London Metal Exchange May Permanently Close Iconic Trading Floor; BrokerTec EU government bond and repo platform migrates to CME Globex

Jan 19, 2021

First Read

$25,851/$300,000 (8.6%)
Barbara Wierzynski and Doug Harris


Hits & Takes
John Lothian & JLN Staff

Tomorrow, Joe Biden becomes the President of the United States of America. Kamala Harris will become the Vice President, the first female vice president in history. Bless them and their mission.

In one of her last acts as a U.S. Senator, Kelly Loeffler donated her paycheck to the Capitol Police Memorial Fund in honor of two officers that died in the wake of a violent attack on the Capitol. Class move.

The CME Group has completed its migration of the BrokerTec EU Government Bond and EU repo trading platform to CME Globex.

Here is the LME discussion paper they issued on the future market structure.

Congratulations to Gary Gensler on being nominated to be the SEC chairman. Welcome back Gary!

We have had two new donations to the JLN MarketsWiki Education GoFundMe campaign: Former FIA General Counsel Barbara Wierzynski and Doug Harris, managing director of Promontory Financial Group, LLC and an NFA board member. Doug is also an advisory board member of DirectSwap, LLC and a director of SAGE, which stands for Services and Advocacy for GLBT Elders. I am particularly moved to have received this donation from Doug on Martin Luther King, Jr. Day, especially considering his work with SAGE.

As for Barbara, to quote MarketsWiki, “She was instrumental in shaping nearly three decades worth of Commodity Futures Trading Commission reauthorizations, expanding the FIA’s focus to global issues, and guiding the industry through the Barings crisis, the downfall of Lehman Brothers and the subsequent development of the Dodd-Frank Act. She was key in the advancement of FIA’s consumer-protection recommendations in the wake of the collapse of MF Global and Peregrine Financial Group, which have been adopted by regulators.”

Thank you to both Doug and Barbara and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

The Pathway to Adventure Council of the Boy Scouts of America was the number one council in the nation in popcorn sales.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


Cannabis Shares Pick Up Pace As 2021 Regulatory Momentum Eyed

Saleem Daya, an analyst with Nasdaq IR Intelligence in Toronto, sees U.S. cannabis regulation poised for a rehaul in 2021 given Democrats’ U.S. Senate win. While he acknowledges some uncertainty, he told JLN that U.S. reform and the implications of Mexico’s legalization efforts are expected to provide new opportunities for sector growth.

Listen to the podcast »


Sponsored Content
?Special Report? First year anniversary workshop of TOCOM/JPX Electricity Futures

Asia’s Most Successful Electricity Futures at Tokyo Commodity Exchange (TOCOM)/Japan Exchange Group (JPX) celebrated its first year of listing in a co-hosted webinar with Quick Corp. on December 15, 2020. The event was attended by over 250 people from 152 companies.

At the workshop, Mr. Hatakeyama, Director-General for Commerce and Service Industry Policy of METI gave an opening remarks and Mr. Ishibashi of Astmax Trading, Inc. gave a keynote speech on Electricity trading and Risk management. In the panel discussion, traders from different power companies shared their experiences in using TOCOM Electricity Futures and their internal risk control systems. They pointed out that there is still a huge opportunity in Electricity Futures market in Japan and requested the exchange to list new products such as those covering the Hokkaido and Kyushu areas and change the product design to extend contract months.

For more details, please refer to the following link


CME Group Completes Migration of BrokerTec EU Government Bond and EU Repo Trading Platform to CME Globex
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets, has successfully migrated its European government bonds and repo trading platform to CME Globex.

*****It has been a long time coming, but a major accomplishment for the CME Group and Executive Chairman and CEO Terry Duffy.~JJL


Capitol Riot Becomes Civics Lessons in Schools; Teachers face difficult questions from students; others point to the need for better civics curriculum, funding
Yoree Koh and Jennifer Calfas – WSJ
At the start of class, Logan Ridenour reminded the high school juniors of the ground rules for discussing the Capitol riot: Everyone is entitled to their own opinion and everyone should be a respectful listener.

*****It is history that will be taught for a long time.~JJL


Washington State Partners With Starbucks For Vaccine Distribution
Rachel Sandler – Forbes
“Starbucks is not a healthcare company, but we do operate 33,000 stores at scale, serving 100 million customers per week,” said Starbucks CEO Kevin Johnson at a press conference. “And we have a world-class team of human-centered design engineers who are working under the direction of the state and healthcare providers, like Swedish, Kaiser Permanente and others, with Microsoft and many other businesses to help support the creation of vaccination centers that can scale.”

*****Ordering at Starbucks just got more interesting: “I’d like a Venti Pfizer Vaccine, 3 pumps, no Moderna, no foam, long shot, extra cold, in my bum and not my arm.”~JB


Why the WNBA can’t wait: Kelly Loeffler should get the Donald Sterling boot
Kevin B. Blackistone – Washington Post
It should come as no surprise why Atlanta’s WNBA franchise, upon its birth in 2008 as the league’s 14th team, chose Dream as its name. Since 1986, we have been reminded of it on the third Monday of every January. The name is a nod to Atlanta’s most famous son, Martin Luther King Jr., whose most famous speech championing human rights included the most unforgettable refrain, “I have a dream . . . ”

*****Maybe we can learn from Joe Biden’s inauguration speech he will give tomorrow about how to exist together.~JJL


Monday’s Top Three
Our top story Monday was Bloomberg’s Biden’s Wall Street Watchdogs Signal New Era of Tough Oversight Second was the Financial Times’ Vaccines won’t get us back in the office any time soon. Third was the Wall Street Journal’s An Old Foe of Banks Could Be Wall Street’s New Top Cop, about Gary Gensler.


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Lead Stories

London Metal Exchange May Permanently Close Iconic Trading Floor
Mark Burton – Bloomberg
Historic London institution shut as pandemic struck in March; LME will issue proposal later Tuesday to close the Ring
The London Metal Exchange will propose permanently closing its open-outcry trading floor, putting an end to the century-old practice of setting the world’s metals prices in a daily shouting match. The iconic trading floor known as “the Ring” is one of the last of its kind in the world, where deals take place face-to-face, in a chaotic daily ritual of barked commands and arcane hand gestures. It’s been closed since the U.K.’s first Covid-19 lockdown in March, when the LME switched to an electronic system for establishing the world’s benchmark prices for industrial metals including copper, aluminum and zinc.

BrokerTec EU government bond and repo platform migrates to CME Globex; The BrokerTec EU government bonds and repo platform is the first of its electronic trading platforms to migrate to CME Globex.
Annabel Smith – The Trade
US derivatives exchange CME Group has completed the migration of its BrokerTec EU government bonds and repo platform to the Globex platform. The EU government bonds and repo platform was the first of BrokerTec’s electronic offerings to be migrated to CME Globex, with the US treasury and repo trading platform scheduled to switch on 1 February this year.

Covid-19 Pandemic Could Be Source of Global Crises for Years: WEF
Paul Gordon – Bloomberg
WEF survey shows economic risks among biggest knock-on effects; Leaders urged to boost resilience and fight misinformation
The coronavirus has exposed the “catastrophic effects” of ignoring long-term risks such as pandemics, and the economic and political consequences could cause more crises for years to come, according to the World Economic Forum. The WEF’s annual survey of global risks lists infectious disease and livelihood crises as the top “clear and present dangers” over the next two years. Knock-on effects such as asset bubbles and price instability lead concerns over 3-5 years.

Goldman Sachs Profit More Than Doubles, Powered by Trading; Wall Street firm’s revenue of $11.74 billion was 18% above 2019’s fourth-quarter level
Peter Rudegeair – WSJ
Goldman Sachs Group Inc. GS -2.23% reported sharply higher profit for the fourth quarter, punctuating a turbulent year in which the Wall Street firm benefited from the markets’ quick recovery from the worst of the pandemic-induced recession.

Chinese Investors Pull More Than $3 Billion From Funds That Missed Out on Ant IPO; Five mutual funds had touted access to Ant Group’s blockbuster initial public offering before the financial-technology giant’s listing was called off
Chong Koh Ping – WSJ
Millions of individual investors in China pulled more than $3 billion from five mutual funds that previously touted access to Ant Group Co.’s blockbuster initial public offering, drastically shrinking the funds just two months after the financial-technology giant’s listing was called off.

Bank of America Profit Falls 22%; Still, lender posted higher-than-expected earnings in fourth quarter
Ben Eisen – WSJ
Bank of America Corp.’s BAC -2.88% earnings fell 22% in the fourth quarter. The second-largest bank in the U.S. said Tuesday that its profit totaled $5.47 billion in the final three months of the year, versus $6.99 billion a year earlier. Still, per-share earnings of 59 cents topped analyst estimates of 55 cents a share.

LME moves to permanently close historic ‘Ring’ metals trading floor; Decision comes after exchange operator switched to electronic trading as pandemic hit
Henry Sanderson – FT
The London Metal Exchange is set to propose permanently shutting its Ring, where metals have been traded since its founding in 1877, a move that would mark the end of in-person trading of commodities in Europe.

Top fraud investigator leaves UK hedge fund Gladstone; Martin Stapleton focused on corporate failures among European industrial mid-caps
Laurence Fletcher – FT
Gladstone Capital, one of London’s most successful hedge funds at betting on falling stocks, has seen the departure of a leading fraud investigator. Martin Stapleton, a former Goldman Sachs employee who focuses on trying to identify company frauds and failures, is leaving after around four years at the firm, people familiar with the company said.

Biden administration selects former CFTC head for SEC chairman role; Gary Gensler becomes chairman of the Securities and Exchange Commission (SEC) bringing with him over 25 years of industry experience.
Annabel Smith – The Trade
The former chairman of the US Commodity Futures Trading Commission (CFTC), Gary Gensler, has been appointed chair of the Securities and Exchange Commission (SEC) by president-elect, Joe Biden.

Business Makes the Case for a Post-Trump Reset; A group of company leaders and former policymakers argue that “globalism” isn’t an epithet. Instead, they argue, it is the way forward.
Andrew Ross Sorkin – NY Times
“Business leaders must realize that they not only have a moral obligation but also a commercial stake in advocating for a fairer, more equitable system. Unless and until the core problem of inequality is addressed, all other overarching objectives and desires will remain elusive.”

SETL Completes World’s First CBDC Fund Transaction on Live Market Infrastructure
SETL, the London-based Settlement and Payments Infrastructure provider, today announced that Banque de France (BDF) has successfully completed a Central Bank Digital Currency (CBDC) transaction, using the SETL blockchain that powers the IZNES fund platform.


Norway Moves to Calm Vaccine Anxiety After Elderly Deaths
Lars Erik Taraldsen and Naomi Kresge – Bloomberg
No evidence of direct link to Pfizer-BioNTech shot: officials; Norway has prioritized vaccination of elderly in nursing homes
Health authorities in Norway sought to allay safety concerns raised by the death of some elderly patients after they were vaccinated against Covid-19, saying there’s no evidence of a direct link. The initial reports from Norway raised alarm as the world looks for early signs of potential side effects from the vaccines. Although doctors say it’s possible that vaccine side-effects could aggravate underlying illnesses, they were expecting nursing-home residents to die shortly after being vaccinated because deaths are more common among the frailest and sickest elderly patients.

UK vaccination rollout a rare pandemic success; Ministers hope end of crisis is in sight, with almost 6 per cent of population inoculated
Chris Giles, Clive Cookson, Sarah Neville and Jasmine Cameron-Chileshe – FT
The UK has pulled ahead of other large advanced economies in the race to vaccinate against coronavirus, and had inoculated almost 6 per cent of its population by the end of last week.

WHO warns of global ‘moral failure’ on jabs; Rich nations accused of not doing enough to ensure supply to poor countries
Harry Dempsey and Tom Wilson – FT
The head of the World Health Organization warned the world was on the brink of “catastrophic moral failure”, as poor countries fall behind richer nations in accessing the vaccines needed to protect their populations against Covid-19.

Harding defends use of £1,000-a-day consultants; UK’s head of test and trace said programme has seen considerable improvements recently
Anna Gross – FT
The head of the UK’s test and trace programme has defended paying hundreds of private consultants an average of £1,000 a day, as she set out plans to spend billions on rapid testing technologies in the coming months.

As WHO Fumes at Western Drugmakers, China Fills Void on Vaccines
Bloomberg News
Cambodia, Thailand, Philippines sign up for Sinovac vaccines; China expands influence in Asia before Biden takes office
For months, the World Health Organization has called on countries to come together to ensure a fair distribution of Covid-19 vaccines among rich and poor nations. Now it’s starting to lose patience. On Monday, WHO Director-General Tedros Adhanom Ghebreyesus said drug manufacturers had prioritized regulatory approval in rich countries, where profits are highest, rather than submitting full dossiers to get the greenlight from the global health body. He said that could delay distribution through Covax, a WHO-backed initiative that aims to supply vaccines to poorer countries.

Germany Targets Working Life to Regain Control of Covid Outbreak
Chris Reiter – Bloomberg
Employers may need to justify lack of home-office options; Merkel, state leaders to discuss virus curbs on Tuesday
Germany is looking at reducing the number of people going to the office as Europe’s largest economy seeks to slow the spread of the coronavirus. Fewer German employers are offering work-from-home options than during the initial wave in March and April, and companies will need to step up, Berlin Mayor Michael Mueller said Tuesday ahead of talks between Chancellor Angela Merkel and state premiers to discuss Germany’s pandemic restrictions. They’re widely expected to prolong the country’s hard lockdown until at least mid-February amid fears about faster-spreading variants of the virus.

Thailand’s Covid Shots Will Cover 50% of Population in 2020, With Talks for More
Randy Thanthong-Knight and Prim Chuwiruch – Bloomberg
Plan already in place to inoculate 50% population: Ministry; Government defends strategy as Thanathorn questions progress
Thailand defended its Covid-19 vaccine strategy after a high-profile government critic said the Southeast Asian nation was too slow in procuring sufficient shots and inoculating its population.

Exchanges, OTC and Clearing

LME issues discussion paper on future market structure
Proposals to enable the LME to modernise and create a metals market fit for the future, adapting to the needs of its evolving customer base and expectations from wider stakeholders; LME remains committed to strategic principles laid out in 2017 Strategic Pathway; Proposals focus on the Ring, liquidity enhancement, margin methodology and market conduct; Commitment to maintain date structure and protect the flexibility offered through the member-to-client relationship
The London Metal Exchange (LME) today issued a discussion paper on market structure, putting forward a set of proposals designed to enable the Exchange to modernise and adapt to emerging trends and evolving customer needs.

Huuuge IPO Helps Cement Warsaw Bourse as Hotspot for Gaming
Konrad Krasuski – Bloomberg
Casino app maker tests appetite for mobile-game publishers; Playtika’s IPO in U.S. is seen as supportive for Huuuge: BI
Poland is solidifying its status as a hotspot for gaming studios seeking new capital after mobile game-maker Huuuge Inc. announced plans to go public on the Warsaw bourse. The producer of free-to-play social casino games said on Monday it is seeking to raise $150 million from offering new shares. Shareholders, including founder Anton Gauffin, also plan to sell part of their stakes, with the company targeting a free float of more than 25%. Huuuge aims to lure investors with average annual sales growth of more than 30% over the past three years.

LCH RepoClear expands settlement connections with European CSDs; New partnerships with Clearstream, Euroclear and Iberclear will provide a single point of access to minimise cross-border hurdles.
Joe Parsons – The Trade
LCH’s repo clearing house has extended its settlement connections with several European central securities depositories (CSDs) to provide greater choice for banks.

CME Group Achieves Record International Average Daily Volume of 5.2 Million Contracts in 2020, Up 8 Percent from 2019
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved record international average daily volume (ADV) of 5.2 million contracts in 2020, up 8 percent from 2019. This record, reflecting all trading done outside North America, was driven largely by growth in Equity Index and Agricultural products, up 85 percent and 28 percent respectively.

London Metals Exchange weighs permanently closing 144-year-old trading pit; The LME was the last bastion of open outcry trading in the City, will later today announce a proposal to make permanent the closing of the trading venue, Sky News reported
William Canny – Financial News
The London Metals Exchange is proposing a plan to close its iconic trading pit, dubbed The Ring, spelling the demise of so-called open outcry trading in London. The LME was the last bastion of open outcry trading in the City, will later today announce the proposal to make permanent the closing of the trading venue, Sky News reported.


Fintech and solar startups kept funding up in Africa’s ecosystem in 2020 despite the pandemic
Abubakar Idris – Quartz
Despite a downturn in Africa’s economy for the first time in 25 years in the wake of the global pandemic, investor interest in the continent’s tech ecosystem remained strong in 2020 as startup funding crossed the $1 billion-mark again as it did for the first time in 2019.

This Fintech Startup Wants To Cover Your Overdraft Fees, And It Just Announced $35 Million In Series A Funding
Eliza Haverstock – Forbes
Nearly two decades before Zuben Mathews co-founded a consumer fintech app, he was studying economics at the University of Chicago as a recent immigrant to the U.S. Despite earning a scholarship and regular allowances from his mother in India, Mathews found himself without a credit score, living paycheck-to-paycheck. He says he spent $1,000 on overdraft fees alone that first year. “I just couldn’t figure out what was going on,” he says. “The amount of times I went downstairs to the vending machine and got Snickers for dinner is something I’ll never forget.”

The Bank-FinTech Collaboration Model Goes Global
With more financial institutions (FIs) turning to external third-party FinTechs to strengthen their small- to medium-sized business (SMB) and corporate offerings, the collaboration model is proliferating across national borders. This week’s look at the latest in bank-FinTech collaboration includes new partnerships in Australia, South Africa, India, Pakistan and across Europe, with many FIs bolstering the foundations of their SMB-serving infrastructures.

Federal agencies, states compete to be fintech regulator
Steven Harras – Roll Call
A federal banking regulator’s grant of the first national trust bank charter to a cryptocurrency startup may touch off a turf war over which agency is best suited to oversee the burgeoning financial technology market.
The Office of the Comptroller of the Currency, a unit of the Treasury Department, on Jan. 13 approved South Dakota-based Anchorage Digital Bank NA to hold cryptocurrencies for customers, making it the first federally regulated bank for digital assets such as Bitcoin.


CoinShares Is Starting an Exchange-Traded Bitcoin Product
Vildana Hajric and Katherine Greifeld – Bloomberg
It will be listed in Switzerland and custodied by Komainu; Bitcoin in midst of furious rally that’s taken it to new highs
CoinShares, a St. Helier, Jersey-based asset manager, is launching an exchange-traded Bitcoin product amid a fierce rally for the world’s largest digital currency. The CoinShares Physical Bitcoin product will go live on Jan. 19 and be listed under the ticker BITC on the SIX Swiss Exchange. It will charge a 0.98% expense ratio. Komainu, a venture developed by Ledger, Nomura Holdings Inc. and CoinShares, will serve as custodian.

BofA Clients With $561 Billion Say Bitcoin Is Most Crowded Trade
Ksenia Galouchko – Bloomberg
Monthly survey shows investor bets on EM, small caps and value; BofA strategists say a market correction could be imminent
For the first time since 2017, Bank of America Corp. clients with $561 billion combined say Bitcoin is the world’s most crowded trade as speculative euphoria hits Wall Street. Investors surveyed by the investment bank this month see signs that long positions in the largest digital currency are reaching unprecedented levels, while retail traders and institutional names join the crypto boom.

Bitcoin’s Turbulence Helps Kindle Rally in Largest Rival Ether
Eric Lam – Bloomberg
Bitcoin’s recent wobbles have turned the cryptocurrency spotlight onto other digital coins including Ether, whose gain this year has outstripped the performance of its bigger rival. The world’s largest cryptocurrency hovered around $37,000 on Tuesday after major gyrations earlier in January.The comparative calm of late may encourage crypto enthusiasts to chase the momentum in coins like Ether, which is up almost 90% in 2021 compared with Bitcoin’s 27% advance. “Bitcoin has been in a range for the past few weeks, which gives time for capital to rotate” into other digital assets, said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.

Before Suicide, French Programmer Made Bitcoin Bequests to Pro-Trump Groups
Robert McMillan and Sam Schechner – WSJ
In December 2020, a French computer programmer named Laurent Bachelier donated more than half a million dollars in bitcoin to a variety of right-wing causes. That same day Mr. Bachelier, who suffered from a debilitating medical condition, killed himself. The donations and their recipients were first described in a report last week by a bitcoin analysis firm, Chainalysis Inc. The Wall Street Journal identified Mr. Bachelier as the donor through online records and interviews with people familiar with the matter.

BofA Clients With $561 Billion Say Bitcoin Is Most Crowded Trade
Ksenia Galouchko – Coindesk
For the first time since 2017, Bank of America Corp. clients with $561 billion combined say Bitcoin is the world’s most crowded trade as speculative euphoria hits Wall Street. Investors surveyed by the investment bank this month see signs that long positions in the largest digital currency are reaching unprecedented levels, while retail traders and institutional names join the crypto boom. The BofA poll doesn’t necessarily mean that more fund managers own Bitcoin. But it’s another temperature check on the token’s 400% rally over the past year that’s dividing some of the biggest names in finance.

Huobi Global Connects to European Banking System via UK’s BCB Group
Ian Allison – Coindesk
Regulated crypto payment services firm BCB Group has partnered with Huobi Global to help the Seychelles-based exchange giant connect its trading desks to the banking system in the U.K. and Europe. Announced Tuesday, customers of Huobi’s over-the-counter (OTC) platform will be able to settle transactions instantly in euros and pounds (GBP) via BCB’s BLINC network. Cryptocurrency exchanges have struggled in recent years to secure banking relationships and establish an interface with the fiat currency world, with some large exchanges having massive daily volume in closed systems of crypto-to-crypto trading. Prior to partnering with BCB, Huobi did not have a European fiat gateway, said Oliver von Landsberg-Sadie, founder and CEO of BCB Group.

CoinShares is launching a physically-backed bitcoin ETP
Yogita Khatri – The Block
CoinShares is launching a new physically-backed bitcoin exchange-traded product (ETP). The product will list on Switzerland’s SIX exchange today. A physically-backed ETP minimizes credit risk, CoinShares’ head of product Townsend Lansing told The Block.

A record $3.7 billion in Bitcoin options are set to expire on January 29 as interest in cryptocurrencies surges
Harry Robertson – Markets Insider
Bitcoin options worth a record $3.7 billion are set to expire at the end of the month. The surge in the Bitcoin price has helped the options market expand rapidly. Investors remain bullish about Bitcoin, according to options data, despite recent volatility.

Livecoin Exchange Announces Closure After December Hack
Tanzeel Akhtar – Coindesk
Cryptocurrency exchange Livecoin announced Saturday it will shut down after a claimed attack on the platform last month. The Russia-based exchange said in a website notice on an alternative domain that it had made a “hard decision to close the business” and will be refunding any remaining funds to users. No amount for losses arising from the breach was disclosed. The firm said: “Our service and team bear hard losses as well as our clients.” Livecoin said it will accept claims for refunds until March 17, after which no new requests will be accepted.


Trump to Rescind Coronavirus Entry Bans for EU, U.K., Brazil
Justin Sink and Alan Levin – Bloomberg
Move takes effect Jan. 26, comes after Covid test requirement; White House says not lifting ban on travel from Iran, China
President Donald Trump is rescinding his coronavirus-related travel bans for non-American citizens arriving from the European Union, the U.K. and Brazil, the White House announced on Monday.

Despots everywhere should lose social media accounts; Twitter’s ‘deplatforming’ of Donald Trump sets a precedent for others far worse than him
James Bosworth – FT
At the start of the year, Donald Trump had more Twitter followers than any other current world leader. Then he became the first to be removed from the platform. It was the highest profile action from the many US technology companies that have cracked down on violent extremism following the insurrection at the Capitol. It also set a precedent, and thus raised a question: who might be next, and in which countries?

Biden names Gensler as SEC head in push towards more scrutiny; Former Goldman banker took tough line on Wall Street while serving during Obama presidency
James Politi – FT
Joe Biden has tapped Gary Gensler, the former Goldman Sachs investment banker and financial regulator during the Obama administration, to be the next chair of the Securities and Exchange Commission.

Trump Leaves Town an Outcast, Trailed by Pandemic, Joblessness
Jordan Fabian – Bloomberg
Biden takes office Wednesday with Trump skipping inauguration; Departing president still faces Senate impeachment trial
Donald Trump departs Washington on Wednesday with Americans more politically divided and more likely to be out of work than when he arrived, while awaiting trial for his second impeachment — an ignominious end to one of the most turbulent presidencies in American history.


GDPR fines jump as EU regulators raise pressure on business; Data protection penalties climb 40% in the past year, according to research
Siddharth Venkataramakrishnan – FT
Fines imposed under the General Data Protection Regulation have increased by almost a half over the past year as European authorities continue to flex their regulatory muscles despite disruption caused by the pandemic.

Chairman of embattled satellite operator accused of insider trading
Josh Kosman – NY Post
The chairman of satellite operator Intelsat is being sued for insider trading in an explosive new shareholder lawsuit that also dings private-equity giants BC Partners and Silver Lake Partners, a New York Knicks shareholder.

ASIC bans former Sydney adviser for three years
ASIC has banned Sydney-based financial adviser Jim Pavlidis from providing financial services for three years. A review of Mr Pavlidis’ advice between 2004 and 2018 found that he failed to provide financial advice that was in the best interests of his clients and to keep proper records. Mr Pavlidis failed to consider the relevant circumstances of each client and left client objectives unaddressed.

From Andrew Bailey to Xi Jinping: Here’s who is attending online Davos this year; World leaders and finance heavyweights will be attending Davos online later this month
James Booth – Financial News
The annual business and politics bonanza in the Swiss ski resort of Davos has moved online this year as Covid-19 sweeps Europe. The World Economic Forum is planning a summer meeting in Singapore, but for now the global elite will have to dial into an online event, which is being held on 25-29 January.

Investing and Trading

Investors Flock Back Into Oil for Reflation Trade, Hedging
Alex Longley – Bloomberg
Brent, WTI futures holdings at highest level since May; Some investors making inflation trades, others hedge supply
Investors and oil companies are rushing back into the crude market. Total holdings of Brent and WTI futures have climbed to the highest level since May. It comes as banks from Goldman Sachs Group Inc. to JPMorgan Chase & Co. see the market’s prospects brightening and some big hedge funds talk of commodities entering a pricing super-cycle.

Newbies discover penny stocks, and 1 trillion shares get traded in a month
Sarah Ponczek and Elena Popina – Bloomberg
In New York, there’s Broadway, off Broadway, and off-off Broadway. A similar hierarchy exists in the modern equity market, and it’s in that third category of way-off-exchange trading where today’s retail speculator is really taking action.

Algorithmic Trading Market Research Report by Trading Type, by Component, by Deployment, by Organisation Size, by End User – Global Forecast to 2025 – Cumulative Impact of COVID-19
GLOBE NEWSWIRE announces the release of the report “Algorithmic Trading Market Research Report by Trading Type, by Component, by Deployment, by Organisation Size, by End User – Global Forecast to 2025 – Cumulative Impact of COVID-19” –

Environmental, Social and Corporate Governance

Total deepens ties with India’s Adani in $2.5bn green energy investment; French major expands presence in country with 20% stake in tycoon’s renewables division
Stephanie Findlay and Anjli Raval – FT
Total has acquired a 20 per cent stake in Adani Green Energy in a $2.5bn deal that deepens the French energy major’s renewables push and its relationship with Indian tycoon Gautam Adani’s empire.

Keystone XL Oil Project Pledges Zero Carbon Emissions; Controversial pipeline would be powered by renewables, built by union labor in bid to avoid ax from Biden
Timothy Puko – WSJ
The Keystone oil pipeline’s developer plans to announce a series of overhauls—including a pledge to use only renewable energy—in a bid to win President-elect Joe Biden’s support for the controversial project.

Bill Gates-Led Fund Raises Another $1 Billion to Invest in Clean Tech; Breakthrough Energy Ventures is doubling the size of its fund and investing in at least another 40 startups
Akshat Rathi – Bloomberg
Here’s more evidence the clean-tech boom is only getting bigger. Breakthrough Energy Ventures, the clean-tech venture capital fund led by Bill Gates, has raised $1 billion for a second round of investments after backing 45 startups with its first billion.

After 1,700% Asset Growth, China Poised to Lead ESG Push in Asia
David Scanlan – Bloomberg
ESG-related ETF assets in Asia to rise 20% in 2021: BI; ETF growth in Asia still lags behind Europe, North America
China is set to post the fastest growth in Asia for environmental, social and governance investments after the country boosted exchange-traded fund assets 18-fold in the past two years, according to estimates from Bloomberg Intelligence.

European Banks Unprepared for Growing ESG Disclosures, UBS Says
Alastair Marsh – Bloomberg
Lenders will face increasing demand to detail their exposures; ESG risks may influence some capital requirements from 2022
Europe’s banks are unprepared to meet increasing demands to spell out their exposure to climate change and other social and governance issues, according to UBS Group AG.

The EU Carbon Market Perks Up After Years in the Doldrums
Prices for emissions permits are setting records as Europe tightens supplies.
Ewa Krukowska -Bloomberg
Sixteen years ago, Europe introduced a market based on what was then a revolutionary notion: forcing companies to cut greenhouse gas emissions by issuing credits that allow them to pollute up to a certain level. If they spew out more, they have to buy allowances from other companies. If they pollute less, they can sell their extra permits and bank the cash.

Credit Managers in Europe Stand Out for Lack of Black Workers
Kelsey Butler and Rachel McGovern – Bloomberg
Recruitment firm Waterman Stern publishes ethnicity survey; Some firms are taking steps to improve diversity metrics
Black workers make up just half of one percent of the staff at Europe’s direct lenders, a low number even in a credit industry overwhelmingly dominated by White males. A report by London-based executive recruitment firm Waterman Stern found that among the wider credit industry only 0.6% of more than 5,700 professionals were Black.


Renaissance Says Losses Should Have Been Expected at Some Point; Quant hedge fund tells clients that drop of 20% to 30% was partly due to increased volatility
Gregory Zuckerman – WSJ
Quant pioneer Renaissance Technologies LLC sent clients an analysis of its performance and a rationalization of recent deep losses, an unusual move for one of Wall Street’s most secretive firms. In the letter sent late Friday, the firm said losses of between 20% and 30% in 2020 for its three funds open to outside investors should have been expected at some point during the course of the funds’ histories. The letter partly blamed heightened volatility for the weak performance.

London Private Equity Fund Loses Ruling on Racism, Fraud Claims
Jonathan Browning – Bloomberg
Queensgate Investments has been sued by former executive; Fund denies claims, but has self-reported the issue to FCA
A private equity fund backed by families in Hong Kong and Qatar lost a bid to keep claims of fraud, racism and anti-Semitism away from public scrutiny. London-based Queensgate Investments LLP wanted to hold further court proceedings in private. But Judge James Tayler said the upcoming hearing should be in public, saying investors and others shouldn’t be prevented from learning about claims alleging financial misconduct.

Bitcoin’s Turbulence Helps Kindle Rally in Largest Rival Ether
Eric Lam – Bloomberg
Commentators say crypto investors looking beyond Bitcoin; Shift follows Bitcoin’s drop from nearly $42,000 early January
Bitcoin’s recent wobbles have turned the cryptocurrency spotlight onto other digital coins including Ether, whose gain this year has outstripped the performance of its bigger rival.

Deutsche Bank, ICAP Sued as Warburg Seeks to Recoup Tax Bill
Karin Matussek – Bloomberg
Bank seeks to recoup losses with suit filed in Hamburg court; First case against Deutsche Bank in Frankfurt was dismissed
Deutsche Bank AG, TP ICAP Plc and two German lawyers are the targets of M.M. Warburg & Co.’s latest legal attempt to recoup the big tax bill it was ordered to pay over controversial Cum-Ex trades, people familiar with the matter said.

BofA’s Wall Street Unit Falls Short of Rivals During Bumper Year
Lananh Nguyen – Bloomberg
Bank of America Corp.’s traders had a good year — but not as good as their rivals. Revenue from sales and trading rose 7% to $3.06 billion in the fourth quarter, missing analysts’ $3.15 billion forecast. The division, helmed by Jim DeMare, was hurt by unexpected weakness in fixed-income trading. Competitor JPMorgan Chase & Co., meanwhile, reaped a windfall from frenetic trading and volatile markets during the pandemic.

BTIG grows institutional equities division with two former Barclays traders; Neil Roberts and Matt Austin join BTIG as equity sales trader and equity trader respectively in its London-based institutional equities division from Barclays.
Annabel Smith – The Trade
Agency broker BTIG has expanded its institutional equities division in London with the appointment of two senior new hires from UK investment bank Barclays.


China’s Sovereign Fund Revamps Overseas Investment Committees
Bloomberg News
Changes to boost efficiency, implement asset allocation goals; Stock rallies complicate CIC’s plan to boost non-public assets
China’s $1 trillion sovereign wealth fund is restructuring how its decides on international investments as it tries to boost efficiency and make better progress on a goal of increasing the share of private assets in its global portfolio.

Thailand Passes $7 Billion Handout to Weather New Virus Impact
Suttinee Yuvejwattana – Bloomberg
More than 30 million people set to benefit from new package; Cash support to boost GDP by as much as 0.6 percentate point
Thai cabinet signed off on a $7 billion cash handout program to help millions of low-income people weather the impact of control measures imposed to contain a new wave of Covid-19 infections.


Johnson vows to business he will seize ‘opportunities of Brexit’
‘Build back better’ council meets for first time
George Parker and Daniel Thomas – FT
Boris Johnson has told 30 leading chief executives that he will seize “the opportunities of Brexit” and use Britain’s new regulatory freedoms to help rebuild Britain’s economy after the Covid-19 crisis.

U.K. Offers Payments to Fishermen Hit by Brexit Trade Obstacles
Joe Mayes – Bloomberg
U.K. Prime Minister Boris Johnson said fishermen hit by Brexit trade disruption will receive payments from the government after new paperwork snarled up fish exports to the European Union. “We’ll make sure they get help,” Johnson told reporters on Monday as he announced a 23 million-pound ($31 million) compensation fund for the fishing industry. The money is to help businesses which have been held up by “bureaucratic delays” through no fault of their own, Johnson said.

Cross-Channel Brexit Cargo Rejections Hark Back to Dover Crisis
Lizzy Burden and Dara Doyle – Bloomberg
Freight firms are refusing to carry goods from France to the U.K. almost as often as during the pre-Christmas Dover crisis, high-frequency data show, illustrating additional costs from Brexit. The rejection rate for cross-Channel cargo rose again last week to 168% of the third-quarter average. It had peaked for 2020 near the end of the year — when France shut its borders to U.K. hauliers for 48 hours to contain a new coronavirus strain — before falling over the holiday period.

High-tech British firms eye U.S. listings in blow to post-Brexit London stock market
Jack Denton – MarketWatch
Two high-tech British firms are considering listings in New York, in a blow to the London Stock Exchange at a time when the city’s post-Brexit role as a financial services hub is changing. Immunocore, a homegrown British biotech company that completed a $75 million funding round last week, has applied to float on the Nasdaq, choosing New York over London for a $100 million initial public offering. Immunocore, which has raised a total of $873.2 million since its inception, has joined with pharmaceuticals AstraZeneca, GlaxoSmithKline, and Eli Lilly and Company, among others, on its cancer drugs, as well as the Bill & Melinda Gates Foundation.

Brexit Finance Shift to France to Accelerate, Central Bank Says
Alexandre Rajbhandari and William Horobin – Bloomberg
The shift of jobs and assets to Paris after Brexit will accelerate this year, providing Europe with an opportunity to strengthen its own financial infrastructure, according to Bank of France Governor Francois Villeroy de Galhau. Financial institutions had transferred about 2,500 jobs and 170 billion euros ($206 billion) worth of assets to France as of the end of 2020, with further relocations expected, Villeroy de Galhau said in an online speech on Tuesday. The protracted departure of the U.K. from the European Union has triggered a tide of businesses moving from London to the continent’s main financial hubs, he said. In 2019, The European Central Bank estimated that 24 banks will settle in the bloc and a total of 1.3 trillion euros in assets will eventually move from London to the euro area.

Brexit drives swaps trading to US platforms
Robert Mackenzie Smith –
Up to 50% of euro and sterling interest rate swaps trading has moved from European and UK venues to platforms in the US since the start of the year, in Brexit’s latest impact on derivatives markets, sources report. The UK’s transition period with the European Union ended on December 31 without an equivalence arrangement for large parts of the financial services industry.

This Brexit deal leaves me lost for words
David Thomas – The Guardian
Martin Kettle’s unadorned, factual assessment of Brexit’s consequences (If Brexit is ‘done’, then where’s the dividend?, 13 January) courteously acknowledges the government’s blithe assurance that these are mere “teething troubles” while otherwise making it clear that on the current evidence they will prove to be anything but. Kettle’s language is restrained. He maintains respect for views he regards as emotional. But if we imagine his piece not to be about the UK, but some unspecified land far away, we learn something extraordinary. We learn of a country agreeing a trade deal that erects barriers to trade; a deal that uniquely creates a customs border within its own sovereign territory; one that not only makes its people poorer but produces a fivefold increase in bureaucracy; a deal that makes the country less secure while probably hastening its own disintegration.

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