First Impressions

John Edge, RRVIG – Timing is Everything

“If you rang up a bank and said, ‘Look, I really understand blockchain, I understand bitcoin, I’ve been to these talks and I think it’s very interesting for OTC markets, because OTC markets don’t have a register of securities’ — there aren’t enough people doing this. There are more banks that want people and less people doing it.”

To John Edge, managing partner at RRVIG, the current technological climate represents a chance for young people to jump into financial markets if they can demonstrate mastery of digital innovations, specifically blockchain, “which no one understands in any sense.” As the industry decentralizes, the task for the emerging professional is finding the links between those new technologies and their applications in finance. One cannot be behind in the game if the game is just beginning.

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Quote of the Day

“A lot of people are fed up with the Fed. Its decision was a buzz-kill, and nothing is moving today. New issues are what this market needs.”

A New York-based trader in the story, “Bankers prepping for spike in bond issuance”

Lead Stories

Why the Fed Has Markets in a Tizzy
Justin Lahart – WSJ
Markets around the world are flummoxed by the Federal Reserve’s interest-rate decision Thursday, and knee-jerk explanations of why hold about as much water as a sieve.

Eurozone’s enforcer ready to keep Greece’s new leader in line
Jon Henley – The Guardian
Whoever ends up moving into Maximos Mansion, the official Athens residence of Greece’s prime ministers, after Sunday’s election, they will not, in any meaningful sense, be running the country.
That honour might be said to go instead to a besuited Dutch economist in Brussels with the imposing title of director-general in the secretariat-general of the European commission in charge of the Structural Reform Support Service.

US Equities Industry ADV In August 2015 Was 7.9 Bn, Highest In Four Years, According To TABB Equities LiquidityMatrix For August 2015
Press Release
US equities industry average daily volume in August 2015 was 7.9 billion, the highest in four years, says TABB Group research analyst Valerie Bogard, who compiles and analyzes the TABB Equities LiquidityMatrix.

Hedge fund manager says he didn’t trade on hacked press releases
Karen Freifeld – Reuters
A hedge fund manager in Moscow claims he never possessed or traded on inside information from an alleged scheme to hack into networks that distribute corporate news releases, according to a court filing late Wednesday.

LATAM WRAP-Bankers prepping for spike in bond issuance
LatAm credit markets were inching wider in light trading on Friday, as bankers braced for a revival in issuance next week after the Fed stalled a lift-off in rates.
The anticlimactic conclusion to the FOMC meeting on Thursday left somewhat deflated traders hoping that a reactivated primary market will invigorate secondary volumes.
“A lot of people are fed up with the Fed,” said a New York-based trader, explaining the drop in volumes.

US moves to ease Cuban trade embargo and open businesses
BBC News
The US has announced eased restrictions on business and travel with Cuba, the latest move by President Barack Obama to improve relations with the country.

JPMorgan’s Dimon Says Violent Moves in Treasuries Are Possible
Hugh Son – Bloomberg Business
Jamie Dimon, JPMorgan Chase & Co.’s chief executive officer, said the bank will be prepared for the possibility that Treasury prices move violently when interest rates rise.

Prospects for Asia bright despite weak global growth this year: Lim Hng Kiang
Marissa Lee – The Straits Times
Global growth has been disappointing this year, but Asia’s growth prospects are still bright in the long term, said Minister for Trade and Industry Lim Hng Kiang.
“Notwithstanding the current challenging macroeconomic conditions, the long-term Asian growth story remains bright,” Mr Lim said in a speech to mark the opening of the annual Singapore Summit on Friday (Sept 18) night.

DoubleLine’s Gundlach to Start Global Bond Fund to Buy G-20 Debt
Miles Weiss – Bloomberg Business
Jeffrey Gundlach, the head of DoubleLine Capital, is starting a global bond fund that will focus on the sovereign debt of major developed and emerging market countries.

Beware the global financial crisis, part III
Heather Stewart – The Guardian
The Barbican cultural centre in London is currently hosting The Colour of Money: a season of films about finance, “from the gold rush to the credit crunch”. If Andy Haldane, one of the Bank of England’s most thoughtful policymakers, is right, they should clear some space in the schedule for Financial Crisis III.

Russian Finance Chief Warns on Wealth Funds in Austerity Debate
Paul Abelsky and Anton Doroshev – Bloomberg Business
Russia may exhaust its two sovereign wealth funds in 16 months to two years if it continues to rely on the $144.5 billion reserves without scaling back budget spending, Finance Minister Anton Siluanov warned, laying bare the stark choices facing the government battling its first recession since 2009.

Interview: Saxo Bank Poised to Expand in Asia as China Opens Up
Andy Traveller – Finance Magnates
As China continues to open up its financial markets and as the world’s economic centre of gravity steadily moves eastwards, many Western firms are trying to figure out how they can “pivot to Asia”.saxo_bank_logo-150×150
One such firm is doing just that: Danish multi-asset online broker, Saxo Bank, which just recently opened a new office in the Shanghai free-trade zone. Finance Magnates caught up with Adam Reynolds, CEO, Asia Pacific at Saxo Bank, to get his view on the market and to learn more about the firm’s strategy in the region.

Bank of America Merrill Lynch Hires a Senior Banker
Dealbook – NY Times
Bank of America Merrill Lynch has hired a long-time deal maker from Deutsche Bank to serve as a senior banker, the firm announced in an internal memorandum on Friday.

U.S. Appellate Court Puts Hold on Action Against Lynn Tilton
Dealbook – NY Times
An appellate court has temporarily put a hold on an administrative securities fraud action filed against the private equity financier Lynn Tilton.
A three-judge panel of the United States Court of Appeals for the Second Circuit in Manhattan imposed the stay on Thursday while considering Ms. Tilton’s challenge to a decision by the Securities and Exchange Commission to try her before an administrative law judge.

Central Banks

How Economists Reacted to the Federal Reserve’s Interest Rate Decision: ‘Relief’
MoneyBeat – WSJ
The Federal Reserve left short-term interest rates unchanged on Thursday after weeks of market-churning debate at the central bank about whether it was time to end an era of near-zero rates. Officials noted concerns about recent turbulence in financial markets and in economies abroad. Here’s what some economists are saying:

Japan finmin – Fed decision likely reflected voice of emerging economies
Tetsushi Kajimoto – Reuters
Japanese Finance Minister Taro Aso said on Friday that the U.S. decision to hold interest rates steady probably reflected lobbying by emerging economies at the recent G20 meeting that rapid U.S. rate hikes would damage their economies.

Central banks fret stimulus efforts are falling short
William Schomberg – Reuters
The world’s leading central banks are facing the risk that their massive efforts to revive economic growth could be dragged down again, with some officials arguing for bold new ideas to counter the threat of slow growth for years to come.

Bank of England may cut rates, says chief economist
BBC News
The Bank of England may have to cut rates to combat low inflation, rather than raise them as its next move, its chief economist Andy Haldane has said.


The Bitcoin Community Disagrees on What Happens Next
Olivia Solon – Bloomberg Business
What is Bitcoin? Is it property, something to be owned? Is it a currency, something to be spent? Or is it a commodity, defined by Webster’s Dictionary as “any useful thing,” and/or “anything bought and sold; any article of commerce.”

Fed Gifts Emerging Markets a Lifeline at Expense of Euro, Yen
Andrea Wong, Lananh Nguyen and Rachel Evans- Bloomberg Business
Emerging markets have a friend in Janet Yellen.
Policy makers from Asia to Latin America can enjoy a reprieve from a 19 percent slump by their currencies over the past year after the Federal Reserve kept rates near zero on Thursday, stemming outflows from these economies. Their counterparts in Europe and Japan aren’t so fortunate; they’re still waiting for a U.S. rate rise that would reduce pressure to bolster easing at home.

TradeTech FX: Buy side wises up to benchmarks
Farah Khalique – Euromoney
The importance of foreign exchange is fast rising on the buy-side agenda, as asset managers start to question how good a deal they get on their currency trades in light of the benchmark reform after the fix scandal, according to market participants at this week’s TradeTech FX conference.

BofA Dragged Into Currency Exchange Lawsuits as U.K. Trader Sues
Patrick Gower and Jeremy Hodges – Bloomberg Business
Bank of America Corp.’s Merrill Lynch was the latest bank to be dragged into a rash of foreign-exchange-related unfair dismissal lawsuits after a former trader sued the lender.

Police Arrested Pascal Reid for Bitcoin. Now He’ll Teach Them about It.
Leon Pick – Finance Magnates
If you can’t beat ’em, teach ’em.
In a bizarre plea deal reached between Florida resident Pascal Reid and prosecutors, the accused will be educating various law enforcement agencies about Bitcoin.

TraderMade Systems Launches Historical FX Data Tool, FXQuest
Andy Traveller – Finance Magnates
As the popular axiom goes, “knowledge is power”. Supplier of technical analysis solutions for the foreign exchange (forex) industry, TraderMade Systems Ltd, is drawing on this sentiment, today announcing the launch of FXQuest, a cloud-based tool that gives clients the ability to access more than four decades of forex data.

Indexes & Index Products

Direxion Launches Two New Leveraged ETFs Based on the ISE Cyber Security Index International Securities Exchange, LLC
ISE ETF Ventures announced that Direxion Investments has licensed the ISE Cyber Security Index (index ticker: HXR) as the basis for two new leveraged exchange-traded funds (ETFs) that will seek to achieve 200 percent, and 200 percent of the inverse, of the daily performance of the index. The funds launched yesterday on NYSE Arca.

BlackRock introduces first Saudi Arabia exchange-traded fund
Jessica Toonkel and Tariro Mzezewa – Reuters
BlackRock Inc has introduced an exchange-traded fund investing in Saudi Arabia, marking the first of its kind.

MSCI ESG Leads the Way as Sustainable Investing Gains Momentum
Press Release – MarketWatch
MSCI Inc. a leading provider of research-based indexes and analytics, reports a surge in demand for Environmental, Social and Governance (ESG) data and indexes. As of July 2015, equity ETF assets tracking MSCI ESG Indexes grew nearly 30% to $1.8 billion during 2015. Since December 2013, assets have more than doubled, rising by 140%, with 22 new ESG ETFs tracking MSCI indexes. So far in 2015, ten of the 11 ESG ETF’s launched have been based on MSCI indexes, accounting for 96% of the total flows in the category.

Another OPEC ETF Debuts
Todd Shriber – Benzinga
Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, can now be accessed by U.S. investors via an exchange traded fund with Thursday’s debut of the iShares MSCI Saudi Arabia Capped ETF.

Currency Conundrum: New Index Tools for Investors Hedging Currency Exposure in International Portfolios
Virtual-Strategy Magazine
Since June 2014, the US dollar (USD) has risen significantly relative to other currencies. Improving indicators about the state of the U.S. economy, actions by the European Central Bank to stimulate the Eurozone and investor expectations that the U.S. Federal Reserve will begin raising interest rates have all contributed to a marked improvement in the valuation of the USD relative to other global currencies.

Market interventions may affect timing of China ‘A shares’ inclusion – FTSE
Michelle Price – Reuters
A timeline of two to three years for including Chinese-listed shares in a major benchmark could be extended after a series of extraordinary interventions that have hurt market access for investors, FTSE Russell’s Asia chief told Reuters on Thursday.

Three New Climate Change Index Series Launched by S&P Dow Jones Indices
S&P Dow Jones Indices (S&P DJI), one of the world’s leading providers of financial market indices, has today announced the launch of three new climate change index series: S&P Global 1200 Carbon Efficient Index Series, S&P Global 1200 Carbon Efficient Select Index Series and S&P Global 1200 Fossil Fuel Free Index Series. All three index series are derived from the constituents of the S&P Global 1200.


Barrick Shuts Copper Unit, Bolstering Drive to Focus on Gold
Danielle Bochove – Bloomberg Business
Barrick Gold Corp. is shutting its standalone copper unit, advancing a drive to focus on its main assets and cut costs four years after the company expanded that business.

Investor dials up £500,000 gold purchase on smartphone
Hugo Greenhalgh – Financial Times
A private investor has bought £500,000-worth of gold bullion through an app on their smartphone in what is thought to be one of the largest transactions of its kind.
BullionVault, the online silver and gold exchange, said it had sold one individual 21kg of gold stored in its Zurich vaults for half a million pounds in August — the highest value deal conducted via its app.

Another Silver Week As Gold Waits On The Fed – GoldMoney Weekly Market Report And Customer Metrics
Press Release
It was another week where silver outshone its yellow cousin amid the ‘wait and see’ ahead of the US Federal Reserve decision whether or not to raise interest rates.

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