Libor Goes From Dying to In Demand With Fed Pushing Fast Loans

May 6, 2020

First Read

Hits & Takes
By JLN Staff

Based on Illinois Governor JB Pritzker’s plan for reopening the state of Illinois, it looks very unlikely JLN will be able to hold an in-person event for the MarketsWiki Education World of Opportunity. We had secured venues again from Trading Technologies and the Stuart School of Business at Illinois Tech, but alas, we won’t be able to use them.

We will be coming up with a plan to deliver a virtual program to any interns who actually get hired into the industry this summer, which is of course a big question. This is just a case of you have to play the hand you are dealt. We still have hopes for a winning hand.

Nasdaq is holding a webinar on “Reg NMS II: The impact of Redesigning Equity Market Structure” on Friday, May 8 at 12 PM EST. Register HERE

Curve Global is holding a webinar titled “The Future of Derivatives – Margin Optimisation” on Wednesday, May 13, 2020 at 16.30 – 17.15 BST. Register HERE. ~JJL

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Eventus has published the main takeaways from its recently held webinar, Market surveillance and compliance post Covid-19. The webinar was co-hosted by Travis Schwab from Eventus Systems and Julie Dixon of Titan Regulation & Advisory and looked at market surveillance and compliance post Covid-19. ~SR

Cointelegraph published this article, entitled “5 Reasons Why Institutional Investors Refuse to Join the Crypto Sector.” Do you think these 5 reasons are accurate explanations of why more institutional investors haven’t become involved with digital assets? Send me your thoughts at mattraebel@johnlothian.com.~MR

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The CryptoMarketsWiki Podcast Episode11: Halving a Good Time
JohnLothianNews.com

Michael Sonnenshein, the managing director at Grayscale Investments, is passionate about bringing digital asset investing to his clients. In this episode of the CMW Podcast, Sonnenshein discusses institutional digital asset investing, the upcoming “Halvening” of bitcoin, and more.

Listen to the podcast »

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Trading Technologies Launches Connectivity to Borsa Istanbul for Derivatives Trading Via the TT Platform
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and Borsa Istanbul, the one and only exchange of Turkey, today announced that all derivative products listed on Borsa Istanbul Derivatives Market (VOIP) are now available for trading through the TT platform and accessible to TT’s global user base.
/jlne.ws/3b7YKDx

*****Years ago I was invited to go to Istanbul by The IFM to participate in a conference they were holding there. I moderated two panels for them. My reasoning for going was “How often do you get invited to go to Turkey?” Not very often. It is good to see Borsa Istanbul make this deal with TT. Turkey took several steps back from the world markets since I was there. This is a step in the right direction.~JJL

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Billionaire Sam Zell Sees Economy Permanently Scarred by Pandemic
Erik Schatzker – Bloomberg
Investor likens impact on U.S. society to the Great Depression; Social distancing, working from home likely to persist a while
Sam Zell, the billionaire known for buying up troubled real estate, said the coronavirus pandemic will leave the same kind of impact on the economy and society as the Great Depression 80 years ago, with long-lasting changes in human behavior that imperil many business models. “Too many people are anticipating a kind of V-like recovery,” Zell said in an interview with Bloomberg Television. “We’re all going to be permanently scarred by having lived through this.”
/jlne.ws/3b8gnDa

******Those who lived through the Great Depression were forever impacted. The same goes for the children of the Great Recession. This one will be no different. How we perceive risk will be different because things we took for granted before became risks we needed to manage.~JJL

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Loeffler Got Lucrative Parting Gift From Public Company en Route to the Senate; The parent company of the New York Stock Exchange, which her husband runs, changed compensation terms to give Kelly Loeffler, a top executive, awards worth millions of dollars as she left for Congress.
Nicholas Fandos and David Enrich – NY Times
When Kelly Loeffler accepted an appointment to be a United States senator from Georgia, she left behind a high-paying job as a senior executive at the parent company of the New York Stock Exchange. But on her way to Washington, her old employer gave her a lucrative parting gift.
/jlne.ws/2W9MVZg

*****The irony is she has to spend some of this money to defend having received it.~JJL

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Restaurant CEO on COVID-19: ‘I honestly don’t see a scenario where 50% to 60% of restaurants don’t close’
Yvette Killian – Yahoo Finance
The restaurant business is a tough one to succeed at during the best of times. Throw in the economic uncertainty and upheaval created by the coronavirus pandemic, and the odds of success become even grimmer.
/jlne.ws/2L1niDI

*****Unfortunately, I concur.~JJL

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Ferrari is now worth more than General Motors and Ford
Robert Frank – CNBC
Ferrari is now worth more than General Motors or Ford, after its market value surged Monday morning to about $30 billion.
Ferrari’s shares jumped as much as 7% on Monday, after the Maranello, Italy-based sports car maker reported better-than-expected earnings. Despite shutting its factory in March, the company’s total shipments of cars increased 5% to 2,738. Revenue fell only 1% to $1.02 billion — better than the $852 million analysts expected.
/jlne.ws/2L6qrCk

*****I blame it all on the movie.~JJL

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Tuesday’s Top Three
Our most read story Tuesday was Wall Street’s Elite Bond Club Is Cracking at the Worst Possible Time from Bloomberg. Second was This pregnant Goldman Sachs trader says Wall Street will never be the same after the coronavirus from Stock Trendigital (who actually got it from CNBC here.) Third was the Chicago Tribune’s obituary of Nicholas De Cicco, a member of the Chicago Board of Trade from 1973 – 2006.

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CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

Libor Goes From Dying to In Demand With Fed Pushing Fast Loans
William Shaw and Alex Harris – Bloomberg
U.S., U.K. lean on benchmark amid massive stimulus efforts; Policy makers have sought to phase out rate by the end of 2021
Regulators on both sides of the Atlantic have spent the better part of three years trying to kill the London interbank offered rate. Now, they’re looking to it once again to underpin hundreds of billions of dollars in loans as they seek to rescue their economies.
/jlne.ws/3caubOY

Nigeria Stares Into the Abyss of a Life Without Oil Cash
William Clowes, Elisha Bala-Gbogbo, and Bill Lehane – Bloomberg
PwC economist says Nigeria may face years without oil revenue; IMF approves biggest ever financial support to the country
Africa’s most populous nation is getting almost nothing from its massive oil wealth. While headline Brent-crude futures have rallied sharply in the past few weeks — rising above $30 a barrel on Tuesday — a glut of Nigerian oil is fetching about $10 less than that. It’s a level that means fiscal revenue for the continent’s biggest economy has cratered.
/jlne.ws/2W918Wz

Europe’s Grand Social Welfare Experiment Can Still Go Horribly Wrong
William Horobin and David Goodman – Bloomberg
Furlough programs protected millions of jobs, but cost a lot; U.K. and others are trying to figure out how to scale back aid
European governments that unflinchingly deployed tens of billions to prevent a catastrophic jobs crisis are now grappling with the challenge of turning off the tap on what’s become one of the biggest welfare experiments in history.
/jlne.ws/2L4k6Y3

Bond Traders Read Clear Message from ECB Ruling: ‘Watch Out’
John Ainger – Bloomberg
Pandemic asset-buying program now in spotlight for Aberdeen; Italian debt shaky again with ‘monetary financing’ a worry
A critical German court ruling on the European Central Bank’s half-decade of quantitative easing is worrying the likes of Aberdeen Standard Investments and UBS Group AG.
/jlne.ws/3b9OoCY

Have investment funds averted a liquidity crisis? The $55tn industry has emerged scared and shrunken but largely intact
Siobhan Riding – FT
In the third week of March, when the dizzying market swings caused by the coronavirus emergency were at their peak, the eyes of the investment world were fixed on the $3.8tn US money market fund sector.
/jlne.ws/3cb46iC

Norwegian oil fund furore focuses on wrong questions; Debate about flight scandal has detracted attention from strategic changes and oversight at world’s biggest sovereign wealth fund
Richard Milne – FT
Norway’s giant $1tn oil fund is currently the subject of intense scrutiny but its critics have become too wrapped up in the wrong questions.
/jlne.ws/35CRRci

BoC says it will try to reach settlements on oil product losses
Reuters
Bank of China (BoC) will try to reach settlements with investors regarding losses on its crude oil investment product, and would resolve remaining disputes through litigation, it said in a statement released on Tuesday.
/jlne.ws/2WvB1Id

U.S. stock exchange field heats up as MEMX gets SEC nod
John McCrank – Reuters
Members Exchange (MEMX), a new bourse backed by major Wall Street firms looking to take on the New York Stock Exchange and Nasdaq Inc (NDAQ.O) through lower fees, said on Tuesday regulators had approved its exchange application.
/jlne.ws/2SGb4nY

Swiss National Bank’s swollen balance-sheet poses risk to ‘credibility’; Analysts fear unintended consequences of central bank’s vast foreign-currency holdings
Sam Jones – FT
When the Swiss National Bank followed last year’s $50bn profit with a record $39bn first-quarter loss, it was a stark illustration of the volatility created by a decade of unconventional monetary policy.
/jlne.ws/2xDcd8D

Defiant ECB Pledges Full Commitment After German QE Ruling
Paul Gordon, Piotr Skolimowski, and Karin Matussek – Bloomberg
Governing Council met after court criticized bond program; ECB noted that EU’s top court says its within its mandate
The European Central Bank responded to a German court ruling criticizing its long-standing bond-buying program by pledging to continue doing everything necessary to revive inflation.
/jlne.ws/2W6kziE

Hedge Fund Association names 2020 Global Board of Directors
HedgeWeek
The Hedge Fund Association (HFA), an international nonprofit trade and nonpartisan lobbying organisation, has announced the results of its 2020 Global Board of Directors election.
/jlne.ws/3fpiSo6

U.S. banking regulators tweak liquidity rule to accommodate emergency facilities
Reuters
U.S. banking regulators announced Tuesday they had tweaked a bank liquidity requirement to ensure that banks were not dinged for participating in emergency Fed liquidity facilities established during the coronavirus pandemic.
/jlne.ws/2YGnPmj

Fed Is Propping Up Companies It Had Warned Banks Not to Touch
Lisa Lee – Bloomberg
Indebtedness will be measured using adjusted earnings; Fed had criticized leveraged borrowers for abusing adjustments
For years, the Federal Reserve warned that too many highly risky companies were engaging in fuzzy accounting that bumped up their earnings — making it easier for them to obtain loans. The practice was driving up corporate debt to excessive and worrisome levels, regulators chastised.
/jlne.ws/3dpRQez

Citadel Waiving Redemption Fees for Fund Clients Seeking Cash
Melissa Karsh – Bloomberg
Griffin’s firm will allow a total of $1 billion in redemptions; Institutions face increased liquidity needs amid pandemic
Ken Griffin’s Citadel will allow investors to pull a total of $1 billion from its main hedge funds without incurring fees or penalties, a sign that clients are grappling with the economic fallout from the coronavirus pandemic.
/jlne.ws/2L2gANN

Goldman Sachs CEO says staff back at offices in Asia, but not New York, London
Elizabeth Dilts Marshall – Reuters
Goldman Sachs Group Inc (GS.N) is gradually returning staff to work at offices in Hong Kong, Sweden and Israel, but will take longer to start the phased-in approach in cities still battling large coronavirus outbreaks like London and New York, the chief executive told staff on Tuesday in a memo seen by Reuters.
/jlne.ws/2W9vh88

Coronavirus

U.S. Coronavirus Cases Surpass 1.2 Million; Among the businesses set to reopen in the next week: hair, nail and tanning salons in Texas; Shanghai Disneyland
Liza Lin – WSJ
The number of confirmed coronavirus cases in the U.S. passed 1.2 million, as the Trump administration said it was considering disbanding the White House coronavirus task force and various states and countries moved ahead with reopening plans.
/jlne.ws/2ziqVCI

Finding a Covid-19 vaccine needs a global effort; Countries should avoid turning to nationalism and share the burdens
The editorial board – FT
Around the world, hopes are pinned on finding a vaccine to defeat coronavirus and allow a return to normal life. The EU showed commendable leadership in hosting an international meeting this week to raise funds to speed up efforts to treat, contain and test for the virus. Governments, donors and pharmaceutical companies will need to do much more in the coming months to ensure that populations, both rich and poor, have equitable access.
/jlne.ws/2xIKG5U

Coronavirus: return to work divides US meat industry; Donald Trump wants to reopen meatpacking plants amid fears of food shortages but unions warn of ‘sacrificial workers’
Gregory Meyer and Aime Williams – FT
Tyson Foods’ beef plant is hard to miss among the irrigated fields outside Pasco, Washington State. Walla Walla County’s second-largest employer, it is flanked by pungent stockyards a mile wide.
/jlne.ws/2L74Gly

Americans’ $2bn lockdown booze binge; Sales for drinking at home soar but alcohol companies say they do not offset bar closures
Alistair Gray and Judith Evans – FT
Americans have spent about $2bn more on alcohol in stores since the start of March than last year, but drinks companies are warning that the surge is failing to compensate for a collapse in business from restaurants and bars.
/jlne.ws/3c9bwTN

Layoffs Start Turning From Temporary to Permanent Across America; Even as they hope for a speedy recovery, companies plan for a slow one.
Shawn Danna, Joe Deaux
With a history going back to 1881, the Michigan Maple Block Co. has long been a reliable fixture in the small northern town of Petoskey. On its website, the family-owned company boasts of having invented the laminated butcher block and that its products grace the Getty Museum in Los Angeles and the Waldorf-Astoria in New York. And yet by early July it will be shutting its Petoskey factory and cutting loose all 56 workers at one of the few year-round businesses in the Lake Michigan tourist town.
/jlne.ws/2W6Lkn5

Sweden’s ‘Gentler’ Lockdown to Limit Economic Damage, SEB Says
Rafaela Lindeberg – Bloomberg
Sweden’s “relatively gentle lockdown strategy” will limit the downturn in its economy compared to those in other Nordic countries, according to analysts writing in SEB’s outlook report. The region’s biggest economy will nevertheless be severely tested by the corona crisis with SEB expecting Swedish GDP to shrink by almost 7% in 2020, making it the largest drop in modern times.
/jlne.ws/2xHYqhe

Euro-Area Survival Put at Risk From Uneven Virus Shock, EU Warns
Alexander Weber and Viktoria Dendrinou – Bloomberg
Southern Europe has been hit harder by virus than the north; Record fall in output still subject to large downside risks
The European Union is facing the deepest economic downturn in its history, which threatens the very future of the euro currency if the crisis is badly handled, the bloc’s executive arm warned.
/jlne.ws/3ccHIp2

China Says Pompeo Has No Evidence Virus Escaped From Wuhan Lab
Bloomberg News
Foreign ministry rejects Pompeo’s claim about disease’s origin; Beijing will support review of virus at ‘appropriate time’
China fired back at U.S. Secretary of State Michael Pompeo, saying he has no evidence to back up claims that the virus that causes Covid-19 escaped from a lab in the central city of Wuhan.
/jlne.ws/2WbcPvU

CNA hit with class-action suit for denying business-interruption claims; CEO Dino Robusto said just yesterday that CNA’s policies exclude coverage for losses from COVID-19-related closures. He’s getting tested in court right away.
Steve Daniels – Crain’s Chicago Business
CNA Financial CEO Dino Robusto just yesterday told analysts the Chicago-based business insurer isn’t required to cover losses due to forced closures to combat COVID-19.
/jlne.ws/2YF3NIU

Ousted vaccine director files whistleblower complaint alleging coronavirus warnings were ignored
Kaitlan Collins, Jeremy Diamond and Kevin Liptak, CNN
Dr. Rick Bright, the ousted director of the office involved in developing a coronavirus vaccine, formally filed an extensive whistleblower complaint Tuesday alleging his early warnings about the coronavirus were ignored and that his caution at a treatment favored by President Donald Trump led to his removal.
/jlne.ws/2WvwrtA

New Report Says Coronavirus May Have Made Early Appearance in France; A sample taken on Dec. 27 from a French patient with pneumonia has tested positive for coronavirus, nearly a month before the disease was first officially acknowledged to have emerged in France.
Adam Nossiter and Aurelien Breeden – NY Times
Weeks before Chinese authorities acknowledged that the coronavirus could be transmitted by humans, and nearly a month before the first officially recorded cases in Europe, a 42-year-old fishmonger showed up at a hospital in suburban Paris coughing, feverish and having trouble breathing. It was Dec. 27.
/jlne.ws/2YE1AO3

A ‘Breakdown of Trust’: Pandemic Corrodes Church-State Ties in Russia; Even as the monasteries of the Orthodox Church are besieged by the coronavirus, apocalyptic-minded priests balk at state restrictions on public worship.
Andrew Higgins – NY Times
A physics student at Moscow State University, Dmitri Pelipenko turned away from science in 2018 to devote himself to God, enrolling as a novice monk at Holy Trinity-St. Sergius Lavra, the spiritual center of the Russian Orthodox Church.
/jlne.ws/2YAUKJf

Understanding the Virus and Its Unanswered Questions
Jason Gale and John Lauerman – Bloomberg
The novel coronavirus that emerged late last year in central China has infected millions of people around the world. It’s taken health officials time to understand that it behaves in ways atypical of similar viruses, producing missteps in the response. The list of symptoms of Covid-19, the disease it causes, keeps growing, complicating efforts to diagnose and treat it. And the virus has yet to give up all its mysteries, creating uncertainties about when the pandemic might end.
/jlne.ws/3dlP5L1

Exchanges, OTC and Clearing

Electronic Dissemination of Rights Issue and Take-over Documents Allowed Until 30 September 2020
SGX
The Monetary Authority of Singapore (MAS), the Securities Industry Council (SIC) and the Singapore Exchange Regulation (SGX RegCo) have today introduced temporary measures to allow with immediate effect until 30 September 2020[1], listed issuers and parties involved in rights issues and take-over or merger transactions the option to electronically disseminate Offer Documents through publication on SGXNET and their corporate websites. There is thus no need to despatch hardcopy Offer Documents as required under the Securities and Futures Act, the Singapore Code on Take-overs and Mergers, and the SGX Listing Rules.
/jlne.ws/2WwQ04D

Ag Barometer index drops below 100 as coronavirus disrupts agriculture
CME Group
Coronavirus concerns, commodity price declines and supply-chain disruptions sink producer sentiment to a three-year low, according to the April Purdue University/CME Group Ag Economy Barometer. The barometer recorded a reading of 96, marking the first time the barometer has fallen below 100 since October 2016 registering 72 points below its record-high just two-months prior. The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers and this month’s survey was conducted from April 19-24, 2020.
/jlne.ws/3djEMHt

CME Group Declares Quarterly Dividend
CME Group
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a second-quarter dividend of $0.85 per share, payable June 25, 2020, to shareholders of record as of June 10, 2020.
/jlne.ws/2YzDIv0

Video: How Total Return Futures work
Eurex
Regulatory changes are driving OTC business to listed solutions. The Eurex Total Return Future (TRF) on the EURO STOXX 50® index is a prime example of this futurization process. Watch this series of videos to learn more about TRFs.
/jlne.ws/2SK2OUi

Announcement of T7 Release 9.0
Eurex
Deutsche Börse AG plans to introduce T7 Release 9.0 on 23 November 2020. The simulation period for T7 Release 9.0 is planned to start on 14 September 2020.
/jlne.ws/2yAY24z

ASX Group Monthly Activity Report – April 2020
ASX
Attached is a copy of the ASX Group Monthly Activity Report for April 2020.
/jlne.ws/2A5G4aP

TMX Group Consolidated Trading Statistics – April 2020
TMX
TMX Group Limited today announced April 2020 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.
/jlne.ws/2YDmtZD

Nasdaq April 2020 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for April 2020, on its investor relations website.
/jlne.ws/2SFWjl7

Members Exchange Receives SEC Approval to Operate U.S. Securities Exchange; Launch Remains on Track for Third Quarter 2020
Business Wire
Members Exchange (MEMX), a market operator founded by members to benefit all investors, announces today the receipt of U.S. Securities and Exchange Commission approval to operate a national securities exchange.
/jlne.ws/2zWlVnj

BOX Exchange Update: Adding Quote Timestamp Field To SAIL Protocol
Mondovisione
BOX Exchange (“BOX”) recently distributed RC-2020-03 which detailed the updates BOX is making to its SAIL Protocol. The new field will allow BOX to report timestamps to the CAT that are related to quote data on behalf of Market Makers. All BOX Market Makers will be required to support the new field.
/jlne.ws/3fq8In5

Cboe Global Markets Reports April 2020 Trading Volume
Cboe
ADV across Cboe’s four options exchanges up 47% over year ago; Cboe EDGX Options Exchange ADV of more than one million contracts a new alltime monthly high; ADV at Cboe’s four U.S. equities exchanges rose 99% over year ago
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported April monthly trading volume.
/jlne.ws/2WuFaMB

ICE Benchmark Administration Publishes Fourth Update Regarding the U.S. Dollar ICE Bank Yield Index
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has published its fourth update regarding the U.S. Dollar ICE Bank Yield Index.
/jlne.ws/2Wa7xAs

Fintech

Revolut is the most hyped fintech in Europe. Can it grow up? The company wants to upend banking but the need to mature is more urgent than ever
Nicholas Megaw and David Crow – FT
On a chilly Wednesday night earlier this spring, a hundred or so Dubliners gathered over pizza and cans of Brooklyn Lager at the top of The Academy, a trendy co-working site. There was plenty to do in the Irish capital that evening, one of the last before the city would be closed down by coronavirus.
/jlne.ws/3bb8VY1

Winvesta Taps DriveWealth to Offer Indian Investors Access to U.S. Securities
Press Release
DriveWealth, LLC, a U.S. based leader in global digital trading technology, announced today a partnership with Winvesta Ltd, a newly launched UK-based global investment platform with operations in India and the U.S. Employing DriveWealth’s proven technology, Winvesta is now offering U.S. stock market access via a mobile app to investors across India, enabling them to invest in their favorite companies. Winvesta clients will also have access to real-time fractional shares in familiar U.S. brands, an offering that DriveWealth has pioneered.
/prn.to/2yxpsIx

Nevertheless She Persisted: How A Female Fintech Founder Raised Her Seed Round
Geri Stengel – Forbes
The average annual cost of a private four-year college is $32,410 and a public college (in-state) $9,410, according to the CollegeBoard. College is expensive. More than 44 million Americans owe $1.6 trillion in student debt, writes Zack Friedman, a Forbes contributor. What if there were a way for students to incur no debt or less debt?
/jlne.ws/2A5vwbF

What’s Cooking with Spiros Margaris? On Fintech, Corona, & the Future
Rachel McIntosh – Finance Magnates
The fintech industry is at once an increasingly prevalent and increasingly invisible force in many – if not most – of human society.
Indeed, the fintech industry seems to be growing horizontally: while there are some companies that aim to build ‘full-contact’ relationships with their clientele, a growing number of them are building infrastructure that takes an elegant backseat to the lives of their customers: technology that is as intuitive and easy-to-use as breathing air.
/jlne.ws/3frNqFR

Bloomberg Launches New Data Management Solution to Increase Operational Efficiency for Clients; Enterprise Data clients, including those now working remotely, can maximize the value of the Bloomberg data they subscribe to with Data License Plus
Bloomberg
Bloomberg today announced the launch of Data License Plus (DL+), a new managed service which aggregates a client’s Bloomberg data into a single dataset and enables users to explore and interact with the data through a web-based user interface. DL+ enhances the client experience by making Data License data easier to use throughout the client enterprise while reducing clients’ data processing efforts.
/jlne.ws/3cbHe2r

PwC Switzerland and Baymarkets announce strategic alliance; Implementing multi-asset post-trade and clearing solutions
Baymarkets AS
Baymarkets AS (“Baymarkets”), the award-winning provider of independent post-trade clearing systems, today announced a joint business relationship with PwC Switzerland, the leading audit and advisory company in Switzerland and financial markets expert, to deliver global post-trade and clearing solutions.
/jlne.ws/2SWYcKH

Cryptocurrencies

OCC Selects Axoni to Modernize Securities Lending Infrastructure
OCC
OCC, the world’s largest equity derivatives clearing organization, today announced that it has selected Axoni, a technology firm that specializes in multi-party workflows and infrastructure, to develop and implement a distributed ledger technology solution to replace its existing securities lending infrastructure. Today’s announcement marks another milestone for OCC’s transformation as this new, innovative technology addresses fundamental challenges in the securities lending industry and will benefit OCC’s clearing member firms by increasing efficiency and reducing reconciliation and associated costs.
/jlne.ws/3c2Vt9Q

Bitcoin Is Staging a Comeback Reminiscent of 2017 Bubble Frenzy
Vildana Hajric and Olga Kharif – Bloomberg
Coins awarded for processing transactions set to drop in May; Bitcoin post-halving rallies have averaged 446 days: Pantera
It’s been left for dead more than once, written off as nothing but a bubble and denounced as rat poison by one of the world’s most famous investors. Yet Bitcoin is once again staging a comeback reminiscent of the token’s glory days, with evangelists pegging their hopes on a technical event as the new catalyst.
/jlne.ws/3cecGNG

BitMEX Is Making Bitcoin Network More Expensive for Everyone, Researcher Finds
Alyssa Hertig – Coindesk
Every day, around mid-morning New York time, the average fee bitcoin users worldwide pay to send the cryptocurrency spikes for up to an hour, then returns to normal. A respected researcher thinks he’s found the reason: BitMEX. If the crypto derivatives exchange used more efficient technologies when broadcasting transactions, users could save as much as roughly 1.7 bitcoin (worth more than $15,000 at press time) in fees every day, or about 7 percent of total daily fees paid, argues pseudonymous bitcoin engineer 0xb10c.
/jlne.ws/3bda950

Dutch Regulator Forcing Crypto Firms to Register Within 2 Weeks
Arnab Shome – Finance Magnates
The De Nederlandsche Bank (DNB) has given an ultimatum to the crypto companies operating within the country to register with the central bank by May 18. This is to comply with the latest Dutch anti-money laundering (AML) laws, passed by the country’s parliament last month. The new laws are in compliance with the Financial Action Task Force-recommended AML directives and standards.
/jlne.ws/3b84mh5

Ukraine’s nuclear power plants may start mining cryptocurrencies
Yogita Khatri – The Block
Nuclear power plants in Ukraine may start mining bitcoin and other cryptocurrencies if a government proposal goes through. Ukraine’s acting energy minister Olha Buslavets has sent a letter to Energoatom, the country’s state-owned operator nuclear power plants, to consider using excess electricity for mining cryptocurrencies.
/jlne.ws/3dmSYzm

Nervos Aims to Spur Blockchain Development With New Incubator Headed by Industry Vet
David Pan – Coindesk
Public blockchain network Nervos has launched a virtual incubator for early-stage startups building decentralized applications (dapps). Dubbed CK Labs, the incubator will fund startups developing their dapps on Nervos’ platform and introduce the products to major crypto investors to help bring products to market. The firm thinks the incubator can help further develop its own two-layer blockchain platform, too.
/jlne.ws/2L7JFY9

Bitcoin transactions soar ahead of Argentina’s “worst crisis” ever
Adriana Hamacher – Decrypt
Argentina’s economy minister suggested that his government would default on its foreign debt for the ninth time, the Financial Times reported today. It comes amid predictions of rapidly falling GDP and wages, and rising unemployment combined with hyperinflation. Analysts say this will create the “worst crisis” in Argentina ever.
/jlne.ws/2yBftBQ

Bitfinex brought in $21.4 million in revenue in Q1 2020, up 96% from last quarter
Yilun Cheng – The Block
Bitfinex generated $21.4 million in revenue in the first quarter of 2020, nearly twice as much as it brought in during the final quarter of 2019. According to new research from The Block, Bitfinex generated $21.4 million during the first quarter of 2020 – a 96% increase from the $10.91 million revenue in the final quarter of last year – and a small decrease from the $26.15 million revenue in 2019’s third quarter.
/jlne.ws/3ba4jBB

Hackers Harnessed Ghost Servers for Mining Cryptocurrency
Aziz Abdel-Qader – Finance Magnates
Popular blogging platform Ghost, and tech firms LineageOS and Digicert were the latest victims for cryptomining attacks, a kind of malware that harnessed their computing powers for mining cryptocurrencies. Ghostb confirmed it has been hacked as attackers abused the vulnerabilities in popular infrastructure tool Salt and gained access to the Ghost (Pro) sites and Ghost.org billing services.
/jlne.ws/2WbeL7E

First Mover: U.S. Arms of Binance, FTX Push Into Margin Trading, But Likely Not at 100x
Zack Voell, Omkar Godbole – Coindesk
Cryptocurrency exchanges based outside the U.S. are pushing to fill what they see as a competitive gap in the world’s biggest economy – offering more leverage to traders who have limited alternatives due to a strict domestic regulatory environment.
/jlne.ws/2WuF3k9

What Stellar’s Investment In Abra, Means For “The Robinhood Of Cryptocurrency”
Ben Jessel – Forbes
Today, the Stellar Development Foundation, a non-profit organization that supports the development and growth of the Stellar blockchain network announced a $5m investment in Abra, a leading cryptocurrency wallet and exchange application, as part of an overall strategic partnership between the two organizations.
/jlne.ws/2SHw8KT

Bloomberg’s Tracy Alloway and Joe Weisenthal on how this crisis is different from ’08
Frank Chaparro – The Block
Episode 16 of Season 2 of The Scoop was recorded remotely with Frank Chaparro, Ryan Todd, along with Bloomberg Financial Journalists and co-hosts of the Odd Lots podcast, Tracy Alloway and Joe Weisenthal.
/jlne.ws/2YDvrpL

Politics

Demographics, economy and death tolls boost Biden in polls; Polls give snapshot of shifting battlegrounds ahead of November’s presidential election
Christine Zhang and Brooke Fox – FT
Polls in key states, combined with changing demographics and bleak forecasts for a pandemic-induced recession, give an early snapshot of how the presidential race appears to be lining up in favour of former vice-president Joe Biden.
/jlne.ws/3ca3H01

Trump Says U.S. Must Reopen Even If More Americans Get Sick, Die
Jordan Fabian and Mario Parker – Bloomberg
White House weighs dissolving virus task force amid reopening; Polls shows 69% of Americans worried about contracting virus
President Donald Trump launched headlong into his push to reopen the country on Tuesday, saying Americans should begin returning to their everyday lives even if it leads to more sickness and death from the pandemic.
/jlne.ws/3b2EVO0

GOP Sen. Kelly Loeffler’s latest ads remind Georgians she has a private plane
Kathryn Krawczyk – The Week
Sen. Kelly Loeffler (R-Ga.) is trying to bury her questionable stock selloff under a pile of money. Loeffler has only been a U.S. senator for a few months, but remains embroiled in an ethics scandal after receiving a closed-door coronavirus briefing in January and quickly selling off stocks. Loeffler has denied any ethics violations in the sale. Still, she’s aiming to win her seat this fall, and debuted several ads Monday that remind voters how much money she’s personally spent fighting coronavirus.
/jlne.ws/2zam4mR

Trump Backs Putin’s Nuclear Powers’ Summit, U.S. Envoy Tells IFX
Henry Meyer – Bloomberg
Trump sent a message to Putin, Sullivan says in interview; Putin called for summit of UN Security Council permanent five
U.S. President Donald Trump supports Kremlin leader Vladimir Putin’s proposal to hold a summit of the five permanent members of the United Nations Security Council, the American ambassador to Moscow said in an interview with a Russian news service.
/jlne.ws/2A4QZl3

Trump Should Worry About His Approval Rating; With six months until the election, the president needs a significant rally to avoid losing badly.
Jonathan Bernstein – Bloomberg
The 2020 presidential election is now less than six months away. We’re close enough that head-to-head polling matchups are no longer totally meaningless. But I still suspect that president’s approval rating is a better predictor. And the news for Donald Trump is not good.
/jlne.ws/2YH4p0K

Division Appears to Be Trump’s Only Coronavirus Plan; Civil wars don’t cure pandemics.
Mark Gongloff – Bloomberg
Lack of Planning on Trump’s Part Is an Emergency on Our Part
“No battle plan survives first contact with the enemy” is an idea that makes sense when applied to war, but the guy who said it first wasn’t necessarily opposed to plans per se. The people running America’s war on Covid-19 seem to have taken the idea too much to heart.
/jlne.ws/2SIDGgv

Trump Pivots to ‘Phase Two,’ Risking More Death to Save Economy
Jordan Fabian and Mario Parker – Bloomberg
White House may disband virus task force by end of month; Americans remain worried about returning to work amid pandemic
President Donald Trump fixed his course on reopening the nation for business, acknowledging that the move would cause more illness and death from the pandemic but insisting it’s a cost he’s willing to pay to get the economy back on track.
/jlne.ws/2YzNtcC

Regulation

Period to cover absent Senior Managers extended due to coronavirus (Covid-19)
UK FCA
The FCA has extended the maximum period firms can arrange cover for a Senior Manager without being approved, from 12 weeks to 36 weeks, in a consecutive 12-month period.
/jlne.ws/2zWgTar

FCA’s national and international response to coronavirus (Covid-19) and Brexit
UK FCA
Speech delivered by Nausicaa Delfas, Executive Director of International, at Deloitte Annual Conduct Risk Conference (webinar).
/jlne.ws/2SIDaPD

FINRA Reminds Firms to Beware of Fraud During the Coronavirus (COVID-19) Pandemic
FINRA
The COVID-19 pandemic is affecting most aspects of our society and daily lives, as well as the U.S. economy and markets. Events with such profound impact routinely create opportunities for financial fraud.
/jlne.ws/2SB9X9l

Proposed Rule Change to Amend FINRA Rule 9231 to Provide for the Compensation of All Panelists that Serve in Connection with a FINRA Disciplinary Hearing
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 9231 to provide for the compensation of all panelists that serve in connection with a FINRA disciplinary hearing, regardless of whether it is an Extended or non-Extended Hearing.
/jlne.ws/2SG4SMK

ESMA reminds firms of conduct of business obligations under MiFID II
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is issuing a Public Statement on the risks for retail investors when trading under the highly uncertain market circumstances due to the COVID-19 pandemic. ESMA also reminds investment firms of the key conduct of business obligations under MiFID when providing services to retail investors.
/jlne.ws/2A5Hnqf

ESMA EXTENDS FOUR TRADE REPOSITORIES REGISTRATIONS TO INCLUDE SECURITIES FINANCING TRANSACTIONS REPORTING
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has approved the extension of registrations of four trade repositories (TRs) to include securities financing transactions (SFT) reporting under the Securities Financing Transactions Regulation. The TRs concerned are DTCC Derivatives Repository plc, UnaVista TRADEcho B.V., Krajowy Depozyt Papierów Wartosciowych S.A. and REGIS-TR S.A. with effect from 7 May 2020.
/jlne.ws/2WuzVMY

Retail investors at risk in volatile markets
ASIC
ASIC analysis of markets during the COVID-19 period has revealed a substantial increase in retail activity across the securities market, as well as greater exposure to risk. We found that some retail investors are engaging in short term trading strategies unsuccessfully attempting to time price trends.
/jlne.ws/2SWKIP5

Pershing pleads guilty to mishandling of client monies
ASIC
On 5 May 2020, Pershing Securities Australia Pty Ltd (PSAL) pleaded guilty at the Downing Centre Local Court in Sydney to mishandling client monies. PSAL is the first company in Australia to face criminal prosecution for breaching client money provisions, which are designed to protect the interests of AFS licensee clients by ensuring that client money is kept separate from licensee money.
/jlne.ws/2YIrKiD

ASIC guidelines for investor meetings using virtual technology
ASIC
On 20 March 2020, ASIC issued guidelines for meeting upcoming annual general meetings (AGM) and financial reporting requirements. See also media release 20-070MR. The guidelines discuss ASIC’s ‘no action’ position on non-compliance with provisions of the Corporations Act that may prevent the holding of AGMs via technology that allows members to participate remotely by online or other electronic means (virtual technology).
/jlne.ws/3dl227V

Investing and Trading

What’s It Worth? A Guide to Valuations in Low-Visibility Markets
Michael Msika and Anooja Debnath – Bloomberg
Stock watchers focus on cash flow and book value over earnings; Currency strategists weigh models to assess fundamentals
Is it cheap or expensive? It used to be a question that strategists answered with a simple formula, but it’s turned into a fool’s errand. The S&P 500 Index’s 12% rally in April and sharp fall in profit estimates sent its forward price-to-earnings ratio to the most expensive level in almost two decades. In the words of Muddy Waters Capital founder Carson Block, “It makes no sense.”
/jlne.ws/2W9zoRG

Companies are dangerously drunk on debt; Sobering up after the crisis will require changes to tax laws, bonuses and pensions
Robert Armstrong – FT
Homer Simpson once proposed a toast “to alcohol, cause of and solution to all of life’s problems”. For global companies that have drunk deep of debt, his line captures a nasty irony. The pandemic poses especially big economic hazards to companies with highly leveraged balance sheets, a group that now includes much of the corporate world. Yet the only viable short-term solution is to borrow more, to survive until the crisis passes. The result: companies will hit the next crisis with even more precarious debt piles. The cycle needs breaking.
/jlne.ws/2WaloqF

How Long-Feared ‘Monetary Finance’ Becomes Mainstream
Ben Holland – Bloomberg
The coronavirus pandemic has turned into something of a break-the-glass moment for economic policy. One emergency measure involves governments borrowing from their own central banks to pay for extra spending. That idea, known as “monetary financing,” is getting hotly debated — and perhaps even put into practice. To some, it’s just an extension of rescue plans that worked after the 2008 financial crisis. Others warn of a slippery slope that historically has led to out-of-control inflation.
/jlne.ws/35BV2Rn

The Oil Crash Created a Recycled Plastic Trap
Emily Chasan – Bloomberg
A few months ago—before the pandemic stopped economies in their tracks—the biggest sustainability issue seemed to be plastic. Over the past several years, companies have rushed to make commitments to source recycled plastic. The idyllic “waste-free economy” was a hot topic at Davos. Danone pledged its Evian water bottles would be made of 100% recycled content. PepsiCo, Coca-Cola and L’Oreal all promised to increase recycled plastic in their packaging.
/jlne.ws/2L8KgZm

Airlines Got the Sweetest Coronavirus Bailout Around; The $50 billion the government is using to prop up the industry is a huge taxpayer gift to shareholders.
Timothy Massad – Bloomberg
The U.S. Treasury Department has asked more than 200 public companies that received almost $1 billion in loans under the Paycheck Protection Program to return the money, even if they technically qualify as small businesses. Treasury Secretary Steven Mnuchin has said the program wasn’t intended for these companies because they have access to the capital markets.
/jlne.ws/3b5MUKh

Clorox has seen 500% increases in demand during the COVID-19 pandemic: CEO
Brian Sozzi- Yahoo Finance
Clorox chairman and CEO Benno Dorer is working nearly around the clock, fitting in a meal or two, squeezing in some family time, getting a wee bit of rest and then rinse and repeating that routine.
/jlne.ws/3dlMelh

Shale Producers Hint at Possible Fracking Revival at $30 Oil
Rachel Adams-Heard and David Wethe – Bloomberg
Diamondback, Parsley may bring back frack crews at that price; Drilling activity has plummeted with collapse in oil prices
A pair of prominent shale producers said all they need is oil around $30 a barrel to consider bringing back curtailed crude output and fracking new wells.
/jlne.ws/2YGub5k

ESG a Win for Stocks, Less So for Bonds Amid Covid-19
Alastair Marsh – Bloomberg
The market convulsions caused by the coronavirus pandemic and efforts to halt its spread might offer some answers to one of fund managers’ biggest questions: What’s the affect on financial performance of investing in companies that make a positive contribution to society and the environment?
/jlne.ws/2yxwTPV

Listen to the Numbers, Not the Spin; Executives are withdrawing guidance at a record pace, but the stock market is responding to the happy talk.
John Authers – Bloomberg
The first-quarter earnings season is limping to a close this week, bringing two childhood sayings back to mind. First: “If you can’t find anything positive to say, don’t say anything.” And second: “Do as I say, not as I do.”
/jlne.ws/2SKbASe

Looking for a Glowing Commodity? Try Uranium; Prices are up sharply as supply runs down, worsened by coronavirus-related mine closures.
Clara Ferreira Marques – Bloomberg
Uranium is having a moment in 2020, climbing a third in six weeks while much of the commodities universe melts down. Years of poor economics and weak investment, combined with the impact of pandemic-related mine closures, are adding up to a supply squeeze, despite demand softened by industrial lockdowns. There will be no swift return to lofty levels last seen over a decade ago, but the metal may still be the only one to end the year with a record shortage and higher prices.
/jlne.ws/2YQsCSD

Institutions

Former BlackRock executive joins LGIM as global operating chief; Brenda Sklar joins LGIM after previously working as head of global client services and global COO of business operations at BlackRock.
Hayley McDowell – The Trade
Legal & General Investment Management (LGIM) has hired BlackRock’s global COO of business operations as the firm’s global operating chief.
/jlne.ws/2Ww7xdb

ICBC joins BidFX EMS as liquidity provider; China’s ICBC will provide emerging market liquidity on the BidFX execution management system (EMS).
Hayley McDowell – The Trade
The Industrial and Commercial Bank of China (ICBC) has become the latest major institution to join BidFX as an emerging markets liquidity provider.
/jlne.ws/3de6hSO

‘Buffer’ Funds Lure Investors Seeking Protection in Market Turmoil; A small group of exchange-traded funds that purport to offer built-in protection against losses—but cap gains at a fixed level as well—has surged in popularity
Mischa Frankl-Duval – WSJ
A small group of exchange-traded funds that purport to offer built-in protection against losses—but cap gains at a fixed level as well—has surged in popularity during this year’s stretch of heightened volatility.
/jlne.ws/2LhQK8J

HSBC seeks to remove management of ZenRock Trading; Banks try to limit fallout from collapse of Singapore commodities trader Hin Leong
Hudson Lockett, Neil Hume and Mercedes Ruehl and Stefania Palma – FT
HSBC has taken steps to remove the management of Singapore-based ZenRock Commodities Trading, seeking to have the company put under judicial management in the latest blow to the city-state’s natural resources sector.
/jlne.ws/35A2CMq

Hedge fund bear takes aim at central banker ‘fruit loops’; Horseman Capital’s Russell Clark has sold his holdings in government bonds
Laurence Fletcher – FT
One of the hedge fund industry’s longest-standing bears has ditched his holdings in government bonds, saying the central bankers who have helped propel their stratospheric rise over recent years are “fruit loops”.
/jlne.ws/35CPuGz

One-Man Hedge Fund Gains 56% With Virus-Resistant Tech Bets
Divya Balji – Bloomberg
EMJ Capital’s Eric Jackson owns shares in Zoom, Delivery Hero; Small long-short fund is up 131% since its 2017 inception
Isolation is old hat for Eric Jackson. Since he launched his technology-focused hedge fund in 2017, he has been running it from a home office. The pandemic requires little adjustment in how he works. But it does force investors everywhere to think about which companies will do better in a scarred global economy. In Jackson’s case, the crisis has given his key holdings a huge boost: Zoom Video Communications Inc. and German food app company Delivery Hero SE have lifted his long-short fund at EMJ Capital Ltd. to a 56% gain this year.
/jlne.ws/2W6MbEj

Credit Suisse Staff Told to Expect Return to Work in Phases
Patrick Winters and Faseeh Mangi – Bloomberg
Many employees to keep working from home for weeks or months; Staff to work from office in alternating groups in phase-in
Credit Suisse Group AG employees have been told to expect to return to offices in four phases as the Swiss bank prepares to reopen offices that have been shuttered to halt the spread of the coronavirus.
/jlne.ws/3b660Qh

BNP Paribas Braces for Wave of Defaults, Hitting Profit; Companies cutting dividend payments hit the French bank’s equity derivatives unit
Noemie Bisserbe and Pietro Lombardi – WSJ
BNP Paribas SA BNPQY 0.33% reported Tuesday a drop in first-quarter net profit as France’s largest bank set aside new provisions to prepare for a flood of customers to default on their loans because of the coronavirus pandemic.
/jlne.ws/2KZJdef

Regions

ICBC joins BidFX EMS as liquidity provider; China’s ICBC will provide emerging market liquidity on the BidFX execution management system (EMS).
Hayley McDowell – The Trade
The Industrial and Commercial Bank of China (ICBC) has become the latest major institution to join BidFX as an emerging markets liquidity provider.
/jlne.ws/3de6hSO

Double Black Swan Hitting Texas Drags Down the Rest of the U.S.
Steve Matthews, Catarina Saraiva, and Devon Pendleton – Bloomberg
Development and real estate are casualties of the oil plunge; ‘I don’t see an end to this,’ a billionaire oilman warns
In all his years in the Texas oil patch, the billionaire Russell Gordy has never seen a bust like this. The nightmarish collapse in crude prices that has accompanied the coronavirus pandemic is sinking fortunes across the Lone Star State, the nation’s second-largest economy. And not even Gordy, an oilman since 1973, can see a clear way out.
/jlne.ws/35BVJdv

Brexit

Brexit: Tension and uncertainty stalk trade talks
Katya Adler – BBC News
Despite the fear, the misery and the suffocating uncertainty of Covid-19, by now you’ve no doubt heard on the Brussels-Paris-Berlin-Dublin-Belfast-London grapevine: the post-Brexit trade talks between the EU and the UK are in trouble. Sure, there’s agreement in basic free trade discussions but clashes on key issues remain. On Tuesday, Ireland’s Foreign Minister Simon Coveney said the two sides looked like they were heading for a crisis which, from the Irish perspective, was “very, very serious”.
/jlne.ws/2ziHUVu

Will Johnson smuggle a bad Brexit through the coronavirus crisis?
Rafael Behr – The Guardian
When Boris Johnson was a journalist he was a notorious breacher of deadlines. Officials and ministers say he carried that attitude into politics. His career has been fuelled by adrenaline wrung from the last minute of every decision, which means he has probably not yet given much thought to Brexit transitional arrangements. They expire at the end of the year.
/jlne.ws/2YAYPgx

Miscellaneous

Harvard Sees $1.2 Billion Revenue Shortfall Due to Pandemic
Janet Lorin – Bloomberg
Harvard University, the richest U.S. college, is forecasting a revenue shortfall of nearly $1.2 billion over two academic years, showing how the economic effects of the coronavirus pandemic are crippling schools.
/jlne.ws/2Wy1ULx

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First Read Cboe's Tilly Outlines Exchange Growth Amid Market Disruption Suzanne Cosgrove - John Lothian News In a webinar interview Thursday, Cboe Global Markets' CEO Ed Tilly said the exchange is contemplating reopening the trading floor next month but will not pull...

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