First Read

Bits & Pieces, Snow Day Edition
Doug Ashburn, John Lothian News

Last week’s east coast “Snowmageddon” dominated the national news for three days despite the fact that, in most places, the totals came nowhere near the hype. Here in Chicago it began snowing Saturday evening and it has only just began to taper off as of Monday morning. The final tally looks to be in the 20-inch area, though Jim Kharouf will tell you there was every bit of two feet at his place even before the Sunday night finale. And though the story is dominating the local news today, on the national scene we are getting a mere fraction of the attention New York received last week.

Today is Groundhog Day, and Phil might see his shadow, but he must first dig up through two feet of snow.

Today’s newsletter is arriving a bit later than usual, due to weather delays. Yes; we realize that for the 4 years that Jon Matte put together JLN from above the Arctic Circle, we were never subjected to these kinds of delays. But he compiled the newsletter from his home, and he rarely got 20 inches of snow between his bedroom and his home office.

Speaking of Jon, he just completed the new web site for the tour company he now works for full time. If you plan to visit Alta, Norway for, say a Northern Lights tour, dogsled adventure, or one of the cruise ships that make their way northward in the summer, have a look at NorthAdventure.no

FIA and SIFMA are coming together this week to host the Asset Management Derivatives conference this week in Dana Point, California. With all the new rules having come online this past year, it is time for the buyside to get together to network and compare notes. Click HERE for more information. Also, the countdown to FIA Boca sits at five weeks and one day. We will be there in full force; please contact us if you would like to schedule a meeting.

The bidding war between CME Group and BGC Partners for GFI Group has moved to the next level, as GFI shareholders Friday rejected CME’s bid (see stories in Lead and Exchanges sections below). CME Group, which was really after GFI’s technology bits, namely Trayport and FENICS, must move to Plan B. Options include trying to buy just the pieces they want, or, if the BGC deal does indeed go forward, bide their time then put in a bid for BGC Partners. That would be fun to watch.

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Coke, Budweiser win as Super Bowl ad battle gets serious
By Lisa Richwine and Jennifer Saba, Reuters
Budweiser capitalized on cuteness with the return of a puppy and Coca-Cola stood out with an anti-bullying message as many brands stirred emotions rather than going for laughs during the annual high-stakes battle of Super Bowl commercials.
jlne.ws/1zuxhog

**JK – It was so serious, that Seahawks coach Pete Carroll opted for tragic/comedy on their last play of the game.

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As Regulators Focus on Culture, Wall Street Struggles to Define It; Big Banks Try to Monitor Employee Attitudes to Avoid Future Problems
By Emily Glazer and Christina Rexrode
“Culture” is the buzzword of the moment at banks—and a puzzle that regulators and Wall Street firms are wrestling to solve. As they emerge from years of bruising fines, layoffs and losses, big banks are trying more than ever to monitor employee attitudes and values to avoid future problems.
jlne.ws/1LDMGsS

***** Let’s start with values and then move to culture.

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Qatar Stock Exchange Will Host In October 2015 The WFE 55th General Assembly And Annual Meetings
MondoVisione
Qatar Stock Exchange will host the 55th General Assembly and Annual Meeting of the World Federation of Exchanges (WFE) during the period from 19th-21st October 2015. The WFE is also the world’s largest gathering of exchanges as it is the trade association of 64 publicly regulated stock, futures and options exchanges from all over the world, in addition to other affiliate and correspondent members.
jlne.ws/1zMJiJf

***** I might have to go.

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Female fund managers in decline
Chris Newlands, FT
The number of female portfolio managers running money in the US has fallen every year for the past six years despite continued efforts to try and bring more women into frontline asset management.
jlne.ws/1K33YxV

***** It is just a dip before the rally.

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MarketsWiki

MarketsWiki Page of the Day
Eric A. Bloom

MarketsWiki Recent Updates

People

GFI Group Inc; Eric A. Bloom; Calvin (Chip) R. Carver, Jr.; Denzil Jenkins; Dennis Zarr; Deposit; Calvin T. Wheeler

Companies, Organizations and Groups

Canonbury Group; Cantor Fitzgerald; Cantor Gaming

Products

Canadian Dollar

Miscellaneous

Candlestick chart; Department of Commerce; Canadian Annual Derivatives Conference

Statistics

58,090,356 pages viewed, 8,144 articles, 189,176 edits
MarketsWiki Statistics

Lead Stories

CME Group and GFI Group Terminate Merger Agreement
CME Group
CME Group Inc. and GFI Group Inc. today announced that they have each determined to terminate their previously announced merger agreement following today’s special meeting of GFI shareholders.
jlne.ws/1AiGOlk

JPMorgan to pay $99.5 million to resolve currency rigging lawsuit
By Jonathan Stempel, Reuters
JPMorgan Chase & Co, the largest U.S. bank, agreed to pay $99.5 million to settle its portion of an antitrust lawsuit in which investors accuse 12 major banks of rigging prices in the $5.3 trillion-a-day foreign exchange market.
jlne.ws/1K2Zw2b

Korea Exchange to be released from direct state control
The Korea Herald
The Ministry of Strategy and Finance decided Thursday to release Korea Exchange and five other organizations from direct state control.
jlne.ws/1yuqQ25

Korea Securities Depository (KSD) and Clearstream launch investment fund cooperation
Deutsche Boerse Group
Clearstream: On 2 February 2015, Korea Securities Depository (KSD) and Clearstream signed a contractual framework in Seoul which launches their investment fund cooperation. The new partnership supports cross-border investment fund distribution (direct and indirect distribution) by linking KSD’s FundNet and Clearstream’s global fund processing platform Vestima.
jlne.ws/1BTXKg4

Deflation alarms ring louder as EU, Chinese factories struggle; Central banks from Switzerland to Turkey via Canada and Singapore have already loosened monetary policy in the past few weeks
Business Standard
European and Chinese factories slashed prices in January as production flatlined, heightening global deflation risks that point to another wave of central bank stimulus in the coming year.
jlne.ws/1K2XvD7

Chinese banks to join new gold fix from March
By Henry Sanderson, FT
The replacement for the near-century-old London gold fix will start in March, with the hope of attracting at least 11 members, including Chinese banks for the first time.
jlne.ws/1LDAEQb

The Treasury Market’s Legendary Liquidity Has Been Drying Up
by Elizabeth McCormick, Daniel Kruger, Bloomberg
Trading Treasuries keeps getting tougher and tougher. For decades, the $12.5 trillion market for U.S. government debt was renowned for its “depth,” Wall Street’s way of talking about a market’s ability to handle large trades without big moves in prices. But lately, that resiliency has practically vanished — and that’s a big worry.
jlne.ws/1BP84mR

Fair Game: Two Judges Who Get It About Banks
By GRETCHEN MORGENSON, NY Times
A Missouri judge ordered Wells Fargo to pay over $3 million for abusing a borrower, and a federal judge in New York said there was evidence the bank had forged documents.
Big banks hold great sway in Washington these days, far more than troubled homeowners do. But outside the Beltway, many people remain caught in the maw of the financial giants, which is why it is heartening when some judges step into the fray.
jlne.ws/1zuzoIY

The perils of a strong US dollar
Edward Luce, FT
The bad news is the US recovery is based on the familiar model of rising consumption
First things first. We are not about to replay the 1930s. The world’s big economies are not deliberately indulging in “beggar thy neighbour” devaluations and protectionism is not poised for an ugly revival. As they say in the US : situation normal, all fouled up — or words to that effect.
jlne.ws/166btoE

Capitalism has broken free of the shackles of democracy
Slavoj Zizek, FT
Economic models have proved more portable than political ideas, writes Slavoj Zizek
People pose for photos in front of a billboard to Deng Xiaoping in Shenzhen, China July 4, 2010. The former Chinese leader’s economic reforms turned Shenzhen into the country’s first Special Economic Zone. Photo by Doug Kanter
To whom will monuments be built a century from now? Among them, perhaps, will be Lee Kuan Yew. He will be remembered not only as the first prime minister of Singapore, but also as the creator of authoritarian capitalism, an ideology set to shape the next century much as democracy shaped the last.
jlne.ws/1K2Wueh

Opinion: U.S. democracy is a victim as the middle class fades away
by Rex Nutting, MarketWatch
Financial insecurity directly leads to disengagement with politics
jlne.ws/166opep

Regulatory

White House to Request $1.7 Billion for SEC; Administration to Seek Modest Increase for Securities Regulators
By Andrew Ackerman, WSJ
The Obama administration is expected to seek a modest funding increase for U.S. securities regulators charged with implementing and policing tough new rules for the financial industry.
jlne.ws/1CS28gY

ESMA publishes opinion on draft RTS on clearing obligation for interest rate swaps
FTSE Global Markets
The European Securities and Markets Authority (ESMA) has published an Opinion on the Draft RTS on the Clearing Obligation on Interest Rate Swaps. This is in response to the European Commission’s notification of 18 December 2014 of its intention to endorse, with amendments, the draft RTS submitted by EMSA on 1 October 2014.
jlne.ws/1zuI02h

Fed to propose margin rule aimed at shadow banking -Tarullo
Reuters
The Federal Reserve plans to propose a rule that applies minimum margin requirements to certain forms of securities financing deals, in a move aimed at reining in the shadow banking industry, a top Fed official said on Friday.
jlne.ws/1zuI4iv

Deutsche Bank under FCA investigation for regulatory failings
Citywire
The London office of Deutsche Bank is being investigated by the Financial Conduct Authority (FCA). Deutsche has been placed under ‘enhanced supervision’ by the FCA amid concerns about governance and regulatory controls at the bank, according to The Times.
jlne.ws/1zuIgy4

Exchanges & Trading Facilities

GFI Group shareholders reject proposed CME Group takeover
By Tom Polansek, Reuters
GFI Group Inc (GFIG.N) shareholders on Friday voted down a proposed takeover by CME Group Inc (CME.O), the companies said, opening the door for a hostile bid from rival BGC Partners.
jlne.ws/1uQNNLg

GFI Investors Said to Reject CME, Clearing Path for Lutnick
by Matthew Monks, Zeke Faux, Bloomberg
GFI Group Inc.’s shareholders rejected CME Group Inc.’s takeover proposal, clearing the way for them to accept a bid by Howard Lutnick’s BGC Partners Inc., a person briefed on the decision said.
jlne.ws/1D5nk3s

January Volume Averaged 108,923 Contracts per Day, Down 0.7% M-on-M
TOCOM
The Tokyo Commodity Exchange announced today that average daily trading volume for January 2015 was 108,923 contracts, down 0.7% from December 2014. On a year-on-year basis, it was up 32.9%. Some of TOCOM’s leading commodities saw increases in volume: the Exchange’s most traded commodity, Gold was up 6.2% to 46,359 contracts and Crude Oil was up 15.9% to 8,487 contracts. Others decreased – Platinum, down 13.4% to 17,834 contracts and Rubber, down 10.4% to 9,477 contracts, and pushed down overall volume.
jlne.ws/1CpBBch

SGX adds Celestial Commodities Limited as Derivatives Trading member
SGX
Singapore Exchange (SGX) is pleased to welcome Hong Kong-based Celestial Commodities Limited as a Trading Member to its derivatives market.
jlne.ws/1zuy8FG

Nasdaq Launches Experimental Access Fee Program; Lowered Access Fees for Key Stocks to Provide Data for Market Structure Improvement
Nasdaq
Nasdaq (Nasdaq:NDAQ) will launch its experimental pricing program today with lower access fees for 14 stocks representing both small and large capitalization companies traded on U.S. equity listings venues.
jlne.ws/1EZinYZ

Euronext Appoints Maurice van Tilburg as CEO of Euronext Amsterdam
Business Wire
Euronext, the leading exchange in the Eurozone, today announced the appointment of Maurice van Tilburg as CEO of Euronext Amsterdam with immediate effect, pending regulatory approvals. Mr. Van Tilburg has almost 20 years’ experience in the exchange sector. Until this appointment, he was Head of Business Projects & Design of the European Equity and Equity Derivatives Markets at Euronext, where he was responsible for the process reform of business initiatives and project delivery of new products and services.
jlne.ws/1CpDF43

CME Group Notices
Additional Margin File- New Release- Updated
2015 Approved Spot Call Butter and Spot Call Nonfat Dry Milk Warehouses – Update #2
FIXML Delivery Transfer Message Enhancements Coming March 17, 2015
Approved List of Live Cattle Stockyards & Slaughter Plants – February 1, 2015
New Web Browser Standards
CNX Nifty Index Futures Price Limits Effective for February 2015
jlne.ws/1yiRpvt

The Spanish Stock Exchange Traded EUR93.7 Billion In January, Up 25 % Year On Year
BME
The number of equity trades in January was 6.9 million
(No Link)

Hedge Funds & Managed Futures

Uncertainty sparks a rush for gold
Simoney Kyriakou, FT
Syriza’s electoral victory in Greece and fears that its anti-austerity stance could spread to other eurozone countries have sent many investors scuttling back to the perceived safety of gold and gold funds.
jlne.ws/18HgNAA

Negative govvies: why would ya?
David Keohane, FT
A question worth asking considering the rather large amount of them knocking about at the moment. According to JPM, the total universe of government bonds traded with a negative yield was $3.6tr last week or 16 per cent of the JPM Global Government Bond Index. It’s an answer in itself, really.
jlne.ws/1K2UnHp

Banks & Brokers

UBS Wins Decura Lawsuit; Case Put UBS in Awkward Position of Arguing That its Restructuring Wasn’t as Extensive as Some Believed
By John Letzing
UBS AG on Friday won a lawsuit brought by Decura IM Investments LLP which alleged that cut backs at the Swiss lender’s investment bank meant it had violated the terms of a joint venture.
jlne.ws/16a3QgW

ICAP Inc. EBS to Deploy HTML5|Based Integrated Trading Platform “Everything EBS”
Forex Magnates
The electronic FX business of ICAP Inc., EBS, is getting a revamped software solution which will bring the variety of platforms that the company offers into a unified experience. The company has designed a multi-platform HTML5-based solution, with new analytics tools, bridging together a number of platforms.
jlne.ws/1CpBhdq

Morgan Stanley Shops Oil-Storage Unit Again
By Justin Baer and Christian Berthelsen, WSJ
Morgan Stanley, whose deal to sell its oil-trading and -storage business to Russian energy firm OAO Rosneft for several hundred million dollars was scuttled last month, is seeking a similar price for the business from other suitors.
jlne.ws/1yufD1l

Julius Baer cuts costs as Swiss franc surges in value
James Shotter in Frankfurt, FT
Julius Baer is to cut its costs by SFr100m ($108m) in a bid to offset the impact of the surge in the value of the Swiss franc since the country’s central bank stopped capping the currency against the euro.
jlne.ws/1yudZNk

MOVES-JP Morgan names Katsuyuki Kuki chairman of Japan banking
Reuters
Financial services company JPMorgan Chase & Co appointed Katsuyuki Kuki as chairman of Banking in Japan to strengthen collaboration between its investment banking and corporate banking divisions.
jlne.ws/18HfOjT

MOVES-Cantor Fitzgerald Europe names head of European equity research
Reuters
Cantor Fitzgerald Europe named Richard Hickinbotham as head of European equity research to focus on the expansion of Cantor’s European equity research platform by building out and extending sector coverage, and covering the industrials sector.
jlne.ws/1AiBnCZ

Citigroup Removed Its Swiss Franc Hedge at the Worst Possible Time
by Julia VerlaineDakin Campbell, Bloomberg
Citigroup Inc.’s loss on a surge in the Swiss franc this month was exacerbated by the bank’s decision to let protections against currency swings lapse a week earlier, according to people with knowledge of the situation.
jlne.ws/1tVpbFT

A Banker Comes In From the Cold; Former Maryland Banker Reveals He Used to Work for the CIA
By Julie Steinberg
Edwin “Ed” Hale Sr., a retired bank executive known locally for his sharp-elbowed approach to business, installed video surveillance on his 186-acre farm and still sleeps with a sawed-off shotgun by his bed.
jlne.ws/1z6DOC7

Clearing & Settlement

Sapient survey reveals derivatives clearing concerns
Automated Trader
Sapient Global Markets, the provider of business technology and consulting services for the capital and commodity markets, has announced the findings of a new survey it conducted examining industry attitudes towards changes in derivatives clearing.
jlne.ws/1wWT0B4

Citi Named Credit Derivatives House and OTC Client Clearer of the Year
MarketWatch
At the Risk magazine annual awards dinner in London last night, Citi won “Credit Derivatives House of the Year” and “OTC Client Clearer of the Year.” Risk is the highly respected international financial risk management and derivatives publication
jlne.ws/1CpASrA

LCH.Clearnet sees FX options clearing in 2015
Futures & Options World
LCH.Clearnet plans to be ready for foreign exchange options clearing by the end of 2015 as the market awaits clarity on the mandatory clearing for non-deliverable-forward contracts (NDFs).
Gavin Wells, global head of LCH’s ForexClear and CDSClear businesses, told FOW that LCH.Clearnet ForexClear will clear FX options, with further FX instruments to follow, by the end of the year.
jlne.ws/1CpAWr9

Indexes & Products

ETF giants bet on futures for flows
Paul Amery, FT
After another record year for asset gathering, ETF providers have set their sights on the global derivatives market. The global exchange-listed futures market totals $30tn in exposures, while derivatives traded off-exchange have a total notional value of nearly $700tn, according to the Bank for International Settlements.
jlne.ws/1KjU5Ky

Oslo Børs Launches New Bond Indices
MondoVisione
As from today Oslo Børs is calculating 20 new bond indices. With that the bond index portfolio is expanded from five to 25 indices.
jlne.ws/1664EUm

Technology

Intel buys former Infineon “Internet of Things” chip unit Lantiq
Reuters
Intel has agreed to buy German network chipmaker Lantiq for an undisclosed amount to expand its range of chips used in Internet-connected gadgets, the companies said on Monday.
jlne.ws/1tVegME

Enforcement

Justice Department probing Moody’s for mortgage deal grades: WSJ
Reuters
The U.S. Department of Justice is investigating Moody’s Investors Services for issuing favorable grades on mortgage deals in the lead-up to the financial crisis, the Wall Street Journal reported on Sunday, citing people familiar with the situation.
jlne.ws/16a3ff1

Environmental & Energy

Climate Change’s Bottom Line
By BURT HELMJAN, NY Times
It was 8 degrees in Minneapolis on a recent January day, and out on Interstate 394, snow whipped against the windshields of drivers on their morning commutes. But inside the offices of Cargill, the food conglomerate, Greg Page, the company’s executive chairman, felt compelled to talk about global warming.
jlne.ws/16kZ415

US coal crisis deepens as gas prices fall
Ed Crooks, FT
The latest sign of the deepening crisis hitting the US coal industry came on Friday, when Alpha Natural Resources announced that it planned to idle production at three mines in West Virginia and cut jobs at two more, affecting about 91 workers in total.
jlne.ws/1KjPGal

Asia-Pacific

Japan Exchange Group Trading Overview In January 2015
MondoVisione
Japan Exchange Group released Trading Overview in January 2015.
jlne.ws/1uQK6Fs

Frontier Markets

The Egyptian Exchange Delays Beginning Of Trading For 1 Minute Mourning Military Martyrs
MondoVisione
The Egyptian Exchange delayed the startoOf trading for 1 minute to mourn military martyrs.
jlne.ws/166crS1

Psychometric testing on the rise in emerging markets
James Kynge in London and Andres Schipani in Bogotá, FT
A mini-boom in psychometric testing is improving financial inclusion in emerging markets, providing an alternative for loan applicants who do not have traditional credit records.
jlne.ws/1yuhqUc

RBI ups forex intervention in spot market; This will ensure comfortable liquidity as inflation eases, say experts
Neelasri Barman, Business Standard
Given that inflation has mostly been under control in the past few months, the Reserve Bank of India (RBI) is now seen intervening more in the currency market’s spot segment than in 2014.
jlne.ws/1DwxZCf

Russian Central Bank Defends Its Independence After Surprise Rate Cut; Ruble Slides Lower Against the Dollar
By Andrey Ostroukh, WSJ
The Bank of Russia has defended its independence after Friday’s surprise cut in interest rates raised concerns about the influence of the Kremlin, industrialists and bankers over the central bank’s policy.
jlne.ws/1663sjD

Miscellaneous

Negative govvies: why would ya?
David Keohane, FT
A question worth asking considering the rather large amount of them knocking about at the moment. According to JPM, the total universe of government bonds traded with a negative yield was $3.6tr last week or 16 per cent of the JPM Global Government Bond Index. It’s an answer in itself, really.
jlne.ws/1K2UnHp

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