Unsung Heroes Series: Q&A with Julie Holzrichter
By Sarah Rudolph – John Lothian News
In the second installment of JLN’s Unsung Heroes series, CME Group’s COO Julie Holzrichter responded to questions about what it’s like managing operations under the unusual conditions brought about by the coronavirus.
SR: What Is different about the environment you are working in now, in this time of self-quarantine? Who is working from home and who is coming into the office?
JH: I think the main difference is that we all miss being able to meet with each other and our clients in person. We’ve had to find new ways of communicating, brainstorming, and solving problems virtually. Internally, I’m proud of how our global team has been able to address these challenges without missing a beat in terms of productivity and performance. Technology has been key in helping us do that and making telework successful for CME Group.
We do have a very small crew of employees in our offices for functions like our clearing house, Global Command Center, facilities and data centers. But, like most companies, most of us have been working remotely for several months now. We announced that our Eurodollar Options trading pit in Chicago will reopen in August, which will require some of our employees to return to the trading floor. In accordance with regional guidance, we will take a phased approach to bringing more employees back into our offices, but most will continue to work from home for several months.
To read the rest of this interview, go here.
Hits & Takes
By JLN Staff
I have updated my story about the IEX D-Limit order type with charts representing the decline in liquidity of SPY, Russell 2000 and S&P 100.
Forget getting up on New Year’s Day morning and watching the Rose Bowl Parade. It has been canceled due to the pandemic. And don’t think about going shopping at Walmart without a mask. Or at the food store Kroger’s.
I have bought a copy of Bad Bunny’s greatest hits for each of the members of the JLN team. The tough part was finding it in cassette format for team members who still use that format.
The second order of JLN’s “The World Needs Journalists” sweatshirts are in and will be mailed out shortly to those who ordered them and to some who were gifted them.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Why Does the N.Y.P.D. Want to Punish Journalists? The Police Department’s proposed new rules threaten press freedom.
The Editorial Board – NY Times
Increased public scrutiny of American policing — through cellphone videos, social media and mass protests — has revealed in recent weeks an urgent need for sustained and systemic reform. The New York Police Department has chosen to respond by pressing ahead with new rules to grant wider latitude to bar journalists from covering official police activity.
*****Don’t fight people who order ink by the barrel – and today, we don’t even need to buy the ink or the film.~JJL
Georgia Gov. Brian Kemp forbids cities, counties from requiring masks as coronavirus surges in the state
Meagan Flynn – Washington Post
Georgia Gov. Brian Kemp (R) signed an executive order Wednesday night explicitly banning cities from enacting their own mask mandates, even as the state experiences a sharp rise in coronavirus cases and other Republican governors are turning to mask orders to try to quell the surge.
*****And right here is why we are doomed. Politics before science.~JJL
****Then there is the polar opposite approach: Colombian cartels killing those who don’t obey their Covid-19 lockdowns ~JB
Frustrated people in Iceland can release their screams over a speaker
Lizzie Thomson – Metro News
There’s no denying that having a good old scream can help release some tension when you’re feeling a little worked up. Well, this is the basis for a new initiative designed to help those stressed out by the pandemic. People in Iceland are being invited to play their screams over a loudspeaker in remote parts of the country.
*****If an Icelander screamed in the woods and there was no one there to hear it….~JJL
Man trademarks over a dozen possible names for Washington NFL team as they get rid of “Redskins”
Christopher Brito – CBS News
Following mounting corporate and public pressure, the Washington NFL team has finally gotten rid of its “Redskins” name after 87 years. One prescient Virginia man is hoping to cash in on the change, having filed dozens of trademark claims for possible new names since 2014.
Wednesday’s Top Three
Our top story Wednesday was John Lothian’s commentary, The D-Limit Order Type of IEX Has My Support, from JLN. Next was Leading with Culture in the Time of COVID-19, from Brian Mehta on LinkedIn. Third was Lady Gaga Dethrones Bad Bunny as the World’s Biggest Pop Star, from Bloomberg.
181,432,580 pages viewed; 24,341 pages; 225,332 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Hospitals in Covid-19 Hot Spots Are Filling Up; Patients stranded in emergency rooms, transferred between facilities as surge in coronavirus cases pushes hospitals in Texas, Arizona and Florida near capacity
Melanie Evans, Joseph Walker and Stephanie Armour – WSJ
As the pandemic pushes U.S. hospitals in the South and West near capacity, the urgent need for available beds has stranded patients in emergency rooms, scrambled ambulances and forced patients to relocate hundreds of miles to relieve overcrowded wards.
IPO Frenzy Grips China’s Nasdaq-Style STAR Market; Experiment in easing restrictions on stock offerings provides tens of billions of dollars for emerging technologies, frantic trading
Xie Yu – WSJ
The year-old STAR market in Shanghai has been a winner for China’s leaders and a playground for its speculators. This experiment in easing restrictions on stock offerings has helped funnel tens of billions of dollars into emerging technologies like quantum communications, which Beijing hopes can upgrade the economy. Along the way it has provided frantic trading and the lure of huge gains.
The comfort of cash in a time of coronavirus; Americans have been hoarding cash during the pandemic, presenting the Federal Reserve with an expensive challenge
Brendan Greeley – FT
At Sunshine Ace in Naples, Florida, signs have been put up to encourage contactless payments during the coronavirus pandemic. Employees at the chain of hardware stores constantly wipe down the touch pads of debit card readers, and at each checkout counter the chain has installed plexiglas shields. When Michael Wynn, Sunshine’s third-generation owner, checked his books for June, payments in cash had dropped slightly since the start of the pandemic. It looked like another sign of the steady demise of cash.
The Billion-Dollar Broker Who Managed a Nation’s Oil Wealth
Jack Farchy and Javier Blas – Bloomberg
Court filings show how Murtaza Lakhani handled Kurdish cash; World’s top traders used middleman as conduit to buy oil
The wire transfer was just one of millions that ricochet through the global financial system every day. Starting at the Zurich branch of a Russian state bank, $800 million zipped through Citigroup Inc. in New York before landing in a small bank in Lebanon. The payment came from Russian oil giant Rosneft PJSC – – a loan to the cash-strapped government of the breakaway region of Kurdistan in northern Iraq that would be repaid with barrels of crude.
A Wild Oil Market, Flowing Cash for Reliance Hold Up Aramco Deal
Saket Sundria and Debjit Chakraborty – Bloomberg
Aramco will re-evaluate strategies in post Covid-19 world: FGE; Deal possible but at lower valuation of $57 billion: Bernstein
It’s not typical of Mukesh Ambani, Asia’s richest tycoon, to announce a deal before signing a document. But that’s exactly what he did last year when he told a packed hall of shareholders that Saudi Aramco, the world’s biggest oil producer, was set to buy a 20% stake in Reliance Industries Ltd.’s refining and petrochemicals business, valuing it at $75 billion. So it may have come as a shock to some of those investors when Ambani said on Wednesday that a deal hadn’t been worked out yet with the delay partly down to the coronavirus.
Jack Abramoff Pleads Guilty in Illegal Investment Promotion
Joel Rosenblatt – Bloomberg
Lobbyist admits role in promoting AML Bitcoin cryptocurrency; Abramoff served time in prison in earlier lobbying scandal
Lobbyist Jack Abramoff pleaded guilty by telephone Tuesday to criminal charges that he illegally promoted to investors a cryptocurrency called AML BitCoin. The former Washington insider, who went to prison in a 2006 lobbying scandal, joined a teleconference with a federal judge in San Francisco to enter his plea instead of appearing in person because of the coronavirus pandemic.
Hedge Fund Titan Sees a Quantamental Future; Computers won’t replace humans at hedge funds. But they’ll help them make smarter trades.
Mark Gilbert – Bloomberg
We all suffer from cognitive biases. Paul Marshall says he’s prone to optimism bias — he’s “too easily romanced by new stories and new opportunities.” He says his financial partner, Ian Wace, succumbs to the gambler’s fallacy, expecting market dislocations to disappear rapidly as prices revert to their mean. But neither trait has prevented them from building Marshall Wace LLP into one of the world’s biggest hedge funds, overseeing more than $44 billion and making billions for themselves in the process.
Bankers Shocked by 45% China Tax Rate Mull Leaving Hong Kong
SOE employees who transferred from China told to report income; Unclear how broadly the tax rules will apply to Chinese expats
Fears of a Hong Kong brain drain are increasing after China moved to tax its citizens’ global income, undermining the financial hub’s appeal to thousands of bankers and other white-collar workers from the mainland.
Carson Block Warns Tesla Short Sellers: ‘I Wouldn’t Do That’
Michael Patterson – Bloomberg
Carson Block and Elon Musk can agree on at least one thing: betting against Tesla Inc.’s stock is a bad idea. Block, the longtime Musk critic and short-selling founder of Muddy Waters Capital LLC, said on Wednesday that he doesn’t have any bearish wagers against Tesla even though he thinks the business is unsustainable.
Greenwich Mansions With Pools Are All the Rage in Pandemic Era
Oshrat Carmiel – Bloomberg
Average size of purchased homes jumps to biggest on record; Buyers want space for offices, schoolwork, safe entertaining
For Greenwich homebuyers during the peak of the pandemic, bigger was better. And it helped to have a pool. The average size of houses that sold in the second quarter — 5,034 square feet — was the largest in 10 years of data-keeping, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The quarterly average in the Connecticut town had never before topped 5,000 square feet.
Mask mandates catch on as states, businesses try to bypass a toxic debate
Griff Witte – Washington Post
They have emerged as an unlikely symbol of partisan divide and a source of bottomless derision for President Trump. But masks on Wednesday moved ever closer to becoming a new national reality in America’s pandemic-scarred life, with businesses, states and health experts preaching their promise as the country’s last line of defense against a fast-growing viral threat.
As the coronavirus crisis spins out of control, Trump issues directives — but still no clear plan
Philip Rucker, Yasmeen Abutaleb and Ashley Parker – Washington Post
President Trump has vowed that the nation’s schools must reopen for the fall semester, but neither he nor his administration has detailed a plan for how to do so safely.
Tunisia’s Leaders Defeated Coronavirus. Now They’re the Problem
Jihen Laghmari and Souhail Karam -Bloomberg
New political feuds dog nation at a critical time for economy; Lawmakers force removal of a premier under fire from Islamists
With the help of police robots and camera-carrying drones, Tunisia endured a punishing lockdown that corralled the coronavirus. Now it’s succumbing to a more familiar malady: political infighting that has claimed the prime minister.
Heineken Profit Plunges as Lockdowns Pummel Sales at Bars
Thomas Mulier – Bloomberg
Heineken NV, the world’s second-largest brewer, reported a 53% decline in first-half earnings as lockdowns decimated sales to bars and restaurants.
It’s Risky to Rely on the Economist’s Vaccine; Assumptions alone won’t buoy the stock market indefinitely.
John Authers – Bloomberg
There is an old joke about economists, and how badly they compare with real scientists. A physicist, a chemist and an economist are shipwrecked on a desert island, with nothing to eat, other than a crate of tins of baked beans which has also washed up on shore. But there is no tin opener. What to do?
Exchanges, OTC and Clearing
Euronext receives clearance from the Danish Financial Supervisory Authority to acquire up to 100% of VP Securities, the Danish Central Securities Depository
Euronext, the leading pan-European exchange, today announces it has received the clearance from the Danish Financial Supervisory Authority to acquire up to 100% of VP Securities A/S1 (“VP Securities”) on 15 July 2020. Euronext welcomes this regulatory approval by the Danish FSA that was the only condition to complete the transaction.
CCP12 report: CCPs show strong resilience despite Covid-19
How did the cleared markets perform during the Covid-19 crisis and resulting turbulences? This question is answered in a detailed report issued by CCP12, the global association of CCPs. The report covers the wide range of markets with centralized risk management, including for instance oil, credit and interest rate derivatives.
HKEX Announces Senior Listing Division Appointments
Janice Wu appointed Co-Head of IPO Vetting; Karen Lok appointed Head of Listing Compliance
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Thursday) pleased to announce two senior appointments to its Listing Division. Janice Wu has been appointed Managing Director, Co-Head of IPO Vetting. Together with Stephanie Lau, Ms Wu will have oversight of all HKEX issuer listing applications. Ms Wu has over 17 years of experience as a senior legal practitioner including as in-house general counsel and in private practice.
Tradeweb Markets and ICE Benchmark Administration introduce Tradeweb ICE CMT Rates for review and comment by market participants
Intercontinental Exchange, Inc.
Tradeweb Markets Inc. (Nasdaq: TW), a leading global operator of electronic marketplaces for rates, credit, equities and money markets, and Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announce that Tradeweb and ICE Benchmark Administration Limited (IBA) have published a paper introducing daily Tradeweb ICE Constant Maturity Treasury Rates (Tradeweb ICE CMT Rates) for review and comment by market participants.
CME Group Adds Access to Delayed and JSON Formatted Data Via Google Cloud
New cloud-based data formats will provide customers with seamless ways to use CME Group’s market data
BME: Non-Resident Investors Own 50.2% Of Spanish Listed Shares, A Record High http://
Share ownership by Spanish households falls one percentage point to 16.1%, although more than 2 million families own Spanish listed shares; Non-financial companies account for 20.8% of the Spanish stock market and collective investment institutions for 7.3%
Non-resident investors owned 50.2% of Spanish listed shares at the end of 2019, according to the latest report from the Corporate Research & IR department of BME. It marks the fourth consecutive historical record and represents two percentage points more than in the previous year and ten more than a decade ago.
TP ICAP extends market data partnership with Japanese vendor; Latest partnership between TP ICAP and QUICK Corp will see distributed data expanded to include money markets, derivatives, fixed income and foreign exchange.
Hayley McDowell – The Trade
Interdealer broker TP ICAP has moved to extend its partnership with Japanese market information vendor QUICK Corp. TP ICAP said it has signed an extension to its agreement with Tokyo-based QUICK Corp, which will allow the broker to continue providing OTC market data from Tullett Prebon to the firm’s clients.
Wirecard Boasted of Hundreds of Partnerships. Some Were Less Than Meets the Eye.; Insolvent German payments company was a prolific issuer of news releases about partnerships struck with retailers and blue-chip names
Caitlin Ostroff – WSJ
Before it unraveled in an accounting scandal, Wirecard AG WDI -7.19% built up an image as a fast-growing financial technology company. It spewed out news releases publicizing partnerships with blue-chip names such as SAP SE, Zurich Insurance Group and SoftBank Group Corp.
Wirecard’s Markus Braun took EUR35m loan from group’s banking arm; Regulators examining deal that is said to have provoked a ‘furious’ reaction from board
Olaf Storbeck – FT
Wirecard’s former chief executive Markus Braun borrowed EUR35m from the payment group’s banking arm in January, triggering a clash with board members and an ongoing review from German financial watchdog Bafin.
FCC & NPCI to Host World’s Largest Virtual Global Fintech Fest
To bring together global fintech and BFSI ecosystems, the Fintech Convergence Council (FCC) the flagship committee of Internet & Mobile Association of India (IAMAI) along with National Payments Corporation of India (NPCI), will host the Global Fintech Fest (GFF), a first-of-its-kind international virtual fintech event.
GFF is presented by the Department of Economic Affairs (DEA), Ministry of Finance, Government of India and the Reserve Bank of India (RBI).
The two day event themed ‘Fintech: With and Beyond COVID’ is scheduled for 22-23 July 2020. GFF is also supported by the World Bank and the United Nations Capital Development Fund (UNCDF).
DrawBridge Lending Surpasses $125 Million In Assets Under Management
Cision PR Web (press release)
DrawBridge Lending, LLC (dba DBL Digital) has surpassed the $125 million-dollar AUM milestone. This represents a new highwater mark established earlier this year and with AUM expected to continue increasing, the 3rd quarter will smash all previous benchmarks for AUM. “If nothing else, this shows the fulfillment of the vision we drew up on the whiteboard and I am proud of everyone’s hard work to get us here,” stated Tom Anderson, President & Chairman.
Crypto Hack Latest in a History of High-Profile Twitter Breaches
Maya Tribbitt – Bloomberg
Some of the highest-profile Twitter accounts, including former President Barack Obama and Tesla Inc. Chief Executive Officer Elon Musk, were subject to a breathtaking hack on Wednesday involving a Bitcoin-related scam. Twitter Inc. temporarily blocked all verified accounts from posting or even changing their passwords while it investigated and sought to resolve the issue. The scale of the hack was unprecedented, but Twitter has had significant security problems before. Here are a few of the most prominent recent attacks.
Widespread Twitter Hack Reaches Bill Gates, Kanye West, Elon Musk, Joe Biden and Barack Obama
Euirim Choi and Robert McMillan – WSJ.com
Twitter Inc. was hit with a widespread attack Wednesday that allowed hackers to take over an array of accounts including those of celebrities, politicians and billionaires such as Bill Gates, Kanye West, Joe Biden and Barack Obama, as well as Apple Inc. and other companies. The attack, which security experts called the most significant hacking incident in Twitter’s history, began before 4 p.m. EDT, when compromised accounts—many of them related to the digital currency bitcoin—began posting messages requesting money be sent to cryptocurrency accounts.
Chainalysis Says Bitcoin Scammed From Twitter Users Is ‘On the Move’
Danny Nelson – Coindesk
The defrauded bitcoin amassed during Wednesday’s monumental Twitter hack is already “on the move,” according to cryptocurrency tracing firm Chainalysis. Chainalysis told CoinDesk it is monitoring four wallets associated with the attack. The most prevalent address received $120,000 in bitcoin from 375 transactions. Secondary addresses received $6,700 in bitcoin from 100 transactions. An XRP wallet netted nothing.
Tax Day lawsuit alleges the IRS violated crypto holders’ constitutional rights
Aislinn Keely – The Block
Last summer, the Internal Revenue Service (IRS) issued thousands of letters to crypto holders warning them that if they did not report their digital assets properly they could face penalties. Now, one of that letter’s recipients is suing the agency on Tax Day, alleging it violated taxpayers’ constitutional rights. Plaintiff James Harper filed a suit against the IRS, its commissioner Charles P. Rettig and unnamed IRS agents for their role in the alleged unlawful seizure of information that identified him as a crypto holder. Harper contends that the IRS violated his rights under the Fourth and Fifth Amendments to the Constitution.
Digital asset manager Grayscale reports record inflows in second quarter of 2020
The multi-billion dollar digital asset manager Grayscale reported the largest quarterly inflows in its history, according to its quarterly report published Wednesday. In the second quarter of 2020, Grayscale raised $905.8 million across its suite of digital asset products, nearly doubling its previous high from the first quarter of 2020 ($503.7 million). As previously reported, Grayscale offers a range of products that provide indirect exposure to digital assets like bitcoin. The second quarter’s inflows brought Grayscale’s 1H20 total investments to $1.4 billion, per the report.
PayPal confirms it is seeking to enter the crypto market
William Girling – Fintech Magazine
A recently published letter to the European Commission reveals that digital payments company PayPal is developing crypto-asset management capabilities. Citing its 22 years’ worth of industry experience, 300mn active user accounts around the world and enduring mission to democratise access to the digital economy, the company declared that it welcomed the Commission’s investigation on how best to integrate cryptocurrencies. “PayPal prides itself in serving as a reliable partner to not only consumers, merchants and business partners, but also to policymakers, regulators and law enforcement,” it said in the letter.
OKCoin Joins Coinbase in Supplying Oracle Feed for DeFi Project Compound
Paddy Baker – Coindesk
OKCoin has launched a new API feed for the decentralized finance (DeFi) space that has already been picked up by lender Compound. The San Francisco-based exchange said Wednesday that OKCoin Oracle would provide on-chain data for DeFi products and features. As a liquid and regulated trading platform, OKCoin said its cryptographically signed price feed would be accurate, adding it would also verify and guarantee the data’s reliability. San Francisco-based exchange Coinbase unveiled its own price feed plugin for the DeFi space in April.
Brave partners with Gemini to let users trade crypto from within its browser
Yogita Khatri – The Block
Brave has partnered with crypto exchange Gemini to let its users trade cryptocurrencies from within the privacy-focused browser itself. Users will be able to buy, trade, earn, and store cryptocurrencies directly via Brave. The Gemini widget is currently available on Brave’s Nightly version, and is expected to go live in Brave’s general release “in the coming weeks,” said Gemini.
Bitcoin Option Traders Now Betting on Short-Term Price Drop
Omkar Godbole – Coindesk
With bitcoin looking heavy this week, short-term sentiment in the options market has flipped bearish. The leading cryptocurrency by market value fell to $9,070 soon before press time, reversing the 2.5% rise to $9,450 seen last week, according to CoinDesk’s Bitcoin Price Index. Prices are now closing on the lower end of the multi-week-long trading range of $9,000 – $10,000. Reflecting the downward trend, the one-month put-call skew for bitcoin options, a metric that measures the price of (bearish) put options relative to (bullish) call options, has risen to 4.9%, according to data provided by crypto derivatives research firm Skew.
Zcash Latest Hard Fork ‘Heartwood’ Makes Mining Private
William Foxley – Coindesk
Privacy coin Zcash has successfully hard forked in the planned network update “Heartwood.” With the update, miners can receive coinbase transactions right to a private address, in addition to other new features. The hard fork occurred on July 16 at 10:58 UTC at block height 903,000, according to the Electric Coin Company (ECC), the for-profit development house behind the project. An uncontentious hard fork, Heartwood was supported by both the ECC and Zcash Foundation.
Samsung Galaxy smartphones now support Stellar blockchain
Yogita Khatri – The Block
Select Samsung Galaxy smartphones, including S10 and S20 series, now support the Stellar blockchain network. The Stellar Development Foundation, the non-profit behind the development and growth of Stellar, has partnered with Samsung to integrate Stellar into the Samsung Blockchain Keystore. The integration allows users to store Stellar private keys in Galaxy smartphones’ inbuilt blockchain wallet. It also enables Stellar developers to build blockchain apps for Galaxy smartphones.
US-EU data sharing deal Privacy Shield struck down by European court; ECJ bans main mechanism for transferring information because of US surveillance
Javier Espinoza – FT
EU judges have struck down the main mechanism to transfer data between the bloc and the US on surveillance concerns, landing a blow to Facebook and thousands of companies that rely on it.
Twitter Hack Spotlights Disinformation Fears as Election Looms
Ben Brody, Misyrlena Egkolfopoulou, and Kartikay Mehrotra – Bloomberg
Accounts of Biden, Obama, Bezos, Musk and Buffett are attacked; Episode raises questions about trust put in verified accounts
The hijacking of several prominent Twitter accounts, including that of Democratic presidential nominee Joe Biden, has again raised questions about the company’s ability to combat disinformation on its platform and rekindled concerns about potential election interference with November just four months away.
Dutch Embrace the Bad-Guy Role Britain Left Vacant in Europe; Wopke Hoekstra is part of a proud tradition of Dutch finance ministers taking a hard line — and he isn’t shying away from the backlash.
Diederik Baazil – Bloomberg
Wopke Hoekstra wasn’t looking for controversy, but when he found it, he didn’t flinch. The Dutch finance minister says he meant to express his solidarity with the countries of southern Europe hit hardest by the coronavirus when he met with euro-area colleagues in early March.
Trump’s Edge on Economy Vanishes as More Voters Now Trust Biden
Gregory Korte – Bloomberg
Half of voters in poll say Biden would better manage economy; Former vice president’s lead over Trump extends to 15 points
President Donald Trump may have lost the one remaining issue advantage he had with voters, with 50% in one new poll released Wednesday saying they trust Joe Biden to do a better job managing the U.S. economy.
Biden Expands Lead as Trump’s Approval Drops; Voters increasingly dislike president’s performance during coronavirus pandemic, but majority of voters back his handling of economy
Andrew Restuccia – WSJ
Former Vice President Joe Biden’s lead over President Trump reached double digits this month as Mr. Trump’s approval rating declined amid widespread disagreement with his handling of the coronavirus pandemic, according to a new Wall Street Journal/NBC News poll.
China slams U.S. response to Hong Kong security law as ‘gangster logic’
Jessie Pang, Yanni Chow – Reuters
China accused the United States of “gangster logic” after U.S. President Donald Trump ordered an end to Hong Kong’s special status under U.S. law in response to Beijing’s imposition of new security legislation on the former British colony.
ESMA chair Steven Maijoor to step down in March 2021; Steven Maijoor has now served the maximum term as chair of ESMA and will step down on 31 March 2021.
Annabel Smith – The Trade
The EU securities markets regulator has confirmed that its current chair, Steven Maijoor, will step down in March next year as the watchdog begins a search process for his successor. Maijoor became chair of the European Securities and Markets Authority (ESMA) in April 2011 and his term was extended five years in 2015, alongside Veronica Ross, who served as ESMA’s executive director.
ESMA Responds to European Commission Consultation on Renewed Sustainable Finance Strategy
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has submitted a response to the European Commission’s (EC) consultation on the renewed sustainable finance strategy. The response covers a broad range of topics from strengthening the foundations for sustainable finance, increasing opportunities for citizens, financial institutions and corporates to have a positive impact on sustainability, to managing and reducing risks relating to environmental, social and governance (ESG) factors.
FINRA Senior Leaders Fireside Chat on Current Issues
During this session, FINRA senior staff provide an update on key regulatory issues.
U.S. Treasury Securities Executed to Hedge a Primary Market Transaction Production Test
Beginning August 3, 2020, members are required to begin to report transactions in U.S. Treasury Securities executed to hedge a List or Fixed Offering Price Transaction or a Takedown Transaction (as defined in FINRA Rule 6710) with an appropriate identifier. See additional information regarding this change in Regulatory Notice 19-30.
FINRA Forms Issue (FINRA Order Form, FINRA New Issue Form, FINRA Participant Agreement Form)
Currently, any users attempting to submit a TRACE or Over the Counter Reporting Facility (ORF) form filing in the FINRA Firm Gateway will incur an error.
FCA and City Corporation collaborate to help innovative companies drive recovery from coronavirus
The FCA and the City of London Corporation will collaborate on the pilot of a ‘digital sandbox’ to support innovative firms tackling challenges caused by the coronavirus (Covid-19) pandemic.
FCA provides guidance to firms on maintaining access to cash for customers
The FCA has today published draft guidance for firms setting out its expectations for banks, building societies and credit unions when they are considering closing branches or ATMs, or converting a free to use ATM to pay to use.
Investing and Trading
California Resources files for bankruptcy; US state’s biggest oil and gas producer latest to succumb after coronavirus sends crude prices into decline
Myles McCormick – FT
California Resources Corp, the state’s biggest oil and gas producer, has filed for bankruptcy, becoming the latest US energy group to buckle under a crash in crude prices triggered by the coronavirus pandemic.
Bond investors fear dearth of opportunities in sedated markets; Measures of volatility have plummeted as central banks ramp up BoJ-style programmes
Tommy Stubbington – FT
Government bond traders and investors are reeling from a hectic start to 2020. Now they face an equally daunting prospect: a dead calm that wipes out trading opportunities for months to come.
Traders Are Betting the Fed’s Bond-Buying Binge Has Just Begun
Liz McCormick and Craig Torres – Bloomberg
Door may be open to more action as soon as July meeting; Strategists envision quantitative easing as growth ebbs
The Federal Reserve has bought trillions of dollars in Treasuries just to fix the bond market. It may need to buy a lot more to help repair the economy. A surge of new coronavirus cases is clouding the economic outlook in the U.S., and that’s likely to translate into pressure for more action from the Fed – – maybe as soon as this month’s meeting. Fed Governor Lael Brainard hinted as much on Tuesday, saying the central bank should pivot its policies toward providing longer-run accommodation.
Two Biggest Diamond Miners Barely Sold Any Stones Last Quarter
Thomas Biesheuvel – Bloomberg
The coronavirus froze up the diamond market so dramatically that the two biggest producers hardly sold any gems at all in the last three months, their combined sales plunging 94% from a year earlier.
Decade of the Dollar at Imminent Risk as Uptrend Break Looms
Cormac Mullen and Ruth Carson – Bloomberg
The slump in the dollar is threatening to bring to an imminent end its near-decade-long uptrend against major peers. Deutsche Bank’s Trade-Weighted Dollar Index — a gauge of the currency against the U.S.’s most-important trading partners — has fallen to test the trendline in place since 2011, a break of which would be an important signal for dollar bears. The index has dropped more than 1% so far this month amid weakening demand for havens, an ongoing rally in risk assets and a shift in sentiment toward currencies like the euro and yuan.
Environmental, Social and Corporate Governance
Aramco, Exxon Make Small Move to Join BP, Shell in Carbon Curbs
Kevin Crowley and Akshat Rathi – Bloomberg
Oil & Gas Climate Initiative seeks to reduce carbon intensity; It’s a significant achievement, says former BP CEO Bob Dudley
Saudi Aramco has joined with European and U.S. supermajors representing a third of the world’s oil industry to begin curbing emissions at their own operations as the clamor builds for the biggest polluters to act on climate impact.
Siberia heatwave caused by man-made emissions, study finds; Surface temperatures in parts of the Russian region were up to 10C above average in May
Anna Gross – FT
The recent Arctic heatwave that saw temperatures rise as high as 38C in Siberia was caused by man-made climate change, scientists have warned.
Goldman’s Traders, Bankers Keep Profit Steady While Rivals Falter; Trading revenue nearly doubled during a volatile stretch for markets; shares rise
Liz Hoffman – WSJ
Nobody is better at capitalizing on market chaos than Goldman Sachs Group Inc. GS 1.35% Its traders and investment bankers posted near-record revenue to keep firmwide profits steady, throwing an elbow to larger commercial-bank rivals that blamed the coronavirus pandemic for lower quarterly results.
Bank of America Profit Falls 52% on Loan Concerns; Trading and investment-banking shine at Charlotte-based bank, but overall revenue slips 3%
Ben Eisen – WSJ
Bank of America Corp. BAC 1.91% ‘s profit tumbled 52% in the second quarter after the bank set aside billions of dollars to prepare for soured loans. The Charlotte, N.C.-based bank said Thursday that it earned $3.53 billion, versus the $7.35 billion it made a year earlier. Per share, earnings of 37 cents were above the 28 cents that analysts polled by FactSet had forecast.
Why Lansdowne may have picked a bad time to quit the short game; London hedge fund said last week that it would shut flagship long/short strategy
Laurence Fletcher – FT
Hedge fund Lansdowne Partners has made a big call on the outlook for stock markets by stopping short-selling in its flagship $2.8bn fund. It may be throwing in the towel at the wrong moment — just as opportunities are finally picking up again.
US fund managers seek to safeguard portfolios against inflation; Investors have poured money into US Treasury inflation-protected securities
Colby Smith in New York and Tommy Stubbington – FT
Demand for inflation-protected bonds has intensified in the US, as investors look to shield portfolios against the risk of a spike in consumer prices as economic activity rebounds from the coronavirus crisis.
Morgan Stanley profits lifted by trading bonanza; Wall Street bank’s revenues strike record as it avoids loan losses that hit rivals
Laura Noonan – FT
Morgan Stanley’s quarterly profits rose 45 per cent after a surge in trading and investment banking swept the firm to record revenues even as coronavirus pushed the US economy into recession.
Bank of America $5bn loan charges only partly offset by trading surge; Profits halve as lender joins peers in bracing itself for potential surge in bad debt
Robert Armstrong – FT
Bank of America set aside $5.1bn for loans losses in the second quarter, leading net income to halve to $3.5bn. The bank joined the industry trend in offsetting the damage from the loan charges with a surge in trading revenues in the second quarter, as market volatility returned and companies rushed to issue new debt.
Interactive Brokers opens office in Singapore; New office in Singapore follows growth in client accounts at Interactive Brokers in the region over the past few years.
Hayley McDowell – The Trade
Interactive Brokers has confirmed it has established an entity in Singapore and opened a new office in the Marina Bay financial district. With the addition of Singapore, Interactive Brokers now has nine entities globally in the US, Australia, Canada, Hong Kong, India, Japan, Luxembourg and the UK, serving more than 876,000 client accounts in over 220 countries.
Chinese stocks tumble 5% in heaviest sell-off since February; Questions over economic health of world’s biggest emerging market prompts selling across global bourses
Alice Woodhouse and Philip Georgiadis and Joshua Oliver – FT
Chinese stocks suffered their worst day since February, tumbling nearly 5 per cent, as investors questioned whether a rebound in the world’s second-largest economy could be sustained.
Opec and Russia primed to unwind historic supply cuts; Cartel and allies aim to restore crude output without knocking market sentiment
Anjli Raval, David Sheppard and Derek Brower – FT
Opec and Russia are primed to start unwinding the record oil supply cuts agreed earlier this year, as they aim to raise production without undermining a recovery in crude prices.
Japanese Investors Dump Record $34 Billion in Foreign Stocks in One Week
Gearoid Reidy and Toshiro Hasegawa – Bloomberg
Japanese investors sold a record amount of foreign stocks last week, offloading a net 3.64 trillion yen ($34 billion) of overseas equity. The figure is almost six times greater than in any previous week. It wasn’t immediately clear what factors were behind the record selling, with fingers pointed at factors including funds locking in profits as U.S. stocks recovered their losses suffered during the pandemic, as well as the settlement of SoftBank Group Corp.’s disposal of shares in T-Mobile US Inc.
Malaysian court grants temporary freeze on $340 million 1MDB money in UK
A Malaysian court on Thursday granted an interim order to stop Saudi energy firm PetroSaudi International (PSI) from using more than $340 million in funds in Britain, which Malaysian prosecutors believe was siphoned from state fund 1MDB.
Retreating Love for Sugar Seen in Indonesia as Virus Cases Soar
Eko Listiyorini – Bloomberg
Indonesian sugar consumption seen falling 25% during lockdown; Prices remain high amid logistics issues in some regions
Indonesia, the world’s biggest importer of raw sugar, is seeing demand tumble as a surge in coronavirus cases hampers out-of-home dining and roils nationwide delivery of the sweetener.
Gove defends post-Brexit plan for UK internal market; Minister rejects claims by SNP government that London is engaged in a power grab
Jim Pickard in London and Mure Dickie – FT
The British government on Wednesday claimed its plan for a post-Brexit internal market in the UK was a “power surge” for the devolved administrations, with responsibility for more than 70 policy areas being transferred from Brussels to Edinburgh, Cardiff and Belfast.
Brexit vote hits leave areas the hardest; Districts with high levels of low-skilled employment have underperformed most since 2016
Chris Giles – FT
Areas of the UK that voted to leave the EU have suffered the biggest economic hit since the 2016 referendum, according to new research that suggests Brexit is likely to further complicate efforts to level up underperforming regions.
No-deal Brexit would hit ‘red wall’ areas hard, manufacturers warn
Richard Partington – The Guardian
Britain’s manufacturers have warned Boris Johnson that former “red wall” seats won by the Tories in last year’s election would be at most risk of severe economic damage from Brexit talks collapsing. Sounding the alarm with less than six months before the end of the Brexit transition period, the manufacturing lobby group Make UK and the accountancy firm BDO said industrial areas in the north of England, the Midlands and Wales could face a “triple whammy” should a deal with the EU fail to emerge.
Ministers unveil post-Brexit powers for UK nations
The UK government has unveiled its blueprint for policing trade between different parts of the country after the post-Brexit transition period ends. Scotland, Wales and Northern Ireland are set to be handed powers in areas such as air quality and animal welfare currently regulated at EU level. But in a bid to protect cross-border trade, they will have to recognise standards drawn up elsewhere in the UK. The SNP says the plan would “strip power” from the Scottish Parliament.
U.K. Reveals Plan to Avoid Internal Trade Barriers Post-Brexit
Joe Mayes – Bloomberg
The U.K. government has set out its plan to avoid disruption to internal trade post-Brexit, seeking to avoid barriers between its constituent nations that would hamper commerce. After Britain completes its split from the EU at year-end, the administrations in Scotland, Wales and Northern Ireland will inherit powers over at least 70 policy areas previously decided by the EU, including air quality and animal welfare.
UK companies stockpile ahead of Brexit potential cliff edge
Daniel Thomas, Peter Foster – FT
British companies are preparing for the UK to sever ties with the EU without a trade deal by stockpiling essential goods and running tests to ensure they can manage the worst-case scenarios of high tariffs and hard borders. Several large listed companies have told the Financial Times they are starting to increase stocks of supplies and review contingency plans in case of border disruption, having used up stores accumulated ahead of previous Brexit deadlines during the coronavirus pandemic.