First Read

Championing Environment, Francis Takes Aim at Global Capitalism
The encyclical on the environment that Pope Francis released on Thursday is as much an indictment of the global economic order as it is an argument for the world to confront climate change.

****** He has the potential to really change the debate. It will be hard to demonize the Pope, though some will try.


Behind Chicago’s Rift With Moody’s: Rater’s Tough New Stance
More than a year before Moody’s Investors Service downgraded Chicago’s bonds to junk status, one of its senior analysts asked top city officials to explain why the third-largest U.S. city was healthier than a troubled island commonwealth flirting with insolvency, according to people familiar with the conversation.

**JK – Chicago compared to Puerto Rico. Not a good place to be – ratings wise – these days.


How bitcoin could make back-office banking more rock ‘n’ roll
Daniel Davies, FT
Electronic currency can help standardise securities settlements, writes Daniel Davies
The business of securities settlement ought to look like a club night with Pete Tong. Just as the DJ and electronic music pioneer stands before a crowd effortlessly manipulating gigabytes of music from a single iPad, the back offices of the world’s financial institutions are supposed to allow traders to switch in and out of trillions of dollars worth of assets without skipping a beat.

***** This has the most disruptive potential I have seen in a long time.


Deutsche Börse exhibits Deutsche Börse Photography Prize 2015 in Frankfurt
Exhibition is part of the RAY 2015 photography triennial at the MMK Museum für Moderne Kunst
Deutsche Börse
Deutsche Börse: Deutsche Börse is opening an exhibition of the finalists of the Deutsche Börse Photography Prize 2015 on Friday, 19 June. The exhibition will feature works by Nikolai Bakharev, Zanele Muholi, Viviane Sassen as well as Mikhael Subotzky and Patrick Waterhouse. The exhibition can be seen as part of the ‘RAY 2015 photography projects’ for the first time in the MMK Museum für Moderne Kunst Frankfurt/Main.

***** I wish I was there to see it. Their regular display is inspiring.


There’s a Pile of Gold in Manhattan. Texas Wants It Back.
by Lauren Etter, Bloomberg
Texas wants its gold back from the Yankees, wherever they’re keeping it.
Governor Greg Abbott signed a law last week to build a depository for its 5,600 bars of the precious metal and, as he said in a statement, “repatriate $1 billion of gold bullion from the Federal Reserve in New York.”

****** Since the U.S. is going to “invade” Texas, they want their gold?


Speaking In Code Part 1: The Female Perspective on Life in Technology
Katie Burgoon, VP Global Human Resources, Trading Technologies, TradeTalk
As head of HR at TT, I like to think we make a concerted effort to stay on top of important workforce issues in the news, whether those topics have surfaced at TT or in the greater tech industry. And one of the biggest topics of debate right now, at least in our industry, is that of women in tech. Or more specifically, the lack of women in the technology industry, particularly in engineering and leadership roles.

***** We are holding the last day of our Chicago 2015 MarketsWiki Education World of Opportunity Summer Intern Education Series at TT and the social part at the TT Tap.


Houses of Parliament Are Crumbling, Report Finds, and There Is No Quick Fix
The Palace of Westminster, Britain’s gorgeous seat of Parliament, is crumbling, with leaky pipes, hazardous, antiquated wiring and roofs that threaten to collapse. It is slowly sinking into the banks of the River Thames. And then there is the asbestos, and the rats.

***** We have a rat problem at the U.S. Congress as well.


Intercontinental Exchange – NYSE Welcomes Fitbit on Its First Day as a Publicly-Traded Company
Press Release
Fitbit, Inc. (NYSE:FIT) opened for trading today on the New York Stock Exchange (NYSE) under the ticker symbol “FIT” after its initial public offering on the floor of the NYSE. Barclays is the Designated Market Maker for the company’s stock.

**JK – I walked 2,000 steps to post this announcement.


Swap Meet: Eris Exchange’s Neal Brady Sees Capital Efficiency Driving Growth of Standardized Swap Contracts

Basel III and other capital rules are coming into into force, making efficient use of capital a global priority. As Eris Exchange’s swap futures contracts continue to set new volume and open interest records, and as ICE begins listing interest rate and credit derivatives based on the Eris methodology, Eris CEO Neal Brady sat down with John Lothian News editor-at-large Doug Ashburn to discuss the emergence of swap futures as an important tool in the new financial order.
Watch the video »

Lead Stories

The HFT Tactic that Hurts the Markets and Counters the Liquidity Argument
Traders Magazine Online News
While the merits of high-frequency trading (HFT) have been espoused many times and in many venues, one research paper argues all the good these market participants do is countered by a single trading tactic they employ – tens of thousands of times per second. – Drum roll, please?
And that tactic is the rapid submission and subsequent cancellation of limit orders, according to new research paper by Alvaro Cartea, Richard Payne, Jose Penalva, and Mikel Tapia, “Ultra-Fast Activity and Market Quality.”

Rival brokers hire Jefferies Bache diaspora
Futures & Options World
ED&F Man, Macquarie and Wells Fargo are among the firms that have hired top London and New York-based brokers who have left Jefferies Bache after the US bank cut a deal with Societe Generale in April and put most staff in its Bache unit at risk of redundancy. Martin Timmins, the former global head of energy at Bache, and four of his energy broking team at that firm have joined ED&F Man in New York, according to sources.

Washington to Bond Traders: We’re Worried About Liquidity Too
Wall Street bankers who’ve been warning that poor liquidity is endangering the $39 trillion U.S. bond market are gaining an audience with regulators.
The Financial Industry Regulatory Authority is meeting with some of the market’s biggest players over the next few weeks to discuss how they can make it easier to buy and sell bonds when sentiment sours. Liquidnet, which is planning the first dark pool for corporate bonds this year, gave a demonstration last week to U.S. Treasury Department officials who expressed concern with the structure of the bond market, said firm founder Seth Merrin.

Finra Hosts Closed-Door Meeting on Bond Trading
One of the ideas the industry has proposed is delaying reporting of large trade sizes by one day. Currently, all trades must be reported within 15 minutes, under Finra rules. News of the industry proposal was reported earlier by the Financial Times.
In corporate debt, trade sizes have been shrinking, lower trading activity has had a greater tendency to move prices, and fewer bonds are changing hands as a percentage of the market’s overall size, traders said.

This Year Is Headed for the Hottest on Record, by a Long Shot; Hottest May, hottest five months. It’s a scorcher.
by Tom Randall, Bloomberg
We broke the record. Again. Last month was the hottest May on record, and the past five months were the warmest start to a year on record, according to new data released by the National Oceanic and Atmospheric Administration. It’s a continuation of trends that made 2014 the most blistering year for the surface of the planet, in records going back to 1880.

Repo market faces structural challenge
Joe Rennison and Philip Stafford, FT
The primary market for short-term funding for banks in Europe stands on the cusp of deep structural change, but the touted solution faces obstacles.

Chinese stock markets have worst week since global financial crisis
China’s major stock indexes finished the week on a grim note on Friday, with the Shanghai index ending the week down 13.3 percent, its worst showing since the global financial crisis.

Questions asked about volatile HK market
WILD gyrations in Hong Kong share prices are raising concerns that a new trading link with mainland China is a conduit for questionable trading practices that could undermine the city’s reputation as a centre of global finance.

Greece Stares Into Unknown as Tsipras Insists a Deal Can Be Done
Greek Prime Minister Alexis Tsipras insisted a deal to avert a default can be reached at an emergency summit of European leaders on Monday as his country clings to the euro after almost five months of brinkmanship.

Grexit would be different test than Lehmans: finance minister
Investment Week
New Zealand’s finance minister, Bill English, has warned a Greek default or exit from the eurozone would present different challenges to the global financial system than those faced during the Lehman Brothers crisis of 2008.

Richard Zabel, Bharara’s Deputy, Moves to Elliott Management
If Preet Bharara’s office were adapted for a Hollywood script, Richard B. Zabel’s character would probably be akin to Dr. John Watson or perhaps Mr. Spock, a trusted lieutenant to a prominent leading man.

Latest Critic of Too-Big-To-Fail: Pope Francis
Move over, Sen. Elizabeth Warren—there’s a new high-profile critic of the world’s largest banks, and he has over a billion followers.

UK trader to claim he is ‘scapegoat’ in US extradition fight
Jane Croft, FT
The trader accused of playing a role in the “flash crash” of 2010 has indicated the main arguments he will use to fight his extradition to the US, including that he has been wrongly “scapegoated”.

New Rules Let Companies Sell Stakes to Investors of Modest Means
Growing companies seeking to raise up to $50 million have a new financing option, starting Friday: a process that will open some private businesses to a wide pool of new investors. More than three years in the making, the regulatory change, an expanded version of a rule known as Regulation A, is intended to let promising companies — the kinds typically backed by venture capitalists and wealthy angel investors — raise money by selling equity stakes to people of more modest means.


SEC backs UK rules on banker accountability
Caroline Binham, FT
One of the most powerful US regulators has endorsed UK rules that will hold senior managers of financial firms to account for failures on their watch — signalling that similar measures may be considered across the Atlantic.

Anti-Money Laundering: An Often-Overlooked Cornerstone of Effective Compliance
Kevin W. Goodman, National Associate Director, Broker-Dealer Examination Program, Office of Compliance Inspections and Examinations

Canadian Securities Regulators Seek Comments on a Summary Disclosure Document and Delivery Regime for Exchange-Traded Mutual Funds
Press Release
Toronto – The Canadian Securities Administrators (CSA) today published for comment proposed amendments that will require exchange-traded mutual funds (ETFs) to produce and file a summary disclosure document called “ETF Facts.” The proposed amendments also introduce a delivery regime for ETF Facts.

Amendments to Various CME, CBOT, NYMEX, and COMEX Trading Rules in Connection with the Elimination of the Futures Trading Pits (Except for the CME Standard & Poor’s 500 Stock Price Index Futures Pit) Effective on Trade Date Monday, July 6, 2015

Exchanges & Trading Facilities

Aim — 20 years of a few winners and many losers
Financial Times
London’s junior market celebrated its 20th birthday this week — but investors have yet to enjoy many happy returns.
Starting with just 10 companies in 1995, London’s Alternative Investment Market is now home to about 1,100 small and midsized companies, and has hatched many fledglings that went on to spread their wings on the main market, such as Domino’s Pizza and Mears Group.

Delisting of CBOT Dow Jones Industrial AverageSM Index ($10 Multiplier) Futures and Options Contracts
The Board of Trade of the City of Chicago, Inc. (“CBOT” or “Exchange”) has delisted the futures and option products identified in the Exhibit below. As previously announced (SER-7296, 4 February 2015), June 2015 was the final futures delivery month and the final option expiration month in these products.

Delisting of Standard and Poor’s MidCap 400 Stock Price Index™ Futures,NASDAQ 100 Index® Futures and Companion Option Contracts, and Standard and Poor’s SmallCap 600 Index™ Futures Contracts
CME Group

ISE ETF Ventures Partner Product Crosses $1 Billion in AUM
International Securities Exchange, LLC
ISE ETF Ventures today announced that its partner firm PureFunds® has surpassed $1 billion in assets under management for its ETF that tracks the ISE Cyber Security IndexTM (index ticker: HXR). This milestone brings the total assets under management for products tied to ISE ETF Ventures to approximately $3.2 billion.

Hong Kong bourse to launch formal consultation on weighted voting rights
The Hong stock exchange took a significant step on Friday towards loosening its strict listing rules, which could pave the way for companies with different classes of shares to list on the island city’s stock market.

Euronext Paris moves to La Défense business district
Euronext Paris announced today that it has successfully completed its move to the Pratorium building in La Défense, just west of the French capital.

Hungarian Power Exchange selects Deutsche Börse’s trading platform for intraday electricity market
Deutsche Börse Group
Deutsche Börse: Deutsche Börse Market Data + Services and Hungarian Power Exchange Ltd. (HUPX) have signed a cooperation in which HUPX will use Deutsche Börse’s global commodity trading platform M7 to establish a local intraday market for electricity in Hungary.

International Flavors & Fragrances Inc., a leading global creator of flavors and fragrances for consumer products, today completed its cross-listing in Paris (ticker code: IFF) using the Euronext Paris Fast Path procedure. IFF is the first US-listed company to make use of this streamlined, cost-efficient process in 2015, and the fifteenth to do so since Fast Path was first introduced on Euronext markets in 2008.

MexDer Unleashes FIX Flyer As Risk Control Gateway Technology Provider
FIX Flyer, a leading provider of electronic trading software to Latin America’s top financial firms and the global capital markets, announced that MexDer, the Mexican Derivatives Exchange, selected FIX Flyer to implement the monitoring and pre-trade risk controls for its electronic trading platform. The FIX Flyer solution has now replaced the previous Risk Gateway allowing MexDer to meet market demands as they rapidly develop.

Aim is more miss than hit for investors as it marks 20th anniversary
Claer Barrett and Kate Burgess, FT
Investors had little to celebrate at the 20th anniversary of London’s Alternative Investment Market this week, as research revealed that nearly three quarters of the companies to have listed on the junior market have been lossmaking.

Korea Exchange: New Listings Of Overseas Commodity And Domestic Strategic ETNs
Korea Exchange (KRX) plans to list 4 overseas commodity ETNs and a domestic strategic ETN on June 18, 2015. Overseas commodity ETNs are issued by Shinhan Investment Co. and domestic strategic ETN is issued by Korea Investment & Securities Co.

LSE announces new group chairman
The Trade News
The London Stock Exchange Group has announced the appointment of Donald Brydon as new group chairman.

Hedge Funds & Managed Futures

Record Cash Wrung From Bond Market to Cover U.S. Stock Buybacks
Oliver Renick, Bloomberg
It’s official, using proceeds from debt sales to send cash to stockholders has never been more popular.

Memo to Bond Market From Fed: You Were Right on Interest Rates; The central bank’s interest-rate projections are moving closer to market expectations
by Liz McCormick, Bloomberg
Federal Reserve policymakers are coming around to the bond market’s wisdom about where interest rates are headed.

Wealth Adviser: Keeping the Heirs’ Inheritance In-House
The major brokerages may be ceding market share to the independent channel, but industry stalwarts Merrill Lynch, Morgan Stanley MS +0.53%, Wells Fargo Advisors and UBS continue to be prime destinations for high-net-worth investors. Still, a more than $30 trillion shift of wealth from one generation to the next may be the biggest test yet for those firms’ executives and their dominance over wealthy investors, Wealth Adviser at reports. “The biggest wildcard is the next generation. It’s not just the wealth creators but wealth inheritors,” says Donnie Ethier of Cerulli Associates. “When that wealth shifts to the siblings, it’s most likely that not all the individuals will stay.”

Bloomberg hires trio from Instinet research arm
By Tim Cave, Financial News
A brokerage run by Bloomberg has hired three executives from an Instinet-owned business that connected its clients to independent research providers.

This may be the world’s most overpriced market
Chinese stocks have soared this year—and so have their valuations. Based on the widely used forward price-to-earnings metric, the Shanghai composite index appears to be the most richly valued major market on Earth.

Banks & Brokers

G.H. Financials accepted as participant of HKFE and HKCC | Financial Industry & Algorithmic Trading News
Financial Industry & Algorithmic Trading News | Automated Trader
G. H. Financials, the independent clearing provider of exchange-traded derivatives, has been accepted as a Participant of the Hong Kong Futures Exchange (HKFE) and the Hong Kong Clearing Corporation (HKCC), which are owned by the Hong Kong Exchanges and Clearing Limited (HKEx). Market access to the HKEx will be through Trading Technologies International.

Customers irate at futures trading firm
A company which goes by two names – Global Growth and Golden Global – has allegedly cheated US$1.48 million (K1.65 billion) from customers, according to local newspaper 7day Daily. The company reportedly tells clients that it is a branch of Standard Bullion, which is a member of the Chinese Gold and Silver Exchange Society.

UBS chief: Lessons learned, but you can’t foolproof the system
By Chiara Albanese, The Wall Street Journal
Sergio Ermotti, chief executive of UBS, which has paid billions of dollars for rate rigging scandals, said Thursday his bank had “learned [the lesson] and we are fixing it”, but cautioned against penalising senior executive for failures with people lower down in the organisation.

R.B.S. Says Customer Accounts Are Fully Updated After Technology Failure
The Royal Bank of Scotland said on Friday that it had updated all customer accounts after a technology failure this week that meant about 600,000 transactions were not processed.

UK govt picks Goldman for RBS and Lloyds deals
Goldman Sachs has been appointed as the government’s advisor on its plans to privatise Royal Bank of Scotland and Lloyds Banking Group, raising questions about potential conflicts of interest at the US investment bank.

Banks’ ageing IT systems buckle under strain
Martin Arnold and Tom Braithwaite, FT
Igor Feitoza, a Brazilian-born entrepreneur, left an angry message on his bank’s Facebook page this week.

Instinet Loses Research Arm Staff to Bloomberg Tradebook
Traders Magazine Online News
After shopping the firm’s independent research service for some time, Instinet has finally shed unit to Bloomberg Tradebook.
As first reported by eFinancial news, the agency-only brokerage has effectively exited the research sales business here by transferring the research sales group to Bloomberg Tradebook, which itself offers users a research platform and its world-renown databases.

Jimmy Lee, the Early Years
Jimmy Lee was able to cross social circles from an early age. Mr. Lee, a famed J.P. Morgan Chase & Co. dealmaker who died unexpectedly Wednesday, was part of several different social groups while a teenager attending the Canterbury School, a Catholic boarding school in New Milford, Conn.

Lazard Hires Arminjon for European Long-Short Equity Strategy
Lazard Ltd., the largest independent merger adviser, hired Leopold Arminjon as a portfolio manager and analyst to run a new European long-short equity strategy in its asset-management business.

Clearing & Settlement

Financial Services Industry Announces Proposed Timeline for T+2 Settlement Cycle in the U.S. – Press Release
The T+2 Industry Steering Committee (T+2 ISC) has released a white paper today outlining the timeline and activities required to move to a two-day settlement cycle (T+2) in the U.S. by the end of Q3 2017. The T+2 ISC, organized by The Depository Trust & Clearing Corporation (DTCC) and made up of members from across the securities industry, including the Securities Industry and Financial Markets Association (SIFMA) and the Investment Company Institute (ICI), was formed to provide oversight and guidance on the U.S. move to a shorter settlement cycle.

Focus: draft rules published for mandatory central clearing of derivatives and single-sided reporting
ASIC has published draft rules for mandatory central clearing of certain derivatives, while Treasury has published draft regulations that would permit single-sided reporting of Over-the-Counter Derivatives in some situations. Partner Tom Highnam (view CV) and Lawyer David Lewis discuss the implications of these draft rules and regulations.

Is retail FX heading on-exchange? Divisa Head of US Sales Ryan Gagne elaborates
Within a very short time frame, the discussion which began with the large vendors and exchange infrastructure providers has not only reopened, but has become a very clear priority of a wealth of industry participants, and in particular, liquidity and technology firms whose clients are retail FX brokerages.

If Google mapped the financial system
FT Alphaville
The Google map of the financial system — which used to represent a London vs the regions settlement structure, plus a teeny tiny dot of central reserves at the BoE itself — was thus transformed into a bank vs non-bank settlement structure instead.

Indexes & Products

S&P Dow Jones Indices Market Attributes: Risk & Volatility June 2015
S&P Dow Jones Indices
Ssignificant majority of our volatility measures are up since our last report. Four weeks ago the VIX reached its lowest level for 2015, closing at 12.11. It closed last night at 14.50. The VIX is not particularly high at present (it remains below its 200-day average), but it is trending up.

New bond index to track S&P 500 names
A new bond index is set to be launched in early July that hopes to make a better comparison between equity and fixed-income returns, and encourage investment products designed around it.

Apple Plagued by the Curse of the Dow
MoneyBeat – WSJ
Friday marks the three-month anniversary of Apple’s inclusion in the Dow Jones Industrial Average. It hasn’t exactly been a stellar three months for Apple’s stock. The old Wall Street adage about the supposed “curse” goes as follows: Companies typically rally in the months leading up to their addition to the Dow 30, but underperform in the months that follow.

Top performing health stocks face boot after Russell rebalance
The Russell 2000 index of small company stocks will lose some heavy hitters from the healthcare sector when FTSE Russell rebalances its indexes at the end of the month, depriving the index of companies that provided much of its growth this year.


Three FinTech Startups You Should Know
I have good news and bad news- Let’s start with the latter, essentially we’re still recovering from a rocky economic situation caused by the recession (this we know). The bad news is that the recession exposed fundamental weaknesses in the world of global finance, demonstrating how interconnected and interdependent economies are today. Sometimes bad things have to happen before good things can.

HK AML crackdown could stifle fintech growth
The Hong Kong Monetary Authority’s plans to crack down on money laundering could have a negative effect on the city-state’s nascent financial technology

Fitbit makes big run on first day of trading
USA Today
Shares of Fitbit (FIT) surged in its first day of trading Thursday, as the wearable health-tracking device maker made a splash in its initial public offering.


CME Group
Mirus failed to adequately monitor the operation of its trading platform (Zenfire), and connectivity of its trading system (Zenfire) with Globex. This failure resulted in unusually large and atypical trading activity by several of the Firm’s customers and caused the mass entry of order messages by Zenfire, which resulted in a disruptive and rapid price movement in the February 2014 Gold Futures market and prompted a Velocity Logic event. –
In accordance with the settlement offer, the Panel ordered Mirus to pay a fine to the Exchange in the amount of $200,000.

CME Group
Pursuant to an offer of settlement that Raphael Kurlansik (“Kurlansik”) presented at a hearing on June 16, 2015, in which Kurlansik neither admitted nor denied the findings or the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that Kurlansik is subject to the jurisdiction of the Exchange pursuant to Rules 402 and 418. In accordance with the settlement offer, the Panel ordered Kurlansik to pay a fine to the Exchange in the amount of $35,000 and suspended Kurlansik’s access to any CME Group trading floor, and direct or indirect access to any CME Group electronic trading or clearing platform for 10 business days, beginning on the effective date below. The suspension will run from June 18, 2015 through July 2, 2015.

The Panel also found that during the time period from November 2012 through April 2013, LCM executed numerous block trades for customers in various Exchange contracts that were not reported within the required time limit following execution and that LCM failed to initially report accurate trade details for certain block trades to the Exchange.
In accordance with the settlement offer, the Panel ordered LCM to pay a fine to the Exchange in the amount of $95,000.

Posen entered numerous orders in the Gold futures contract without the intent to trade but rather to observe the market’s reaction and to encourage market participants to trade opposite his smaller orders that were resting on the opposite side of the book. After receiving a fill on his smaller orders, Posen would cancel the resting orders he had entered on the opposite side of the order book, within one second.
In accordance with the settlement offer, the Panel: 1) ordered Posen to pay a $75,000 fine in connection with this case and companion case NYMEX 13-9258-BC ($45,000 of which is allocated to COMEX); and 2) ordered Posen to serve a five (5) five week suspension of any access to any CME Group Inc. trading floor and of direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex. The suspension shall run from June 18, 2015 through July 23, 2015, inclusive.

Pursuant to an offer of settlement Harvest Energy, Ltd. (“Harvest”) presented at hearing on June 16, 2015, in which Harvest neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that it had jurisdiction over Harvest pursuant to Rules 402 and 418, and that on February 5, 2014, Harvest entered into an EFRP transaction that did not contain documentation of the corresponding simultaneous swap transaction, and therefore was not a bona fide EFRP.

SEC Launches Enforcement Cooperation Initiative for Municipal Issuers and Underwriters
Press Release
The Securities and Exchange Commission today announced a new cooperation initiative out of its Enforcement Division to encourage issuers and underwriters of municipal securities to self-report certain violations of the federal securities laws rather than wait for their violations to be detected.

SEC Charges Microcap Oil Company, CEO, and Stock Promoter With Defrauding Investors
Press Release
The Securities and Exchange Commission today charged a Texas-based oil company and its CEO with defrauding investors about reserve estimates and drilling plans, and charged the author of a stock-picking newsletter for his role in a fraudulent promotional campaign encouraging readers to buy the oil company’s penny stock shares.

State Street says SEC may file charges
State Street Corp said it may face enforcement action by the U.S. Securities and Exchange Commission following investigations related to solicitation of asset servicing business for public retirement plans.

Environmental & Energy

On Technology in Agriculture, Pope Francis’s Concerns are for Corporate Power, Not G.M.O. Risk
By Andrew C. Revkin – The New York Times
Needless to say, there’s a lot to explore in Pope Francis’s encyclical, “Laudato Si’ — On the Care of Our Common Home,” so I’ll be doing a string of posts, as time permits, on particular sections.

Climate aid key to Paris deal, says Amber Rudd
By Emma Howard – The Guardian
Climate aid to developing countries is likely to be the biggest sticking point hindering a global deal at the UN climate talks in Paris later this year, according to the UK’s energy and climate secretary.

Three ways we will build the cities of the future from waste
By Dirk E Hebel – The Guardian
As the global population grows, it is also becoming more city-based with 70% expected to live in urban areas by 2050.

Paris Smog Obscuring Eiffel Tower Threatens Diesel-Car Dominance
by Mathieu Rosemain, Bloomberg
Famed Parisian landmarks such as the Eiffel Tower have been increasingly obscured in recent years by an oppressive smog. City officials have placed the blame chiefly on diesel exhaust, widening a Europewide attack on the fuel.

What You Need to Know About the Company That Lost Nearly $19 Billion in 24 Minutes
by Frederik Balfour, Bloomberg
It’s been nearly one month since Hanergy Thin Film Power Group Ltd.’s shares were suspended May 20, and there is no indication when they might resume.

Proposed Rule for Big Trucks Aims at Cutting Fuel Emissions
The Obama administration is set on Friday to unveil a major climate change regulation intended to rein in planet-warming carbon pollution from heavy-duty trucks.


Europe’s Banks Head to Asia Amid $1 Trillion Capital Shortfall
by Christopher Langner, Bloomberg
European banks are heading to Asia for capital as new rules at home demand they sell more than $1 trillion of equity and subordinated debt to increase loss buffers.

After Doubts, Economists Find China Kills U.S. Factory Jobs
A generation of economists trained to believe that trade had little to do with the long decline in high-paying U.S. factory jobs is changing its mind.

A Closer Look at Indian Bonds
S&P Dow Jones Indices
The CPI inflation rate in India rose as expected to 5.0% year-over-year in May 2015(from 4.9% in April), led by a higher crude oil price. The market is now expecting the Reserve Bank of India to remain on hold, in contrary to their expectation that most other emerging market policy rate decisions will have a more hawkish stance. This may contribute to the fact that Indian bond funds have recorded moderate inflows in the last couple weeks, as opposed to the outflows seen in most other emerging countries.

Hong Kong asserts control of its political future
Finance Asia
In a milestone parliamentary vote that will shape the political future of Hong Kong, 28 lawmakers rejected a Beijing-backed electoral reform bill on Thursday, delivering a clear “No” to the central government.

Frontier Markets

The Saudi Stock Exchange Announces The Trading Hours During The Holy Month Of Ramadan
The Saudi Stock Exchange (Tadawul) would like to congratulate all of our market participants and audiences for the holy month of Ramadan. On this occasion, the Exchange would like to draw everyone’s attention that the trading hours during the holy month of Ramadan will remain unchanged and as follows:

FTIL signs new sale agreement to dilute its stake in IEX
The earlier agreement that took place in November stands cancelled and the new agreement will be closed within 60 days, said the company

Saudi Tadawul’s inclusion in MSCI won’t affect Turkey
Experts agree that the entry of Saudi stock market Tadawul to MSCI EM index would have little effect on Turkish stocks

Emerging stocks set for fifth week of losses on dollar, Greece
Emerging market stocks were on track for their fifth straight week in the red on Friday as China shares tumbled to their steepest weekly losses since 2008, their eight-month bull run losing steam fast on tighter regulation and a wave of IPOs.

Transitioning Turkey faces new set of political challenges
Turkey has made enormous strides since the turn of the century, recording a decade of growth and pushing through vast waves of reform. Now its main challenge is to inject enough fresh growth into an economy that shows signs of stalling and avoid the middle income trap. This will not be easy, especially now that the political outlook has become clouded following an unconvincing win for the ruling AKP party


Take two – volatility, variance and higher levels thereof
By Rex Jones and Axel Vischer
In our first article of our “VSTOXX® series” we highlighted VSTOXX® Futures and Options and the properties of “vol of vol”, stressing the differences to equity volatility in relation to skew and kurtosis. This second article takes a step back to present the different forms of volatility. We then take two steps forward to show how these tools can be applied to measure volatility of volatility, and review products along their merits and nuances.

The Old Lady of Threadneedle Street blogs!
Izabella Kaminska, FT
Welcome to Bank Underground, the official (and slightly subversive sounding?) Bank of England staff blog.

Dow Jones Begins New Round of Layoffs
Dow Jones, the parent company of The Wall Street Journal, began a sweeping round of job cuts on Thursday, including eliminating entire teams of reporters and closing international bureaus.

If Google mapped the financial system…
Izabella Kaminska, FT
It’s a “square mile” because back in the day — before phones, fax machines or the internet was invented — representatives from the key settlement banks had to gather in person to net and settle outstanding debts and claims against each other (a mile essentially being about as far as messengers could be asked to travel in a day).

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