Ushering In The OCC’s Renaissance – John Davidson, OCC
The OCC’s ENCORE clearing system, while resilient, is long in the tooth and inflexible. OCC’s Project Renaissance aims to revamp the central counterparty’s data, risk management and clearing systems. The OCC chose Cinnober as a partner for the multi-year project. While that key initiative is something the OCC has planned for years, the SEC’s decision not to renew the clearinghouse’s capital plan was a curveball.
In this video from JLN’s Industry Leader Series, OCC CEO John Davidson talks about those two developments.
Watch the video »
Hits & Takes
Amid the bitcoin rally, CME Group reported a record daily volume day on April 4, posting more than 22,500 contracts, topping the prior record of 18,300 on February 19. ~JK
This last Saturday I attended a reunion of alumni of University Church at Purdue, a multi-denomination campus ministry where I worked and was part of a unique pre-seminary Christian community. Many of my friends from University Church went on to become ministers, or serve others in various ways. One of the ministers who led us, Don Nead, was in attendance at the age of 90.~JJL
Yopo, the new global social network for individuals, nonprofits and companies who want to give back and make a difference,” founded and headed up by former FIA Europe chief executive Simon Puleston-Jones, has been renamed WokenUp. ~SR
Justin Sun, founder and CEO of TRON (TRX) announced over Twitter that the “Sun Network,” a major expansion to the TRON Network, will be released soon (scheduled for May 30, 2019). According to an article on TRON’s Medium account that was linked in Sun’s Twitter post, the move will allow for the “unlimited” expansion of TRON’s “dAppchain,” a blockchain designed specifically for the development of decentralized applications (“dApps”).~MR
What is the over-under on the number of Cinnober jobs lost due to its acquisition by Nasdaq? Any thoughts?~JJL
Friday I learned we have a verbal agreement from a huge open outcry trader from the CME Group to participate in our Open Outcry Traders History Project. Progress is being made.~JJL
HBOs Game of Thrones latest season opens next Sunday. Who will end up on the Iron Throne at the end?~JJL
The price of Brexit has been £66 billion so far, plus an impending recession — and it hasn’t even started yet
Jim Edwards – Business Insider
The damage to the UK economy due to Brexit has cost £66 billion ($86 billion) so far, and left the United Kingdom teetering at the brink of a new recession, according to economic data published last week.
***** Everything has a cost, even self-inflicted wounds.~JJL
Lloyd’s to bar ‘under-the-influence’ staff from entering building; Tough new code on alcohol and drugs to be imposed following sexual harassment claims
Judith Evans – FT
People under the influence of alcohol or illegal drugs will be barred from entering Lloyd’s of London under a “modernised” code of conduct to be introduced this week following sexual harassment claims at the 331-year-old insurance market.
*****This basically cuts the work day down to 4 hours.~JJL
You Say Security, I Say Utility; Midtrial Acquittal
Gary DeWaal – Bridging the Week
The Securities and Exchange Commission’s FinHub group issued guidance last week, providing a checklist of characteristics to help determine whether a cryptoasset may constitute a security or not. It’s helpful, but the introduction of a concept called “Active Participant” may be problematic. Contemporaneously, the SEC’s Division of Corporation Finance published a no-action letter to an air charter service company that intends to issue a stablecoin-type cryptoasset to serve as a means of payment for booking flights through its permissioned blockchain relying on smart contract technology. Staff said the token did not need to be registered as a security; however, this conclusion may also be less helpful as precedent than apparent.
Friday’s Top Three
Our top read story on Friday was Thom Thompson’s JLN continued coverage of the Jitesh Thakkar trial, in Defense rests in a “thin” case against Jitesh Thakkar. Second was Bloomberg’s piece Dalio Sounds Alarm on Capitalist Flaws, Warns of Revolution. Third was The Trade’s Virtu Financial and MarketAxess join forces on global ETF and fixed income project
148,573,142 pages viewed; 23,674 pages; 218,097 edits
Gold Badges and Boozy Breakfasts: Inside the Frenetic Fight for IPO Listings; The battle for listings between NYSE and Nasdaq is set to be epic this year, with values potentially beating the dot-com-era record
Corrie Driebusch – WSJ
When BJ’s Wholesale Club Holdings Inc. was planning its IPO last year, a team from Nasdaq Inc. descended on its headquarters in Westborough, Mass., to try to persuade it to list on the exchange.
LME Code of Conduct to apply to third party events; The commodity trading industry is under pressure to improve gender diversity
Neil Hume – FT
The first code of conduct in the 142-year history of the London Metal Exchange will also apply to third party events that carry its branding.
The Perils of After-Hours Stock Trading; Perhaps the biggest one: It tempts investors to react to a news event, in hopes of making a quick profit
Nick Ravo – WSJ
Stock exchanges technically open and close at certain times of day, but investors can still trade shares of stocks and exchange-traded funds during sessions before the opening and after the close.
Euronext Clears Another Hurdle in Effort to Acquire Oslo Bors
Will Hadfield – Bloomberg
Euronext NV cleared another hurdle in its bid to acquire Norway’s stock exchange after the nation’s markets regulator said the Franco-Dutch exchange operator and rival bidder Nasdaq Inc. would both make suitable owners.
Nasdaq, Euronext deemed fit and proper owners of Oslo Bors
Sudip Kar-Gupta, Terje Solsvik – Reuters
Stock market operators Euronext and Nasdaq, both vying for the control of Norway’s Oslo Bors, have been deemed fit and proper owners by the Norwegian financial supervisory authority, the finance ministry said.
Judge in Barclays-Qatar Criminal Fraud Trial Discharges Jury
Franz Wild and Jonathan Browning – Bloomberg
Ex-Barclays CEO Varley and three others accused of dishonesty; First jury trial of bank bosses connected to financial crisis
A judge discharged the jury in the fraud trial of former Barclays Chief Executive Officer John Varley and three other executives in connection with payments to Qatar at the peak of the 2008 financial crisis.
FCA official pledges to use criminal powers against dirty money
Enforcement chief Mark Steward flags ‘large number of investigations’
Yusuf Khan – The Financial Times
A top official at the UK’s financial watchdog has fired a warning shot to banks by promising to use its criminal powers in cases where City of London firms launder dirty money.
Flagging a “large number of investigations”, Mark Steward, the head of enforcement at the Financial Conduct Authority, pledged to use the “full intention” of rules that cover the laundering of ill-gotten gains. These rules were recently enhanced to allow the watchdog to use both its criminal and regulatory powers.
Deutsche Bank introduces client clearing through LCH CDSClear; Deutsche Bank is the first German bank to offer client clearing in US and European credit default swaps via LCH CDSClear.
Hayley McDowell – The Trade
Deutsche Bank has gone live as the first German investment bank to offer client clearing for credit default swaps through LCH CDSClear.
Trading Firm Jane Street Challenges Wall Street; High-tech company known for its dominance of the exchange-traded fund market is pushing into corporate bond trading
Matt Wirz – WSJ
A high-tech trading firm known for its dominance of the exchange-traded fund market is pushing into territory long controlled by Wall Street banks: corporate bonds.
DTCC Expands One-Stop Trade Reporting With New Eligibility Capabilities Provided By Droit
The Depository Trust & Clearing Corporation (DTCC), today announced that it is partnering with Droit, the leader in real-time transactional compliance, to enable market participants to leverage Droit’s reporting eligibility capabilities within DTCC’s Pre-Reporting Transformation Services for supported G20 regimes as well as the forthcoming Securities Financing Transactions Regulation (SFTR).
China steps up retail access to $5tn government bond market; Purchase period for individual investors extended to entire month from ten days
Don Weinland and Hudson Lockett – FT
China is inviting in more retail investors to its Rmb33.5tn ($5tn) government bond market, in a bid to deepen liquidity while also boosting the sale of bonds that are fuelling a rebound in the world’s second biggest economy this year.
China’s bond market is opening — but are the rating agencies ready?; Questions over the integrity of credit ratings have long dogged the $12.5tn market
Hudson Lockett and Yizhen Jia – FT
When a Shanghai unit of CEFC China Energy sold its first bonds to domestic investors in 2014 the company carried an “AA” credit rating, a grade that in global markets would signal a very strong ability to pay off its debts. The company held at or above that level for several years: right up until a few weeks before it defaulted. A missed payment last May was the first of 11 defaults on bonds totalling Rmb28.1bn ($4.2bn) in 2018, according to Refinitiv data.
Ex-Morgan Stanley Banker Is Leading the Charge Toward Boutiques; May Nasrallah is taking on financial goliaths in the Middle East.
Matthew Martin – Bloomberg
In the midst of the financial crisis, as bankers around the world worried about their fate, May Nasrallah made a bold decision.
Russia Eyes Greater Energy Dominance as Novatek Taps Arctic
Olga Tanas, Dina Khrennikova, and Anna Shiryaevskaya – Bloomberg
Company seen as the driving force behind Russian LNG expansion; Russia to become fourth-largest exporter by 2030: Novatek CFO
Almost 1,500 miles from Moscow, the tiny port of Sabetta nestles in a desolate Russian Arctic peninsula. A former outpost for Soviet geologists, it’s now the site of Russia’s most ambitious liquefied natural gas project, operated by a company that only entered the market just over a year ago.
China Is on a Big Gold-Buying Spree
Ranjeetha Pakiam – Bloomberg
Inflows since December increase to 42.9 tons as holdings climb; Central-bank demand will help to support prices, Goldman says
China’s on a bullion-buying spree as Asia’s top economy expanded its gold reserves for a fourth straight month, adding to investors’ optimism that central banks from around the world will press on with a drive to build up holdings. Prices advanced back toward $1,300 an ounce.
Exchanges, OTC and Clearing
Introduction of Code of Conduct for the LME and LME-branded events
LME Group operates according to a clear set of values that guide its decision-making and the behaviour of its employees. Today, as part of its stated commitment to high standards of both conduct and transparency, the LME is publishing its Code of Conduct.
SGX pioneers interest rate derivatives on Japan repo
Singapore Exchange (SGX) is launching Asia’s first Total Return Futures (TRF), based on the Nikkei 225 Index, as it continues to pivot towards futurised derivatives. The new futures solution further expands SGX’s suite of risk-management tools that meets increasing market demand for new trading instruments, providing greater transparency and capital efficiencies.
Deutsche Bank goes live offering client clearing at LCH CDSClear
LCH, a leading global clearing house group, today announced that Deutsche Bank has gone live as the first German bank to offer client clearing via CDSClear. Asset management firms MEAG and Union Investment are clearing European and US credit default swaps at LCH.
Euronext welcomes the positive recommendation from the Norwegian Financial Supervisory Authority, concluding that Euronext would be a suitable owner of Oslo Børs VPS
Euronext, the leading pan-European exchange, announces today that it has received the recommendation by the Norwegian Financial Supervisory Authority (Finanstilsynet) to the Norwegian Ministry of Finance, recommending that Euronext should be approved as a suitable owner of up to 100% of the capital of Oslo Børs VPS, as applied for, without ownership or other restrictions.
Merger Benefits Diminished Under Existing JPX-TOCOM Plan; The current plan to keep crude oil and petroleum products on TOCOM will diminish the benefits of the planned merger with JPX.
Government authorities still do not see eye to eye over the planned consolidation of TOCOM (the Tokyo Commodity Exchange) into JPX (Japan Exchange Group), despite a recent agreement for the two to merge by October.
Expansion of the Frankfurt Stock Exchange; Your event and conference spot in the heart of the city
Deutsche Börse is expanding the historic central Frankfurt building that is home to the famous trading floor seen so often in the media into an attractive focal point for the financial center of Frankfurt and for the general public.
Fintech start-up Branch raises funding for EM lending push; New alliance with Visa helps loan provider pursue new markets
Tim Bradshaw – FT
Branch International, a Silicon Valley-based start-up that offers loans to first-time borrowers and customers without bank accounts in Africa, India and Mexico, has raised $170m in new financing.
Tech firms face tough UK rules to end ‘self-regulation’; Plans for sweeping sanctions and oversight include ‘duty of care’ to tackle harmful activity
Sarah O’Connor, George Parker and Madhumita Murgia – FT
Technology companies in the UK face new rules, sanctions and oversight by an independent regulator as the government declared the “era of self-regulation” in the sector to be over.
Bitcoin Exchange Kraken Sued by Former Trading Desk Manager
Vildana Hajric and Matthew Leising – Bloomberg
Trading desk manager alleges he was promised a 10% commission; Suit says New York desk generated over $19 million in profits
A former employee of Kraken, one of the oldest Bitcoin exchanges, is suing the crypto platform for allegedly failing to pay him for work he did.
Vitalik takes on Roubini in Seoul to defend crypto’s offer of anonymity and social change
If you were a crypto enthusiast in Seoul this week, you were almost certainly witnessing the showdown between two of the industry’s most recognized faces. Ethereum co-founder Vitalik Buterin and renowned crypto skeptic, Nouriel Roubini went head to head at the Deconomy Conference in South Korea yesterday in front of over 1,000 people to discuss the true value of digital assets. If you weren’t fortunate enough to be in Seoul, however, we’ve rounded up the key points of debate at the much-awaited event.
Crypto Market Capitalization Hits 5-Month High Above $185 Billion
Sebastian Sinclair – Coindesk
The combined value of the cryptocurrency market rose to $185.89 billion earlier today, its highest level since Nov. 18.
The Game Is On For Bitcoin, Ethereum, Ripple And Litecoin
Panos Mourdoukoutas – Forbes
Investors, traders, and speculators are jumping into the Bitcoin and cryptocurrency markets again, sending prices soaring across the board. Over the last seven days, Bitcoin has gained 25.74%, Ethereum 18.76%, Ripple 16.12%, and Litecoin 53.20%–see table 1. The rally was extended across the cryptocurrency markets, with 94 out of the top 100 cryptocurrencies gaining in price-see table 2.
CME Group reports “record trading day” on bitcoin futures
The Block Crypto
CME Group, the Chicago-based derivatives marketplace, has experienced an all-time high trading volume on April 4, 2019, according to a Tweet from the firm on Friday. According to CME Group, the firm recorded over 22,500 bitcoin futures contracts on April 4, which is equivalent to about 112,700 bitcoins. This surpassed its previous record of over 18,300 (equivalent to 64,300 BTC) on February 19, 2019.
The Media’s Cringeworthy Coverage of Bitcoin’s Latest Price Surge
Sebastian Sinclair – Coindesk
Mainstream news coverage of cryptocurrency is often disingenuous or factually incorrect – that’s certainly no surprise given the nascent technology is widely misunderstood. But if one would have thought that recent milestones – bitcoin’s 10th anniversary, the arrival of crypto projects from the likes of JP Morgan and Facebook – would have encouraged the media to get smarter, this week’s news shows attitudes at major publishers haven’t changed much.
***The author of this article holds no cryptocurrency, but certainly has plenty of opinions.~MR
SEC Guidance Sparks Fear and Loathing in Crypto Industry
Jeff John Roberts – Fortune
When the Securities and Exchange Commission this week issued guidelines for cryptocurrency companies that want to sell digital tokens, many in the industry praised the SEC for new regulatory clarity, but also privately seethed the agency had gone too far.
Cryptocurrency Exchange Platforms are Now Increasing Trading Fees Due to Crashing Volumes
Bitcoin Exchange Guide
TradeBlock, a leading provider of cryptocurrency trading tools for institutional investors, has released its research report on April 4, 2019, detailing how the prolonged bear market that brought about declining trading volumes has also forced cryptocurrency exchanges to increase their fees.
The Current And Future Implications Of Cryptocurrency For The Legal Industry
Michael Miglio – Forbes
One of the features of cryptocurrency that’s often touted as a benefit by its many supporters is its lack of regulation, relatively speaking. Blockchain technology has given us the means to cut out the middlemen (banks and governments) in peer-to-peer transactions. It’s also arguable that legislators should increase their regulation, but that hasn’t prevented a number of legal issues from arising.
Litecoin Has Climbed More Than 200% This Year
Charles Bovaird – Forbes
Litecoin prices have tripled in 2019, climbing higher as the digital currency benefits from numerous tailwinds. The cryptocurrency, which is very similar to its digital sibling bitcoin, reached an annual high of $98.89 on April 3, CoinDesk price data reveals. At this point, the altcoin (a digital currency besides bitcoin) had gained almost 230% year-to-date (YTD), additional CoinDesk figures show. The cryptocurrency has pulled back since then, giving up some of its returns, but reached as much as $90.21 earlier today, still up more than 200% YTD.
Controversial Trump pick gets World Bank top job
Donald Trump’s pick for World Bank president, David Malpass, has officially been approved for the role. Mr Malpass, a Trump loyalist, was a senior economic adviser to the US president during his 2016 election campaign. His appointment has stirred debate, as some worry that Mr Malpass, a critic of the bank, will seek to reduce its role.
Trump’s Fed Picks Have Fond Memories of the Gold Standard; Stephen Moore and Herman Cain are outside the economics mainstream in wanting to peg the dollar to gold.
Peter Coy – Bloomberg
John Maynard Keynes, the secular saint of left-leaning economists, called gold a “barbarous relic.” Milton Friedman, his counterpart on the right, said a gold standard for the dollar “is not feasible because the mythology and beliefs required to make it effective do not exist.” In 2012, a survey of leading economists by the University of Chicago Booth School of Management found that 34 percent disagreed with a gold standard and 66 percent disagreed strongly.
Hedge-fund billionaire Ray Dalio says capitalism needs urgent reform
Ciara Linnane – MarketWatch
Capitalism is no longer working for most Americans, according to one hedge-fund billionaire, who says the expanding wealth gap dividing the haves and have-nots is creating a volatile environment with disturbing parallels to the economic and social upheaval of the 1930s. Ray Dalio, founder of Bridgewater Associates LP, the world’s biggest hedge fund, says capitalism has developed into a system that is promoting an ever-wider wealth gap that puts the very existence of the United States at risk.
Threats From Trump Often Fall Short
Michael Tackett and Linda Qiu – The New York Times
For President Trump, a threat is frequently his first impulse. He is forceful, declarative and speaks with unvarnished conviction. He has made the theme of promises made, promises kept the anthem of his re-election effort. But his threats often remain just that.
Proposed Rule Change to Extend the Pilot Period Related to FINRA Rule 6121.02 (Market-wide Circuit Breakers in NMS Stocks)
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the pilot period related to FINRA Rule 6121.02 (Market-wide Circuit Breakers in NMS Stocks) to the close of business on October 18, 2019.
FINRA Provides Guidance on Customer Communications Related to Departing Registered Representatives
This Notice addresses the responsibilities of member firms when communicating with customers about departing registered representatives.
CFTC Staff Provides Further Brexit-Related Market Certainty
The Commodity Futures Trading Commission’s (CFTC) Divisions of Swap Dealer and Intermediary Oversight (DSIO), Market Oversight (DMO), and Clearing and Risk (DCR), today announced they will grant no-action relief to provide greater certainty to the global marketplace in connection with the anticipated withdrawal of the United Kingdom of Great Britain and Northern Ireland (UK) from the European Union (EU) with or without a ratified withdrawal agreement (Brexit).
ASIC extends temporary disclosure-related relief for product dashboards
ASIC has amended ASIC Class Order [CO 14/443] to provide legal certainty about the disclosure obligations relating to choice product dashboards.
The ASIC Podcast; Episode 45: Product intervention powers and design and distribution obligations
ASIC has welcomed the passage of key financial services reforms contained in the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) legislation.
UK Financial Conduct Authority and Australian Securities and Investments Commission agree to strengthen cooperation post-Brexit
The UK Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) today announced they have agreed two Memoranda of Understanding to ensure there is continuity once the UK leaves the European Union. The MoUs cover trade repositories and alternative investment funds (AIFs).
Australian regulators cautiously embrace AI to boost compliance; Markets watchdog begins trials designed to tackle misconduct and improve regulation
Jamie Smyth – FT
Australian regulators, bruised by harsh criticism of their failure to prevent banks from ripping off consumers, are turning to artificial intelligence to boost compliance across the finance industry.
Did FCA jump too late to investigate London Capital & Finance?
Alex Ralph – The Times
As far back as October 2015, one would-be investor in London Capital & Finance was writing on an online financial forum that “something does not seem right”. Just over three years later, the Financial Conduct Authority appeared to agree, ordering the investment company to withdraw marketing materials and freezing its assets. Now questions are being asked not only of the business but of the regulator itself. Why the delay?
Hong Kong’s financial regulator urged to keep an open mind on fintech start-ups as city hands out virtual bank licences
Enoch Yiu – South China Morning Post
Financial companies are urging the Hong Kong Monetary Authority to be more open-minded in giving new virtual bank licences as it would become difficult to attract international players to set up in the city.
Investing and Trading
Petroleum and BHP have invested in Carbon Engineering, a start-up developing technology to take carbon out of the atmosphere.
Clifford Krauss – NY Times
SQUAMISH, British Columbia — Everyone knows an electric fan can make people feel cooler on a steamy day. But could fans moderate the planet’s rising temperatures?
Modern Monetary Theory Finds an Embrace in an Unexpected Place: Wall Street
Patricia Cohen – NY Times
The package of eccentric ideas known as modern monetary theory — for example, that annual deficits are too small, and that the United States can essentially print money to pay off its debt — has been on the receiving end of a remarkable level of vitriol.
How’s Your ETF Portfolio Doing? Good Luck Finding Out; Ready-made ‘model portfolios’ are growing—but there is no standardized tracking of performance, making comparisons difficult
Asjylyn Loder – WSJ
These days it is easy to comparison-shop for everything from sneakers to paper towels. But if you’re in the market for a ready-made portfolio of exchange-traded funds—an increasingly popular product with the potential to make or break your finances—it may be a lot tougher.
And the No. 1 Stock-Fund Manager Is…; A Fidelity growth fund wins with a 38% performance gain over the past 12 months
Suzanne McGee – WSJ
What a difference three months can make in the world of top-performing mutual-fund managers.
US investors step in as foreign funds tiptoe away from Treasuries; US budget deficit expected to reach $1tn mark this year
Robin Wigglesworth – FT
The US budget deficit is expected to reach nearly $1tn this year, at a time when foreign investors are cautiously tiptoeing away from the Treasury market. Luckily, American investors are stepping into the breach.
Bond Markets at Risk of Misstep on Inflation, Fidelity Says
Ruth Carson – Bloomberg
Investors are too excited about dovish central banks: Fidelity; Fund is short dollar against the yen, likes Asia EM currencies
As fears of slowing growth spark a frenzy of bond buying around the globe, Fidelity International’s George Efstathopoulos has another risk on his mind: an upsurge in inflation.
Low-Volatility Stocks Can’t Keep Up With the Market
Evie Liu – Barron’s
Low-volatility stocks—or those that tend to have the smallest price moves—outshined the market during the fourth-quarter selloff last year. Now, that magic is gone.
The LNG Market’s Transformation Continues Apace – and Right On Schedule
The Streetwise Professor
In 2014, I wrote a whitepaper (sponsored by Trafigura) on impending changes to the liquefied natural gas (LNG) market. The subtitle (“racing towards an inflection point”) captured the main thesis: the LNG market was on the verge of a transformation. The piece made several points.
What Is ‘Quantamental’ Investing?; This stock-picking approach relies on a combination of quantitative and fundamental investing techniques
Simon Constable – WSJ
Investors increasingly may hear the term “quantamental” being used by financial professionals. It refers to an investment strategy that combines a fundamental approach to investing with a quantitative one, hence quantamental, which combines parts of both words.
A Fund’s Long Time Frame: Forever; Akre Focus Fund’s managers often hold the same small collection of stocks for years
Gerrard Cowan – WSJ
Akre Focus Fund (AKREX) takes buy-and-hold investing to heart, often holding the same small group of stocks for years at a time.
The Current Allure of ‘Ultrashort’ Bond Funds; With the Federal Reserve on hold, and its next move uncertain, investors want to keep their options open
Dan Weil – WSJ
Millennials are an attractive market for many companies. But a fund that focuses on companies that target millennials hasn’t attracted much interest from investors, despite impressive returns.
t has created uncertainty over interest rates, is generating renewed interest in ultrashort-term bond funds.
When to Dump a Loser Mutual Fund; Funds in the bottom of the quarterly rankings share some attributes that investors can watch out for
Suzanne McGee – WSJ
What about the losers? Every quarter, this report looks at the funds that excel—the top-performing actively managed U.S. stock funds over the previous 12 months. Focusing on which funds end up on top tells us something about what kind of investment styles and strategies work in the current market environment.
A Million Tons of Copper Is on the Way: It May Not Be Enough
Laura Millan Lombrana and Jack Farchy – Bloomberg
Analysts at industry event this week are in bullish spirits; CRU Group sees copper deficit at 270,000 metric tons by 2023
Giant mines currently under construction will churn out an additional 1 million tons of copper through 2023, but that won’t be enough to fully close an expected gap between supply and demand in the next few years.
JPMorgan Says Watch These Market Correlations for Warnings
Joanna Ossinger – Bloomberg
Watch credit spreads versus equities, strategist Normand says; Divergence of EM and DM currencies versus dollar is notable
A shift in correlation between U.S. equities and credit spreads, and a divergence between developed- and emerging-market currencies versus the dollar could be early warning signs of major market turning points, according to JPMorgan Chase & Co.
Warren Buffett urges Wells Fargo to look beyond Wall St for next chief; Top shareholder in US bank says new leader should not come from JPMorgan or Goldman
Robert Armstrong, Eric Platt and Oliver Ralph – FT
Warren Buffett, the largest shareholder in Wells Fargo, has called on the US bank to look outside Wall Street for a new chief executive who can restore its battered reputation.
Activist investor Bramson renews bid for Barclays board; The letter to shareholders comes at a time of tumult at Barclays’ investment bank
David Crow – FT
The activist investor pushing for Barclays to shrink its investment bank has warned there is a “real threat” that the UK lender will have to raise fresh capital unless it scales back its trading operations.
Hedge fund Renaissance pulls back on hunt for market trends; Once highly successful strategy of latching on to patterns in futures has faltered
Laurence Fletcher – FT
Renaissance Technologies, one of the world’s most influential and secretive hedge fund firms, has sharply cut back its use of strategies that bet on patterns in futures markets, a big sign of such strategies’ waning popularity.
Jury discharged in Barclays executives fraud case; Ex-chief executive and three others on trial over alleged payments to Qatar in 2008
Jane Croft – FT
The jury has been discharged in the trial of four senior Barclays executives facing fraud charges over alleged payments to Qatar at the height of the 2008 financial crisis.
Ex-Morgan Stanley Banker Is Leading the Charge Toward Boutiques; May Nasrallah is taking on financial goliaths in the Middle East.
Matthew Martin – Bloomberg
In the midst of the financial crisis, as bankers around the world worried about their fate, May Nasrallah made a bold decision.
Credit Suisse under fire from proxy advisers for CEO bonus
Credit Suisse’s shareholders should vote against the bank’s compensation report at the April 26 annual general meeting, proxy adviser Glass Lewis said, citing an “unjustified CEO bonus increase” for Chief Executive Tidjane Thiam.
Frackers, Chasing Fast Oil Output, Are on a Treadmill; With more oil wells front-loaded to boost output, many companies will have to drill again soon—and find new capital to keep production up
Rebecca Elliott – WSJ
Shale companies from Texas to North Dakota have been managing their wells to maximize short-term oil production. That has long-term consequences for the future of the American energy boom.
Sovereign wealth funds must choose a different path; Investments in employee-owned companies will make a positive impact
Christopher Mackin – FT
Sovereign wealth funds, with a combined $8tn in assets, are in the news. China Investment Corporation recently teamed up with France’s largest bank to create a EUR1bn-plus fund to back European companies. Norway’s oil fund cut back its investment in oil and gas stocks, and Abu Dhabi’s Mubadala set up a tech hub with SoftBank.
Larry Fink says BlackRock aims to control a Chinese asset manager; World’s largest investment group ‘very engaged’ with local regulators
Peter Smith – FT
Larry Fink says BlackRock is “very engaged” with Chinese regulators as the world’s largest asset manager attempts to take control of a local investment group.
UniCredit Employee in China Allegedly Embezzled $15 Million From Clients
Regulator expected to announce penalty in the coming months; Money allegedly used to buy apartments in U.S., Greece, Japan
A UniCredit SpA employee in China allegedly siphoned off about 100 million yuan ($15 million) of clients’ money over three years by taking advantage of shared passwords and other internal security loopholes, according to people familiar with the matter.
Norway Is Walking Away From Billions of Barrels of Oil
Mikael Holter – Bloomberg
Opposition Labor Party shifts position on Lofoten drilling; Raises fears in the oil industry that other changes could come
Western Europe’s biggest petroleum producer is falling out of love with oil. To the dismay of the nation’s powerful oil industry and its worker unions, the opposition Labor Party over the weekend decided to withdraw its support for oil exploration offshore the sensitive Lofoten islands in Norway’s Arctic, creating a solid majority in parliament to keep the area off limits for drilling.
Cboe changes Brexit share trading plans after regulator clash
Huw Jones – Reuters
Cboe has decided to offer trading in all shares in London and Amsterdam following a row between regulators over where shares can be traded if Britain leaves the EU on April 12 without securing a delay or a transition deal with Brussels.
Europe’s biggest cross-border share trading platform said if there is no deal, trading in British and Swiss securities will continue on its British platform, but trading in European Economic Area instruments – mainly euro denominated stocks – will cease and shift to Amsterdam.
Theresa May to visit Berlin and Paris in push to delay Brexit date; UK prime minister to hold talks with Merkel and Macron ahead of EU summit
Guy Chazan – FT
Theresa May is to travel to Berlin and Paris for talks with Angela Merkel and Emmanuel Macron on Tuesday, a day before a critical EU summit that will discuss Britain’s request for a delay to the date for its exit from the bloc.
Leaving London: voices from the financial front lines of Brexit; The Financial Times talks to people involved in moves from the City of London to rival EU cities
In the 33 months since the UK voted to leave the EU, thousands of financial services companies with European hubs in London have been assessing their options.
No-deal Brexit is ‘simply crazy’ – Irish EU commissioner
A ‘no-deal’ Brexit makes no sense and is the worst possible Brexit outcome, European Agriculture Commissioner Phil Hogan said on Monday.
Legislation against fake news is open to abuses; Laws on ‘truth’ can offer autocrats a route to online censorship
The editorial board – FT
Malign actors ranging from authoritarian states to extremist groups have been spreading “fake news” since long before the term was coined. The rise of social media has increased exponentially the speed and impact with which untruths can be disseminated. Yet plans like those unveiled by Singapore to impose direct penalties on purveyors of fake news are disturbing. Top-down approaches risk being abused and turning into censorship. The best way to tackle fake news is to teach consumers to identify and reject it.