First Impressions

SEFCON V: One Year In – November 12, 2014, Grand Hyatt New York
JohnLothianNews.com
The Wholesale Markets Brokers’ Association, Americas (WMBAA) will host its fifth annual SEFCON event on November 12. Register Here

Watch the video promo and register to join dealers, traders, exchanges and regulators for this once-a-year look at the state of the SEF world.

Now that SEFs have been operational for a year, it is time to take a fresh look.

Watch the video »

Quote of the Day

“Numerous banks and companies started to prepare — more or less openly — for an end of the euro area even though member states and E.U. institutions never considered the possibility of terminating the euro. The feared collapse threatened to become an uncontrolled self-fulfilling prophecy.”

Hans-Georg Kamann, central bank attorney, in the story, “In Court, Lawyer Calls E.C.B. Bond Plan ‘an Egregious Extension’ of Powers”.

Lead Stories

In Court, Lawyer Calls E.C.B. Bond Plan ‘an Egregious Extension’ of Powers
JAMES KANTER and JACK EWING – NY Times
Europe’s highest appeals court began hearing arguments on Tuesday morning on a suit that aims to block a European Central Bank bond-buying program that has never been deployed — but whose mere announcement two years ago was widely credited with helping rescue the eurozone from market forces that could have destroyed it.
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Repo Traders Face FSB Collateral Rule in Shadow Bank Push
Jim Brunsden – Bloomberg
Traders are facing new global rules on how they determine the value of collateral in repo transactions as regulators seek to prevent panic writedowns that are seen fueling future financial crises.
The Financial Stability Board, a global group that brings together central bankers and government officials from the Group of 20 nations, today published a set of guidelines on discounts applied to collateral handed over as part of repurchase-agreement trades and other securities-financing transactions that aren’t processed through clearing houses. It also set minimum standards for some types of trades.
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Big bond fund outflows are risk for banks
John Plender – Financial Times
The International Monetary Fund’s Global Financial Stability Report is not a document to which people turn naturally for a cheery post-crisis view of where markets are going. Predictably enough, the latest report calls for increased vigilance. Yet a determined optimist might argue that it is in one important respect rather positive.
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Strategic bond managers hedge against further high yield sell-off
Anna Fedorova – Investment Week
Strategic bond managers have started increasing their high yield hedges via synthetic exposure in anticipation of further stress in the asset class.
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No Happy Ending for Investors in Central Bank Fairy Tale
Simon Kennedy – Bloomberg
You know it’s a special moment in the financial markets when analysts ditch the jargon and reach for artistic references. Ed Yardeni cited “The Wizard of Oz.” International Monetary Fund Managing Director Christine Lagarde went with both “Alice in Wonderland” and Harry Potter. Stephen King — the HSBC Holdings Plc chief economist, not the author — trolled the fantasy aisle.
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Central Banks

Central Bank Details Somber State of Europe’s Banking System
JACK EWING – NY Times
Europe’s banking system is smaller and less dependent on borrowed money than it was in 2012, but it is still burdened by bad loans and is not very profitable, the European Central Bank said on Monday in a report that portrayed eurozone lenders as still in recovery after the financial crisis.
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Could Falling Share Prices Also Be Part Of the Central Bank Toolkit?
Alen Mattich – MoneyBeat – WSJ
It’s a sign of the times that all it takes is equity markets to fall just a few percentage points to trigger speculation of yet more central bank policy intervention. But what if those tumbling asset prices actually were part of central bank policy?
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Currencies

Corporates ‘complacent’ over FX hedging costs
Michael Watt – FX Week
A senior treasury official at a global technology company has fired a warning shot across the bows of his fellow corporate treasurers, branding them ‘complacent’ about the future of FX hedging costs.
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Currency Comeback Seen in Record $5.9 Trillion a Day at CLS
Lucy Meakin – Bloomberg
CLS Group Holdings AG, operator of the world’s largest currency-trading settlement system, handled a record $5.94 trillion a day in September as volumes recovered from a slump in price swings that crimped activity.
The average value of transactions settled by CLS each day rose 21 percent from August, it said in a statement. The New York-based company settled more than 2 million payments on Sept. 17, the most since its creation 12 years ago.
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JP Morgan chief FX trader in London Richard Usher leaves bank -source
Reuters
JP Morgan’s chief currency trader in London, Richard Usher, has left the bank, a source familiar with the matter said on Tuesday.
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GreySpark FX Trading Report: Buyside Firms Increasingly Trade FX With Other Buyside Firms In Bank-To-Bank Venues
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Indexes & Index Products

Janus makes foray into ETFs with VelocityShares deal
Jessica Toonkel – Reuters
Janus Capital Group Inc , fresh from hiring bond star Bill Gross, said on Monday it plans to make its first foray into the $1.8 trillion exchange-traded funds (ETF) space through the acquisition of VelocityShares parent, VS Holdings Inc.
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‘Fear gauge’ at highest since eurozone crisis
Ralph Atkins in London and Vivianne Rodriguez in New York – Financial Times
US stock market volatility has jumped to the highest since the eurozone debt crisis, according to a closely watched index highlighting the global turbulence created by worries over the world economic recovery.
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Gold

Gold Futures Rise to Four-Week Hihg on Demand for Haven
Nicholas Larkin and Joe Deaux – Bloomberg
Gold futures rose to the highest in almost four weeks as concern that economic growth is slowing spurred demand for a haven asset.
The metal advanced this month as Federal Reserve officials indicated a worldwide economic slowdown may delay U.S. interest-rate increases. Germany cut its growth outlook today and investor confidence fell to the weakest level in two years as recession concerns mount.
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Silver price set-up attracts China banks
Thomas Hale and Neil Hume – Financial Times
Several Chinese banks have expressed interest in participating in the new global price setting mechanism for silver, according to the head of the London Market Bullion Association.
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South Africa’s Gold CEOs Ready for Mergers as Prices Decline
Kevin Crowley – Bloomberg
South Africa’s gold miners are ready for mergers and acquisitions as the falling price of bullion forces companies to cut costs and repay debt.
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