Man vs. Machine in Battle for a Better Stock Index; Strategy of ADM approach to Bunge; DTCC’s Vision For U.S. Equity Market Structure

Jan 23, 2018

First Read

Hits & Takes
JLN Staff

SGX reported that the Emerging Markets Asia Index jumped 40 percent in 2017, surpassing the 20 percent rise in the MSCI World Index. SGX’s MSCI Taiwan Index rose 14 percent. ~JK

Part 2 of CME Group’s five-part Webinar Series “Inside Eurodollar, US Treasury and Fed Fund Futures Markets” takes place this Wednesday, Jan 24. The topic is the practical application of U.S. Treasury futures. You can go here to register.~SR

HKEX set a new turnover record in futures and options today, with a day session record of 1,779,740 contracts and whole day total turnover of futures and options at 1,819,708.~JJL

The World Economic Forum meeting at Davos is off to a weird start – heavy snow has everybody bogged down. The weather is expected to clear, but now avalanches are an increased risk, apparently.~SD

Social Market Analytics, the firm that gathers actionable trade signals from social media, now has a crypto API covering more than 200 digital assets.~SD

Is your 2018 calendar filled with business trips? You’re not the only one. Global business travel is set to grow in 2018.~SD


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FIS Named a FORTUNE World’s Most Admired Company
FIS, a global leader in financial services technology, today announced it was named among FORTUNE Magazine’s World’s Most Admired Companies for 2018.

***** Reminds me of how much I admired Sungard.~JJL


Harrods Famed Food Halls Get a Grand Makeover; The legendary department store is no longer just for tourists and princes.
Richard Vines – Bloomberg
Harrods is a destination for shoppers from around the world, but ask most Londoners when they last visited and you may get a blank look.

***** I love the variety of Harrods’ food halls.~JJL


Facebook Says Social Media Isn’t Always Healthy for Democracy
Sarah Frier – Bloomberg Technology
Facebook Inc. acknowledged today that social media can have a negative impact on democracies, and that the company has more work to do in order to ensure that the good outweighs the bad.

***** My father always said, “everything in moderation,” which takes on new meaning in the case of Facebook.~JJL


Monday’s Top Three
Yesterday’s top read story was the FT’s piece Commodities trader Louis Dreyfus turns to blockchain. Second went to WalletHub on the short lived story 2018 Government Shutdown Report: Most & Least Affected States. Third went to Finance Magnates on its story, Lightspeed Trading Forges Deal with Lime Brokerage to Merge Businesses



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Lead Stories

It’s Man vs. Machine in a Battle to Pick a Better Stock Index
Rachel Evans and Kailey Leinz – Bloomberg
Would you let a robot pick your investment portfolio? Deutsche Boerse AG’s Stoxx Ltd. indexing business is set to find out with its two latest market gauges. The first, the Stoxx Global Artificial Intelligence Index, will use human-led research to select companies involved with artificial intelligence technology. While the second, the Stoxx AI Global Artificial Intelligence Index, will deploy machine learning to pick those companies.

ADM approach to Bunge marks potential U-turn on oilseed strategy
Tom Polansek – Reuters
Archer Daniels Midland Co’s (ADM.N) proposed takeover of Bunge Ltd (BG.N) could signal a change in the company’s strategy on oilseeds, giving the top U.S. grain merchant a much bigger capacity to crush soy just months after ADM’s chief executive said the firm would cut spending on the sector.

DTCC Outlines Vision For Modernizing U.S. Equity Market Structure
Looking Beyond T+2, DTCC Examines Ways To Optimize And Accelerate Securities Settlement To Free Up Liquidity, Reduce Risk, And Improve Straight-Through Processing
The Depository Trust & Clearing Corporation (DTCC), today announced its vision for the evolution of the U.S. equities market structure, unveiling a series of proposals to provide seamless access to new shortened settlement processing options, both pre-and post-trade.

World Gold Council investigates global standard for gold kilobars; WGC talks on creating a global kilobar standard would aim to include companies from the world of gold refining, banks and brokers
The World Gold Council (WGC) is studying the creation of a global standard for gold kilobars so they can be deployed as collateral in futures markets and potentially encourage demand, sources close to the matter said.

More than 10 percent of $3.7 billion raised in ICOs has been stolen: Ernst & Young
Anna Irrera – Reuters
More than 10 percent of funds raised through “initial coin offerings” are lost or stolen in hacker attacks, according to new research by Ernst & Young that delves into the risks of investing in cryptocurrency projects online.

Top Swiss cryptocurrency lawyer questions ‘stupid’ ICO structure
Brenna Hughes Neghaiwi – Reuters
One of the top lawyers in the booming cryptocurrency industry says the legal structure he helped set up to raise funds for new virtual currencies is “old, inflexible and stupid” and may no longer be fit for purpose.

Banks Need Human Upgrade to Stay Competitive, Wyman Study Finds
Edward Robinson – Bloomberg
For all the reorganizations the financial services industry has undertaken in recent years, it won’t achieve long-term success unless it dramatically changes the way new managers are hired, consulting firm Oliver Wyman said in a report.

Lloyds Is Planning to Place Traders in a Glass Box to Comply With New Rules
Stefania Spezzati and Jack Sidders – Bloomberg
About 120 staff said to be physically put in glass partitions; Ring-fencing rules require isolation of riskier activities
Lloyds Banking Group Plc is taking new rules to isolate its trading operations literally. Some traders will soon be physically separated from their colleagues and placed in a glass box to comply, according to people with knowledge of the matter.

How Nigerians Beat Bitcoin Scams; The country’s embrace of the cryptocurrency has led to some old-school precautions against fraud.
Tim McDonnell – Bloomberg
Depending on your feelings about Bitcoin, it may seem appropriate that Nigeria’s love for the cryptocurrency began with a scam. Mavrodi Mondial Moneybox (MMM), a 30-year-long global Ponzi scheme that began in Russia, roped in millions of Nigerians from late 2015 to the end of 2016 with promises of 30 percent returns in as little as 30 days. When the government began to crack down on bank accounts linked to the scheme, MMM’s operators cut the banks out and started requiring victims to use Bitcoin. By the time MMM suspended its payouts, shortly before Christmas 2016, it had robbed an estimated 3 million people in Nigeriaówhere the per capita annual income is less than $3,000óof $50 million.

The Programmer at the Center of a $100 Billion Crypto Storm; How a top source of bitcoin data contributed to a sudden plunge in digital currencies
Paul Vigna and Jim Oberman – WSJ
The drop was swift: Prices for bitcoin and dozens of other digital currencies on Jan. 8 fell sharply, lopping more than $100 billion off their collective market value.

After Bitcoin Futures, Watch Out for Crypto Repos; Oxygen, a digital currency platform due to launch this year, will allow investors to strike repurchase agreements with one another
Laurence Fletcher – WSJ
A former Goldman Sachs banker plans to launch a digital currency platform that will make it easier for investors to short one cryptocurrency against another, potentially bringing the nascent market one step closer to the financial mainstream.

Former KPMG Executives Charged With Conspiracy; Six accountants were accused of arranging to obtain and misuse confidential information about regulator’s plans to inspect audits
Rebecca Davis O’Brien, Dave Michaels and Michael Rapoport – WSJ
At KPMG LLP, prosecutors say, the revolving door spun out of control. Starting in 2015, the giant accounting firm wanted badly to improve its standing in the eyes of its regulator. But when KPMG recruited employees from its overseer, a scandal emerged over leaks of confidential information that resulted Monday in the indictments of five people on fraud and conspiracy charges.

Noose Tightens on Anonymous Cryptocurrency Trading in South Korea; Authorities bring in new rule on investors’ identities as part of efforts to cool one of the region’s hottest bitcoin markets
Eun-Young Jeong and Steven Russolillo – WSJ
South Korea’s finance regulators are expanding measures to verify cryptocurrency investors’ identities, as part of the country’s moves to control one of Asia’s hottest bitcoin markets.

Nobel winner warns of catastrophe if central banks issue their own cryptocurrencies
Not so fast, says Bengt Holmstrom, a 2016 recipient of the Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

ADM and Bunge sow seeds for grain revival with tie-up talk; Merchants under pressure from shrinking margins amid growing competition
Gregory Meyer in New York and Neil Hume in London – FT
The proposed $30bn tie-up between Archer Daniels Midland and rival Bunge has highlighted how the toughest market conditions in a generation have forced the world’s biggest grain merchants to rethink strategies and attitudes to dealmaking.

Gender should be on the agenda of business schools; With sexual harassment being outed, have we reached a tipping point toward gender inclusivity in b-schools?
Sharon Mavin and Carole Elliott – London School of Economics and Politics
As business and management educators we have a role to develop greater awareness and appreciation of diversity in society and our workplaces. Gender should be on the agenda of business schools. Gender-inclusive organisations and gender-inclusive management and leadership should be non-negotiable. Business schools have ethical, social and economic imperatives for integrating gender inclusivity into their cultures and curricula.

Exchanges, OTC and Clearing

Ingrid M. Haas is the new Head of Communications and Marketing at Deutsche Bˆrse AG
Deutsche Boerse Group
On February 15, 2018, Ingrid M. Haas will join Deutsche Bˆrse Group. She reports to the CEO Theodor Weimer. She is responsible for Group Communications and Group Marketing.

Deutsche Boerse’s new CEO sets sights on wooing business from London post-Brexit
Tom Sims – Reuters
Britain’s departure from the European Union offers an historic opportunity for Deutsche Boerse to expand its business and to secure a larger portion of the euro clearing business, the exchange’s new chief executive said on Monday.

Nasdaq Elects Joseph Mecane to the Board of Directors of its U.S. Exchanges
Nasdaq, Inc. (Nasdaq:NDAQ), today announced the addition of Joseph Mecane to the board of directors of the following U.S. exchanges operated by the company: The Nasdaq Stock Market, LLC; Nasdaq PHLX, LLC; Nasdaq BX, Inc.; Nasdaq ISE, LLC; Nasdaq MRX, LLC; and Nasdaq GEMX, LLC. Mr. Mecane was elected on January 17, 2018.

Inside Nasdaq: Nelson Griggs, President Nasdaq Stock Exchange
Nelson Griggs Nelson Griggs oversees Nasdaq’s new listings and capital market business as well as global business development and relationship management with the 3,500 companies listed on Nasdaq’s listing markets around the world. Mr. Griggs also serves as a board member of the Nasdaq Private Market.

MTS BondsPro bridges global markets with launch of 22-hour trading day
London Stock Exchange Group
MTS Markets, part of London Stock Exchange Group (LSEG), has extended the trading day to 22 hours, six days a week, on its BondsPro platform for corporate bonds and emerging market debt. Traders can now access liquidity and real-time execution on MTS BondsPro’s anonymous, all-to-all order book from 7pm ET until 5pm ET the following day, bridging market hours across Asia, Europe and the US.

TSE Clinches “Best ETF Stock Exchange” in Industry Journal’s “2018 Best of the Best Awards”
On January 16, Tokyo Stock Exchange, Inc. (TSE) clinched the “Best ETF Stock Exchange” in the “2018 Best of the Best Awards” given out by Asia Asset Management, a Hong Kong-based trade journal for the asset management industry in the Asia Pacific region.

Ibovespa breaks new record and reaches 81.675 points
B3’s main stock market performance index – Ibovespa – hit a record high today ending the day at 81.675 points, up 0.56% from last trading session. The previous Ibovespa record of 81.219 points was recorded on January 19, 2018.
(No link)

Crypto Exchange BitFlyer Embraces Regulation the Market Fears
Julie Edde – Bloomberg
BitFlyer granted EU license, becomes ‘most compliant’ platform; Firm was third-biggest bitcoin trader in 2017: Bitcoinity data.
BitFlyer Inc., one of the world’s first cryptocurrency trading platforms, is embracing the regulation that the market fears is coming its way.

Vietnam’s Biggest Exchange Cancels Trading After Malfunction
Giang Nguyen and Andrea Tan – Bloomberg
Ho Chi Minh City bourse closed for entire day on Tuesday; No trading in companies that make up the benchmark VNIndex
Trading on Vietnam’s main stock exchange, home to the nation’s benchmark VN-Index, was canceled on Tuesday after a malfunction at the bourse.

Deutsche Boerse creates index using algorithm to track AI leaders like Apple
Reuters Staff
Deutsche Boerse has launched an index that tracks companies that are leaders in artificial intelligence (AI) by using an algorithm to identify early adopters of the technology.

HKEX Sets Launch Date for New Securities Trading System
Hong Kong Exchanges and Clearing Limited (HKEX) will introduce its new securities trading system for the Hong Kong market, the Orion Trading Platform – Securities Market (OTP-C), on Monday, 5 February 2018, replacing the current AMS/3.8 system, an upgraded version of the AMS/3 system rolled out in 2000.

ISE receives GLEIF accreditation for LEI services
The Irish Stock Exchange (ISE) has been accredited by Global Legal Entity Identifier Foundation (GLEIF) as a provider for Legal Entity Identifier (LEI) services. The ISE operates its LEI services through ISEdirect, its online services website.

Exploring bitcoin futures: Nasdaq CEO
Fox Business
Video: Nasdaq CEO Adena Friedman on the outlook for stocks, regulation, rising interest rates, the Trump administration’s trade policy and bitcoin.

IG posts record profits ahead of regulatory crackdown
Hannah Murphy – FT
IG Group, the UK’s largest online trading platform by market share, posted record half-year results and announced the launch of a new German subsidiary, but warned that an imminent regulatory clampdown on the retail investment sector in Europe was disproportionate.

UBS MTF adds surveillance and reporting technology from Aquis; Trading platform will use Aquis software for market surveillance and RTS 27 reporting under MiFID II.
Hayley McDowell – The Trade
UBS MTF has implemented market monitoring, surveillance and reporting software provided by Aquis Technologies.

FX Futures and FX Rolling Spot Futures: Fee holiday for transaction fees from 22 January 2018 until 28 February 2018
Effective 22 January 2018, the following measure of Eurex Clearing will come into effect:


Coinbase Says Twitter’s Tina Bhatnagar to Lead Customer Support
Olga Kharif – Bloomberg
Coinbase Inc. , one of the leading cryptocurrency exchange and digital wallet services, has hired Tina Bhatnagar to help it cope with overwhelming customer demand.

Intel asks customers to halt patching for chip bug, citing flaw
Stephen Nellis – Reuters
Intel Corp said on Monday that patches it released to address two high-profile security vulnerabilities in its chips are faulty, advising customers, computer makers and cloud providers to stop installing them.

Fintech set to kick off this year’s London floats; IntegraFin IPO understood to be a way for founding investors to cash out
Kate Beioley and John Murray Brown – FT
The first UK initial public offering of the year looks set to be of a £500m company, IntegraFin, that caters to independent financial advisers.

Rival Systems Completes Certification for Cboe Futures Exchange (CFE) Migration to Bats Technology Platform
Rival Systems
Rival Systems (Rival), announced that the firm has already established readiness for the Feb. 25 planned migration of Cboe Futures Exchange (CFE) onto the Bats technology platform. Rival has completed testing and received certification by the exchange for the integration of market data and order entry technology, promoting a seamless transition for clients participating in markets affected by the change.

First Cryptocurrency Freight Deal Takes Russian Wheat to Turkey
Isis Almeida – Bloomberg
Prime Shipping Foundation piloted blockchain payment system;Vessel carried 3,000 tons from Rostov to Samsun in December
Cryptocurrencies are making inroads into food commodity trading. The first freight deal settled in Bitcoin was executed last month on a vessel carrying wheat from top shipper Russia to Turkey, according to Prime Shipping Foundation, the venture behind the transaction.

Bitcoin May Split 50 Times in 2018 as Forking Craze Accelerates
Olga Kharif – Bloomberg
Bitcoin forks are often easier than initial coin offerings; ‘I feel like bitcoin forks are kind of the new alt coin’
Bitcoin God arrived last month. Bitcoin Pizza was delivered in January. Bitcoin Private’s issuance date is… still a secret.

Gold Market Mulling Blockchain for $200 Billion of Supply
Eddie Van Der Walt and Ranjeetha Pakiam – Bloomberg
Tech may prevent spread of conflict minerals, money laundering; Bullion joins commodities from oil to tomatoes in ledger push
Gold is going digital. Blockchain technology may help keep track of the roughly $200 billion of the precious metal dug from remote mines, traded by middlemen and melted down by recyclers that’s sold each year to buyers scattered around the world.

Business schools have a problem with fintech; Graduates told the FT that teaching is poor. But why?
Helen Barrett – FT
I sat in on an MBA finance class at a leading business school recently. The professor, who was explaining the intricacies of asset management and just-in-time manufacturing, was magnetic. The students were intelligent and full of enthusiasm. I thoroughly enjoyed myself and came away elated at my new-found understanding of lean strategies.


Russian Twitterbots are blaming the US shutdown on Democrats
Max de Haldevang – Quartz
The PR war over the US government shutdown has been a tale of rival hashtags. Democrats are desperately branding it the “Trump shutdown,” while Republicans are pushing the phrase “Schumer shutdown,” after Democrat Senate leader Chuck Schumer.

Heads of State and C.E.O.s in Davos Beware: 6 Feet of Snow in 6 Days
Keith Bradsher – NY Times
It may be tempting fate to try to gather 60 heads of state and hundreds of global business leaders in the dead of winter in a Swiss mountain valley. This year, the World Economic Forum’s luck seems to have run out.

Who Should Pay for Financial Transparency? Banks or Government?
Peter J. Henning – NY Times
We are all familiar with the maxim “There’s no such thing as a free lunch,” but a sticking point is who will foot the bill when one side has to put up the money.

Why Markets Shrug Off Political Turmoil; In the last few years, investors have ignored expert advice about a long list of issues.
Mohamed A. El-Erian – Bloomberg
Despite almost nonstop news coverage last week of the high likelihood and adverse implications of a U.S. government shutdown, the performance of stocks and bonds in recent days betrayed little evidence of investor concern. Go back a little further and markets have shown a striking ability to shrug off political and geopolitical instability. Is it luck, or do markets have a better handle on these issues than most experts?


CFTC Cancels TAC Meeting Scheduled for January 23
Due to a lapse in appropriations that occurred at midnight on January 19, 2018, the Technology Advisory Committee (TAC) meeting scheduled for Tuesday, January 23 is cancelled and will be rescheduled for a later date. Consult for the new date and participation information.

Six Accountants Charged with Using Leaked Confidential PCAOB Data in Quest to Improve Inspection Results for KPMG
The Securities and Exchange Commission today announced charges against six certified public accountants – including former staffers at the Public Company Accounting Oversight Board (PCAOB) and former senior officials at KPMG LLP – arising from their participation in a scheme to misappropriate and use confidential information relating to the PCAOB’s planned inspections of KPMG.

FINRA Launches Small Firm Helpline to Provide Enhanced Support; New FINRA360 Initiative Provides Small Firms Additional Assistance
The Financial Industry Regulatory Authority (FINRA) today launched a Small Firm Helpline, the latest in a series of actions to enhance support for small firms that have been taken as part of the FINRA360 organizational improvement program.

What’s in a Blockchain Name? SEC Demands More Than Investor Bait
Benjamin Bain – Bloomberg
Clayton says agency is scrutinizing changes in business models; Companies have reaped big gains from new names in recent weeks
Companies looking to ride the cryptocurrency wave are drawing a stern warning from the top U.S. securities regulator: You better do more than change your name.

Bank Regulators’ Spokeswoman Steps Down to Speak for Wall Street
Jesse Hamilton – Bloomberg
FDIC’s Hagenbaugh joining Financial Service Forum, agency says; Former journalist worked for Federal Reserve after 2008 crisis
Barbara Hagenbaugh, a spokeswoman for two U.S. regulators in the years after the financial crisis, is flipping the script and becoming a voice for the biggest firms on Wall Street.

Trump Team Keeps Approach to Global Financial Rules, for Now; With continued engagement may come efforts to rein in rule-making bodies that some officials say have overstepped their mandate
Gabriel T. Rubin – WSJ
While President Donald Trump hasn’t dropped his skepticism of global institutions, it seemed to be business as usual last year in terms of U.S. engagement with international financial regulators. But there are hints that this approach may change moving forward.

ICO regulator anger translator
Alexandra Scaggs – FT
SEC Commissioner Jay Clayton spoke about ICOs on Monday at the Securities Regulation Institute (a legal conference). He did not mince words.

Investing and Trading

Goldman issues a warning on bitcoin — and an even bigger warning on Ethereum; Goldman quotes historian on ‘tulip bubble’: ‘Our descendants doubtless will laugh at the human insanity of our Age’
Ryan Vlastelica – MarketWatch
The chorus of bitcoin bears is growing louder by the day. The latest to issue a stern warning against the world’s largest digital currency is Goldman Sachs’s investment management division, which wrote that there is “no doubt” that the cryptocurrency’s astronomical rise over the past year “has pushed it into bubble territory.”

Jerome Powell’s Challenge at the Fed: Keep the Economy Humming; With unemployment and inflation both low, the incoming chairman must navigate the central bank’s rate-tightening cycle
Nick Timiraos – WSJ
Janet Yellen’s progress in easing the Federal Reserve away from ultralow interest rates and paring its portfolio of bonds leaves a big challenge for her successor, Jerome Powell : how to keep the U.S. economy right where it is.

El-Erian Warns Financial Advisers on Over-Promised ETF Liquidity
Sarah Ponczek and Carolina Wilson – Bloomberg
Mohamed El-Erian, chief economic adviser at Allianz SE, reiterated his concerns about liquidity in exchange-traded funds.

It Has Been a Near-Perfect Investing Environment. But It May End Soon; For two decades, government bonds have provided what amounts to free insurance against stock-market struggles. But that’s a historical anomaly.
James Mackintosh – WSJ
The perfect investment is one that only goes up. Almost as good is an investment that does well when the rest of your portfolio hits a rough patch, but over time still makes money.

Trend Chasing Dominates Markets and Wall Street Is on Edge
Dani Burger – Bloomberg
Market-momentum strategies on pace for best month since 2014; Warning signs point to coming reversal, pain for popular trade
Asset allocators hoping to turn a profit this month only needed one simple rule: Don’t fight the trend.

Goldman Risk-Appetite Metric at Record Amid ‘Extreme’ Markets
Sid Verma – Bloomberg
Global stocks and U.S. Treasuries are in the throes of their most “extreme” start to the year ever as bullish sentiment engulfs markets, according to Goldman Sachs Group Inc.

Index Industry Association Surveys the Index Universe
First Annual Survey Reveals 3.288 Million Indexes Globally
Businesswire – Index Industry Association (IIA), a global organization of index administrators, today announced the results of a revealing new survey of its fourteen member firms that quantifies the total number of indexes available globally for the first time ever. According to the survey, there are 3.288 million indexes globally with equity indexes representing over 95 percent of benchmarks calculated.


Morgan Stanley Says Harold Ford Jr. Wasn’t Fired for Sexual Misconduct
Kate Kelly – NY Times
Six weeks after firing the former congressman Harold E. Ford Jr. for unspecified misconduct, Morgan Stanley clarified Monday that the misconduct was not sexual in nature.

UBS Catching Up to American Rivals With Buyback; Investors may be upset at expected dividends playing second fiddle to buybacks. They shouldn’t
Paul J. Davies – WSJ
Some European investment banks are finally catching up with U.S. peers. UBS will start a share buybacks worth 2 billion Swiss francs ($2 billion) over the next three years, becoming only the second major European banking group after HSBC to hand a big chunk of cash to shareholders this way since the crisis.

Morgan Stanley Warns on U.S. Trade Risk and Suggests Hedges
Joanna Ossinger – Bloomberg
Trade risk in U.S. markets is no longer hypothetical, and investors would do well to pay attention, according to Morgan Stanley strategists.

Exclusive: Ackman cuts staff, shuns limelight as he seeks to turn around fund Svea Herbst-Bayliss – Reuters
William Ackman is cutting almost a fifth of staff and looking to lower his public profile as he seeks to turn around Pershing Square Capital Management after three straight years of losses, people familiar with the move told Reuters on Monday.

Zombies Torment a Hedge Fund Titan; Too many unprofitable companies are being kept alive by cheap money.
Mark Gilbert – Bloomberg
Out of the mouths of babes and sucklings, wisdom can sometimes be heard. The same applies to money-losing hedge-fund managers.

Goldman Sachs Plans Geneva Reopening in Swiss Push
Jan-Henrik Foerster and Patrick Winters – Bloomberg
Goldman Sachs Group Inc. is seeking to open a representative office in Geneva, two years after effectively exiting the city, as it expands in Switzerland, according to two people familiar with the bank’s intentions.

BNY Mellon to launch FX prime brokerage service; New service will allow clients to access a new source of much-needed liquidity in the FX space.
Joe Parsons – The Trade
BNY Mellon is entering the FX prime brokerage service arena, taking on rivals such as Citi, Deutsche Bank and JP Morgan.

Bank of America wants more brokerage clients to be bank clients
Elizabeth Dilts – Reuters
Bank of America (BAC.N) is offering cash and interest rate incentives to Merrill Lynch clients for opening first-time checking and savings accounts as it tries to seize the large chunk of wealth that brokerage customers hold at other institutions.


Singapore Soars Up Innovation Rankings, U.S. Falls Out of Top 10
Michelle Jamrisko and Wei Lu – Bloomberg
U.S. out of top 10 for first time in the gauge’s six years; South Korea, Sweden repeat as 2018 leaders, Singapore is 3rd
Score another one for Seoul while Silicon Valley slides.
The U.S. dropped out of the top 10 in the 2018 Bloomberg Innovation Index for the first time in the six years the gauge has been compiled. South Korea and Sweden retained their No. 1 and No. 2 rankings.

Japan bitcoin bourse group stages Europe expansion; Exchange to offer trading of bitcoin/euro pairs after gaining Luxembourg licence
Hannah Murphy in London – FT
BitFlyer, the Tokyo-based operator of one of the world’s largest bitcoin exchanges, is expanding into Europe after receiving regulatory approval, as the infrastructure that supports cryptocurrency trading continues to grow off the back of the recent boom.

China’s IPO hopes buoyed by outsized belief in ‘unicorns’; Bankers have put a $100bn value on Xiaomi, which has just 7% of the smartphone market
Louise Lucas in Hong Kong – FT
Xiaomi has a scant 7 per cent share of the smartphone market and is still clawing its way back from a particularly torrid low point. However, bankers advising the Chinese handset maker on a potential initial public offering reckon its value could be up to $100bn ó roughly the same as investment bank Goldman Sachs or miner Rio Tinto.

China Sucks Gas Out of Global Market Amid Shift From Coal; Move boosts LNG price and leaves large swathes of industry in China struggling with limited gas supplies
Sarah McFarlane and Nathaniel Taplin – WSJ
China is replacing coal with gas, sucking up global supplies of the fuel and pushing up the price of liquefied natural gas to a three-year high.

Beleaguered Bond Traders Pin Their Hopes on Swedish Speed Trains
Love Liman – Bloomberg
Government committee has proposed $29 billion train investment; Increased borrowing could boost liquidity in shrinking market
For countries, not having a lot of debt is generally a good thing. For bond traders, it’s another story.


Pay news publishers, Murdoch urges Facebook; Media mogul says cable TV-style carriage fees could solve fake news problem
Shannon Bond in New York – FT
Rupert Murdoch called on Facebook to pay carriage fees to publishers similar to the model of the pay-television industry, in the latest criticism of the social network’s impact on the news business.

Fox-Sky Deal Not in Public Interest, U.K. Regulator Says
Joe Mayes – Bloomberg
Antitrust regulator issues provisional findings on deal; Shares rise as broadcasting standards issues aren’t a problem
U.K. regulators dealt a setback to 21st Century Fox Inc.’s planned 11.7 billion-pound ($16.3 billion) takeover of Sky Plc, saying the deal would give Rupert Murdoch too much control over the country’s media.

Zuckerberg criticises misinformation in social media; Amazon raises Prime prices, more Russian trolls on Twitter, foldable phones
Leslie Hook in San Francisco – FT
Facebook will begin favouring news sources its users consider trustworthy, in an attempt to stem the spread of false and misleading information on its platform, write ;Shannon Bond and Richard Waters.

21st Century Fox Bid for Sky Is Provisionally Rejected by U.K. Regulator
Prashant S. Rao – NY Times
Britain’s competition regulator provisionally rejected on Tuesday a bid by 21st Century Fox to take control of the British satellite broadcaster Sky on the grounds that it was “not in the public interest,” it said in a statement.

John Lothian Newsletter

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Past JLN Newsletters

When Americans Took to the Streets Over Inflation

When Americans Took to the Streets Over Inflation

First Read $42,376/$300,000 (14.1%) ++++ Hits & Takes John Lothian & JLN Staff CME Group and FTSE Russell are putting on a webinar TODAY at 11 a.m. ET titled, "Russell U.S. recon: Mitigating risk with derivatives." If you are invested in small cap stocks, you...

Gensler says SEC to review payment for order flow

Gensler says SEC to review payment for order flow

First Read $42,376/$300,000 (14.1%) ++++ Hits & Takes John Lothian & JLN Staff The new CME Group micro Treasury futures contracts are not the basis point futures I have suggested, but they are very close and maybe better. Certainly the micro name will enhance...

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