First Impressions

Bits & Pieces
By John J. Lothian

Futures Magazine is changing its name. Forty-three years after changing its name from Commodities to Futures, Futures Magazine will become Modern Trader, according to its editor in a video interview with a Chicago futures broker.

Futures Magazine Editor Dan Collins spilled the beans in a video interview with Price Group energy broker Phil Flynn on the Price Futures Group’s YouTube channel. That fact alone speaks volumes to the changes in the media space and the markets Futures has faced since last changing its name.

The re-booted magazine will feature 20 new sections, according to Collins, who noted the changes in the markets started shortly after the name change to Futures. He cited the introduction of equity options at the CBOE as the beginning of the industry changes, and the closing of the futures pits at the CME Group’s markets was mentioned.

In related news, the NFA is changing its name to National Modern Trader Association. Or not.

Last week, Chicago trader Mark Mendelson filed a lawsuit against Allston Trading, accusing the firm of engaging in “spoofing” and other unlawful trading practices in the Treasury Bond Futures market. You can check out the suit on MarketsWiki HERE. Mendelson was part of the lawsuit against the CME Group last year related to Globex access.

A big contingent from the JLN team will be at IDX in June. Besides myself, we will have Jim Kharouf, Doug Ashburn, Colin Ashburn and Alison Fay. Colin and Alison will be handling the technical aspects of our video efforts there. If you would like to meet with us while we are in London, please let me know.

Quote of the Day

“There is a reduction of risk appetite and, hence, volumes in the fixed income markets. This makes it much harder to do large trades even in a liquid futures market such as Bund futures. Markets move off the back of much smaller trade sizes than they did historically.”

Simon Wilson, head of fixed income electronic markets for Emea at Royal Bank of Scotland, in the story, “Bund futures highlight trading challenge”.

Lead Stories

Fed’s Bullard – low rate vow is ‘not helpful,’ GDP targeting is
By Ann Saphir – Reuters
Forward guidance and bond-buying, two mainstays of global central banking since the 2007-2009 financial crisis, may actually be of little use in jump-starting a moribund economy, a study by a top Federal Reserve official showed on Thursday.

Libor Accused Received Help From Boss, Evidence Shows
By David Enrich – WSJ
The man accused of being the ringleader of a global interest-rate-rigging conspiracy received a helping hand from his boss, according to evidence presented in a London trial Thursday.

Bund futures highlight trading challenge
By Joe Rennison – Financial Times
The challenges of trading in a key eurozone futures market were highlighted earlier this month as investors piled into the contract when German government bond yields shot up.

Busted Metals Traders Distract from Larger Manipulation Problem
By Seth Mason –
The Chicago Mercantile Exchange recently suspended two traders from the United Arab Emirates, Heet Khara and Nasim Salim, for manipulating gold and silver prices. The two traders utilized a technique called “layering.”

Questions arise about banks’ role in FIFA bribery case
By Douwe Miedema and Karen Freifeld – Reuters
A raft of banks could face tough questions in the sweeping U.S. crackdown on alleged corruption in global soccer as prosecutors review how much they knew about millions of dollars in bribes flowing through the U.S. banking system to accounts around the world.

Chicago bond sale attracts $6bn in demand
By Robin Wigglesworth – Financial Times
Chicago has pulled off a successful $674m bond sale after being downgraded to junk by Moody’s, attracting over $6bn of investor orders despite concerns over how the third-biggest US city will fill its gaping pension deficit.

Why the Fed poses a huge threat to the biotech merger ‘feeding frenzy’
By Akin Oyedele – Business Insider India
There’s a “feeding frenzy” among biotech companies.
In 2014, there were 45 transactions totaling $141 billion, the highest on record, according to Jefferies.
And 2015 is already busy, with at least 16 transactions already announced before the middle of the year.
In a research note published Thursday, analysts at Jefferies note that one of the main drivers of what they call a “feeding frenzy” has been low borrowing costs.

Excuses for Slow GDP Growth
The weather has done it again. For the second year in a row, officialdom blames bad winter weather for blah first-quarter economic growth. But this excuse doesn’t wash. Stimulus hasn’t worked.

Fuss Doubts Fed Rate Rise This Year, Sees Treasury Yields Capped
By Kevin Buckland and Hiroko Komiya – Bloomberg
Federal Reserve Chair Janet Yellen says she expects to raise interest rates this year. Loomis Sayles & Co. Vice Chairman Daniel Fuss doesn’t buy it and says Treasury yields will be capped.

S.E.C.’s Kara Stein Takes Aim at Deutsche Bank
By William D. Cohan – NY Times
The recent spate of settlements by big Wall Street banks has underscored their astonishing ability to persuade powerful government officials to let them escape without any real penalty for wrongdoing.

Central Banks

Fed Policies Said to Be Examined as Lawmakers Widen Leak Probe
By Craig Torres – Bloomberg
Congressional investigators have broadened their probe of a 2012 leak of confidential Federal Reserve material to include whether Fed officials adhered to their own policies for safeguarding information and handling breaches, according to two people familiar with the matter.

Fed’s Williams says U.S. rate rise likely this year, economy to bounce back
By Masayuki Kitano and Saeed Azhar – Reuters
San Francisco Fed President John Williams said on Thursday the Fed was likely to raise interest rates later this year, adding that he expects above-trend U.S. growth for the rest of 2015 after a weak first quarter.

Nowotny Says ECB Can’t Give Greece Interim Funding
By Nicole Lundeen – WSJ
The European Central Bank can’t provide interim funding to Greece under current rules, a member of the central bank’s governing council said.

ECB warns of record low interest rate threat to insurers
By Marc Jones – Reuters
The European Central Bank said on Thursday that record low interest rates were putting insurance firms and banks under increasing pressure and warned that any sell-off in stocks and bonds could damage the euro zone’s recovery.

BOJ’s Kuroda: We’re not brewing a bubble
By Mia Tahara-Stubbs – CNBC
Tokyo stocks are at fifteen-year highs and the yen at eight-year lows, but Bank of Japan Governor Haruhiko Kuroda told CNBC he doesn’t think a bubble is brewing nor is he worried about where the yen is headed.

Canadian Central Bank Leaves Benchmark Rate Unchanged at 0.75%
By Paul Vieira – WSJ
Canada’s central bank kept its benchmark interest rate at 0.75% on Wednesday and said its outlook for a return to growth starting midyear is largely unchanged, even as concerns emerge about momentum in the U.S. economy.


Electronic Trading Takes Over Currency Market Roiled by Scandals
By Lucy Meakin – Bloomberg
Electronic trading accounts for more than half of the $5.3 trillion-a-day foreign-exchange market for the first time, according to a Euromoney Institutional Investor Plc survey, as clients seek more transparency after rate-fixing scandals.

Poised for Revolution, Currency Trading Gets Veteran Combatant
By Sam Mamudi and John Detrixhe – Bloomberg
Bats Global Markets Inc. is betting on a revolution in currency trading like the one in stocks 20 years ago. It began its crusade with a $365 million acquisition followed by a price war.
The currency market “over the next three to five years is going through a structural change that won’t come again,” Bats Chief Executive Officer Chris Concannon said in an interview in the company’s downtown Manhattan office. “It’s equities in the 1990s.”

Forex’s ‘Last Look’ Practice Gets Curbed
By Chiara Albanese – WSJ
Two of the world’s biggest currency-trading platforms plan to restrict a controversial industry practice in which banks can pull out of trades at the last moment if the market moves against them.

Summers and Swiss bitcoin hoards
By Izabella Kaminska – Financial Times
The FT’s Richard Waters reports that Larry Summers, former US treasury secretary and secular stagnation theorist, is to form part of the advisory board at Xapo, a Silicon Valley Bitcoin start-up specialising in deep cold storage of bitcoins in Swiss vaults and the issuance of bitcoin debit cards.

Indexes & Index Products

Nasdaq Lists The Global X YieldCo Index ETF
Press Release
Nasdaq announced that Global X Funds will list a new exchange-traded fund (ETF), the Global X YieldCo Index ETF (Symbol:YLCO), which will begin trading on The Nasdaq Stock Market Thursday, May 28, 2015.


This hyped-up company now owns tonnes of gold – but you still shouldn’t touch it
By Dominic Frisby – MoneyWeek
Today, we revisit a story I wrote about last week – the company that is aiming to be the PayPal for gold, Canada-listed BitGold.
There was a huge announcement on Friday. BitGold acquired GoldMoney.

Gold can glitter if stocks hit the rocks
By Jeff Reeves – MarketWatch
For the record, I am no gold bug.
In fact, last September I wrote in this column that gold may be “tarnished for good” and would continue to stumble — and aside from a short-lived head-fake in February, that has proven true.
But given the continued volatility in the stock market and the risk of a correction, it’s worth considering a targeted bet on the precious metal.

Treasure Hunters: Lake Michigan Shipwreck Could Lead to Lost Confederate Gold
By Daniel Xu – OutdoorHub
There may be millions of dollars in gold bullion at the bottom of Lake Michigan, and those searching for it say they have found the first clue to its location. Kevin Dykstra and Frederick J. Monroe made news late last year after they discovered the remains of the 17th century French ship Le Griffon, the first ship to sail the Great Lakes. While the two men are still investigating the shipwreck, they said that they were not looking for historic ships when they discovered the wreckage. Instead they were looking for something a lot more lucrative.

Here’s Where We’ll Build Our First Space Mines, According to the Miners
By Kiona Smith-Strickland – Gizmodo
There’s gold in them thar’ space rocks, say the miners of the future. There’s also platinum, rare earth elements, and even water. Mining in space may sound like science fiction, but as the founders of two space mining companies recently told me, their plans are very real.

Hedge Funds Have Taken a Shine to Silver
By Giles Turner – WSJ
Silver prices have remained stuck at historical lows for the past three years, but hedge funds have decided now is the time to pile in. Last week, hedge funds snapped up silver at the fastest pace since 1997, increasing their net long position to a three-month high according to data from Bank of America Merrill Lynch.


The Stock Market: A Picture of Excess
By Pater Tenebrarum – Smarter Analyst
We have decided to expand a bit on our recent post about “ominous charts” and show a few more charts that should at least give one pause. We hasten to add that none of them should be seen as timing indicators. It must be stressed that we continue to be in unprecedented situation, with central banks worldwide cutting interest rates to the bone with policy rates in the major currency areas having been kept at or near zero for an unusually long time period.

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