Future of Swiss Banking Hangs in Balance as Voters Head to Polls

Jun 7, 2018

Future of Swiss Banking Hangs in Balance as Voters Head to Polls

Jun 7, 2018

Jeff Bergstrom

Jeff Bergstrom

CIO

First Read

Hits & Takes
JLN Staff

Mark Ibbotson passed the Kilt Challenge on to the FIA’s Emma Davey at the IDX gala in support of Futures for Kids last night. Ibbotson raised £10K of his £14K goal. Of course, if you forgot, you can still donate.~JJL

The Chicago Bar Association on June 8 will be presenting a program focusing on enforcement, crypto derivatives and cybersecurity, with Cliff Histed, a partner of K&L Gates LLP, leading the enforcement update panel.

This in-person-only futures and derivatives update from the CBA has an impressive lineup of speakers from the CFTC, US Attorney’s Office, Cboe, CME Group, NFA, FBI and more.

The cost is what I would call just a fraction of the cost of a good attorney’s hourly rate. Click HERE for more details.~JJL

There was a big story in the Sunday Times about Michael Spencer’s plans after NEX.~JJL

James Sullivan from Divento is raising money for Futures for Kids by embarking on a 215 mile kayak trip, starting in the Cotswold Hills in Gloucestershire and navigating no fewer than 45 locks before ending up thoroughly knackered at Southend-On-Sea, some 8 days later. You have to love the creative ways people in the futures world are supporting Futures for Kids.~JJL

IDX will return to The Brewery in 2019 on June 3 – 5.~JJL

I won the auction for a collection of Game of Thrones books and a map all in a frame and signed by George Martin at the Futures for Kids gala auction last night. Please no one tell my wife.~JJL

 

(Click for larger image)

This woman made a business out of hooking up cryptocurrency holders with yachts and $4 million cars — now she’s launching a currency named after herself
Zoe Bernard – Business Insider
For many in the cryptocurrency community, the hashtag #whenlambo signifies the Lamborghini as the embodiment of the aspirational wealth they someday hope to possess.
/jlne.ws/2sUb1aP

***** Trying to pry those coins from their hot, sweaty hands.~JJL

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London equities trading opens one hour late after ‘technical issue’; Cause of the failure is unclear
Philip Stafford and Adam Samson in London – FT
The open of trade on the London Stock Exchange was delayed by an hour on Thursday due to a “technical issue” that prevented the opening auction from taking place.
/jlne.ws/2sKVpGv

**** We all appreciated the extra hour to sleep in this morning.~JJL

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Post Crisis Rates Feed `Wealth Gains’ for the Rich, Nordea Says
Frances Schwartzkopff – Bloomberg News
The new global head of macro research at Nordea Bank AB says it’s now clear that the historically low interest rates that followed the global financial crisis have led to “wealth gains” for the rich while others are more indebted.
Kristin Magnusson Bernard, who used to work with financial stability at the European Central Bank, says the lessons learned from cutting interest rates to historic lows mean policy makers may well look to new tools to support economies in the future.
/goo.gl/k7ZydH

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Wednesday’s Top Three
Our most read page yesterday was the bio page on MarketsWiki for John Lothian. Most interesting man in the world? Could be. Second most read story was Michael Bloomberg chastising Google in the story, Google Walks Away From America’s Security. Third was Business Insider’s A crypto trader setting up a hedge fund apologised for making so much money

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MarketsWiki Stats
127,431,101 pages viewed; 23,148 pages; 213,312 edits
MarketsWiki Statistics

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Lead Stories

Future of Swiss Banking Hangs in Balance as Voters Head to Polls
Catherine Bosley – Bloomberg
Switzerland holds referendum on Sunday on ‘Vollgeld’ proposal; Central bank has been a vocal opponent of the initiative
The Swiss are about to decide on the future of their banking system. Up for a national vote on Sunday is a measure that would upend the way financial institutions do business by forbidding banks from “creating” money through lending. That’s something that’s been a key tenet of finance for centuries, but one that some have questioned given the industry’s role in the global crisis a decade ago.
/jlne.ws/2sOxOVd

Settlement giant Euroclear to take stake in London-based fintech; European financial giant to join backers including Euronext, AllianceBernstein and S&P Global
Samuel Agini – Financial News
Euroclear, the Belgian settlement house that sits at the heart of financial markets, is set to invest in a London-based technology company that wants to improve bond market liquidity, according to two people with knowledge of the matter.
/jlne.ws/2xZMsz1

Shady ICO Issuers Are Taking ‘Bags of Cash’ to Border, U.S. Says
Matthew Leising and Nick Baker – Bloomberg
SEC’s Clayton gives strong warning on digital-token sales; ICOs have raised $9 billion this year, surpassing 2017 record
A top financial regulator gave a strong warning Wednesday that U.S. scrutiny of initial coin offerings is just getting started. Securities and Exchange Commission Chairman Jay Clayton, speaking at a conference in New York, said companies raising money through digital-token sales shouldn’t have any illusions that the government will treat them differently than firms participating in traditional stock offerings. He added that the market deserves close attention because the SEC has already seen examples of fraudsters fleeing the country after persuading U.S. investors to back their ICOs.
/jlne.ws/2xQzLGC

***** There are two things wrong with this story. The first is that they are using cash to move across borders after selling crypto coins. Second is they are using cash.~JJL

Buy bread and sell marriage is Japan’s big equity trade; Yamazaki Baking seen as an indicator of rising labour costs that boosts inflation
Leo Lewis – FT
For equity investors, Japan’s demographics present an endlessly foggy vista punctuated with fleeting moments of clarity. The past few weeks have provided one such: buy bread, sell marriage.
/jlne.ws/2sNrr4p

New Bitcoin ETF Would Set Buyers Back $200,000; Van Eck and SolidX each had plans for exchange-traded funds put on hold in 2017
Paul Vigna – WSJ
Two firms that unsuccessfully tried to launch bitcoin-based exchange-traded funds last year are teaming up to take a second shot at it.
/jlne.ws/2sLjCwn

UK financial regulator refuses to budge on EU solvency rules
Oliver Ralph – FT
The UK’s financial regulator has dealt a blow to life insurers by refusing to change a much-hated part of the EU’s Solvency II capital rules, citing uncertainty over Brexit.
/jlne.ws/2xQtxXg

Howard Lutnick’s Treasury market return faces tough competition; Since sale of eSpeed in 2013, BrokerTec now dominates trading flows
Philip Stafford – Financial Times
Howard Lutnick, who pioneered electronic trading in the world’s biggest government bond market, is mounting a comeback and seeking to challenge the current dominance of BrokerTec, the leading venue that is being bought by the CME Group. The chief executive of BGC Partners, the interdealer broker, will formally unveil the launch of the venue, called Fenics UST, at a fixed income conference in the US on Thursday, at a pivotal time in the $14tn market for buying and selling government debt.
/goo.gl/9uwGYw

Italy’s Young Populists Are Coddling the Old—and Holding the Country Back; For a nation that needs optimism and entrepreneurial vigor, the new leadership has a backward-looking agenda.
Peter Coy – Bloomberg
At just 31 years old, Luigi Di Maio, head of Italy’s populist Five Star Movement, is no one’s image of a gerontocrat. Yet since helping form a new coalition government, Di Maio has given priority to rolling back a gradual increase in Italy’s retirement age—even though doing so would help older Italians while adding to the debt burden on his own generation.
/jlne.ws/2xSchAI

Post Crisis Rates Feed `Wealth Gains’ for the Rich, Nordea Says
Frances Schwartzkopff – Bloomberg
Central bankers could explore more tools, top economist says; Nordea’s new head of economic research discusses central banks
The new global head of macro research at Nordea Bank AB says it’s now clear that the historically low interest rates that followed the global financial crisis have led to “wealth gains” for the rich while others are more indebted.
/jlne.ws/2xSdxDW

Russia-Saudi Soccer Encounter Has the Oil Market’s Attention
Javier Blas, Ilya Arkhipov and Glen Carey – Bloomberg
Putin to meet Saudi crown prince in Moscow to watch the game; The two oil giants are debating a possible production boost
This month’s packed geopolitical calendar has another key date — a meeting between Vladimir Putin, the Russian president, and Mohammed bin Salman, the powerful Saudi crown prince.
/jlne.ws/2sOcGhM

Goldman Sachs enlists staff for cyber security war games; Immersive Labs’ platform to help bank’s employees learn how to fend off attacks
Laura Noonan, Investment Banking Correspondent – FT
Goldman Sachs is turning to cyber security war games to make sure its 8,000 technology staff are up to speed on the hacks and viruses that could delete bank data, compromise privacy or otherwise threaten vital operations.
/jlne.ws/2sOLkrM

Exchanges, OTC and Clearing

CCP Release 15.0: Feature to be introduced in production on 18 June 2018
Eurex
As already announced in Eurex Clearing circular 027/18, the launch of CCP Release 15.0 is scheduled to take place on 18 June 2018.
/jlne.ws/2xRU46k

DTCC Collaborates with EquiLend, Trax, IHS Markit and Pirum to Advance Securities Financing Transaction Reporting Processes
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced new efforts to further streamline and enhance its global trade reporting capabilities as market participants prepare for the upcoming reporting requirements contained within the Securities Financing Transaction Regulation (SFTR), which are expected to begin to take effect in late 2019. SFTR will require firms which are subject to SFTR to report securities financing transactions including repurchase agreements, securities lending and margin lending trades to a registered Trade Repository.
/goo.gl/kcfB8H

Single Stock Futures: Introduction of two SSFs; Single Stock Dividend Futures: Introduction of one SSDF
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 11 June 2018, due to previous corporate actions:
/jlne.ws/2xMwZC9

London Stock Exchange Trading to Start Soon After Outage
Viren Vaghela – Bloomberg
Markets operator says to open trading at 9 a.m. U.K. time; Comes after opening auction was delayed earlier Thursday
The London Stock Exchange Group Plc said it will resume trading shortly, after its opening auction was delayed in a rare outage for the stock market.
/jlne.ws/2sKUAxp

China eyes repatriation of tech unicorns with new listing rules; Baidu, Alibaba, and JD.com among groups expected to sell depositary receipts
Gabriel Wildau in Shanghai and Emma Dunkley in Hong Kong – FT
China’s financial regulator has published rules for the issuance of a new type of security that will enable overseas-listed, fast-growing companies to list on the mainland.
/jlne.ws/2sNBJBQ

SGX reports market statistics for May 2018
SGX
Securities daily average value (SDAV) on 31 May 2018 was the highest single day SDAV at S$3.53 billion since 31 May 2013, ahead of changes from MSCI’s May 2018 semi-annual review of its equity indexes
Open interest in SGX FTSE China A50 Index futures grew 25% month-on-month, as investors geared up for MSCI’s A-Shares inclusion
/jlne.ws/2sOejvR

Shenzhen Stock Exchange Adopts New Corporate Bond Listing Agreement To Consolidate Comprehensive And Stringent Law-Based Supervision
MondoVisione
On June 4, Shenzhen Stock Exchange (hereinafter as “SZSE”) released the Notice on Adopting the SZSE Corporate Bond Listing Agreement and SZSE Asset-backed Security Transfer Service Agreement (hereinafter as the “Notice”). According to the Notice, the new Corporate Bond Listing Agreement and ABS (short for “Asset-backed Security”) Transfer Service Agreement (hereinafter as the “New Agreements”) will be officially adopted since June 18.
/jlne.ws/2sMPeBz

CME Group Inc. Announces Second-Quarter 2018 Earnings Release, Conference Call
CHICAGO, June 6, 2018 /PRNewswire/ — CME Group Inc. (CME) will announce earnings for the second quarter of 2018 before the markets open on Thursday, July 26, 2018. Slides and written highlights for the quarter will be posted on its website at 6:30 a.m. Central Time, the same time it provides its earnings press release. The company will hold an investor conference call that day at 7:30 a.m. Central Time, at which time company executives will take analysts’ questions.
/goo.gl/iMRpah

Fintech

UK fintech start-up Revolut reaches 2 million users
James Cook – Telegraph
London fintech start-up Revolut has announced that it has grown to 2m users following its launch in 2013. The company operates a branch-less bank which lets customers control their account using an app. Revolut customers can use its banking app to invest in cryptocurrencies, and the company said that it plans to add stock-trading features in the future.
/jlne.ws/2sN4TkB

Moving towards enterprise level testing
ITIVITI TALKS
/jlne.ws/2HvDCcf

Insurers pay premium for cyber security experts; Advising clients and pricing risk is a boom industry, with huge salaries on offer
Oliver Ralph – FT
When Jim Trainor came to the end of an illustrious, 20-year career in the upper echelons of the FBI in 2016, the then 50 year-old had no shortage of options. Consulting, cyber security companies and start-ups were all under consideration.
/jlne.ws/2sNqIR3

BSO expands Asia presence with new Hong Kong and Singapore offices
BSO
We’ve opened new offices in Hong Kong and Singapore to facilitate continued demand from the global electronic trading community to tap into the thriving Asian markets.
/jlne.ws/2sP0ldr

Cryptocurrencies

In Wake Of Data Breaches, Blockchain Technology Can Minimize Financial Fraud
Andrew Rossow – Forbes
In today’s world, we have the ability to manage our finances with the touch of a button, or swipe of a finger–all without stepping foot into a bank. But, as I’ve said many times before, convenience always trumps privacy, and there’s no way around that fact.
With the emergence of new technology, comes the emergence of new threats and new hackers, attackers, and other forces devoted to exploiting vulnerabilities in these advancements. In the finance sector, fraud is becoming more prevalent on the daily. Hackers are getting smarter about how to get their hands on consumer’s financial and personal information. Just last year, over 145 million Americans had their social security numbers, addresses, and driver’s license numbers compromised by hackers through the Equifax data breach, and most recently, Facebook through the Cambridge Analytica data leak.
/jlne.ws/2JCz8oK

China President Xi Jinping – Blockchain Is Reshaping Global Economic Structure
Crypto News
Xi Jinping, the President of China, arguably the most powerful politician in the world today, has said at the annual academic conference hosted by the Chinese Academy of Sciences that blockchain technology, artificial intelligence (AI), and Internet of Things (IoT) are reshaping the global economic structure.
/jlne.ws/2JApdju

14 Indian Banks Join Blockchain Initiative for Improved Inter-bank Transactions
Miguel Gomez – Cryptovest.com
A young consortium of banks in India aims to use blockchain technology to tackle the grinding infrastructure problems that the country faces at this moment.
/jlne.ws/2JyheU2

GMEX to develop blockchain multi-asset exchange with crypto firm; Multi-asset exchange will allow for trading of cryptocurrencies, equities, FX and commodities.
Hayley McDowell – The Trade
GMEX Group is partnering up with cryptocurrency firm ThinkCoin to develop a blockchain-powered multi-asset exchange. The trading technology and post-trade services firm recently launched its own centralised, blockchain-powered exchange, GMEX Fusion, which will be combined with ThinkCoin’s TradeConnect multi-asset trading network.
/jlne.ws/2xZpxUv

Coinbase Expands With Deal for Broker-Dealer Keystone Capital; Cryptocurrency business plans to use Keystone assets to move into fast-growing market for coin offerings
Paul Vigna – WSJ
Coinbase, one of the leading cryptocurrency and bitcoin businesses, is acquiring a securities dealer that the company hopes will allow it to expand into the red-hot coin-offerings market.
/jlne.ws/2xW2l9g

Crypto Unicorn Circle Aims to Expand Into Regulated Banking
Benjamin Bain , Lily Katz , and Jesse Hamilton – Bloomberg
Crypto venue says it met with OCC to explore banking functions; Venture is still at least months away from seeking a charter
Circle Internet Financial Ltd., one of the world’s most valuable cryptocurrency platforms, is looking to make a big leap into the highly regulated realm of U.S. banks and brokerages.
/jlne.ws/2sR2rto

Cryptocurrency Exchange Huobi Wants to Become Decentralized
Camila Russo – Bloomberg
Huobi, one of the biggest cryptocurrency exchanges, wants to walk the talk. The Singapore-based platform plans to invest $100 million toward building Huobi Chain. Once the project is complete, Huobi plans to migrate its operations onto this blockchain, according to a statement by the company.
/jlne.ws/2sKjUn7

Bitcoin ETF Dreams Kept Alive With New SEC Filing
Camila Russo – Bloomberg
Companies want to offer fund for institutional investors; SEC asked providers to pull applications earlier this year
ETF providers hope to have cracked regulators’ code for creating the first exchange-traded product backed by Bitcoin — but it’s going to cost you.
/jlne.ws/2xQz2Fo

The 10 Largest Companies In the World Are Now Exploring Blockchain
Michael del Castillo – Forbes
Love it or hate, the biggest companies in the world just can’t ignore blockchain any longer. The distributed ledger technology that first let owners of the bitcoin cryptocurrency exchange value without a bank has forced its way into the research and development halls of the ten largest companies in the world.
/jlne.ws/2xQxXgO

Entrepreneurship: How Xunlei’s Lei Chen pivoted to blockchain; The tech chief changed tack — but ran into trouble with regulators and investors
Emily Feng – FT
Xunlei has had a wild year. Once a video-sharing network, the company pivoted to blockchain after introducing a virtual token — the Link Token — in October.
/jlne.ws/2xMyBvO

Banks Turn to Blockchain to Speed Up Indian Internal Trade Deals
Rahul Satija and Anto Antony – Bloomberg
Some 14 Indian banks have signed up for blockchain platform; Aims to cut processing time, improve transaction security
Banks responsible for about half of India’s internal trade have joined a consortium that aims to introduce blockchain technology in order to speed up processes and reduce hurdles to approving new loans.
/jlne.ws/2sM0YEA

Our path to listing SEC-regulated crypto securities
Asiff Hirji – Coinbase
Today, we’re announcing that Coinbase is on track to operate a regulated broker-dealer, pending approval by federal authorities. If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). This step forward is being made possible by our acquisition of a broker-dealer license (B-D), an alternative trading system license (ATS), and a registered investment advisor (RIA) license.
/jlne.ws/2xOGFMp

Insurers pay premium for cyber security experts
Advising clients and pricing risk is a boom industry, with huge salaries on offer
Oliver Ralph – The Financial Times
When Jim Trainor came to the end of an illustrious, 20-year career in the upper echelons of the FBI in 2016, the then 50 year-old had no shortage of options. Consulting, cyber security companies and start-ups were all under consideration. But he ended up heading to Aon, an insurance broker, where he advises clients on how to deal with their cyber risks.
/goo.gl/ScAoNc

Politics

James Madison Would Like a Few Words on Trade Wars; The fourth president tried all kinds of sanctions to open markets, but still ended up in the War of 1812.
Noah Friedman – Bloomberg
President Donald Trump says trade wars are easy to win, but that hasn’t always been true in U.S. history. To the contrary, for the first 40 years of the republic, the founders struggled desperately to establish international trade agreements that Americans would find acceptable. The need for trade leverage was the first factor motivating James Madison to call for a new Constitution. And trade wars had a way of turning into shooting wars. The War of 1812, the first declared war in U.S. history, was the result of a trade fight that the Americans seemed unable to win with economic sanctions alone.
/jlne.ws/2sKXKBb

Trump Gets a Lot Out of Trade Wars. The U.S. Gets Less; For political advantage, the president is isolating America from its allies, bolstering China, and threatening a world economic order crafted by Washington seven decades ago.
Michael Schuman – Bloomberg
The Trump administration is doing its best to convince the world that its decision to slap tariffs on a host of foreign-made goods is no big deal. The dispute with Canada is “a family quarrel,” according to top Trump economic adviser Larry Kudlow. As for the growing rift with Europe over Trump’s policies on trade and other issues, Secretary of Commerce Wilbur Ross says they’re “blips on the radar screen” and “everybody will get over this in due course.”
/jlne.ws/2sNxG8y

Republicans Are Scaring Money Out of Wall Street
Elizabeth Dexheimer – Bloomberg
Top spot on finance committee could be hers with blue wave; Possibility benefits GOP candidates and moderate Democrats
Blaine Luetkemeyer, a Republican member of the House Financial Services Committee, recently issued a warning to a group of Wall Street lawyers and lobbyists in Washington. “We do not want a Maxine Waters chairmanship,” the Missouri lawmaker told the group gathered for a luncheon hosted by the Exchequer Club. “That’s the death knell to many of you.”
/jlne.ws/2xWrwIO

S&P Global Platts lifts ban on Iranians at London event; Oil industry had criticised decision to exclude Iranians from conference over sanctions
David Sheppard in London – FT
The hot topic of conversation as crude traders and executives gathered at an oil conference in the City of London this week was the impact of renewed US sanctions on Iran’s energy industry. But the meeting hosted by S&P Global Platts had an uncomfortable twist — Iranians were barred from the event because of the organiser’s own fears of breaching the US’s punitive measures.
/jlne.ws/2sKPHUY

Mulvaney disbands consumer advisory board
Ken Sweet – AP News
Members of a group of outside experts required by law to meet twice a year with Consumer Financial Protection Bureau said Wednesday that the group has been dissolved by CFPB head Mick Mulvaney.
Mulvaney, acting director of the CFPB, told the 25 members of the Consumer Advisory Board on Wednesday morning that they will be replaced and the board will be reconstituted, according to two of the members. These people requested anonymity since the announcement was not official yet.
/goo.gl/yPvAGF

Elizabeth Warren says there’s a dirty little secret behind the Republicans’ push for broad deregulation
Pedro Nicolaci da Costa – Business Insider
Senator Elizabeth Warren offered a scathing critique of Republican efforts to deregulate industries ranging from energy and finance to the environment and consumer safety under President Donald Trump.
Warren, seen as a possible Democratic presidential candidate in 2020, said the argument that regulations restrict economic activity was just a front for corporations and their lobbyists who want to minimize restrictions on their activities, even when they harm the environment or consumers.
/goo.gl/iRfELU

***SR: From that story – “Warren is worried that the Consumer Financial Protection Bureau, whose creation was her signature undertaking, is being damaged under its acting director, Mick Mulvaney. In the past he has questioned the very need for the CFPB’s existence.”

Regulation

SEC Director ‘Underwhelmed’ by Crypto Exchanges’ Self-Reporting
Miguel Gomez – Cryptovest.com
The SEC’s view on ICOs is still not completely settled, but it’s progressed significantly in defining which tokens offered by startups should be considered securities.
Exchanges that offer these tokens have to register with the SEC and transparently self-report market activity surrounding these special coins. Brett Redfearn, director of the division of trading and markets for the SEC, is not pleased with what he’s seen in this particular department.
/jlne.ws/2JD7qYM

ESMA 1Q18 Risk Dashboard Sees Complex Products and Volatility as Key Risks
ESMA
The European Securities and Markets Authority (ESMA) has issued today the latest iteration of its Risk Dashboard, covering risks in the EU’s securities markets for 1Q2018. ESMA’s overall risk assessment remains unchanged from 4Q17 at high levels.
/jlne.ws/2sOoBfs

Exam Restructuring + the SIE Exam
FINRA
Chip Jones, FINRA’s Senior Vice President of Member Relations and Education, leads a discussion with John Kalohn, Vice President, Testing & Continuing Education, and Joe McDonald, Senior Director, Qualifications & Exams, about FINRA’s exam restructuring initiative. It includes the new Securities Industry Essentials (SIE) exam for prospective securities industry professionals, which is available starting October 1, 2018. They explain what the SIE exam covers, how to enroll and how the new exam affects member firms. They also explain why FINRA decided to restructure “rep-level qualification exams.” (10 min. 13 sec.)
/jlne.ws/2xQCVds

Malaysia Said to Plan Arrest of Jho Low and Ex-Goldman Banker Ng
Elffie Chew , Andrea Tan , and Anisah Shukry – Bloomberg
Warrants issued for Low and a former 1MDB unit official; Prime Minister Mahathir has made investigation a priority
Malaysian authorities conducting a probe into troubled state investment fund 1MDB have issued an arrest warrant for financier Low Taek Jho and are preparing warrants for two others, including a former Goldman Sachs Group Inc. banker, people with knowledge of the matter said.
/jlne.ws/2sOWAol

FCA investigations shoot up, but fines imposed fall
Hamza Ali – Citywire
The number of investigations by the Financial Conduct Authority (FCA) have shot up over the last year but total fines imposed have come right down, according to research by Wealth Manager.
/jlne.ws/2xQYLgH

Investing and Trading

World’s Worst Bond Market Wants More After 300 Basis Point Hike
Constantine Courcoulas – Bloomberg
It is going to take more than a 300-basis-point rate hike to impress investors in this year’s worst-performing bond market. By most accounts, Turkey’s central bank finally did the right thing by raising interest rates last month after an emerging meeting. But for bond holders, the lira’s depreciation is stoking inflation and eating away at real returns. So dire is the impending acceleration in prices that it will offset the central bank’s last move, according to the Institute of International Finance, “leaving the real policy rate largely unchanged.”
/jlne.ws/2xObCQR

Not Enough Time on Clock to Sell Volatility, Morgan Stanley Says
Cormac Mullen – Bloomberg
Implied volatility, carry too low for sellers to profit: MS; Risk of mean-reversion is high, given current age of cycle
Time is the enemy of the volatility seller, according to Morgan Stanley. The level of implied volatility is too low and the time it takes to generate sufficient income from volatility-selling strategies too long for investors to profit from taking a negative position on price swings, strategists at the bank including Phanikiran Naraparaju, wrote in a note to clients this week.
/jlne.ws/2xQjZLT

CMC Markets profits jump 24% after bet on wealthy clients pays off
Hannah Murphy – FT
CMC Markets, the online derivatives trading platform, posted a 24 per cent jump in profits, as a move to target richer clients ahead of tough regulatory curbs on the sector began to pay off.
/jlne.ws/2xS3xuu

Institutions

Deutsche CFO says bank can break free from ‘vicious cycle’
Laura Noonan – FT
Deutsche Bank has a “tremendous” opportunity to break free from a “vicious cycle of declining revenue, sticky expenses, lowered ratings and rising funding costs”, chief financial officer James von Moltke told an investor conference on Wednesday, as the German bank goes on a charm offensive to lift its share price from record lows.
/jlne.ws/2xQaBrt

Crispin Odey and other bears reap big gains as volatility jumps; Hedge funds winning from short bets in stocks and bonds
Miles Johnson in London and Lindsay Fortado in New York – FT
A hedge fund run by Crispin Odey, the London-based investor who has in effect bet his entire fund on a spectacular market collapse, has gained 19.9 per cent in the year to date helped by an outsized bearish bets on equities and government debt.
/jlne.ws/2xQAmI7

JPMorgan Sees a Busy Season for London IPOs Out of Africa
Loni Prinsloo – Bloomberg
Investors seeking growth that Europe, U.K. just can’t deliver; At least six companies weighing dual listings, bank says
JPMorgan Chase & Co. is having one of its busiest years yet for African companies looking to trade their shares in both London and local equity markets such as the Johannesburg Stock Exchange.
/jlne.ws/2sMkgtj

UBS Is Cutting Asset-Management Jobs
Jan-Henrik Foerster , Sonali Basak , and Peggy Collins – Bloomberg
Firm redirects resources to passive products, sustainability; At least 100 jobs said to have been eliminated already
UBS Group AG’s asset-management head Ulrich Koerner is adding job cuts to a raft of initiatives intended to turn around the business.
/jlne.ws/2xM1DeO

AIG eyes expansion of life and retirement unit; Brian Duperreault says he is ready to do another big deal if he found the right target
Alistair Gray and Oliver Ralph – FT
AIG’s chief executive has said he would do another multibillion-dollar acquisition “in a heartbeat” if he could find the right target, as he eyes potential expansion of the US insurer’s life and retirement business overseas.
/jlne.ws/2xQGPTD

Deutsche Bank close to completing investment banking cuts; German bank’s finance chief struck an upbeat tone on the future of the institution at a conference in Frankfurt
Clare Dickinson – Financial News
Staff cuts at Deutsche Bank’s investment banking unit should largely be finished by the end of the month, the German lender’s finance chief has said.
/jlne.ws/2xPUABJ

Regions

Europe fund managers polarised on Italy; Growing concerns over Italian stocks and the effects of possible contagion
Kate Beioley – FT
European fund managers are deeply divided in their response to Italy’s political upheaval as some seize on the turbulence to buy the country’s bonds while others take a scythe to their Italian holdings.
/jlne.ws/2xQ9Z59

Britain Has Gone Nine Days Without Wind Power
Rachel Morison – Bloomberg
Forecasters see wind output staying low for at least two weeks; Wind generating 4.3% of U.K. electricity on Wednesday
Britain’s gone nine days with almost no wind generation, and forecasts show the calm conditions persisting for another two weeks.
/jlne.ws/2sMjyw9

Brexit

Paul Dacre, the Controversial British Newspaper Editor Blamed For Brexit, Announces Retirement; To some Paul Dacre is the godfather of the British press—to others he’s the arch enemy of minorities who’s poisoned discourse in the country.
Jamie Ross – The Daily Beast
To many, he’s the most brilliant and successful British newspaper editor of his generation. To others, he’s the arch enemy of women, immigrants, and countless other minorities, who has done more to stoke up hatred and division in his home country than anyone else.
/jlne.ws/2sRzZHQ

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First Read $26,851/$300,000 (9.0%) Denise Knabjian ++++ Hits & Takes JLN Staff The U.S. has surpassed the 25 million Covid-19 infections level, according to data reported Sunday by Johns Hopkins University. JPX has signed a memorandum of understanding, or MOU,...

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ETF trading surges on European stock exchanges

ETF trading surges on European stock exchanges

First Read $26,851/$300,000 (9.0%) Denise Knabjian ++++ Hits & Takes JLN Staff The U.S. has surpassed the 25 million Covid-19 infections level, according to data reported Sunday by Johns Hopkins University. JPX has signed a memorandum of understanding, or MOU,...

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