Johnson Wins Crushing Majority in Election That Upends Britain; EU confirms one-year Brexit reprieve for derivatives industry

Dec 13, 2019

First Read

Hits & Takes
By JLN Staff

Our Open Outcry Traders History Project subject today is Ed Tilly, the executive chairman and CEO of Cboe Global Markets.~JJL

Yesterday we shot an interview with Buck Haworth of Born Tech for the Open Outcry Traders History Project. Buck delivered a great interview. Look for that one in the coming weeks.

We also shot an interview with Jim Gordon of Straits Financial, their chief compliance officer. He and Buck both said they still have dreams about life on the trading floor.~JJL

The DTCC announced it has appointed Alison Wolpert as the managing director of government relations activity globally. Wolpert, who led DTCC’s U.S. government relations function for more than 6 years and serves as executive director of the organization’s political action committee, will succeed Mark Wetjen, who is leaving on January 3, 2020. ~SR

The signature count for the petition on for Justice for Jitesh stands at 2120. Industry leaders in technology continue to add their names to the petition, as well as others.~JJL

The Futures Industry Association reported that worldwide volume of exchange-traded derivatives was 2.82 billion contracts in the month of November, down 4.8% from the previous month but up 2.2% from November 2018. Year-to-date, volume in the first eleven months of the year was 31.52 billion contracts, up 14.6% from the first eleven months of 2018. Total open interest at the end of November was 1.01 billion contracts, up 6.6% from a year ago.~SR

The Options Industry Conference for 2020 is in Puerto Rico. The JLN team will be there, including editor and producer Mike Forrester, editor Matt Raebel and myself.~JJL

Denmark’s tax agency, Skattestyrelsen, has begun sending out letters to cryptocurrency traders in Denmark, asking for full records of all of their cryptocurrency transactions, similar to the letters sent out by the IRS in October.~MR


The transition to data solutions and commercial hedging tools: CQG’s Ryan Moroney

At FIA Expo 2019, CQG President Ryan Moroney spoke with JLN about CQG’s evolution from a products-based company to a “solutions-based” company 40 years in, and how its values- and ethics-based culture helped that transition, as well as the company’s current investment in the collection and integration of data into automated decision-making tools.

Watch the video »


CurveGlobal continues to innovate and build momentum
London Stock Exchange Group
New uncapped pre-paid trading fee scheme available; CurveGlobal products demonstrating the benefits of competition and choice for futures markets; Successful completion of new funding round to drive international product expansion and long-term growth
CurveGlobal, the interest rate derivatives business, has introduced a unique uncapped pre-paid trading scheme. The upfront fixed fee allows all CurveGlobal Markets Member Firms and their clients to execute an unlimited number of lots in any CurveGlobal interest rate derivatives products over a one year or three-year period. CurveGlobal continues to grow with Open Interest in EUR and GBP short-term interest rate (STIR) products having recently exceeded 7% of volumes traded, and with an even greater market share of trading in SONIA contracts. The momentum behind CurveGlobal reflects a growing appetite for more capital-efficient and open alternatives to existing derivatives trading services. CurveGlobal addresses several of the market’s biggest concerns, which include a desire to have a choice of where to clear (and optimise) trades.

****I believe there is nothing better for the market that competition. Everyone loves a monopoly or duopoly, but competition brings innovation and growth.~JJL


Apology to John Dawkins AO
In late May 2019, ASIC published a media release about Federal Court Proceedings concerning Vocation Ltd and its directors, including former Australian Treasurer, John Dawkins AO. The headline of that release, if read in isolation from the balance of the statement, may have incorrectly conveyed to a reader that the officers of Vocation Limited (in liquidation), including Mr Dawkins AO, were found to have made misleading statements to the market. No such findings were made by the Court and ASIC did not intend to suggest otherwise. After communications between Mr Dawkins AO’s lawyers and ASIC, a corrected release was subsequently published by ASIC on 5 June 2019.

*****Now here is something unique and righteous, a regulator apologizing for doing something wrong.~JJL


CryptoMarketsWiki Coin of the Week: Stellar (XLM)
The Stellar Foundation cancelled an ongoing airdrop this week. The Foundation had planned to give away a total of 2 billion XLM tokens (worth over $120 million) to verified users over the course of 20 months. According to a blog post by Keybase, a company with whom the Stellar Foundation had partnered for the airdrop, the airdrop was cancelled due to “hordes” of fraudulent accounts applying for the airdrop – more than Keybase was capable of accounting for. The airdrop began in September; since then, about 300 million of the planned 2 billion XLM tokens were distributed to verified users.


Thursday’s Top Three
Our most read story on Thursday was Bloomberg’s Wall Street Is Being Hunted by Futures Cops for Government Leaks. Next was the horrific story from the Chicago Tribune, Two teenage boys with Chicago ties are dead after volcano erupts in New Zealand, their parents are still listed as missing. In third was the CME Group’s KC vs. Chicago Wheat Spread: A Tale of Two Markets.


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Lead Stories

Johnson Wins Crushing Majority in Election That Upends Britain
Tim Ross, Alex Morales, and Greg Ritchie – Bloomberg
Opposition leader Corbyn to stand down after Labour drubbing; Johnson victory puts U.K. on course to exit EU by Jan. 31
Boris Johnson won an emphatic election victory that redraws the political map of Britain and gives the prime minister the mandate he needs to pull the U.K. out of the European Union next month.

EU confirms one-year Brexit reprieve for derivatives industry; Brussels has drafted plans to offer continued market access in no-deal scenario
Jim Brunsden and Philip Stafford – FT
The EU has confirmed it will grant the derivatives industry more time to prepare for a potential no-deal Brexit, saying that emergency access to crucial UK market infrastructure would last for one year after Britain drops out of the bloc.

EU Pledges to Cut Greenhouse-Gas Emissions to Net-Zero by 2050; In a sign of the challenges ahead, Poland refuses to implement the climate plan before June
Emre Peker – WSJ
European Union leaders agreed to cut the bloc’s greenhouse-gas emissions to net-zero by 2050, coupling efforts to fight climate change with a massive economic transition poised to test EU unity.

U.S. regulator homes in on climate risks to U.S. markets
Ann Saphir – Reuters
The first public report on climate-related risks to financial markets ever commissioned by a U.S. market regulator will be out in June, the head of the group charged with writing it said on Wednesday.

Conservatives Win Commanding Majority in U.K. Vote: ‘Brexit Will Happen’; The strong showing is vindication for Boris Johnson, who now has a chance to put his personal stamp on Britain, beginning with Brexit.
Mark Landler and Stephen Castle – WSJ
Prime Minister Boris Johnson and his Conservative Party won a commanding majority in the British Parliament, a striking victory that redraws the lines in British politics and paves the way for the country’s exit from the European Union early next year.

New York Fed Again Upsizes Liquidity Plans for Turn of the Year; Bank said overnight provisions for available liquidity would rise to $150 billion between Dec. 31 and Jan. 2
Michael S. Derby – WSJ
The Federal Reserve Bank of New York said Thursday it is again increasing the scope of liquidity operations it is willing to offer financial markets to ensure money-market rates remain relatively calm over an uncertain year-end.

Broker group warns of investor risks posed by U.S. direct share-listing proposal
Joshua Franklin, Michelle Price – Reuters
The U.S. Securities and Exchange Commission risks weakening investor protections if it allows companies to raise money in the public market through a direct listing without the support of underwriting banks, an influential broker group said on Friday.

Beware the liquidity iceberg; The past few months may have been a precursor to more difficulties ahead
Jamie Hambro – FT
A decade ago it was a lack of liquidity that froze the world’s financial system. This year the liquidity iceberg brought an end to Neil Woodford’s fund management venture and struck the £2.5bn M&G property fund, which was forced to ban withdrawals.

Congress Offers A Regulatory 2.0 Upgrade To CFTC For Digital Commodities
Jason Brett – Forbes
On November 26, 2019, the House of Representatives added H.R. 4895 on the Union Calendar for consideration. The CFTC Reauthorization Act of 2019 had been approved by the House Agriculture Committee and sent the bill with House Report 116-313, providing further details and clarifications on the policy changes in the Act.

Battle over Volcker’s rule outlives its creator; Regulatory legacy of the central banking giant remains ambiguous, and contentious
Robert Armstrong – FT
Paul Volcker will be remembered, first and foremost, as the central banker who vanquished the inflation of the 1970s, positioning the US for decades of prosperity. His legacy also includes the post-crisis financial regulation that bears his name — the “Volcker rule” prohibiting banks from proprietary trading, making market bets with their capital. Here, Mr Volcker’s impact remains more ambiguous, and contentious.

Fed Plans More Term Repo Actions to Curb Year-End Turmoil
Alex Harris – Bloomberg
The Federal Reserve Bank of New York announced plans to conduct repurchase-agreement operations within the second half of December that will span January.
It will now conduct term operations totaling $365 billion, the New York Fed said on its website. The Dec. 16 operation is a 32-day offering with a maximum limit of $50 billion, while the other term actions range from 13 to 15 days with a maximum size of $35 billion, tenors it has used previously.

FX futures reach new record at CME Group; CME Group said clients are increasingly looking for FX products to manage exposure.
Hayley McDowell – The Trade
US derivatives exchange CME Group has said its FX futures surged to a new single-day volume record of 2.7 million contracts earlier this month. The new record was set on 11 December, exceeding the previous record of 2.5 million contracts set on 14 June 2017.

Lagarde’s first presser: a review
Claire Jones – FT
Christine Lagarde gave her first policy presser today as European Central Bank chief. Four things stood out. The first was what she had to say about stablecoins. Central bankers dismissed the rise of bitcoin as a fad and the cryptocurrency itself as the “devil’s spawn”. But, as we’ve pointed out, the mere idea of Libra has economic officialdom terrified. That fear’s not only down to Facebook’s might, it also reflects the fact that central banks need to do more to allow the transfer of funds across borders cheaply and quickly.

What I learnt when Paul Volcker came to dinner; We will miss former Fed chairman’s wise — and thrifty — approach to finance
Gillian Tett – FT
A couple of years ago, Paul Volcker, the mighty former chairman of the Federal Reserve, attended a boisterous dinner party at my home in New York with a motley group of economists, financiers, politicians and journalists.

Exchanges, OTC and Clearing

Cboe exchange files to list new short volatility ETF
Saqib Iqbal Ahmed – Reuters
Cboe BZX Exchange has sought permission from the Securities and Exchange Commission to list shares of an exchange traded fund that would let investors bet against stock market gyrations, according to a regulatory filing.

CME Group FX Futures Reach New Volume and Open Interest Records
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, announced its foreign exchange (FX) futures reached a new single-day volume record of 2.7 million contracts on Dec. 11, 2019, surpassing the previous record of 2.5 million contracts set on June 14, 2017.

Three in one blow: Eurex winner at the FOW Awards 2019
They came one after the other and, in the end, Eurex took home three awards at the FOW Awards in London: Exchange of the Year – Europe, Prop Traders’ Exchange of the Year, Most Innovative New Contract (Eurex’s ESG Futures)

Volatility Derivatives: Postponement of the introduction of Futures on the EURO STOXX 50® Realized Dispersion Index
The launch of the Futures on the EURO STOXX 50® Realized Dispersion Index for 16 December 2019, that was announced in Eurex circular 111/19, will be postponed until further notice.

Attention: adjusted trading hours over the holiday season
Please be aware of the changed trading hours over the holiday season and year-end 2019:

Euronext announces quarterly review results of the CAC family indices
Euronext today announced the results of the quarterly review for the CAC family indices. The changes due to the review will be effective from Monday 23 December 2019.

Euronext announces quarterly review results of the ISEQ® family of indices
Euronext today announced the results of the quarterly review for the ISEQ® family of indices. The changes due to the review will be effective from Monday 23 December 2019.

360T launches FX swaps limit order book with midpoint matching; 360TGTX MidMatch provides traders with the ability to electronically exchange risk at the mid, with ANZ and Commerzbank the first to use the new service.
Hayley McDowell – The Trade
Deutsche Börse’s FX trading division 360T has confirmed the launch of an automated FX swaps limit order book with mid-rate matching functionality.

HKEX to Enhance Pre-Opening Session and Volatility Control Mechanism in its Securities Market
Consultation concludes that Pre-Opening Session (POS) and Volatility Control Mechanism (VCM) enhancements will benefit market; Separate rollouts planned for 2020 for the two enhancement programmes
Hong Kong Exchanges and Clearing Limited (HKEX) published today (Friday) its consultation conclusions on the proposed enhancements to the Pre-Opening Session (POS) and Volatility Control Mechanism (VCM) in its securities market.

ASX participates in Digital Asset’s fundraising

TMX Group Holiday Operating Schedule
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Wednesday, December 25, 2019 for Christmas Day, Thursday, December 26, 2019 for Boxing Day and on Wednesday, January 1, 2020 for New Year’s Day.

Trades Completed in the First US Regulated Bitcoin Options on ICE Futures U.S.
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced the first block trade of BakktTM Bitcoin (USD) Monthly Options (BTM) submitted to ICE Futures U.S.

NYSE National Proprietary Market Data Feed migration to Pillar Publishers – extended till December 13, 2019
As previously announced, the Legacy market data publishers will be replaced with NYSE Pillar Publishers for all market data feeds. The new NYSE National Pillar Publishers have been available in production since Sept 16, 2019.

NYSE Files Revised Direct Listing Proposal; Revised proposal is substantially similar but lowers market value requirements for direct
Following the SEC’s rejection last week of its proposed rule change on direct listings, the NYSE filed a revised rule change proposal with the SEC yesterday. The new rule change proposal is substantially similar to the proposal the NYSE filed in November, except that issuers can meet the NYSE’s market value requirement by selling $100 million of shares (rather than $250 million under the initial proposal). Consistent with the initial proposal, the revised rule change proposal would provide the same flexibility for an issuer to sell newly issued primary shares into the opening auction in a direct listing, and would also delay the requirement that an issuer have 400 round lot holders at the time of listing until 90 trading days after the direct listing (subject to meeting certain conditions). See our previous client memo for more information.


Trumid partners with Inforalgo to streamline bond trading processes; Trumid teams up with Inforalgo following increased client demand for eased straight through processing.
Hayley McDowell – The Trade
US bond trading platform provider Trumid has teamed up with data automation specialist Inforalgo to streamline increasingly electronic trading processes for corporate bond clients.

Fintech company surges more than 60% in market debut
Donna Fuscaldo – Forbes may not get the same attention and adoration that Chime or RobinHood garner, but when it comes to raising money via an initial public offering, it has the show-stopping appeal. The business-to-business software and payments company priced its IPO at $22 a share, higher than the $16 to $18 a share range the Palo Alto, Calif.-based fintech had been targeting. Since the stock began trading on the New York Stock Exchange under the ticker “BILL” it has been surging, recently up 60% to $35.08 a share.

How to Navigate the Capital Markets Technology Supply Chain
Fraser Bell – via LInkedIn
Competition in the capital markets technology space has been intensifying in recent years, and it’s not hard to see why. Data from U.S. industry group FINRA shows electronic trading in the United States in the latest annual period rose a staggering 87% to a record 67 billion recorded transactions a day.


Bitcoin Whales Consolidation May Mean More Turbulence Ahead
Olga Kharif – Bloomberg
Big holders control more Bitcoin than in 2017, researcher says; Concentration leaves owners vulnerable to wild price swings
A closer look at Bitcoin holdings data shows a potentially troubling trend among the anonymous accounts — increased consolidation among large owners.Investors with 1,000 to 1 million Bitcoins that are often referred to as whales hold 42.1% of all Bitcoin supply, up from 37.9% during the height of the speculative bubble two years ago, according data from researcher Coin Metrics.

NY wants to make it easier for cryptocurrency exchanges to list new tokens — but why?
Yessi Bello Perez – TNW
The New York Department of Financial Services (NYDFS) wants to update its contentious BitLicense, which regulates cryptocurrency businesses based in or serving customers in the Big Apple. Proposed changes include publishing a list of approved assets on the NYDFS website. Any licensed digital asset provider would be allowed to offer these as long as it notifies the regulator first.

The IRS really needs an exemption for crypto
Matthew De Silva – Quartz
The taxman cometh, and he asketh about virtual currency. The US tax agency has released a new draft of its Schedule 1 form, used by taxpayers to report additional income and deductions. For 2019 tax filers, the Internal Revenue Service has posed a new question, prominently listed at the top of the document: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

Countries vie for cryptocurrency supremacy as Libra tips scales
Roger Blitz – FT
Mark Zuckerberg had barely settled into his seat in front of the US House of Representatives financial services committee in October when the grilling began. No niceties were afforded the Facebook chief executive. Very quickly, members from both sides of the political divide went on the offensive. Facebook, he was brusquely told, should be broken up. Libra, its cryptocurrency project, was being deserted by its backers and he should put it on hold until a regulatory framework was in place.

Tagomi is undercutting large crypto exchanges in a bid to lure active traders to its platform
Frank Chaparro – The Block
Cryptocurrency brokerage Tagomi is slashing its trading fees in a bid to lure active traders away from exchanges like Coinbase and Gemini to its platform. The firm, which has raised approximately $28 million in venture capital funding, gatecrashed the digital asset trading world at the end of 2018 as an aspiring agency broker that would allow large traders to access liquidity across several markets. In recent months, the firm has expanded its client pool to include active retail traders.

Galaxy Digital and XBTO Submit First Block Trade on Bakkt BTC Options
Aziz Abdel-Qader – Finance Magnates
(ICE), the parent company of the New York Stock Exchange (NYSE), today announced the first block trade of its options on BTC monthly bitcoin futures was submitted to its US futures marketplace. The first trade was executed between Galaxy Digital Trading and XBTO. The ICE’s statement comes on the heels of another milestone announced earlier this week when Bakkt said that over 1,000 cash-settled futures contracts had been traded in Asia within a few hours of the launch. The ICE-backed crypto platform now offers four types of regulated bitcoin derivatives products.

Bitfinex now using compliance tool from Chainalysis to keep ‘bad actors off’ its platform
Yogita Khatri – The Block
Cryptocurrency exchange Bitfinex has integrated a compliance tool from blockchain analysis firm Chainalysis to monitor cryptocurrency transactions in “real-time.” Announced Thursday, Chainalysis said its “Know Your Transaction (KYT)” compliance software will help Bitfinex monitor large volumes of cryptocurrency activity and identify high-risk transactions on a continuous basis. This, in turn, will help the exchange to focus on the most urgent activity and enforce compliance policies.

*****You can read the press release here.~MR

Weibo accounts of Justin Sun and Binance co-founder are blocked
Celia Wan – The Block
The Weibo accounts of cryptocurrency exchange Binance co-founder Yi He and TRON founder Justin Sun have been blocked. On the Chinese social media platform, He’s profile now reads: “the account has been blocked due to violations of laws and regulations and the relevant provisions of the Weibo Community Convention.”

Hold Tight, Here Come the Blockchain Wars
Gavin Wood – Coindesk
This post is part of CoinDesk’s 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Gavin Wood is the co-founder of Ethereum, Parity Technologies, Polkadot and the Web3 Foundation.
I don’t want to romanticize what, at the end of the day, is only a few of the many pipe-dream promises finally starting to be fulfilled. That said, I will stick a flag in the sand and state that I do believe that a renewed flurry in the world of blockchain is coming.

This Token Project Offered to Shut Down. Its Market Cap Shot Up $10M
Brady Dale – Coindesk
The oldest ICOs have treasuries worth more than their tokens’ market capitalizations. Should those projects give some of that money back? That was the essential question raised by DigixDAO, which is offering its DGD token holders an all-or-nothing option: completely dissolve its treasury or keep making grants to enhance the ecosystem. Digix CEO Kai Cheng Chng wrote on the DigixDAO blog that Digix has received a lot of feedback since its early-2016 token sale. “One recurring comment was for a mechanism for dissatisfied DGD token holders to make a clean break from DigixDAO,” he wrote.

What Are The Top 10 Blockchain Predictions For 2020?
Biser Dimitrov – Forbes
By all measures 2019 was a remarkable year for the blockchain and crypto space. We saw the birth of new alliances, new cryptocurrency trading products, Bitcoin and Ethereum survived the bear market, and a plethora of blockchain protocols matured and expanded in growth. Finally, the U.S. Congress and foreign central banks are paying close attention to the benefits of blockchain and digital assets. Even China has entered the blockchain race in full force by spending billions on innovation. The largest financial companies in the world are building on blockchain and this trend is not slowing down.


Supreme Court Weighs Whether to Hear Trump Appeals Over Financial Records; Justices could agree or decline to consider president’s legal efforts to block subpoenas by Congress, prosecutors
Brent Kendall and Jess Bravin – WSJ
Supreme Court justices at their private conference Friday are expected to consider President Trump’s legal efforts to block congressional and criminal subpoenas seeking access to his financial records.

Trump out of bounds — two books explore a depraved administration; New insider works show a paranoid and compromised president working outside acceptable limits
Edward Luce – FT
One of the rare anecdotal gems in A Warning, the book by Anonymous, a senior White House official, is how Donald Trump reacts to anyone trying to keep a record of meetings. “What the f*** are you doing?” the US president asks. “Are you f***ing taking notes?” Staff take this as a classic signal that he is about to ask his lawyers to do something unethical, says Anonymous. Which is to say it is a regular event.

U.K. Election Results Map: How Conservatives Won in a Landslide
Allison McCann, Lauren Leatherby and Blacki Migliozzi – The New York Times
Prime Minister Boris Johnson and his Conservative Party secured a landslide victory in the British general election. Here are the latest official results:
The Labour Party suffered its worst showing in more than 80 years. The pro-independence Scottish National Party, known as the S.N.P., picked up 48 of Scotland’s 59 seats. Its powerful performance could renew calls for a referendum on Scottish independence, which Mr. Johnson opposes.


CFTC Fostering a ‘True Culture of Compliance’
Travis Schwab – TABB Forum
In its annual report for fiscal year 2019, the CFTC Division of Enforcement hammered home its intent to be tough on wrongdoers as the Commission strives to create a culture of compliance among industry participants. The key focus of the agency is spoofing and other market manipulation, as well as fostering a culture of cooperation. Eventus Systems’ Travis Schwab takes a detailed look at the priorities of the agency and what future enforcement priorities might entail.

Federal Court hands down penalties in ASIC action against Vocation Limited (in Liquidation) and three officers
On 1 November 2019, the Federal Court of Australia delivered judgment on penalties and made final orders in ASIC’s civil penalty proceedings against Vocation Limited (In Liquidation) (Vocation) and its officers, Mark Hutchinson (former CEO), John Dawkins AO (former Chairman) and Manvinder Gréwal (former CFO).

ESMA issues 2019 report on Accepted Market Practices under MAR
The European Securities and Markets Authority (ESMA) has published today its second annual report on the application of accepted market practices (AMPs) in accordance with the Market Abuse Regulation (MAR).

ESMA consults on procedural rules to impose penalties on supervised entities
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has opened today a public consultation on future procedural rules regarding penalties for third-country central counterparties (TC-CCPs), trade repositories (TRs) and credit rating agencies (CRAs).

FINRA Announces Senior Leadership Team Under New Examination and Risk Monitoring Program Structure; 2020 Exams Will Be Conducted Under Unified Program
FINRA announced today the senior leadership team under the new examination and risk monitoring structure within the organization. This marks the consolidation of FINRA’s three exam functions into a single, unified program—a process that began in October 2018.

Investing and Trading

Big investors turn screw over climate pollution disclosure; Asset managers including TCI, BNP Paribas and Legal & General lead charge on emissions reporting
Attracta Mooney, Laurence Fletcher and Leslie Hook – FT
Many of the world’s biggest investors have long supported calls for companies to spell out their carbon emissions. But a growing number of large asset managers are going a step further, warning they will actively punish board executives at companies that do not improve their pollution disclosure.

Repo and swaps markets point to further volatility; Central bankers are trying to anticipate the source of the next funding crunch
John Dizard – FT
This year end is on the way to seeing the worst financial disaster since the Y2K bug and the implosion of the world’s computers at the stroke of midnight on December 31 1999. You remember that moment, caused by programmers’ failure to anticipate a new century in writing operating systems and applications. Or maybe you do not, since Y2K came and went without much going wrong.

Fed plans to double repo market intervention to avoid cash crunch; Move comes in response to concerns of a jump in short-term borrowing costs
Colby Smith and Joe Rennison – FT
The US Federal Reserve will pump almost half a trillion dollars into the financial system over the end of the year, dramatically increasing intervention in the market in an attempt to avoid a repeat of September’s alarming rise in short-term borrowing costs.

Bank of Canada’s Poloz Sees Era of Low Global Interest Rates
Theophilos Argitis – Bloomberg
Bank of Canada Governor Stephen Poloz said he expects global interest rates to remain low for years to come due to the effects of structural forces such as sluggish productivity and population growth.

Boom times are back for carbon offsetting industry; Pledges from big corporations fire up market that crashed a decade ago
Anna Gross, Leslie Hook and Tanya Powley – FT
In a village in rural Uganda, small teams are building boreholes to provide clean water to poor communities. These rudimentary wells mean locals do not have to boil water, cut down trees for burning wood or produce polluting smoke.

How ethanol plant shutdowns deepen pain for U.S. corn farmers
Mark Weinraub, Stephanie Kelly – Reuters
When the U.S. ethanol industry was booming, Indiana farmer Paul Hodgen made good money selling about a quarter of his crop to a local facility that produced the corn-based fuel.

Pulled IPOs cap subdued year for Canadian deals, signal challenges ahead
Nichola Saminather – Reuters
The scrapping of a second Canadian IPO in as many months this week caps a year of declining activity, highlighting the challenges facing issuers as trade uncertainty and the growth of passive investing weigh on new offerings.


Gundlach’s $150 Billion Decade May Be His Industry’s Last Hurrah
John Gittelsohn – Bloomberg
Fame, performance and demand for bond funds have powered flows; Barriers to entering the ‘big leagues’ are high, the CEO says
It was one of the ugliest breakups the money-management business had ever seen — a tabloid tale of ego and betrayal. But a decade after the star investor known to his staff as “the Godfather” stunned Wall Street with his bitter split from TCW Group and creation of a rival firm, the verdict is in:

Wall Street’s Muni-Bond Bankers Brace for a Record Year in 2020
Danielle Moran – Bloomberg
BofA, Citi, Oppenheimer expecting more than $400 billion; Bond sales surge as governments seize on lower interest rates
The Federal Reserve’s decision to keep interest rates low is providing stimulus to a once contracting Wall Street business: underwriting municipal bonds.

Fired SocGen Banker Seeking $5 Million Must Re-Run Court Fight
Gaspard Sebag – Bloomberg
Jebali says was fired for blowing whistle; SocGen says he lied; Paris court couldn’t reach verdict, no date for new review
A former Societe Generale SA banker who claims he was unfairly fired for blowing the whistle on a bribery scheme must now wait about two years for a verdict after a Paris court failed to reach a decision on his $5 million lawsuit.

Deutsche Bank Considering Cutting Bonus Pool by as Much as 20%
Steven Arons and Eyk Henning – Bloomberg
Size of decline in bonuses set to outpace 5% drop in headcount; CEO Sewing seeking to balance cost cuts with retaining talent
Deutsche Bank AG is considering deep cuts to bonuses for this year as Chief Executive Officer Christian Sewing seeks to eliminate billions of euros of costs in a radical restructuring.

Brexit Wins the Election, But Will Still Prove Tough; Sterling’s rally after Boris Johnson’s landslide shows that both voters and investors are overwhelmingly focused on leaving years of uncertainty behind them
Jon Sindreu – WSJ
The U.K. election has one big winner: The thesis that “getting Brexit done” after 3½ years of uncertainty is the only thing that really matters. Reality will likely prove more complex.


Bond Defaults Reach Once-Safe Corners of Chinese Finance; Chinese authorities are allowing more companies to renege on their debts
Xie Yu – WSJ
A commodity trader has become China’s first state-owned enterprise to inflict losses on dollar bondholders in two decades, according to S&P Global Ratings, a new landmark in a rising wave of defaults.


What Boris Johnson’s Win Means for Markets; Clarity on Brexit is welcome, but the direction of sterling assets will depend on the global and British economy and Johnson’s spending plans.
Marcus Ashworth – Bloomberg
Sterling has punched up to new highs for the year on the back of a comprehensive election victory for Boris Johnson’s Conservative Party.

Conservatives Win Commanding Majority in U.K. Vote: ‘Brexit Will Happen’
Mark Landler and Stephen Castle – The New York Times
Prime Minister Boris Johnson and his Conservative Party won a commanding majority in the British Parliament, a striking victory that redraws the lines in British politics and paves the way for the country’s exit from the European Union early next year. The Conservatives were projected to win 364 seats in the House of Commons, versus 203 for the Labour Party, according to the BBC, with almost all of Parliament’s seats decided.

Brexit Once Meant a Weaker British Pound, but Not Anymore
Amie Tsang and Matt Phillips – The New York Times
When Britain voted in 2016 to leave the European Union, its currency plummeted on world markets, reflecting agitation over the economic and financial disruption that seemed to lie ahead. Three years later, with Brexit still not achieved, trading in the pound has been telling a different story. The pound, which made steady gains ahead of Thursday’s general election, jumped when exit polls pointed to a victory for the Conservatives and Prime Minister Boris Johnson, who vowed to complete the rupture with Europe.

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