First Impressions

Room For One More: MIAX Due To Open 15th US Options Exchange
Jim Kharouf – JLN
MIAX options, the youngest exchange group in the US options industry, announced plans to launch MIAX Pearl in the fourth quarter.
The new exchange, introduced at the Options Industry Conference in Palos Verdes, Calif. is pending regulatory approval. MIAX Pearl will offer a maker-taker pricing model. While much is made of the proliferation of US options markets and possible oversaturation of exchanges, MIAX executives believe they need to create the new market to continue their growth.

Quote of the Day

“There will be no investment, movement or development in any region of the world without the vote of the Saudi sovereign fund.”

Saudi Prince Mohammed in the story, “Domestic focus may limit clout of $2 trillion Saudi fund”

Lead Stories

Donald Trump’s Week of Playing with Financial Fire; If he were president right now, the markets would be reeling and interest rates rising in reaction to his comments about debt.
By GENE B. SPERLING – Politico
Maybe, if he hasn’t already seen it, Donald Trump should get himself tickets to the Broadway smash “Hamilton.” Because he may want to understand a little bit about Alexander Hamilton’s playbook. One message that Hamilton, the nation’s first Treasury secretary, was clear about was this: Never do or say anything that might call your country’s credit into question; it will only cost you a lot more the next time you try to borrow. Careless talk by itself can badly damage an economy.

Wall Street’s Bond Forecasters Splinter as Fed Credibility Wanes
Susanne Walker Barton, Catarina Saraiva – Bloomberg
Standard Chartered’s Costerg Sees Rate Cut Fueling Treasuries; Bloomberg survey shows diverging views on U.S. economy, yields
To Thomas Costerg, the big question for bond investors isn’t whether the Federal Reserve will raise U.S. interest rates this year.

Carl Icahn’s fund moves to large bearish stance: Barron’s
The net short position of an investment fund run by billionaire Carl Icahn sharply increased at the end of the first quarter, meaning he could be one of the biggest beneficiaries if financial markets crash, Barron’s reported over the weekend.

QuickTake Q&A: Why Payments for Stock Trades Face More Scrutiny
U.S. regulators are looking at whether mom-and-pop traders are getting a raw deal. The Justice Department and New York attorney general are said to be investigating a widespread practice known as “payment for order flow,” in which brokers sell their clients’ stock-trade orders to market-making firms.

Domestic focus may limit clout of $2 trillion Saudi fund
Saudi Arabia aims to create the world’s biggest sovereign wealth fund, a $2 trillion behemoth that can throw its weight around global markets, but the fund’s growth abroad is likely to be slowed by its responsibility for aiding the economy at home.

The 42-Year History of Saudi Arabia’s Treasuries Holdings
Saudi Arabia’s holdings of U.S. government debt are close to record highs, according to data the Treasury disclosed Monday after 42 years in response to a Bloomberg Freedom of Information Act request.

Deutsche Bank’s Woes May Be ‘Insurmountable,’ Berenberg Says
Deutsche Bank AG is stuck in a vicious circle as co-Chief Executive Officer John Cryan seeks to overhaul an impaired business that needs more capital, which the bank would struggle to raise if it tried to tap investors, according to Berenberg.

Former banker to head new UK industry body to clean up markets
Former senior banker and broker Mark Yallop was named on Wednesday as the first permanent chairman of a new industry body in Britain to clean up financial markets after a spate of interest rate and currency rigging scandals.

More investors seeking financial advice are turning to lower-cost options
BY JIM PUZZANGHERA – Los Angeles Times via Miami Herald
When John Rocca began earning enough money to start socking some away for retirement about 10 years ago, he took a time-honored approach to investing: hiring a broker from a large investment bank. But, like more and more Americans recently, he soon decided that approach to retirement investing wasn’t working for him.

How Mortgages Could Keep This Central Bank in Check
It is fine to take big financial risks, so long as they are understood and everyone else isn’t doing the same thing. Thank goodness, then, that the U.K.’s consumer finance regulator reckons banks are lending to home buyers responsibly.

China wants Britain’s help creating a financial super-regulator
By Michelle Price and Benjamin Kang Lim – Reuters
China has asked Britain for advice on plans to create a financial super-regulator, as it looks to improve financial oversight following last year’s stock market crash, sources with knowledge of the talks told Reuters.

HSBC to Move 840 Technology Jobs Out of Britain to Save Costs
Dealbook – NY Times
HSBC said on Monday that it would move 840 jobs in its information technology division out of Britain to lower-cost countries such as India as part of an effort to reduce its expenses.

SigFig, an Automated Investment Firm, Will Team Up With UBS
Dealbook – NY Times
Advisers in UBS’s American wealth management division will use a robot to cater to well-heeled clients.
The company’s 7,000 advisers will begin using technology developed by a San Francisco start-up, SigFig Wealth Management, one of a growing group of so-called robo-advisers that are shaking up the brokerage business with low-cost, automated investing.

Central Banks

Ataturk’s Army of Central Bank Owners in Revolt Over $140 Payout
Onur Ant – Bloomberg
Offspring of seed investors demand more of $5.6 billion profit; ‘This is an issue of honor,’ weeping shareholder tells board
In the wake of World War I, Mustafa Kemal Ataturk set out to create a central bank that would steer his new Turkish Republic through the wreckage of the Ottoman Empire and end its dependence on London and Paris. He implored people to invest and thousands did, many with their life savings.

Central Bankers’ Wisdom Faulted as Gold Holdings Surge 25%
Ranjeetha Pakiam – Bloomberg
ETPs have expanded to the highest level since December 2013; IG Asia’s Aw sees structural shift in gold investment demand
The great gold rush of 2016 is gathering pace. Holdings in exchange-traded funds have now surged by a quarter, with investors taking advantage of lower prices over the past two weeks to enlarge stakes on rising concern about central bank policy making worldwide.

Fiscal constraints mean BOJ likely to keep helicopter grounded
Bank of Japan Governor Haruhiko Kuroda likes to keep markets guessing by saying one thing and doing another, but, when it comes to ruling out “helicopter money” to reanimate the economy, officials and close associates say he almost certainly means it.

Central Banks Should Observe Blockchain, Says Japan’s Central Bank Official
Cryptocoin News
The Deputy Governor of the Bank of Japan, the country’s central bank, has stated that central banks around the world “will and have” to watch the progress and developments concerning digital currencies like Bitcoin and its underlying technology, the blockchain.


Top Currency Traders Warn White House Race May Echo Brexit Chaos
Rachel Evans – Bloomberg
Campaign trail rhetoric foreshadows dollar volatility ahead; Policies on trade, currency manipulation may weaken greenback
Traders wanting to know what November’s U.S. presidential election will mean for the dollar need look no further than the U.K.

Even gold is not as secure as un-hackable Bitcoin currency
The Bitcoin system is said to be reaching its capacity limits – spelling a possible disaster for thousands of those who decided to invest in the world’s top cryptocurrency. One of the leading programists from the company quits it, selling all of his Bitcoins and calling it a “failed experiment”. On the other hand, with the growing number of Bitcoin users, even politicians and bankers can’t anymore deny its importance in the financial and digital world.

Indexes & Index Products

Index IDEA: FTSE Russell diversified factor index highlights mid-cap value stock strength
FTSE Russell
US mid-cap stocks, currently defined as companies with between $25 million and $3.4 billion in total market capitalization, have led all other major US cap tiers over the last 15 years, as measured by the Russell Midcap Index. And, during this period, value-oriented midcap stocks have led growth-oriented midcap stocks, as measured by the Russell Midcap Pure Value and Russell Midcap Pure Growth Indexes.

Credit Suisse Sees Saudi MSCI Inclusion by 2019
Credit Suisse says that Saudi Arabia’s plans to ease restrictions on foreign investors could increase the chances of being included in the MSCI Index by 2019.

KLCI only market in the red after MSCI review – Business News
The Star Online
Bursa Malaysia was the only Asian stock market in the red at midday on Monday as funds reduced their stakes after US index provider MSCI reduced its weightage for Malaysia’s equities.

In a Dilemma: South Korea in Dilemma over MSCI World Index Entry
The South Korean financial authorities are in a dilemma with a decision on whether South Korea is to join the MSCI World Index or not scheduled to be made in a month. The incorporation can have a positive effect in terms of foreign investment attraction but the relaxation of foreign exchange trading regulations to that end can affect the stability of the South Korean currency.


ICBC Standard Bank to buy Barclays’ precious metals vault
China’s ICBC Standard Bank said on Monday that is has agreed to buy Barclays’ London precious metals vaulting business as it moves to expand its capabilities in precious metals clearing and storage services.

Why is the gold monetisation scheme not taking off?; Experts say banks need to push the scheme; norms for jewellers need to be simplified to increase participations
Rajesh Bhayani – Business Standard
The Gold Monetisation Scheme, which was launched with much fanfare, is not gaining acceptance despite the government’s efforts to make it practical to execute. One of the reasons for this is said to be banks’ apathy towards the scheme and second, the slow process of certifying collection centres and refineries under the scheme.

The volatile gold play that’s nearly doubled this year
Can you dig it?
This year’s best-performing exchange-traded funds are all gold plays. Among ETFs with more than $500 million in market value, the top dog is triple-leveraged gold miners product (NUGT), with an insane 315 percent rally.

University of Michigan to Invest in Gold, Copper Mining Fund
The University of Michigan plans to invest $30 million in a fund that will buy North American gold and copper mines from distressed companies.


‘I’ll Never Retire’: Americans Break Record for Working Past 65
Almost 20 percent of Americans 65 and older are now working, according to the latest data from the U.S. Bureau of Labor Statistics. That’s the most older people with a job since the early 1960s, before the U.S. enacted Medicare. Because of the huge baby boom generation that is just now hitting retirement age, the U.S. has the largest number of older workers ever.

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