First Impressions

We have 163 total attendees signed up so far for the Chicago series, with organizations like CME Group, Tradovate, Mizuho Securities, Allston Trading, DRW, Eurex, Rosenthal Collins Group, R. J. O’Brien Associates, ADM Investor Services, CBOE, Societe Generale, Trading Technologies, National Futures Association, ABN AMRO Clearing, Akuna Capital, CTG Trading, Spot Trading, Russell, HTG Capital Partners and Transmarket Group represented among others.

There is still room for the first two days of the Summer Intern Education series to be held in the auditorium at IIT’s Stuart School of Business.

It is good to be back in the land of air conditioning, electricity and lunch I don’t have to cook while keeping the flies away. Thank you to the JLN team for their great work while I was away.

Quote of the Day

“With more than 60 export credit agencies enabling our foreign competitors to seize opportunities away from workers, it’s critical that Congress restores this important tool for American exports.”

Jay Timmons, the president of the manufacturers’ association in the story, “Senate Resurrection of Export-Import Bank Goes to Divided House”

Lead Stories

The Hottest Bet for Exchanges Is Invading Currencies Market
by John Detrixhe, Bloomberg
For exchanges that historically stuck to stocks and futures contracts, the hottest new bet is challenging banks’ dominance in currency trading.
Deutsche Boerse AG, which runs the Eurex futures exchange and Xetra stock market, joined the battle on Sunday with the 725 million euro ($793 million) purchase of currency market 360T. Its decision came six months after Bats Global Markets Inc., a stocks and options specialist, waded into the business by spending $365 million on Hotspot FX.

BlackRock dives into private deals as banks shy away
BlackRock Inc (BLK.N) is on the prowl for energy and infrastructure projects in the United States, Mexico and Asia that its institutional clients can invest in, Mark McCombe, head of BlackRock’s institutional business, said in an interview last week.
The asset manager, the world’s largest, is trying to build a name for itself in private financing deals to attract and please yield-hungry clients such as U.S. pension funds, McCombe said. He sees particular opportunity now because banks that had funded those types of projects are constrained from doing so by post-crisis regulations.

Senate Resurrection of Export-Import Bank Goes to Divided House
NY Times
In a rare and fiery weekend session, the Senate voted on Sunday to resurrect the federal Export-Import Bank, handing the Republican Party’s most conservative wing a major defeat and setting up a showdown this week with House leaders divided over the moribund export credit agency.
The bipartisan vote, 67 to 26, broke a filibuster and allowed supporters to attach a measure to a three-year highway and infrastructure bill that would reauthorize the Export-Import Bank. That bill is expected to pass the Senate early this week.

BofA: Here’s Another Sign the Bull Market Is Running Out of Steam
A huge chunk of this year’s increase in the Standard & Poor’s 500-stock index is attributable to just two sectors—retail and health care—according to Bloomberg News.

Deregulator of Banks Set to Testify Before House
Dealbook – NY Times
When the House Financial Services Committee examines the sweeping overhaul of financial regulation on its fifth anniversary, legislators will first hear on Tuesday from a former senator with longstanding familiarity with banking regulations.
That would be Phil Gramm, one of the chief architects of a comprehensive deregulation of the financial rules in the late 1990s. That led to the creation of mega-banks and looser oversight of financial derivatives, which some critics say laid the groundwork for the financial crisis.

ICE delays Singapore platform launch to later this year
Intercontinental Exchange will launch its Singapore platform later in the year, the bourse said on Monday, following delays after China opposed the inclusion of cotton and sugar futures that would use Chinese prices as references.

Banks in developed markets back from 2008 near-death experience
Julia Faurschou, FT
Banks in developed markets are beginning to look more attractive to large investors again. Previously, a number of high-profile fund management groups had removed them from their portfolios over regulatory concerns.

Bond Market’s Got It All Wrong When It Comes to Biggest Foe
by Daniel Kruger, Bloomberg
Inflation is the big enemy of the bond market. But bond investors, it turns out, tend to overestimate their foe.

A few big winners keep U.S. stock market afloat in 2015
Amazon’s stock price surge into Friday made it the latest of a series of companies to boom following results, and its performance this year, along with a few others, has basically kept the S&P 500 above water.

One of the richest men in the world is backing a startup that ranks Wall Street’s hedge funds
JONATHAN MARINO, Business Insider
The ability to generate conclusions about hedge fund managers’ behavior could be the tipping point for whether big investors double down in hard times or call for redemption.

JP Morgan’s Daniel Pinto: ‘If you don’t adapt, you are dead’
By David Wighton, Financial News
For a man running a large investment bank, Daniel Pinto smiles a lot. But then, the genial Argentinian has a lot to smile about.

Deutsche Börse Plans Job Cuts, Other Cost-Cutting Measures
Germany’s Deutsche Börse AG on Monday reported double-digit-percentage rises in revenue and net profit, helped by higher trading activity in capital markets, and set 2018 earnings targets that will include job cuts and other measures to reduce costs and boost group efficiency.

Central Banks

Andy Haldane, Bank of England’s Chief Economist, Gets Shareholder Capitalism Entirely Wrong
Tim Worstall, Forbes
It’s a bit of a worry when central bankers get caught up in the latest fashionable nonsense to sweep through the intelligentsia. They’re supposed to be the sensible, even conservative, people who don’t succumb to the winds of public opinion in that fashion. But that is what seems to have happened to Andy Haldane, the chief economist at the Bank of England.

A new guard is forming at the Federal Reserve
The Washington Post
There will be a new face at the Federal Reserve’s policy-setting meeting in Washington this week, the first of a string of turnovers as the central bank prepares for the next phase of the nation’s economic recovery.
Patrick T. Harker will take a seat at the Fed’s 27-foot mahogany table as president of the Federal Reserve Bank of Philadelphia. Harker was picked for the job in March and took his post July 1. He replaces Charles Plosser, who had led the regional bank for nearly a decade and was an outspoken critic of the Fed’s easy-money stance.

BOJ’s Nakaso warns of China slowdown impact on exports
Japanese policymakers must be mindful of the potential negative impact that China’s economic slowdown could have on Japanese exports, central bank Deputy Governor Hiroshi Nakaso said on Monday.
He also warned of the risk that an expected interest rate hike by the U.S. Federal Reserve could heighten global market volatility and hurt emerging markets vulnerable to capital outflows.

Fed May Hint September Liftoff Is on Table With Statement Tweaks
The Federal Reserve’s message for the market this week could contain hints about the timing of its first interest-rate rise that echo the advice once offered in an old teen love song popular in the 60s: “See You in September.”


Greece Made Preparations to Exit Euro
NY Times
Already struggling with internal conflict, Greece’s government is facing new criticism over secret preparations that would have allowed the country to leave the euro if necessary.
In a recording released on Monday, Greece’s former finance minister detailed a contingency plan to create an alternative banking system that could switch to a new currency. The system would be “euro-denominated but at the drop of a hat it could be converted into a new drachma,” the former finance minister, Yanis Varoufakis, said on the recording of a July 16 interview with an influential investment organization.

Tony Dalton Joins R.J. O’Brien as Head of FX Division
R.J. O’Brien & Associates
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, announced that Tony Dalton has joined the firm today in its New York office as Head of the FX Division. Dalton is widely considered one of the pioneers of foreign exchange (FX) prime brokerage, after building that business for three major global banks.

Blockchain’s Newest Fan Is Executive Who Upended European Stocks
Bloomberg Business
Peter Randall, known for helping unleash a new era of competition for European stock exchanges in 2007, is seeking to upend the status quo yet again. This time, the goal is using the underlying technology for the digital currency bitcoin to dramatically speed up the transfer of assets.”Clearing and settlement processes are fragmented, cumbersome, costly and in need of technological innovation and simplification,” Randall said in the statement. “We are currently in discussion with a number of first-tier institutions who are looking to commercialize blockchain technology.”

China’s yuan unchanged as central bank signals stability
Economic Times
China’s yuan was flat against the dollar on Monday after the central bank set the official guidance rate almost unchanged, sending a message that monetary authorities wish to see the currency steady for the moment, traders said.
The People’s Bank of China (PBOC) set the midpoint rate at 6.1176 per dollar prior to market open, effectively flat at 0.01 per cent weaker than the previous fix at 6.1169.

Indexes & Index Products

Chinese fund manager GF International launches MSCI China A International ETF
Chinese asset manager GF International Investment Management Ltd on Monday said it will launch an exchange-traded fund (ETF) tracking the MSCI China A International Index, becoming the first ETF in Asia to track the index. The index was introduced in June last year and represents the A share component of the MSCI Emerging Markets Index when the latter fully includes A shares – or stock traded in Shanghai or Shenzhen by mainland investors and some foreign institutions.

FTSE Russell launches 50% hedged international indices
ETF Strategy
FTSE Russell, a global index provider, has announced the launch of the FTSE 50% Hedged Index Series. The series is designed for use as underlyings for index-tracking funds, such as ETFs, and as a performance benchmark to help US dollar-based investors evaluate their currency exposures and hedging strategies when investing internationally.

McGraw Hill Said to Weigh Acquiring SNL Financial
Insurance Journal
McGraw Hill Financial Inc. is in talks to buy SNL Financial, the financial news and data services provider owned by buyout firm New Mountain Capital, according to people familiar with the matter. A deal valuing Charlottesville, Virginia-based SNL at about $2 billion may be announced Monday, said the people, who asked to not be identified because the matter isn’t public.

Commodity-Producer ETFs Hit Multi-Year Lows as Raw-Materials Slump
The commodity rout’s hits just keep on coming. The latest: exchange-traded funds that track the raw-material producing companies. Some of these investment vehicles are hitting multi-year lows as commodities’ prices tank.

Do Big Mutual Funds and ETFs Hurt Your Wallet?
If it seems like your airplane tickets cost too much this summer or your bank is overcharging you at the ATM, you might think about blaming your mutual fund.


The carnage isn’t over in gold, other metals-mining stocks
Caveat emptor! Mining stocks are cheap, with gold, platinum and copper at multiyear lows, but if you plan on buying them at these prices, read this first.

Poll: When will gold regain its shine?
Gold’s woes are showing no signs of easing after a stronger dollar and weak demand from China sent the precious metal tumbling down to a five-and-a-half year low last week.
Continuing its downtrend on Monday, gold slipped 0.3 percent to around $1,095 an ounce, reversing Friday’s brief gains.

Money managers holding more short positions in gold -BofA report
Money managers, who have been cooling on gold for some time, last week held more short positions than long ones in the precious metal for the first time in nearly a decade, Bank of America reported Monday, suggesting an expectation prices will continue to fall.
“Gold no longer precious – money managers net short for the first time” since the bank started tracking this kind of information in 2006, researchers Jue Xiong and Stephen Suttmeier wrote in the report.
Investors also held record short positions in silver, they said.

India’s Rajesh Exports Acquires Newmont’s Swiss Gold Refiner
Rajesh Exports Ltd., India’s biggest exporter of gold jewelry, agreed to buy Swiss refiner Valcambi SA from owners including Newmont Mining Corp. for $400 million.
The cash purchase helps ensure gold supplies to India, the largest consumer of the metal after China, Bangalore-based Rajesh Exports said in an exchange filing on Monday. Its stock rose to close at the highest level since at least July 2000, while shares in Newmont, the largest U.S. gold producer, fell.

Australian acquisition next on the agenda for Indian gold baron
The Sydney Morning Herald
The Indian gold baron who paid $US200 million ($274 million) for one of the world’s largest gold refineries on Monday insists that an Australian acquisition is next on his agenda.
Rajesh Mehta, whose company Rajesh Exports is one of the world’s biggest private sector gold buyers and the operator of more than 80 jewellery stores across the subcontinent, is the new owner of the Valcambi gold refinery in Switzerland, after buying it from a syndicate led by Newmont Mining on Monday.

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