Futures exchanges eye shift to ‘Flash Boys’ speed bumps

May 30, 2019

First Read

Hits & Takes
By JLN Staff

John McPartland resigned from his position as senior policy advisor in the Financial Markets Group at the Federal Reserve Bank of Chicago. He has accepted a position with Hidden Road Partners LP, a quantitative investment firm.~JJL

Former Chicago Board of Trade executives Bill Boyk and Fred Grede are no longer with Bcause and their names were removed from the Bcause website. There were some other departures as well for Bcause, which is fighting bankruptcy.~JJL

The Deutsche Boerse speed bump pilot starts on June 3, and will “park” German and French stock orders for 1 millisecond. That is one one-thousandth of a second. The Intercontinental Exchange‘s speed bump for gold and silver futures will be 3 milliseconds.~JK

FIA’s Emma Davey‘s not-so kilt challenge for Futures for Kids has raised £1,993.43 so far, of her £5,000 target. To donate to a great person and a great cause, click HERE and help Emma reach her goal.~JK

The Associated Press ruled ‘crypto’ Isn’t a substitute for ‘cryptocurrency’ in their AP Stylebook, which we live by here at John Lothian News.~JJL

Also, the newest AP Stylebook is out, and in addition to the “crypto” ban, it contains new entries on vaping, budtender, and deepfake, as well as a new health and science chapter.~SR


Blockchain officially confirmed as slower and more expensive
Izabella Kaminska – FT
Hat tip to Joe Weisenthal at Bloomberg for flagging the following shocker from the Bundesbank on Wednesday (our emphasis): A trial project using blockchain to transfer and settle securities and cash proved more costly and less speedy than the traditional way, Germany’s central bank president said.

*****Believe the hype, or the un-hype?~JJL


US energy department rebrands gas exports ‘molecules of freedom’
The US Department of Energy said the expansion of a Texas facility meant more “molecules of US freedom” could be produced and exported worldwide.
The facility, based in Quintana, produces liquified natural gas (LNG).
The move was a clear indication of US commitment to promoting clean energy, the statement said.

***** I am going to use some molecules of freedom to cook some freedom fries later today.~JJL


KPMG loses veteran female partners over male colleague’s conduct
Sarah O’Connor and Madison Marriage – The Financial Times
Two of KPMG’s high-flying female partners have quit their jobs in response to the way the Big Four accounting firm has dealt with concerns about alleged bullying by a senior male partner in the UK. The departures have caused shock and dismay among staff at the firm, which has already faced a bruising period following a series of accounting controversies that have sparked criticism of its culture and values.

***** There is a right way and a wrong way. Try the right way.~JJL


KRM22 enters into agreement to acquire Object+ for up to $3.9m
Financial risk management software company KRM22 entered into an agreement to acquire Object+ for up to $3.9m. The acquisition of Object+’s technology products would expand KRM22’s market risk solutions to pre-trade and at-trade with direct connectivity to major global exchanges, the company said.

*****Another former sponsor of MarketsWiki bought by KRM22.~JJL


Wednesday’s Top Three
Our top read pieces of the day on Wednesday were led by the CME Group announcement CME Group to Launch Next Generation of CME SPAN Margin Methodology. There are some interesting upgrades to the margining platform. Second was the top read story on Tuesday, The 10 traits that make a truly exceptional employee from Quartz. Third was Bloomberg’s U.S. Risks ‘Devastating’ Blow From China’s Rare Earths Monopoly


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Lead Stories

Futures exchanges eye shift to ‘Flash Boys’ speed bumps; High-frequency traders fight effort to put brakes on ultrafast transactions
Philip Stafford – FT
After years of trying to cater to their quickest customers, the world’s biggest futures exchanges are now looking to slow them down. Deutsche Börse’s Eurex will start a pilot scheme next week that introduces tiny delays, or “speed bumps”, to the trading of options on French and German stocks. The London Metal Exchange is also set to receive approval for a similar initiative, from UK authorities.

U.S. exchanges must face renewed high-frequency trading claims: judge
Jonathan Stempel – Reuters
A Manhattan federal judge has ordered seven U.S. stock exchanges to face proposed class-action claims that they defrauded ordinary investors by quietly enabling high-frequency traders to trade faster and at better prices.

Wall Street Sees a Win in SEC’s Crackdown on Broker Conflicts
Benjamin Bain and Robert Schmidt – Bloomberg
New rule requires firms to act in clients’ ‘best interest’; Critics say regulations won’t eliminate shady practices
Wall Street is finally getting tougher rules that crack down on industry conflicts of interest. Bankers are hardly sweating it.

China Puts U.S. Soy Buying on Hold as Tariff War Escalates
Bloomberg News
Nation doesn’t plan to cancel previous purchases, people say; Perdue has said China pledged to buy another 10 million tons
China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated, according to people familiar with the matter.

ADM’s top grain-trading executive leaves in latest reshuffle; Chicago-based company will fold four divisions into three in realignment
Gregory Meyer – FT
Archer Daniels Midland is parting ways with its top grain-trading executive as it undertakes a second internal realignment in 15 months, joining a lengthening list of agribusinesses shuffling senior ranks. Chicago-based ADM said on Wednesday it would fold four divisions into three as its origination and oilseed businesses become one called ag services and oilseeds. The two predecessor divisions produced 60 per cent of ADM’s $3.4bn in operating profit before tax in 2018.

Britain is now stranded in Brexit limbo; Barring a referendum, doing nothing looks increasingly like the default option
Philip Stephens – FT
Enough. Britain must make up its mind about Brexit. Whether it’s crashing out, a resurrected deal or another referendum to settle the issue, the nation cannot remain trapped in a dismal nether world stranded between leave and remain. Halloween, October 31, is the deadline.

Fed Hopeful Shelton Questions Value of Bank’s Dual Mandate
Christopher Condon and Craig Torres – Bloomberg
Shelton says she’s unsure maximum employment is Fed’s job; Would rather financial markets be left to set interest rates
Judy Shelton, a conservative economist being considered by the White House for a spot on the Federal Reserve’s Board of Governors, isn’t convinced the goals set for it by Congress are relevant for the U.S. central bank.

Ruth Madoff’s $600,000 Deal With Trustee Approved By Judge
Erik Larson – Bloomberg
A $600,000 settlement between Bernard Madoff’s wife and the trustee raising money for victims of the con man was approved by a New York judge, resolving a decade-old lawsuit against the former socialite.

Investors Brace for a New Cold War That Will ‘Last Our Careers’
Enda Curran and Bei Hu – Bloomberg
Dalio, Mobius, Jen say U.S.-China fight won’t end anytime soon; The conflict is roiling markets as it expands beyond trade
Ray Dalio calls it a “long ideological war.” Mark Mobius sees little hope for a quick resolution. And Stephen Jen says we’re witnessing the start of a 15-round fight.

Bitcoin Billionaires — return of the Winklevoss twins; Ben Mezrich’s account of the brothers’ move makes an easily digested cryptocurrency primer
Richard Waters – FT
Some books aren’t really books at all: they’re thinly disguised movie pitches that have been fleshed out to sit between hard covers.

Companies Like Apple That Depend on Rare Earth Metals Have Nowhere to Turn
Sophia Cai – Barron’s
China’s threat to clamp down on exports of rare-earth metals poses problems, because those exports account for more than 80% of U.S. rare-earth imports, according to the U.S. Geological Survey. China not only mines the minerals but also has most of the world’s processing capacity.

Bump in the night: FX flash crashes put regulators on alert
Saikat Chatterjee, Trevor Hunnicutt – Reuters
The increasing frequency of flash crashes in the $5.1 trillion-a-day foreign exchange market has regulators scrambling for answers.

Investors aren’t prepared to weather a devastating summer stock market tornado
Brian Sozzi Yahoo Finance
One has to wonder if some investors are even watching the markets and rising trade tensions between the U.S. and China. Because clearly, many remain upbeat on stocks (at still high relative valuations) despite all the increasingly negative news swirling around this month.

Exchanges, OTC and Clearing

Nasdaq Commodities to launch on-request price quotes for members
Nasdaq Commodities will introduce a new trading system for its members where price quotes will be provided on request, the exchange said in a statement on Tuesday.

Aquis counts growing cross-industry participation on SI connectivity hub; Aquis Market Gateway launched in January 2018 now counts SIs including Jane Street, Citadel Securities and Tower Research Capital as users.
John Brazier – The Trade
Aquis Technologies, the technology arm of Aquis Exchange, has announced that it has recorded a substantial increase in the use of its systematic internaliser (SI) connectivity hub during the first part of 2019.

Make the most of your IDX visit with Eurex
The annual IDX conference will be held on 4-5 June at the Brewery in London. We, Eurex team, are looking forward to meeting you there! We would like to draw your attention to some of the events we’re organizing, making sure you get the most out of your visit.

HKEX Appoints New International Advisory Council Member
Marcus Wallenberg appointed to HKEX IAC; Becomes fifth Council member
Hong Kong Exchanges and Clearing Limited (HKEX) today (Thursday) is pleased to announce the appointment of Marcus Wallenberg to the HKEX International Advisory Council.

BoardProspects Board Recruitment Platform Announces Partnership with Nasdaq Governance Solutions
BoardProspects.com, the Board Recruitment Network, announced today a new partnership with Nasdaq Governance Solutions, a business of Nasdaq, Inc. (Nasdaq:NDAQ), to provide its members with access to Nasdaq Boardvantage®, an award-winning board portal and collaboration software solution.

Performance Bond Requirements – Agriculture, Interest Rates and Energy – Effective May 30, 2019
CME Group

Formulating TSE Index Data Correction Policy, etc.
Tokyo Stock Exchange, Inc. (TSE) has considered formulation of “TSE Index Data Correction Policy”, taking into account opinions of market users that were mainly collected through a public comment procedure. As a result, TSE has decided to introduce said policy. In addition, in order to apply said policy, TSE will partially revise “Policies Concerning Calculation of TSE Indices”.

Related Data and TSE’s Comments and Responses regarding “Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure” etc. published
In March, 2019, TSE published the “Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure” and the “Current Issues regarding TSE Cash Equity Market Structure (Summary of Current Issues).”


IHS Markit hires securities finance veteran for APAC; IHS Markit hires from Digital Asset Holdings in APAC to lead new services and solutions for beneficial owners.
Joe Parsons -The Trade
IHS Markit has hired Stewart Cowan to lead its securities finance product in the Asia-Pacific region.

General Atlantic in talks to sell stake in energy data provider Argus; Sale could value Argus at around £2bn amid robust investor interest in specialist data groups
Anjli Raval and Javier Espinoza – FT
General Atlantic, the US-based investor, is in advanced talks to offload half its stake in energy information provider Argus amid a booming market for specialist data groups, according to people with direct knowledge of the matter.

How governments are beginning to regulate AI; The first international accord on AI development comes as countries grapple with the future of governance of the technology
Madhumita Murgia and Siddarth Shrikanth – FT
In a historic step last week, 42 countries came together to support a global governance framework for one of the most powerful emerging technologies of our times — artificial intelligence.

Add Cyberattacks to the List of Municipal Bond Credit Risks
Martin Z Braun – Bloomberg
Baltimore ransomware attacks underscore threat: Breckinridge; More than 20 ransonware attacks on municipalities this year
Huge pension debt. Crumbling infrastructure. Climate change. Now add cyberattacks to the list of things that municipal bond investors should worry about.

JP Morgan turns to machine learning for options hedging
New models sidestep Black-Scholes and could slash hedging costs for some derivatives by up to 80%

How To Identify What Technologies To Invest In For Digital Transformation
Peter Bendor-Samuel – Forbes
Unfortunately, two common situations in digital transformation cause CIOs (or others leading the transformation) to deliver little or no business value. An Everest Group study last year found that 73% of the digital transformations that we studied failed to provide any value whatsoever, and 78% failed to achieve their business objective. Put another way, only 22% achieved their business objective. In both common situations that lead to delivering little or no value, the executives leading the transformation took a technology-first approach. In this blog, I’ll explain how this leads to digital transformation failures and explain an alternative approach that succeeds in delivering value.


Robinhood’s Free Crypto Trades Powered by Chicago’s Jump Trading
Matthew Leising and Benjamin Bain – Bloomberg
Robinhood Markets Inc.’s move to add cryptocurrencies trading last year was certainly a popular one, helping the maker of the free trading app double its customer base. But it needed help to pull it off.

Salesforce Joins Blockchain Bandwagon With New Ledger Tool
Nico Grant and Olga Kharif – Bloomberg
Leader in customer relations software has catching up to do; Provides secure system for clients to work with partners
Salesforce.com Inc. unveiled a blockchain service in a bid to boost revenue and keep up with peers in digital ledgers, joining a growing list of companies that have sought to harness the emerging technology.

Cashscript Is Coming, Bringing Ethereum-Like Smart Contracts to Bitcoin Cash
Jamie Redman – Bitcoin.com News
On May 27, the analytics and data web portal Coin Dance announced the team has added the Cashscript project to the website’s development tracker. Cashscript is a high-level language that enables basic smart contract functionality on the Bitcoin Cash (BCH) network.

US Congressmen Urge Presidential Economic Advisor to Hold Blockchain Forum
Ana Alexandre – Cointelegraph
A group of United States congressmen has requested that Lawrence Kudlow, the director of the National Economic Council, hold a blockchain forum, in a letter published on May 24. A group of seven congressmen, including Trey Hollingsworth, Darren Soto, Bill Foster, Tom Emmer, Ted Budd, Josh Gottheimer, and David Schweikert, has submitted a request to hold a forum on blockchain technology.

Project Libra: Everything We Know About Facebook’s Cryptocurrency
Brady Dale – Coindesk
The world’s biggest social media company appears dead-set on launching its own cryptocurrency. Facebook has yet to announce plans publicly but media reports on its crypto ambitions have emerged over the past six months, painting a partial picture of how the social network wants to capitalize on blockchain technology. In short, a team led by former PayPal president David Marcus is building an asset-backed cryptocurrency, one designed to operate within the company’s existing messaging infrastructure (WhatsApp, Instagram and Facebook Messenger).

Associated Press Rules ‘Crypto’ Isn’t a Substitute for ‘Cryptocurrency’
John Biggs – Coindesk
The AP Stylebook, a venerable handbook for journalists, academics and other writers, has issued a guideline that should make the infosec community happy – if not cryptocurrency enthusiasts. In short, don’t call digital money “crypto.” The six-letter word was traditionally associated with cryptography, but in recent years has been used to refer to bitcoin and the plethora of copycats and competitors that followed it, to the chagrin of many security specialists.

Crypto to Venezuela’s rescue? A non-profit uses digital coin to ease crisis
Grete Suarez – Yahoo Finance
A charity founded by Coinbase’s CEO Brian Armstrong is donating cryptocurrency to citizens in Venezuela, with the country roiled by famine, disease and political turmoil. As Venezuela’s political and economic crisis reaches a boiling point, GiveCrypto.org has figured a workaround to a widespread shortage of money. The organization is donating cryptocurrency to Venezuelans in need, to buy groceries and household goods. “We early on selected Venezuela as where we are going to work, primarily because money is so broken there,” said Joe Waltman, executive director of GiveCrypto.org told YFi PM in an interview.

Former Goldman Sachs Exec Leaves Blockchain.Com for Ripple
Helen Partz – Cointelegraph
Former Goldman Sachs exec Breanne Madigan has left her position at crypto wallet provider Blockchain.com to join Ripple, crypto media outlet The Block reported on May 28. Madigan, a Wall Street veteran with about 14 years of experience at major global investment bank Goldman Sachs, has reportedly left Blockchain.com after serving there as Head Institutional Sales and Strategy for 14 months, according to her LinkedIn profile.

Another Satoshi: Second Copyright Filing Appears for Bitcoin White Paper
Daniel Palmer – Coindesk
Craig Wright, the Australian entrepreneur who recently and controversially filed copyright registrations for the bitcoin white paper and original code, now has a legal rival.

How Billionaires Are Buying Up Bitcoin
Billy Bambrough – Forbes
Far from the murky, impersonal world of online bitcoin and cryptocurrency exchanges, billionaires who want to buy bitcoin do it through an office in west London’s upmarket Mayfair—and the relatively new service is becoming increasingly popular amongst the super rich with an interest in crypto.

Three of Ireland’s ‘Big Four’ Banks Using Blockchain to Verify Staff Credentials
Yogita Khatri – Bloomberg
Three of Ireland’s “Big Four” banks are using blockchain tech to verify employees’ credentials. The Bank of Ireland, AIB and Ulster Bank are using a blockchain solution from Deloitte for the pilot initiative, news outlet Fora reported Thursday.

Vanguard Is Now Using Blockchain Technology To Help Manage $1.3 Trillion In Index Funds
Jeff Kauflin – Forbes
Vanguard, the 44-year-old mutual giant famous for popularizing index investing, has completed one of the most noteworthy implementations of blockchain technology for a financial institution to date. It’s now using blockchain—the distributed ledger software that underpins cryptocurrencies like bitcoin—to help manage data for some of its most widely used financial products, including its second-largest mutual fund, the $800 billion Total Stock Market Index Fund.


Nancy Pelosi cannot hold the line on Trump impeachment; Robert Mueller’s statement has put the spotlight squarely on the House speaker
Edward Luce – FT
Had Robert Mueller been speaking in an earlier age his message would have come across loud and clear: it is the job of Congress, not the legal system, to deal with Donald Trump. Over to Capitol Hill.

Mueller statement raises pressure for Trump impeachment; More Democratic presidential hopefuls call for House speaker Pelosi to begin proceedings
Kadhim Shubber and Courtney Weaver – FT
Nancy Pelosi, the Democratic speaker of the US House of Representatives, is facing intensifying pressure to launch impeachment proceedings against Donald Trump after the dramatic public intervention of Robert Mueller, the special counsel who investigated Russian interference in the 2016 presidential election.

What Is This ‘Private Prosecution’ of Boris Johnson?
Jonathan Browning – Bloomberg
Boris Johnson, the Conservative Party front-runner to become the next U.K prime minister, has often been accused of lying, even before he was a politician. But now he faces a criminal lawsuit over his statements — and one that comes not from the state but a 29-year-old British entrepreneur. It’s only possible because of an ancient quirk of English law that allows for a private prosecution. And it’s a tool that’s becoming increasingly fashionable.

Prosperity Reigns Where Immigrants Live; Trump bashes migrants, but he also employs them. There’s a reason he does so much business in states that attract them.
Matthew A. Winkler – Bloomberg
The hypocrisy of Trumponomics is laid bare by the demonizing of undocumented workers as the Trump Organization profits from them. With so many Trump hotels, residential buildings and golf courses located where migrants are numerous, Employer-in-Chief Donald Trump has enjoyed the economic benefits of immigration. That’s because states with the greatest concentration of immigrants create the most jobs and biggest increase in personal income. Where immigrants are relatively scarce, states generate the fewest jobs and smallest rise in income.

Refusal to remove video shows Facebook enabled Russian election meddling: Pelosi
U.S. House Speaker Nancy Pelosi said on Wednesday that Facebook Inc’s refusal to remove a heavily edited video that attempted to make her look incoherent had convinced her the company knowingly enabled Russian election interference.


ASIC updates information for businesses on ICOs and crypto-assets
ASIC has released new information to help businesses involved with initial coin offerings (ICOs) and crypto-assets to consider their legal obligations and satisfy themselves they are operating lawfully.

ESMA closed for Public Holidays on 30 and 31 May
The European Securities and Markets Authority (ESMA) is closed for Public Holidays on 30 and 31 May and will reopen on Monday 3 June.

ESMA updates Q&AS on MiFID II and MiFIR investor protection and intermediaries
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). The updated Q&As provides new answers on best execution and information on costs and charges.

ESMA adjusts application of the trading obligation for shares in a no-deal Brexit
The European Securities and Markets Authority (ESMA) has further considered the impact of the United Kingdom (UK) leaving the European Union (EU) without a withdrawal agreement (no-deal Brexit) on the trading obligation for shares (STO) under Article 23 of MiFIR and in the absence of an equivalence decision in respect of the UK by the European Commission (EC).

NFA orders New Canaan, Conn. former commodity pool operator and commodity trading advisor Almas Capital Management LLC and its former sole principal Mark Nichols to both not reapply for NFA membership
NFA has ordered New Canaan, Conn. former commodity pool operator and commodity trading advisor Almas Capital Management LLC (Almas Capital) and its former sole principal and associated person Mark Nichols to both not reapply for NFA membership, in any capacity, or act as a principal of an NFA Member.

FCA and PRA jointly fine Raphaels Bank £1.89m for outsourcing failings
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have fined R. Raphael & Sons plc (“Raphaels”) for failing to manage its outsourcing arrangements properly between April 2014 and December 2016.

Investing and Trading

The Bond Market Is Giving Ominous Warnings About the Global Economy; An inverted yield curve has typically not been a good sign.
Neil Irwin – NY Times
You know the moment in a horror movie when the characters are going about their business and nothing bad has happened to them yet, but there seem to be ominous signs everywhere that only you, the viewer, notice?

Corn Prices Climb on Worries Over Size, Quality of Harvest; Inclement weather has disrupted farmers’ planting schedules, forcing them to plant crops late and raising risk of infection
Joe Wallace – WSJ
Crop prices are vaulting higher as massive disruption on U.S. farms raises concerns about the size and quality of this year’s harvest. Prices began taking off in mid-May, after inclement weather put farmers well behind in their planting schedules and raised worries that swaths of farmland wouldn’t be sown at all. The surge continued after the U.S. Department of Agriculture confirmed that farmers had planted a fraction of what they have typically done by this time of year.

Morningstar takes aim at rating giants with $669m DBRS deal; Group looks to break into oligopoly of S&P, Moody’s and Fitch
Richard Henderson and Peter Wells – FT
Morningstar, the financial data company, has redoubled its efforts to crack the credit ratings business with a deal to buy DBRS, the fourth largest agency.

Opinion: This is the only protection your stock-market investments will ever need
Howard Gold – MarketWatch
As the Dow Jones Industrial Average DJIA, -0.87% and S&P 500 index have fallen more than 5% from their recent highs, investors have rushed toward safety. Funds that aim to lower risk and limit stock market losses raised almost $10 billion in the first four months of 2019, The Wall Street Journal reported.


Woodford fund shrinks by £560m as investors pull capital; Accelerating decline by flagship vehicle catches regulator’s eye
Owen Walker and Peter Smith – FT
The size of Neil Woodford’s flagship investment fund has shrunk by £560m in less than four weeks as investors abandon the UK’s best-known portfolio manager following a sustained period of weak performance.

Morgan Stanley’s Gorman Says Stocks Collapse Is Unlikely
Chris Anstey – Bloomberg
Slide in Treasury yields could prove just ‘short-term funk’; Leveraged loans not a systemic risk, Fed on top of it: Gorman
Morgan Stanley Chief Executive Officer James Gorman said financial markets are fragile thanks to worries over the trade war, but a rout isn’t likely given the solid state of the economy and the probability that U.S.-China talks resume.

Poker-Playing Hedge Fund Managers Have an Edge; A new study strengthens the case that skill at the card game helps in the investment decision-making process.
Aaron Brown – Bloomberg
Do poker players make good hedge fund managers? On one hand, there’s skill overlap. Both activities demand aggressiveness, accurate calculations under pressure, keen behavioral insight and shrewd risk-taking. On the other hand, poker seems like a risk-seeking activity, suggesting reckless and overconfident managers. Poker requires deception and gamblers are often considered untrustworthy. Also, time spent learning and playing poker is time taken away from investing.

BGC Partners Announces Its 2019 Annual Meeting of Stockholders
Press Release
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners” or “BGC” or “the Company”), a leading global brokerage and financial technology company, today announced that it plans to hold its 2019 Annual Meeting of Stockholders on Tuesday, June 25, 2019, at 10:00 a.m. ET at the Company’s executive offices in New York City. The meeting will include a brief discussion by Chairman and Chief Executive Officer, Howard W. Lutnick.

EM traders depart Deutsche Bank
Robert Hogg, IFR News
Emerging markets credit traders Vivek Mittal and Vikramdeep Gill have left Deutsche Bank according to sources.

Banks’ rates trading revenues hits lowest since 2006: Coalition
The revenues for the 12 biggest global investment banks from trading fixed income, currencies and commodities (FICC) declined in the March quarter, led by a sharp fall in trading government debt and swaps, according to data from industry watcher Coalition.

HSBC plans retail wealth headcount boost; eyes Singapore expansion
Sumeet Chatterjee – Reuters
HSBC Holdings PLC plans to boost its Asia retail wealth management staff by about 300 by end of this year, with Europe’s biggest lender by assets sharpening its focus on Singapore to add to its presence in core markets of Hong Kong and China.

Wells Fargo adds former Bank of America executive to board
Imani Moise – Reuters
Wells Fargo & Co said on Wednesday the bank’s board of directors had elected former Bank of America Corp executive Charles Noski to join the board.


Why stock investors in China need to prepare for a cold war; Some fund managers have ditched companies that are vulnerable to US export bans
James Kynge – FT
China and the US are “embracing while fighting”, to use a Chinese phrase. The concealed aggression may serve some purpose for the combatants, but for investors it makes it hard to know where the next punches may land.

Zambian Bonds Reach Another Grim Milestone
Paul Wallace – Bloomberg
Zambia’s bonds have reached another grim milestone. The spread on the copper producer’s $750 million of debt maturing in September 2022 rose above 2,000 basis points this week. At 22%, the yield was 20 percentage points more than U.S. Treasuries of an equivalent maturity.

South Africa Is Hobbled by Market Change; Leaving aside the politics and the economy, a re-weighting of emerging markets indexes puts a limit on the country’s attractiveness.
Marcus Ashworth – Bloomberg
The downside of being the most liquid emerging market currency is that it’s hard to avoid the impact when investors turn cold on risk assets. Unfortunately, South Africa’s rand has other issues to wrestle with too. The currency has recovered some of its poise after a selloff on Tuesday, which was sparked in part by nerves around the composition of Cyril Ramaphosa’s new cabinet. But even as the political situation settles, there’s another technical dynamic that will limit the country’s attractiveness: A re-weighting of the MSCI emerging market indexes.

Takeover of little-known Baoshang casts doubt over other small Chinese banks
Ryan Woo, Cheng Leng – Reuters
A rare government takeover of a little-known Chinese bank has revived concerns about the true health of hundreds of small lenders in the country as a slowing economy and souring loans test their capital buffers and drain their reserves.


Kill off spectre of no-deal Brexit, Hammond warns next PM
William James, Kate Holton – Reuters
Britain’s finance minister on Thursday warned those in his party vying for Prime Minister Theresa May’s job that a no-deal Brexit would imperil the economy and urged candidates to tone down irresponsible spending pledges.

EU Softens Post-Brexit Limit on London Trading After Rebuke (1)
Bloomberg Law
Investors will be able to trade all U.K. shares in London; U.K. regulator says not all concerns have been addressed
European Union regulators walked back a policy that would have blocked some equity trading on London exchanges after Brexit, following criticism from money mangers and officials in the U.K.


Moneyball for Cattle Is Creating an American Steak Renaissance; A strong economy and a genetic focus on marbled meat is paying off for steakhouses and ranchers.
Lydia Mulvany, Michael Hirtzer – Bloomberg
Reliance is a black Angus bull with a long, fluid stride. He has a quiet confidence when he walks. It’s one of the qualities that led cattlemen to bid up the prized animal to $150,000 during a recent bull sale at Woodhill Farms in Viroqua, Wisconsin.

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