exchange, Inc. (“COMEX” or “Exchange”) will increase the spot month position limit for one (1) aluminum futures contract from 100 to 150 futures contract equivalents as noted below and in Exhibit A of COMEX Submission No. 20-337. Please note that the spot month limit in the August 2020 contract month is unchanged.
Increase of Spot Month Position Limits for Five (5) Copper Futures and Option Contracts
Effective at the close of trading August 28, 2020 for the September 2020 contract month and beyond, the Commodity Exchange, Inc. (“COMEX” or “Exchange”) will increase the spot month position limits for five (5) copper futures and option contracts from 750 to 1,000 futures contract equivalents as noted below and in Exhibit A of COMEX Submission No. 20-343. Please note that the spot month limits in the August 2020 contract month are unchanged.
Performance Bond Requirements: Agriculture, Energy, and Metal Margins – Effective July 31, 2020
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.
MayStreet Expands Cash Treasury Offering with the Addition of Fenics Data
MayStreet, the industry’s leading market data infrastructure provider, today announced it has added Fenics USTreasuries (Fenics UST) to its US cash treasury data portfolio. Owned and operated by BGC Financial, L.P., Fenics UST is a low-latency, fully electronic U.S. Government securities trading venue that delivers displayed liquidity calibrated to the industry’s tightest tick increments.
ChartIQ to Expand Offering with FactSet; FactSet clients can now access Term Structure Graph in the product’s first enterprise adoption
Cosaic, a financial technology company that delivers software to promote end user workflow and efficiency, today announced that it has expanded its agreement with FactSet, a global provider of integrated financial information, analytical applications, and industry-leading service, to include Term Structure Graph. This news comes off the tail end of a recent rebrand: Cosaic is the new company name for the world-renowned charting solution, ChartIQ.
The number of Robinhood users holding Kodak stocks soars after Trump admin announces $765M loan
Saniya More – The Block
As of Thursday afternoon, more than 125,000 Robinhood users held Kodak stocks, a more than 1200% increase from last week. Kodak’s stock soared after the company secured a $765 million loan from the Trump administration to launch a pharmaceutical manufacturing business. Kodak stocks jumped up by over 200% on Tuesday, increasing to 318% by Wednesday. On Thursday, the stock price has fallen about 14% as of press time, hovering around $28.
(Eagle-eyed stock watchers noted that Kodak’s stock moved upward prior to the Trump administration’s announcement, raising concerns about a possible leak that the company’s CEO declined any knowledge of.)
TradingScreen’s MARKTS Boosts Access To Digital Assets
TradingScreen Inc. subsidiary MARKTS, a cryptocurrency order and execution management system (OEMS), announces today its partnership with XTRD, an orders routing and connectivity provider targeting digital markets, to enable end-users to connect to an additional set of crypto exchanges on the MARKTS platform.
Five Years Later, the Ethereum DApp Ecosystem Looks Exactly as Predicted
Andrey Shevchenko – Cointelegraph
The Ethereum ecosystem is now seeing the growth and adoption of ideas outlined more than five years ago, including many of the components of DeFi. Ethereum’s fifth anniversary from the mainnet launch is upon us, marking an important milestone in the long history of the first smart contract platform to reach significant adoption.
BOJ appoints new head for department overseeing digital currencies
The Bank of Japan said on Friday it has appointed its top economist, Kazushige Kamiyama, as head of the payments and settlements department, which oversees research into central bank digital currencies (CBDC).
Twitter reveals how Bitcoin scammers hijacked celebrities’ accounts; The company has now confirmed that 130 accounts were targeted by the criminals, with 45 being used to send tweets.
Alexander Martin – Sky News
Twitter has revealed how accounts belonging to celebrities including Barack Obama, Jeff Bezos and Kim Kardashian were hijacked by Bitcoin scammers two weeks ago.
Ethereum History in 5 Charts
Christine Kim – Coindesk
Five years ago this week, the first general-purpose blockchain went live on mainnet. Ethereum paved the way for a whole new use case for blockchain technology untethered from Bitcoin’s original vision as electronic cash.
DeFi project KeeperDAO raises ‘seven-figure’ seed funding to build liquidity pool
Yogita Khatri – The Block
KeeperDAO, an on-chain liquidity underwriter for decentralized finance (DeFi) protocols, has raised seed funding from notable investors. The “seven-figure” seed round, i.e. worth more than $1 million, was led by Polychain Capital and Three Arrows Capital, KeeperDAO co-founder Tiantian Kullander, told The Block. The KeeperDAO project was first revealed in December, as a joint effort between Amber Group and Talo Systems. Amber is Kullander’s crypto trading and market-making firm, and Talo is a blockchain research firm run by Taiyang Zhang, who is also the CEO of DeFi protocol Ren. Kullander and Zhang jointly manage the KeeperDAO project.
Ripple paid $15.1 million in XRP incentives to MoneyGram in Q2 2020
Yogita Khatri – The Block
Ripple paid its partner MoneyGram $15.1 million in XRP incentives in the second quarter of 2020. MoneyGram revealed the figure in its Q2 earnings report published on Thursday. The Nasdaq-listed firm said Ripple paid $15.1 million, but $6.3 million was offset by related transaction and trading expenses, leaving $8.8 million as a net benefit. MoneyGram categorizes Ripple payouts as “market development fees” and “contra expense” rather than revenue. The firm receives these incentives in XRP based on the volume it does via Ripple’s On-Demand Liquidity (ODL) platform.
SEC Wants to Start Scrutinizing Binance Chain Transactions
Danny Nelson – Coindesk
The U.S. Securities and Exchange Commission (SEC) appears to be gearing up for a closer look at Binance coin (BNB) and other tokens on cryptocurrency exchange giant Binance’s eponymous blockchain. SEC disclosed in a Wednesday memo that it intends to award Menlo Park, Calif.-based CipherTrace a single-source contract on the grounds it’s the only blockchain analysis firm capable of tracing Binance Chain transactions. “CipherTrace products are the only known blockchain forensics and risk intelligence tool that can support BNB and all tokens on the Binance network,” the securities watchdog said in the contract description.
Congressional Blockchain Caucus co-chairman ordered to pay $50K fine following House ethics probe
Michael McSweeney – The Block
Republican Congressman David Schweikert of Arizona was ordered to pay $50,000 in fines and was issued a formal rebuke by a House of Representatives ethics panel following a two-year investigation. As reported by Politico, Schweikert was found to have violated 11 ethics rules and standards, including those related to campaign finance and reporting errors. The investigation was related to a former aide to Schweikert, Oliver Schwab, who previously served as his chief of staff.
Zcash maker teams with Gemini, Binance for new crypto education program
Andrew Hayward – Decrypt
Crypto in Context is a new education initiative spearheaded by the maker of Zcash. Companies such as Gemini, Binance, and Digital Currency Group are also involved. Local leaders can host workshops and events with support from the program. For many newcomers, cryptocurrency can be an incredibly foreign, unfamiliar, and complicated concept to grasp, let alone embrace—but it’s one that, in theory, could help many communities and countries that are hurt by monetary policy or have inadequate access to banking services.
Bank of Japan Puts Top Economist in Charge of Digital Yen Initiative
Paddy Baker – Coindesk
The Bank of Japan (BoJ) has moved its most senior economist to lead the department responsible for research and development into central bank digital currencies (CBDCs). Kazushige Kamiyama, formerly director-general of the BoJ’s Research and Statistics Department, has moved to the Payments and Settlements Systems Department, Reuters reported Friday. The department has been heavily involved in a digital currency working group alongside five other central banks since the start of the year.
Ether Addresses in Profit Have Soared 132% in a Year
Omkar Godbole – Coindesk
Even with ether (ETH) close to yearly highs, profitable addresses have grown by a hefty 132% since last July. In the last week, ether has established a foothold above $300 for the first time in 12 months. While the second-largest cryptocurrency is trading with only a relatively small price increase year on year, the number of profit-making or “in the money” ether addresses has more than doubled to 31.37 million from 13.5 million over that time, according to blockchain analytics firm IntoTheBlock. The numbers indicate many took advantage of the opportunity to buy ether under $300, resulting in almost 18 million more in-profit addresses – a rise of 132%.
The U.S. election is getting ugly – and investors are getting nervous
David Randall, April Joyner – Reuters
Investors are increasingly preparing for the risk of a contested U.S. presidential election come the fall, worried that an ugly political situation will create volatility across markets.
Trump Escalates His Election Doubts With Biden Lead Widening
Jordan Fabian – Bloomberg
Trump suggested delaying Nov. 3 vote over fraud concerns; Tweet came as economy cratered and virus continued to spread
President Donald Trump is quick to call “fake news” any suggestion he won’t win a second term, yet his recent campaign shakeup and increased attacks on mail-in voting signal the political peril he faces from a raging pandemic and cratering economy.
BETTER FINANCE: The EU Capital Markets Recovery Package Should Take Individual Investors And The Wirecard Case Into Account
On 24 July 2020, the European Commission (EC) announced the “Capital Markets Recovery Package”, as part of its overall coronavirus recovery strategy, aimed at making it easier for capital markets to support European businesses in their recovery from the fallout from the ongoing Covid-19 crisis. To this end the EC proposes changes to capital market rules, including a reduction of investor protection levels.
Does Trump Want to Save His Economy? The president is showing little urgency or strategy as the economic recovery stalls ahead of the November election.
Jim Tankersley – NY Times
The United States just suffered its worst economic quarter in nearly 75 years. Its recovery from the depths of a pandemic-induced recession has stalled, as coronavirus deaths rise again across the country. President Trump has what appears to be one final chance to cut a deal with Congress to ensure hard-hit workers and businesses do not collapse before the November election. He has shown little interest in taking it.
Missourians need help from Washington if we want to lessen the recession’s devastation
Denise Cross – Kansas City Star
Our communities have been hit hard by the COVID-19 pandemic and the resulting economic downturn, the deepest since the Great Depression. The Kansas City area unemployment rate jumped from 3.4% in February to 10.8% in May, closely mirroring what’s happening statewide. Economic conditions have created dire state revenue shortfalls that, without substantial federal assistance in the next federal coronavirus relief package, will force painful cuts to education, health and public safety. These cuts would cause Missouri’s budget crisis to be longer and deeper than necessary, but Missouri’s congressional delegation has the power to mitigate this crisis on behalf of Missourians.
Obama warns that Trump’s actions threaten US democracy
Stephen Collinson, CNN
In one of the most jolting moments in modern political history, former President Barack Obama reclaimed his political pulpit with a stark warning that his successor is a grave and imminent threat to American democracy and racial justice.
Fauci to testify before U.S. House COVID-19 panel after being blocked by White House
David Morgan – Reuters
Dr. Anthony Fauci, the top U.S. infectious disease expert, will testify on Friday before a coronavirus subcommittee in Congress, weeks after President Donald Trump’s administration first refused to let him address the panel.
Rich Investors Will Be Fine If Biden Hikes Taxes, UBS Says
Berber Jin – Bloomberg
New spending would likely offset any tax increases, bank says; UBS urges investors not to make drastic portfolio moves
With Joe Biden leading President Donald Trump in the polls, some investors are concerned the age of corporate tax cuts and deregulation may soon end, replaced by a Democratic administration eager to soak the rich. Those fears are unfounded, according to UBS Group AG. While Biden has proposed tax increases on high-income individuals and corporations, such hikes would be offset by massive spending packages targeted at accelerating the country’s recovery from the coronavirus, the investment bank said.
Trump Can’t Delay the Election. He Can Still Do Lasting Harm; Republicans should condemn the president’s unfounded assertion that this year’s vote will be illegitimate.
Editorial Board – Bloomberg
Throughout his first term, President Donald Trump has set new standards for reckless and divisive conduct in office. His latest declaration marks a dangerous new low. He suggested this morning (on Twitter, of course) that the election in November, which will rely more heavily than usual on mail-in voting due to the pandemic, was bound to be inaccurate and fraudulent, and floated the idea of delaying it.
Democracy Is the Loser of Trump’s Vote-Delay Ploy; The coronavirus will make the 2020 election challenging enough, even without a president seemingly bent on undermining history and the Constitution.
Cass R. Sunstein – Bloomberg
What once seemed a paranoid fantasy is now looking plausible: Well behind in the polls, President Donald Trump is suggesting a possible delay in the 2020 election.
CFTC Market Risk Advisory Committee Approves Subcommittee’s Single-Step Transition Recommendations at Public Meeting
The Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC) approved recommendations regarding the scheduled October 2020 transition of discounting and price alignment interest for certain products to the secured overnight financing rate (SOFR), otherwise known as the “Single-Step Transition,” at its July 21, 2020 public meeting. Commissioner Rostin Behnam is the sponsor of MRAC.
Swiss Banker Found Guilty in $700 Million 1MDB Transfer
Hugo Miller – Bloomberg
Former compliance officer fined 50,000 Swiss francs by court; Coutts employee approved Low’s Seychelles account transfer
A former Coutts & Co. banker was found guilty of failing to flag money-laundering concerns related to a $700 million transfer into an account controlled by Low Taek Jho, the alleged mastermind behind the 1MDB scandal. The man, who was only identified as A., was fined 50,000 Swiss francs ($55,000) by the Swiss Federal Criminal Court in a ruling Friday.
Court finds former Tennis Australia director Harold Mitchell breached his duties
Today the former Vice President of Tennis Australia (TA), Harold Mitchell, was found by the Federal Court of Australia to have breached his director’s duties in connection with a 2013 decision by the TA Board to award the domestic television broadcast rights for the Australian Open tennis tournament to the Seven Network. Stephen Healy, the former Chairman and President of TA who was also sued by ASIC, was found not to have breached his director’s duties.
NSW director charged with making false statement to ASIC
Mr David Robert Maclachlan of Batemans Bay, New South Wales, has been charged with making a false or misleading statement to ASIC. An ASIC investigation alleges that in April 2018 Mr Maclachlan, a former director of Auslead Pty Ltd ACN 072 539 701 (deregistered), made a false or misleading statement on a form that he lodged with ASIC to deregister Auslead Pty Ltd.
ASIC review of 31 December 2019 financial reports
ASIC today announced the results from its review of the financial reports for the year ended 31 December 2019 of 90 listed entities and other public interest entities with larger number of users of their reports. The review was conducted as part of ASIC’s ongoing risk-based reviews of the financial reports.
SEC Charges CEO and Company With Defrauding First Responders and Others Out of Millions
The Securities and Exchange Commission today announced charges against a San Antonio-area businessman and his company for running a multimillion-dollar fraudulent scheme that victimized scores of investors, many of them retired San Antonio police officers and other first responders.
SEC Charges Former Georgia State Legislator With Defrauding Investors in Ponzi Scheme
The Securities and Exchange Commission today charged former Georgia state legislator and former member of the Georgia Board of Regents Clarence Dean Alford with defrauding at least 100 investors in his now-bankrupt energy development company, Allied Energy Services LLC.
EDF Fined $6 Million in Market-Abuse Case Over Nuclear Project
Alan Katz – Bloomberg
Electricite de France SA was fined 5 million euros ($6 million) by France’s markets regulator for providing false information on the Hinkley Point C nuclear project.
EBA and ESMA launch consultation to revise joint guidelines for assessing the suitability of members of the management body and key function holders
The European Banking Authority (EBA) and the European Supervisory Market Authority (ESMA) launched today a public consultation on their revised joint Guidelines. This review reflects the amendments introduced by the fifth Capital Requirements Directive (CRD V) and the Investment Firms Directive (IFD) in relation to the assessment of the suitability of members of the management body. The consultation runs until 31 October 2020.
ESMA withdraws registration of NEX Abide Trade Repository AB
The European Securities and Markets Authority (ESMA), the EU’s Securities Markets Authority, has today withdrawn the trade repository (TR) registration of NEX Abide Trade Repository AB (NATR).
Proposed Rule Change to Amend the FINRA Rule 6800 Series (Consolidated Audit Trail Compliance Rule)
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend the FINRA Rule 6800 Series, FINRA’s compliance rule (“Compliance Rule”) regarding the National Market System Plan Governing the Consolidated Audit Trail (the “CAT NMS Plan” or “Plan”) to be consistent with an amendment to the CAT NMS Plan recently approved by the Commission.
Investing and Trading
After Bond Market Turmoil, Fixed-Income Automation is Top Priority
It’s been an eventful year for fixed-income trading desks coping with extreme volatility during an unprecedented global pandemic. As liquidity in fixed income became scarce in March, buy-side traders reverted to traditional voice trading relationships, while some e-bond trading venues saw record volumes. Now that volatility has subsided, buy-side firms are refocusing on electronic trading and seeking ways to automate workflows and source liquidity. In this Q&A, FlexTrade’s Sales Director EMEA Manuela Bauer examines the significance of integrations between FlexTrade’s fixed-income EMS and electronic bond trading platforms, demand for protocols like direct streams and RFQs, and the potential for interoperability on the buyside trading desk.
A trading tool that’s transforming the $10 trillion-plus corporate bond market
Dhara Ranasinghe, Saikat Chatterjee – Reuters
Expectations of a borrowing deluge from corporates globally are turning bond market attention to a little-known tool that’s already helping smooth trading of illiquid debt the way exchange-traded funds (ETFs) did years ago.
Apple’s stock split may not be good for the Dow
Noel Randewich – Reuters
Apple (AAPL.O) announced a stock split on Thursday and it may not bode well for future gains in the Dow Jones Industrial Average .DJI. The iPhone maker made the surprise announcement in its quarterly report, saying it will split its stock four-to-one when trading opens on Aug. 31, Apple’s first share split since 2014.
Amazon posts biggest profit ever at height of pandemic in U.S.
Jeffrey Dastin, Akanksha Rana -Reuters
Amazon.com Inc (AMZN.O) on Thursday posted the biggest profit in its 26-year history as online sales and its lucrative business supporting third-party merchants surged during the coronavirus pandemic.
Oil trading boosts Glencore’s 2020 expectations
Switzerland-based Glencore (GLEN.L) expects a stellar performance from its oil trading arm to help the division hit the top end of its full-year target for operating income, it said on Friday.
Bond Yields Are Sending a Scary Signal on Stocks; The renewed rally in U.S. Treasuries doesn’t bode well for stocks.
A. Gary Shilling – Bloomberg
There is no shortage of investors shrugging off the latest leg lower in U.S. Treasury bond yields, saying heavy central bank involvement in this part of the financial market make such moves less of a signal that the economy or that equities are headed for trouble. That interpretation would be a mistake.
People Fear They’ve Got Too Much Cash in Their Bank Accounts; Falling interest rates are tempting some Americans to forgo safety and pour their savings into assets such as stocks and bitcoin.
Donald Moore – Bloomberg
The savers are getting restless. Running out of guaranteed ways to get meaningful returns, some people are increasingly being tempted to raid their interest-earning cash savings to load up on assets such as bitcoin, gold and stocks. The comfortable, if small, returns of high-yield savings accounts are looking less palatable as volatile assets take off.
Environmental, Social and Corporate Governance
Why Alarm Over Climate Change Is Not Alarmism; New information about the link between atmospheric CO2 and eventual global average warming bolsters the case for climate policy now.
Gernot Wagner – Bloomberg
Is climate change scary because of “black swans”—the low-probability, high-impact tail risks that are, by definition, unlikely? Or is it about what’s well known, already quantified, and very likely to happen unless the world slams on the emissions brakes? And does the difference matter?
Shell and Total report big drop in profits, but made clean-energy investments.
Stanley Reed – NY Times
Royal Dutch Shell and Total, two of Europe’s largest oil companies, reported sharply lower quarterly profits on Thursday, after widespread lockdowns designed to tackle the pandemic slammed demand for oil and gas.
Rising Seas Could Menace Millions Beyond Shorelines, Study Finds; As climate change raises sea levels, storm surges and high tides will push farther inland, a team of researchers says.
Brad Plumer – NY Times
As global warming pushes up ocean levels around the world, scientists have long warned that many low-lying coastal areas will become permanently submerged.
Powell Says Fed Committed to Improving Workplace Diversity, Culture; Central bank chairman responds to searing critique of economic profession by former staff economist
Nick Timiraos – WSJ
Federal Reserve Chairman Jerome Powell said the central bank was deeply committed to fostering a diverse and inclusive work environment after a former staff economist published a lengthy blog post critiquing the treatment of women and minority economists in academic and policy-making circles.
Duke Targets Cow Poop in Its First Renewable Gas Investment
Naureen S Malik – Bloomberg
Duke Energy Corp. has seen the future and it smells of cow manure. The Charlotte, North Carolina-based utility giant has made its first investment in renewable gas, a source of fuel that’s tiny relative to the vast natural gas industry but also one that’s growing fast as more companies recognize its environmental benefits.
Buffett’s Berkshire boosts its stake in Bank of America to 11.8%
Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) said on Thursday it has bought another $522 million of stock in Bank of America Corp (BAC.N), boosting its already large stake in the second-largest U.S. bank by assets.
Mystery Sheikh Tried to Claim Nomura for His Own, Bank Says
Laura Joffre – Bloomberg
Satari Ajikawo tried to alter Nomura’s name in official record; Ajikawo had targeted another financial company in 2015
Nomura International Plc is in a London court to stop a man who says he’s a sheikh from pretending that he owns the bank and trying to change its name. Satari Ajikawo has filed forms with Companies House, the official registrar of companies in the U.K., several times to try to change Nomura’s name. The bank says he has no connection to it.
Europe Is Building the Next Tesla. Who Knew? Nikola’s remarkable rise has relied heavily on European expertise. That raises questions about its valuation and Europe’s failure to find a rival to Tesla.
Chris Bryant – Bloomberg
When Nikola Corp. started trading on Nasdaq in June, the Phoenix-based clean transportation company raced quickly to a valuation of almost $30 billion. Its market worth has since fallen to a more reasonable $10.5 billion, but that’s still pretty spicy for a business yet to generate any revenue. Its most promising products are its heavy trucks, powered by electric batteries or hydrogen fuel cell.
Australia Unveils Its Plan to Make Facebook and Google Pay for News; New plan could inform efforts elsewhere in the world to monetize content from publishers
Mike Cherney – WSJ
Media companies in Australia will be able to seek payment from Facebook Inc. FB 0.52% and Alphabet Inc.’s GOOG 0.62% Google for news articles that are posted on their platforms, according to new rules, which could set a precedent for other countries seeking to compel tech giants to compensate local publishers.
Hong Kong postpones legislative elections for a year over coronavirus fears
James Griffiths and Sarah Faidell, CNN
Hong Kong will postpone legislative elections due to be held in September by one year because of the coronavirus outbreak, the city’s leader said Friday.
The German economy had its biggest slump in 50 years.
Jack Ewing – NY Times
The German economy shrank 10.1 percent from April through June compared to the previous quarter, the biggest decline since the government starting keeping the data in 1970.
BNP Paribas to move 400 jobs to Europe due to Brexit
French bank BNP Paribas (BNPP.PA) said on Friday it was creating 400 jobs in continental Europe due to Britain’s exit from the European Union, and that it has taken all measures required by regulators to continue to operate in the United Kingdom.
CBI warns over no-deal Brexit preparations
Daniel Thomas and Peter Foster – FT
Daniel Thomas and Peter Foster in London YESTERDAY 141 Print this page Be the first to know about every new Coronavirus story Subscribed Most companies now lack the time and resources to prepare for a no-deal EU exit, according to the CBI, with one in five saying they were less prepared for Brexit than in January due to coronavirus disruption. In a survey by the employers’ group, three-quarters of companies said they were concerned about a further economic shock from a failure to agree a trade deal with the EU — the UK’s biggest trading partner.
Food Security Fears As Britain Heads For No-Deal Brexit
Alasdair Lane – Forbes
It’s almost inconceivable—citizens of a modern, wealthy nation like the United Kingdom, running out of food. But it could happen. That’s the stark warning from a British parliamentary committee this week. The culprits include the obvious: COVID-19 and climate change; as well as the slightly less so: Brexit. Divorce from the European Union could put more strain on British food supplies than even the pandemic—which saw a spate of supermarket self-emptying mania—the Environment, Food and Rural Affairs Committee warned yesterday.
CBI warns over no-deal Brexit preparations; One-fifth of companies say planning for end of transition period has gone backwards
Daniel Thomas and Peter Foster – FT
Most companies now lack the time and resources to prepare for a no-deal EU exit, according to the CBI, with one in five saying they were less prepared for Brexit than in January due to coronavirus disruption.
Twitter Links Hack to Phone-Based Phishing Attack
Robert McMillan – WSJ
The hackers behind the high-profile online break-in at Twitter Inc. TWTR -1.18% earlier this month talked their way onto the company’s network using the telephone, the company said. “This attack relied on a significant and concerted attempt to mislead certain employees and exploit human vulnerabilities to gain access to our internal systems,” Twitter said Thursday via tweet.