First Impressions

It’s over – a dinner conversation
Jim Kharouf and Doug Ashburn
“It’s over,” said one guest at the dinner table on Sunday.
He was speaking candidly about the futures industry and its prospects. Rather than facing a rebuttal from the other six industry professionals at the table, he ended up with three others on his side and three more willing to listen.

Quote of the Day

“An environment where there has been little movement in the major currencies, including the euro and the yen has affected EBS volumes.”

ICAP in the FT’s story: “ICAP currency trading touches six-year low.”

Lead Stories

How I learned to stop worrying and love (eurozone) deflation?
Izabella Kaminska | FT Alphaville
Okay, so it’s not the first time we’ve heard a positive spin on deflation. Who can forget the famous last words of Deflation Draghi in June this year? “Well, I am not sure I get the point, but I think I get it. First, the fact that inflation is low is not, by itself, bad; with low inflation, you can buy more stuff. ” A view that was definitely not echoed by all economists in the field.
***DA: Deflation is great if one a) has no debt backed by assets declining in value or b) is not a creditor in danger of being under-collateralized by such declines.

Risk-Adjusted: Where is the value in Emerging Markets?
Profit & Loss Webinar in association with CME Group
In this first of a series of free live audio webinars in association with CME Group, we look at trends in emerging markets, Tuesday, November 12, 11am EST/10am CST/4pm GMT. Register below.

Bravery, creativity and a lot of money: How to cure the eurozone
Marcello Minenna –
The eurozone crisis is in remission – it has not gone for good. Market participants were reminded of that in late September, when the president of the European Central Bank (ECB) suggested another shot of liquidity for eurozone banks may be needed to keep market interest rates in check.
***DA: Pile on. What could possibly go wrong?

Fed in no rush to cut bond buys, top policymakers say
The Federal Reserve should scale back its asset purchases only when the U.S. economy shows clearer signs of improvement and even then it should act slowly, one senior central banker said on Monday, while two others stressed there is no need to rush.
***JM: And really, how cold could winter be, after all.  Play us another merry tune, Mr. Grasshopper!

HKEx Welcomes First Offer Of RMB Sovereign Bonds Through Its Facilities
Hong Kong Exchanges and Clearing Limited welcomes the decision by the Ministry of Finance of the People’s Republic of China to list renminbi-denominated sovereign bonds again on its Stock Exchange, and for the first time use the Exchange’s facilities for a public offer of its bonds.

Sweden’s Finance Chief Loses the Pony Tail
Charles Duxbury  – MoneyBeat – WSJ
Sweden’s finance minister has just finished giving a seminar on the state of the economy Monday, but it was the state of his hair that received more questions from journalists. The Nordic state’s most famous pony tail is no more: Anders Borg has cut it off.
***JM: It was only afterwards that they explained they were talking about the other kind of “haircut.”

Newedge to join forces with GMEX Group
Press Release
London – Newedge, a provider of multi-asset brokerage and clearing, is to join forces with Global Markets Exchange Group International (GMEX Group). GMEX Group is an exchange business focused on the launch of new products, including differentiated Interest Rate Swap Futures contracts, and derivatives indices, as well as exchange business partnerships in emerging markets enabled by multi-asset trading technology.

Timeline of the growing currency probe
Emily Cadman –
At least six authorities across the globe – the European Commission, Switzerland’s markets regulator Finma and the country’s competition authority Weko, the UK’s Financial Services Authority, the Department of Justice in the US and the Hong Kong Monetary Authority – are investigating whether traders in some of the world’s biggest banks colluded to manipulate benchmark rates in the foreign exchange market.

Swiss finance minister calls for tighter leverage rules
James Shotter in Zürich and Patrick Jenkins in London –
Shares in UBS and Credit Suisse, Switzerland’s two largest banks, fell sharply on Monday after the Swiss finance minister said that the country’s leverage rules, already among the toughest in the world, should be tightened further.
***DA: UBS stock is still 50 percent higher than it was a year ago.

Central Banks

The ECB’s easing dilemma
Izabella Kaminska | FT Alphaville
Courtesy of Icap’s market analysis team, here’s the turnaround in the Eonia December 13-January 14 spread this month. As Lena Komileva, chief economist at G+ Economics, notes on Monday, October’s eurozone inflation print (0.7 per cent, the weakest in four years) has raised expectations that the ECB could delivery further easing before year-end. The unanswered question, however, is in what form will the easing come.

Italy’s finance minister urges ECB to ease policy, combat strong euro
Italy’s finance minister urged the European Central Bank to ease monetary policy, questioning the effectiveness of the bank’s strategy of verbal intervention to cap the strong euro, the Financial Times reported on Tuesday.

MyTreasury Wins 2013 Treasury Management International Money Market Fund Dealing Portal Award
Press Release
MyTreasury, a leading multi-product cash investment portal, today announced it has been awarded the 2013 Treasury Management International Best MMF Dealing Portal award. This is the sixth consecutive year MyTreasury has won this award, as voted by the readers of Treasury Management International (TMI).


ICAP currency trading touches six-year low
Philip Stafford –
Currency trading at ICAP, the world’s largest interdealer broker, fell to its lowest monthly level in more than six years as a drop off in volatility and uncertainty over the trajectory of US monetary policy led to a slump in foreign exchange markets.

Bitcoin Firm Files for Bankruptcy
Robin Sidel and Katy Stech –
A three-month-old company with ties to one of the biggest promoters of the virtual currency bitcoin has filed for bankruptcy protection with less than $50,000 in assets. Alydian Inc., a unit of CoinLab Inc., on Friday filed for Chapter 11 protection in U.S. bankruptcy court in Seattle.

BTC China beats Mt. Gox and Bitstamp to become the world’s No. 1 bitcoin exchange
Emily Spaven – Coindesk
BTC China has become the world’s biggest digital currency exchange having handled a greater volume of bitcoins in the past week than Mt. Gox and Bitstamp.
***JM: Nervous regulators, I’d like you to meet BTC China.  BTC China, these are nervous regulators.

The Euro: Sing When You’re Losing
Katie Martin – MoneyBeat – WSJ
Regular readers may recall the intriguing recent study from Deutsche Bank showing that trading volumes in the euro slid as the currency itself climbed, indicating that the great euro rally that peaked in late October was built on spindly foundations.

Indexes and Index Products

European ETP assets cross $400 billion mark
ETF Strategy
Global exchange-traded product (ETP) flows reached $32.9 billion in October, according to the latest BlackRock ETP Landscape Report, as the US debt ceiling was raised and the likelihood of Q4 Fed tapering faded under continued signs of slow US economic growth.

Tradeweb: iTraxx Spreads Tighten Steadily Through October While Selling Dominated Cash Credit Markets
CDS: Spreads on the iTraxx main index have been tightening steadily throughout the month with only a few exceptions – the most notable one occurring between October 3 and October 9, when mid spreads peaked at 101.7 basis points.


India’s Gold Demand Fell by Half Ahead of Diwali This Year
Biman Mukherji and Debiprasad Nayak –
Indians bought around half the gold they usually buy in the run-up to Diwali this year, according to sellers of the precious metal, citing reduced availability as a result of measures aimed at curbing imports and higher prices in India compared with gold on the international market.

LBMA Appoints Ruth Crowell Chief Executive Officer
Claudia Carpenter – Bloomberg
Ruth Crowell will be chief executive officer of the London Bullion Market Association, effective at the end of December.

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