Nasdaq moves to acquire Oslo Bors by outbidding Euronext; LSE acquires stake in Euroclear

Jan 30, 2019

Nasdaq moves to acquire Oslo Bors by outbidding Euronext; LSE acquires stake in Euroclear

Jan 30, 2019

First Read

Hits & Takes
JLN Staff

Cold. Cold. Cold. Don’t go outside unless you have to if you are in the U.S. Midwest. It is just plain, frostbite creating, death-inducing cold.~JJL

Minneapolis is very smart as they have a skyway system between buildings where you don’t have to wear a coat to walk around town. I would still wear a sweater. Other northern cities have them too. The CBOT Building has one that connects to the Cboe, but it has been closed for years.~JJL

My daughter Katherine turned 21 last week. I can’t believe time went by so fast.~JJL

EEX shared this: Yesterday, #EEX reached a new daily record volume of 16.9 TWh in Phelix-DE Futures, the benchmark product for European #power trading. The previous record of 16.8 TWh was traded on 14th September 2018.~JJL

The Chinese government started looking at a new version of the long languishing foreign investment law that would address foreign ownership of enterprises in China as part of the country’s opening up initiative. In other China news, Chinese investors, leery of the stock market, are increasingly looking at provincial bonds.~SD

Bloomberg is reporting that Canada is holding a lottery to decide who gets the stock ticker “POT.”~JJL

It’s an ever-changing market: for a cool infographic, check out this depiction of U.S. stock market sector weightings from 1800 on. (Obviously, there are some approximations in this.)~SD

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The Exchange Traded Product That Lost 99% Of Its Value Is Finally Dying
Luke Kawa – Bloomberg
VXX matures this week after 10 years betting on volatility; Futures market expected to absorb any large liquidations
The most popular way to play volatility is going to its grave this week, but the impending death of an exchange-traded note sold by Barclays Plc is not the end of the story for futures traders.
/bloom.bg/2TjHKlK

****The transition out of VXX, and its numerous related VIX futures hedges, to new positions appears to have been orderly, even though VXX headed into Tuesday with a good chunk of its historical AUM in tow (~$500m). For an in depth look at some of the mechanics involved in the maturation of a exchange traded debt obligation that uses derivatives on an index that is calculated using derivatives based upon an index, see this Six Figure Investing blog.~SD

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U.S. Slips Out of Top 20 in Global Corruption Index
Casey Quackenbush – Time
The U.S. has plummeted in an annual corruption index, falling out of the top 20 countries for the first time since 2011, watchdog Transparency International said in a new report that links the global erosion of democracy and tidal wave of autocrats to an uptick in graft.
bit.ly/2sS2sNM

****** Did they take Chicago out of the index?~JJL

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‘Life-threatening’ temperatures hit record daily low in Chicago
David Struett – Chicago Sun-Times
Temperatures fell early Wednesday to make it the coldest Jan. 30 in Chicago on record.
By 4 a.m., it was already minus 19 degrees, which beats the last record daily low of minus 15 on Jan. 30, 1966, the National Weather Service said.
Temperatures will continue to fall throughout Wednesday, possibly reaching between minus 20 and minus 28 degrees, the weather service said.
bit.ly/2ME5ZZa

***** Whatever you want to do today, just don’t do it outside.~JJL

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Chicago Pit Traders Have Weathered Worse Than an Arctic Freeze
Lydia Mulvany – Bloomberg
Scott Shellady, known in the trading pits of Chicago for his trademark “cow jacket,” isn’t going to let a historic blast of Arctic freeze on Wednesday keep him away from the options pits at the world’s largest derivatives exchange, even though many of the city’s workers are planning to hunker down at home. “I come from a family of farmers,” said Shellady, who commutes into the city from northwest Indiana. “And there’s a word in English that describes the weather we’re having. Winter.”
/bloom.bg/2sVPOO6

***** For Scott Shellady and me, it does not hurt we have some extra insulation to guard from the cold.~JJL

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Why investors suck at selling stocks; Research suggests portfolio managers take the process of buying shares more seriously
Katie Martin – FT
Professional portfolio managers have two basic functions in life: buying stuff and selling stuff. New research suggests they do a shockingly bad job of the latter, and it is costing them dearly. What is more, they do not even seem to realise they are doing it.
/on.ft.com/2FUhrPS

***** My father always said people know when to buy, but don’t know when to sell. I guess he was right.~JJL

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Is Free Fair To All? (Editorial)
Phil Mackintosh – Nasdaq
It seems we’re all getting used to getting things for free. Cloud storage, email, social media and lots of the apps we download to our phones.
But is free good for a stock market too?
The economic problem with providing anything for free is well knownóyou get too much consumption of the free goodówhich is not an efficient use of resources. It’s known as the free-rider problem.
/goo.gl/n7QxpZ

****** Free….Free, Free, Free!

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Tuesday’s Top Three
Our top story of the day yesterday was Forbes’ How This 24-Year-Old Former NYSE Equity Trader Made History. Second was the info story on Chicago’s mayoral candidates from WBEZ, Chicago Mayoral Election Candidate Questionnaire. There you can see which candidates support or oppose a transaction tax on the financial markets. Third was The Wall Street Journal’s Two Groups Account for $1 Billion in Cryptocurrency Hacks

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Lead Stories

Nasdaq makes move to acquire Oslo Bors by outbidding Euronext; Exchange group has said it has unanimous approval from the board of directors at Oslo Bors to acquire the Norwegian exchange for $770 million.
Hayley McDowell – The Trade
US exchange operator Nasdaq has officially launched a rival bid for Norwegian stock exchange Oslo Bors with an offer that exceeds Euronext’s initial bid made earlier this month.
bit.ly/2FY5vwM

London Stock Exchange acquires stake in Euroclear; UK exchange group acquires 4.92% stake in Euroclear as two look to work together on commercial collaboration and product development.
Jon Watkins – The Trade
The London Stock Exchange (LSE) has acquired a 4.92% stake in Euroclear for EUR278.5 million, following a similar move by one of its trading venue rivals last year.
bit.ly/2FZ7DUJ

Fidelity Is Said to Plan March Launch of Bitcoin Custody Service
Matthew Leising and Alastair Marsh – Bloomberg
Service may help institutional investors ease into crypto; Commonplace in other assets, custody’s absence keeps pros out
Fidelity Investments is targeting a March launch date for its Bitcoin custody service, according to three people with knowledge of the matter, as the mutual-fund giant moves forward with a plan that could help ease fears of trading cryptocurrencies.
/bloom.bg/2FZ5bxI

NYSE, Nasdaq Rival Aims to Shed Light on Fee Profits; The exchanges don’t disclose profit margins for these kinds of services
Gretchen Morgenson – WSJ
Brokerage firms and banks have complained for years about rising fees at big stock exchanges. Now, they are getting a glimpse of the potential profits the exchanges could be making from them. On Tuesday, Investors Exchange, a small exchange that competes with the NYSE, Nasdaq Inc. and Cboe Global Markets Inc. CBOE -1.23% for stock trades, filed an analysis with the Securities and Exchange Commission comparing its costs of providing comparable market data and connectivity to clients with fees levied by the big exchanges.
/on.wsj.com/2FWy3GJ

London Stock Exchange buys stake in settlement house Euroclear; UK bourse boosts presence in Europe with EUR278m share in one of biggest settlement houses
Sarah Provan – FT
The London Stock Exchange Group has snapped up a 4.9 per cent stake in Belgian-based settlement house Euroclear, looking to increase its influence in one of the key utilities of global market plumbing.
/on.ft.com/2FYOanl

LSE’s Schwimmer Makes Dealmaking Debut With Euroclear Stake
Viren Vaghela – Bloomberg
London Stock Exchange Group Plc unveiled the first deal under its new leadership, agreeing to take a minority stake in settlement giant Euroclear Holding SA/NV.
/bloom.bg/2FZ5jNv

London’s renminbi trading eclipses pound-euro; Trading volumes in the Chinese currency against the US dollar rise 17 per cent
Eva Szalay – FT
London’s push to become a major trading hub for the Chinese currency is paying off, with trading volumes for the renminbi eclipsing those for the pound against the euro for the first time last year, according to a survey from the Bank of England.
/on.ft.com/2FWELg0

The Brexit Bill: Here’s the Damage So Far; The divorce from the EU might be delayed, softened or even abandoned, but the cost of separation is already apparent.
Joe Mayes – Bloomberg
Britain’s vote to leave the European Union has already come at a cost regardless of where Brexit goes from here. Some of the damage is tangible, such as jobs, investment and capital; some of it less so, like international clout and talent.
/bloom.bg/2FWuPTD

Theresa May Survives a Critical Brexit Vote
Stephen Castle – NY Times
British Prime Minister Theresa May survived a critical vote in Parliament on Tuesday that could have delayed Brexit, undermining her strategy for leaving the European Union and undercutting the country’s constitutional protocol.
/nyti.ms/2DGWUfv

John Phizackerley receives no further payout from TP ICAP
Philip Stafford – FT
John Phizackerley received only the minimum legal and contractual entitlements to settle his sacking from TP ICAP last year, the UK interdealer broker disclosed on Wednesday.
/on.ft.com/2FWAPfb

TP ICAP downgrade triggers spat with Moody’s; Agency said lower rating reflected interdealer broker’s increased costs and debt levels
Philip Stafford – FT
TP ICAP has become embroiled in a public dispute with Moody’s Investor Services after the UK interdealer broker was downgraded by the credit rating agency.
/on.ft.com/2FX2j4j

MiFID II sees global equities trade execution rates decline; Analytics on average global commissions shows that rates have declined across developed and emerging markets.
Hayley McDowell – The Trade
Execution rates on equity trades globally have fallen significantly over the course of 2018 as MiFID II unbundling rules in Europe take hold, according to Greenwich Associates.
bit.ly/2FY4DIk

Europe should beware the lure of bigger banks; As long as continent-wide deposit insurance remains out of reach, mergers will be risky
Simon Samuels – FT
In many ways it was hardly a surprise that the chairman of UBS, Axel Weber, said recently, when commenting on European banks, that “what Europe needs in order to catch up with American firms is European champions, banks that are larger in size”. Last year was a bad one for European bank shares, capping a torrid decade after which, for most large banks, profits and share prices are still well below pre-crisis levels.
/on.ft.com/2FV1F7D

‘Exchanges owe us answers’ says IEX as it discloses market data and connectivity costs; IEX becomes first exchange operator to disclose its costs with the detailed report revealing incumbent exchanges are grossly marking up fees.
Hayley McDowell – The Trade
Investors Exchange (IEX) has publicly disclosed its costs of producing market data and connectivity, suggesting that incumbent exchanges could be marking up charges for such services by as much as 4,000%.
bit.ly/2G0tbQQ

London Metal Exchange quizzed by regulators on phone trades; European regulations calling for price transparency pose a problem for LME’s phone-trading
By Samuel Agini – Financial News
Europe’s top financial regulator has clashed with one of the City of London’s oldest exchanges over a quaint method of trading employed in the metals markets.
bit.ly/2FVSMuj

Exchanges, OTC and Clearing

Nasdaq to Make an Offer to Acquire Oslo B¯rs VPS with Unanimous Support from Oslo B¯rs VPS Board of Directors
GlobeNewswire
Nasdaq starts bidding war on the Oslo Stock Exchange; While Euronext has secured control over more than half of the shares in the Oslo Stock Exchange, the US Nasdaq comes in from the sidelines. They offer seven kroner more per share than Euronext.
Marius Lorentzen, Asgeir Aga Nilsen and Anders Nybakken Kvale -E24
Nasdaq AB, which is owned by the US Nasdaq stock exchange, announces on Wednesday that they are now making an offer to buy all the shares in Oslo B¯rs at NOK 152 per share.
bit.ly/2FYpfA3

Nasdaq bids $771 million for Oslo Bors in Euronext challenge
Terje Solsvik, Gwladys Fouche – Reuters
Nasdaq Inc on Wednesday made a rival bid for Oslo Bors VPS, setting up a takeover battle with Euronext for the 200-year-old Norwegian stock market operator.
/reut.rs/2G0rhzG

Nasdaq Announces Quarterly Dividend of $0.44 Per Share
GlobeNewswire
The Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.44 per share on the company’s outstanding common stock. The dividend is payable on March 29, 2019 to shareowners of record at the close of business on March 15, 2019. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
bit.ly/2FY519K

Nasdaq Private Market Facilitates a Record $12 Billion in Transaction Volume in 2018; Strong market activity and investor demand drives record-setting jump in secondary liquidity
GlobeNewswire
The Nasdaq Private Market, LLC (NPM), a leading provider of liquidity solutions for today’s private securities, has released its 2018 Year End Private Company report, which summarizes private company liquidity activity on the NPM platform.
bit.ly/2FYRGOG

London Stock Exchange Group plc announces acquisition of 4.92% stake in Euroclear Holding SA/NV
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG”) announces it will acquire an aggregate 4.92% stake in Euroclear’s share capital for EUR278.5 million (£241.9 million)
bit.ly/2G1mDBE

Staying ahead of the curve: the fintech trends 2019 (part II)
Eurex
In the first part of this article, we reported on the most important technology trends that experts expect to disrupt, shift and change the way our industry will do business in 2019. What will Deutsche Bˆrse and especially Eurex do to further implement new technologies such as artificial intelligence (AI), machine learning and blockchain? We spoke to our in-house experts about “what’s cooking” at Deutsche Bˆrse and Eurex.
bit.ly/2G0mr5u

Equity derivatives: Introduction of Single Stock Futures and equity options; withdrawal of admission of Single Stock Futures and equity options
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 4 February 2019:
bit.ly/2FUjPWQ

EEX And GDT Take Next Steps Towards Joint Venture For A European Dairy Auction
MondoVisione
The European Energy Exchange (EEX) and Global Dairy Trade (GDT) have successfully concluded the initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products.
bit.ly/2FWDTb7

‘Next steps taken’ towards European dairy auction venture
Sylvester Phelan – Agriland.ie
The initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products has been concluded by the European Energy Exchange (EEX) and Global Dairy Trade (GDT).
bit.ly/2FUp60A

Fintech

Barchart Announces Integration of OnDemand APIs into MATLAB
Barchart
Barchart, a leading provider of financial market data and technology, has announced a partnership with MathWorks. New integration with MATLAB, the programming environment from MathWorks for algorithm development, data analysis, visualization, and numeric computation will now allow traders, financial engineers, risk managers and analysts currently using MATLAB and its Datafeed Toolbox to directly access Barchart’s OnDemand API solutions and to gain access to Barchart’s data from within MATLAB.
bit.ly/2FZeLjX

TickSmith Achieves Amazon Web Services Financial Services Competency as well as Advanced Technology Partner Status in the AWS Partner Network
PR Web
TickSmith, a FinTech software company specialized in Big Data technology, announced today that they have achieved Amazon Web Services (AWS) Financial Services Competency status as well as Advance Technology Partner status in the AWS Partner Network (APN). These designations recognizes TickSmith for delivering solutions built on AWS to help financial clients better ingest, manage, and categorize the growing amount of data that firms need to cope with to minimize risk, navigating compliance requirements, and improve the performance of running advanced analytics at scale.
/goo.gl/pWT8pv

Ant Financial raised almost as much money in 2018 as all fintechs in US and Europe
John Detrixhe – Quartz
When it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.
bit.ly/2MKHE4c

A George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steam
Dakin Campbell – Business Insider
A fintech startup that acts as a data hub for Wall Street bond investors has raised new money to fuel its expansion just as analysts grow worried about a softening mortgage market and the implications for the American consumer.
dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board.
/read.bi/2ME8ESE

Global fintech funding has soared but big banks are shying away from buying disruptive upstart firms
Madeline Shi – Business Insider
Global fintech funding hit record high last year, but M&A in the space hasn’t followed suit.
VC-backed fintech companies raised nearly $40 billion (up 120%) across 1,707 deals globally (up 15%) over the past year, according to data tracker CB Insight’s latest fintech report on Tuesday.
Despite this funding surge, big banks have largely stayed on the sidelines when it comes to buying these upstarts.
/read.bi/2MF3e9Z

Cryptocurrencies

IHS Markit buys stake in blockchain start-up Cobalt; Investment comes as banks hunt for cost savings in currencies trade processing
Eva Szalay – FT
Data and analytics company IHS Markit has bought a stake in currencies start-up Cobalt, in an effort to boost the use of blockchain technology to handle the fiddly business of trade processing.
/on.ft.com/2FW1GrP

JPMorgan Says Blockchain Is Making Progress Outside Crypto
Joanna Ossinger – Bloomberg
Research chair Chang says meaningful impact 3-5 years away; Trade finance, supply chain seen as areas for advancement
It may take a few years for blockchain’s impact to be felt meaningfully, but it will provide some advancements in certain areas even as cryptocurrencies falter, according to JPMorgan Chase & Co.
/bloom.bg/2FY4nt2

What Gemini’s ‘Revolution Needs Rules’ Campaign Means For The Crypto Community
Samantha Radocchia – Forbes
Regulations are a tricky subject in even the most established and traditional industries.
But in an emerging space, the debate can quickly get heated. For instance, Geminióa crypto exchange headed by the Winklevoss twinsórecently splashed advertising all over NYC. The ads were adorned with the catchy, albeit somewhat cryptic, phrase “Revolution Needs Rules.”
bit.ly/2MMKPsd

SWIFT Chief Announces Trial DLT Integration With R3
Ian Allison – Coindesk
SWIFT, the global banking payments network, is to begin testing its gpi payments standard with R3’s Corda platform. Speaking on stage at the Paris Fintech Forum this morning, SWIFT CEO Gottfried Leibbrandt said: “Later today we are announcing integration with R3.”
bit.ly/2FYkx5x

BlockFi scores new funding from Coinbase Ventures, sets sights on international expansion
Ryan Todd – The Block Crypto
Coinbase Ventures is joining the growing list of investors backing crypto lending, providing an extension of BlockFi’s $4 million convertible note issuance in December.
bit.ly/2FYtZpl

Blow To Bitcoin As CEO Warns Crypto Winter Could Turn ‘Nuclear’
Billy Bambrough – Forbes
Bitcoin and the wider cryptocurrency market has been suffering through a year-long bear market that was branded “crypto winter” late last year for its debilitating effect on the industry.
bit.ly/2FYcd5K

European Union: ESMA And EBA Publish Supervisory Policy Statements On Crypto-Assets
Michael Huertas – Mondaq
QuickTake: With a range of issues identified, can the EU afford inaction?
The European Banking Authority (EBA) and more recently its sister European Supervisory Authorities (ESAs), the European Securities and Markets Authority (ESMA), as well as the European Insurance and Occupational Pensions Authority (EIOPA) have used 2018 to accelerate their further policymaking or delivery of actions that flow from various “FinTech Action Plans1 as well as their multi-annual supervisory priorities.
bit.ly/2FYd5Y4

Bitcoin’s Three Biggest Problems In Reaching The Masses
Panos Mourdoukoutas – Forbes
Bitcoin has gained a great deal of buzz in recent years. And it has made a few people very rich in the process. Those who were on the right side of the market at the right time, that is.
bit.ly/2FYJKwM

Politics

Trump Says the Economy Is Unstoppable. Most Economists Say Otherwise
Jim Tankersley – NY Times
The Trump administration’s rosy view of the economy is increasingly diverging from a decidedly more cautious outlook from other prognosticators, including economists at the Federal Reserve and elsewhere, who are warning that growth is slowing, in part because of the president’s own policies.
/nyti.ms/2FW2IEd

Harley-Davidson Profit Is Wiped Out by President Trump’s Tariffs
Gabrielle Coppola – Bloomberg
Earnings per share miss estimates by widest margin since 2009; Retail deliveries in home market dropped 10% in fourth quarter
Harley-Davidson Inc. barely broke even in the last quarter of a year in which the struggling American icon got caught up in President Donald Trump’s trade wars. The motorcycle maker’s shares plunged the most in a year.
/bloom.bg/2FW0eFT

Malpass emerges as leading contender to head World Bank; US Treasury undersecretary has struck a sceptical tone on multilateral institutions
Sam Fleming – FT
The US is narrowing its list of potential nominees to lead the World Bank, with David Malpass, a senior Treasury official, emerging as one of its finalists, people familiar with the matter said.
/on.ft.com/2FYkF4P

Steven Mnuchin Draws Claims of Conflict of Interest in Decision on Russian Oligarch
Kenneth P. Vogel – NY Times
Democrats in Congress raised ethical concerns on Tuesday about connections between Treasury Secretary Steven Mnuchin and a billionaire Republican donor who stands to benefit financially from the Trump administration’s decision to lift sanctions on the Russian oligarch Oleg V. Deripaska’s companies.
/nyti.ms/2FWvEff

Trump Will ‘Never Be Safe’ From Russian Intelligence and Will Have ‘No Defense,’ Retired General Says
Jason Lemon- Newsweek
Retired four-star General Barry McCaffrey warned that President Donald Trump will “never be safe” from Russian intelligence due to his one-on-one private meeting with President Vladimir Putin in Helsinki last year.
bit.ly/2G2mCh1

Regulation

ESMA appoints new chair of the Investment Management Standing Committee
ESMA
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed the following individual to serve as chair of its Investment Management Standing Committee (IMSC):
bit.ly/2G0nBOo

ESMA updates Q&A on Benchmark Regulation
ESMA
The European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmark Regulation (BMR).
bit.ly/2FXAwkq

Proposed Rule Change to Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps)
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 12, 2020. FINRA Rule 0180 temporarily limits, with certain exceptions, the application of FINRA rules with respect to security-based swaps.
bit.ly/2FY5U24

Proposed Rule Change to Expand Time for Non-Parties to Respond to Arbitration Subpoenas and Orders of Appearance of Witnesses or Production of Documents
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 12512(d) through (e) and FINRA Rule 12513(d) through (e) of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rule 13512(d) through (e) and FINRA Rule 13513(d) through (e) of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to expand time for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents, and to make related changes to enhance the discovery process for forum users.
bit.ly/2G1o2Iq

Proposed Rule Change Relating to FINRA Rule 6750 (Dissemination of Transaction Information)
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 6750 to provide that FINRA may publish or distribute aggregated transaction information and statistics on non-disseminated TRACE-Eligible Securities at no charge.
bit.ly/2FWYMmz

CFTC’s Release Schedule for Delayed Market Data Reports
CFTC
The Commodity Futures Trading Commission’s (CFTC) Market Intelligence Branch of the Division of Market Oversight today announced an updated release schedule for CFTC market data reports that were delayed during the lapse in appropriations. The goal of the new report schedule is to provide market participants with data as quickly as possible, given the agency’s resource constraints.
bit.ly/2FZ9hWC

FCA proposes new measures to encourage effective stewardship
UK FCA
The FCA is proposing new measures and gathering views on how to encourage effective stewardship in the interests of investors. Most UK consumers hold investments, for example through their pensions, which are looked after by asset managers. Asset managers have a duty to oversee these investments in their clients’ interests.
bit.ly/2FYRFtZ

FCA launches consultation on General Insurance value measures data
UK FCA
Today the Financial Conduct Authority (FCA) has launched a consultation proposing new rules requiring firms to report General Insurance (GI) value measures data to the FCA for publication. Alongside the Consultation Paper, the FCA has also published a third annual value measures dataset, covering the period August 2017-August 2018.
bit.ly/2FXoqI3

Commissioner Berkovitz states his opposition to proposed swap trading rules
Brad Rosen – Wolters Kluwer
In remarks before the Commodity Markets Council State of the Industry 2019 conference, Commissioner Dan Berkovitz lays out a comprehensive argument that the CFTC’s proposed swaps trade execution requirement undermines competition
/goo.gl/b63wRW

Standard Chartered fined $40M for currency rigging ‘cartel’
Kevin Dugan – NY Post
A top Wall Street watchdog on Tuesday slapped a big bank with a $40 million fine over a brazen currency rigging scheme that had traders referring to themselves as a “cartel” and openly boasting about their ability to “bully” other currency traders.
/nyp.st/2G2aBbp

As the EUR500 note slowly dies, Harvard economist Kenneth Rogoff is getting his wish
John Detrixhe – Quartz
For lovers of large-denomination paper money, Harvard economist Kenneth Rogoff is enemy No. 1. His book, The Curse of Cash, outlines the case for getting rid of as much of paper money as possible, and larger notes in particular, because of the role cash plays in money laundering and tax evasion.
bit.ly/2FX1d8U

Investing and Trading

New UK stewardship code to look at adoption of ESG criteria; Auditing watchdog consults on principles to dictate how asset managers will police investee groups
Owen Walker – FT
The UK’s auditing watchdog has proposed that fund managers take environmental, social and governance factors into account when overseeing the companies in which they invest.
/on.ft.com/2FUhP

PwC and EY to ban non-essential consulting for audit clients; Industry has faced criticism after string of high-profile accounting scandals
Madison Marriage – FT
PwC and EY said on Tuesday that they will stop providing non-essential consulting services to audit clients by 2020.
/on.ft.com/2FYavBy

Conflict of interest changes open doors for specialist consultancies; Proposals increase scrutiny of big firms but create opportunities for smaller rivals
Andrew Hill – FT
Advice about risk and regulation has been a big growth area for the largest consultants in recent years. Now the biggest firms ó notably the Big Four accountancy and professional services groups ó may need to take their own medicine.
/on.ft.com/2FWPJ5a

GE Powered the American CenturyóThen It Burned Out; How the company that was once America’s biggest, the maker of power turbines, the seller of insurance, the broadcaster of ‘Seinfeld,’ became a shadow of its former self
Thomas Gryta and Ted Mann – WSJ
They came by the dozens in luxury sedans, black Ubers and sleek helicopters. As they did each August, General Electric’s most important executives descended on a hilltop above the Hudson River for their annual leadership gathering.
/on.wsj.com/2FY95a0

Charting GE’s Historic Rise and Tortured Downfall
Bloomberg
General Electric Co. has unraveled. The onetime icon of American industry last year suffered its biggest annual stock decline of the modern era as it was booted from the Dow Jones Industrial Average; investors were blindsided by multiple multibillion-dollar charges against earnings; and the board ousted the chief executive officer, handing the reins to an outsider for the first time ever. Meanwhile, the company’s pension remains the most underfunded in the country, its accounting is under federal investigation and its power segment is searching for a way out of a terrible slump.
/bloom.bg/2FYntz5

SanBio’s crash causes margin calls, drags down Japan’s start-up market
Ayai Tomisawa – Reuters
A crash by a Tokyo biopharmaceutical firm’s shares on Wednesday ended a month-long rally in Japan’s start-up market that was fueled by retail investors feeling small-cap stocks could rise despite global economic risks.
/reut.rs/2FXTVS3

Disclosure is a lure for green bond investors; Saving the planet is not first priority for some in the environmental finance market
Kate Allen – FT
Sales of green bonds have boomed from zero to almost $200bn a year in just over a decade. This explosive growth has been largely ascribed to investors’ eagerness to back companies promising to improve the environment, but there is another powerful reason why green bonds have become popular: disclosure.
/on.ft.com/2G0tZoQ

Institutions

SocGen Plans Investment Bank Job Cuts After Trading Slump
Fabio Benedetti Valentini – Bloomberg
Bank said to plan saving at least 100 million euros annually; SocGen said to be weighing cuts in areas such as fixed income
Societe Generale SA is making a last-ditch effort to boost its performance after a trading slump threatened Chief Executive Officer Frederic Oudea’s targets.
/bloom.bg/2FYJPRc

Credit Suisse Wins Bid to See Secret Bank Bonus Data in Tax Case
Kaye Wiggins – Bloomberg
London court lets Swiss lender see how much other banks paid; Figures to be disclosed in lawsuit over crisis-era bonus levy
Credit Suisse Group AG won a court bid to see how much money its rivals paid under a one-time U.K. banker bonus tax that was levied amid public anger in the wake of the financial crisis.
/bloom.bg/2G0kDJK

Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown
Patricia Laya and Andrew Rosati – Bloomberg
Lawmaker claims Russian airplane has come to whisk it away; Gold accounts for much of the country’s remaining hard assets
Venezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank.
/bloom.bg/2FYIcD4

Treasury agency had role in controversial RBS unit GRG
Andy Verity – BBC
Evidence has emerged of a government agency’s role in the Royal Bank of Scotland’s (RBS) controversial Global Restructuring Group (GRG). The Asset Protection Agency influenced GRG’s strategy including decisions that determined business customers’ fortunes, the BBC has learnt.
/bbc.in/2FUe8YY

Exclusive: U.S. regulator drops fine against Citi over fair-lending claims – sources
Patrick Rucker – Reuters
A top U.S. bank regulator has decided not to fine Citigroup for discriminating against minority mortgage borrowers, dropping the public rebuke that some officials had sought, two people familiar with the matter told Reuters.
/reut.rs/2FYhPgi

Janus Henderson closes Australian equities funds worth $352 million
Paulina Duran – Reuters
Fund manager Janus Henderson is closing down its three Australian equities funds due to tough fund-raising conditions, and will return nearly A$490 million ($352.65 million) to investors, a company spokeswoman said on Wednesday.
/reut.rs/2FYcOo0

Goldman Sachs securities division engineering co-head to retire: memo
Reuters
Goldman Sachs Group Inc said on Tuesday that Konstantin Shakhnovich, co-head of engineering for the U.S. bank’s securities division, is retiring, according to a memo seen by Reuters.
/reut.rs/2FYpEmf

Regions

S&P route into China’s $12tn bond market faces perils; First licence for foreign credit-rating agency promises to unlock flows from abroad
Don Weinland and Emma Dunkley – FT
S&P Global’s breakthrough into China’s domestic ratings scene is promising to bring a new level of clarity to foreign investors hoping to take a bigger slice of the country’s $12tn bond market.
/on.ft.com/2FW1NDL

European Cannabis Products Have Been More Popular Than Expected
Sam Unsted – Bloomberg
The pot growth story has mostly focused on developments in Canada and the U.S., but one broker says medical cannabis and wellness products are proving a bigger money spinner than it had expected in Europe.
/bloom.bg/2FZbCR8

U.S. Midwest Freezes, Australia Burns: This Is the Age of Weather Extremes
Somini Sengupta – NY Times
In Chicago, officials warned about the risk of almost instant frostbite on what could be the city’s coldest day ever. Warming centers opened around the Midwest. And schools and universities closed throughout the region as rare polar winds streamed down from the Arctic.
/nyti.ms/2FYkyWX

Eight Asian Billionaires Aged Over 90 Control $125 Billion
Venus Feng – Bloomberg
It’s been a mournful start to 2019 for two of Asia’s richest families. Eka Tjipta Widjaja, who began as a coconut and palm-oil trader at age 15 before building a multibillion-dollar empire in Indonesia, died Saturday at 98. A week earlier, Henry Sy, a shoe salesman who became the wealthiest man in the Philippines, died at 94. Their combined fortunes exceeded $16.5 billion.
/bloom.bg/2FYZMXA

Brazilian coffee glut weighs on global growers; Record output drives down prices and piles pressure on farmers
Emiko Terazono – FT
All eyes in the coffee market are on Brazil, as record production levels have knocked global prices to near 12-year lows.
/on.ft.com/2FYowPx

Japan’s 10-day holiday stirs concern in traders and investors
Hideyuki Sano, Tomo Uetake – Reuters
To mark the ascension of Japan’s new emperor, the government has declared an unprecedented 10-day holiday from late April to early May, worrying investors, who say a market shutdown could cause disruption and unsettle the yen.
/reut.rs/2FYetdq

Want to Bet on Currency Market Risk? The Aussie Is Fast Becoming Main Game in Town
Cormac Mullen – Bloomberg
AUD correlations with stocks higher than other DM and EM FX; Currency one of the cheapest risk-off hedges in FX, RBC Says
Australia’s dollar, a favorite among traders for betting on risk in currency markets, is even more attractive than usual as a proxy, Royal Bank of Canada says.
/bloom.bg/2G2lOJ1

Canada Is Holding a Lottery to Decide Who Gets the Stock Ticker POT
Kristine Owram – Bloomberg
Exchanges to hold first random lottery to determine winner; POT likely to join tickers WEED and MJ in cannabis lexicon
The stock symbol POT is up for grabs on Canadian exchanges and demand is so high that they’re holding a lottery for the first time ever to determine who gets it.
/bloom.bg/2FX455t

Brexit

Parliamentary backing sets May on Brexit collision course with EU; Prime minister’s U-turn persuades Eurosceptics to support her move to renegotiate deal
George Parker, Laura Hughes and Alex Barker – FT
Theresa May faces a clash with Brussels after the House of Commons backed her efforts to rewrite her own draft Brexit treaty, an attempt to break the deadlock at Westminster.
/on.ft.com/2FY2JYc

Miscellaneous

After 15 years on Wall Street, I use a 100-year-old psychology framework to show bankers and hedge funders how to get to the top
Justin Doyle, Level Up with JD
I am an executive coach for senior professionals in investment banking, private equity and hedge funds. I help them get promoted and make more money in smarter ways with less stress. I was an M&A banker at Goldman Sachs and worked at top funds like Perry Capital and Moore Capital for 15 years before I became a coach. We are all smart and have the technical skills to do the job; getting ahead is about improving how we interact with our colleagues and clients.
/read.bi/2FYqDTt

John Lothian Newsletter

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Past Newsletters

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Wave Goodbye to Libor. Welcome Its Successor, SOFR

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Math Whiz Trades Without Humans to Build a $700 Million Fortune

Math Whiz Trades Without Humans to Build a $700 Million Fortune

First Read Hits & Takes By JLN Staff Dan Stern is the subject of today's MarketsWiki Education Open Outcry Traders History Project video. Stern is part of a prominent Chicago Board of Trade family of traders and lovers of soccer.~JJL John...

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London Startup Aims to Bring Bond Sales Closer to Automation

First Read Hits & Takes By JLN Staff ADM Investor Services Singapore has joined the Singapore Exchange as a Derivatives Trading and Clearing Member. And Singapore is a long way from Decatur, so this is big news for ADMIS.~JJL Did you know the CME Group offers a...

Nasdaq moves to acquire Oslo Bors by outbidding Euronext; LSE acquires stake in Euroclear

Jan 30, 2019

First Read

Hits & TakesJLN StaffCold. Cold. Cold. Don’t go outside unless you have to if you are in the U.S. Midwest. It is just plain, frostbite creating, death-inducing cold.~JJLMinneapolis is very smart as they have a skyway system between buildings where you don’t have to wear a coat to walk around town. I would still wear a sweater. Other northern cities have them too. The CBOT Building has one that connects to the Cboe, but it has been closed for years.~JJLMy daughter Katherine turned 21 last week. I can’t believe time went by so fast.~JJLEEX shared this: Yesterday, #EEX reached a new daily record volume of 16.9 TWh in Phelix-DE Futures, the benchmark product for European #power trading. The previous record of 16.8 TWh was traded on 14th September 2018.~JJLThe Chinese government started looking at a new version of the long languishing foreign investment law that would address foreign ownership of enterprises in China as part of the country’s opening up initiative. In other China news, Chinese investors, leery of the stock market, are increasingly looking at provincial bonds.~SDBloomberg is reporting that Canada is holding a lottery to decide who gets the stock ticker “POT.”~JJLIt’s an ever-changing market: for a cool infographic, check out this depiction of U.S. stock market sector weightings from 1800 on. (Obviously, there are some approximations in this.)~SD++++++++The Exchange Traded Product That Lost 99% Of Its Value Is Finally DyingLuke Kawa – BloombergVXX matures this week after 10 years betting on volatility; Futures market expected to absorb any large liquidationsThe most popular way to play volatility is going to its grave this week, but the impending death of an exchange-traded note sold by Barclays Plc is not the end of the story for futures traders./bloom.bg/2TjHKlK****The transition out of VXX, and its numerous related VIX futures hedges, to new positions appears to have been orderly, even though VXX headed into Tuesday with a good chunk of its historical AUM in tow (~$500m). For an in depth look at some of the mechanics involved in the maturation of a exchange traded debt obligation that uses derivatives on an index that is calculated using derivatives based upon an index, see this Six Figure Investing blog.~SD++++U.S. Slips Out of Top 20 in Global Corruption IndexCasey Quackenbush – TimeThe U.S. has plummeted in an annual corruption index, falling out of the top 20 countries for the first time since 2011, watchdog Transparency International said in a new report that links the global erosion of democracy and tidal wave of autocrats to an uptick in graft.bit.ly/2sS2sNM****** Did they take Chicago out of the index?~JJL++++‘Life-threatening’ temperatures hit record daily low in ChicagoDavid Struett – Chicago Sun-TimesTemperatures fell early Wednesday to make it the coldest Jan. 30 in Chicago on record.By 4 a.m., it was already minus 19 degrees, which beats the last record daily low of minus 15 on Jan. 30, 1966, the National Weather Service said.Temperatures will continue to fall throughout Wednesday, possibly reaching between minus 20 and minus 28 degrees, the weather service said.bit.ly/2ME5ZZa***** Whatever you want to do today, just don’t do it outside.~JJL++++Chicago Pit Traders Have Weathered Worse Than an Arctic FreezeLydia Mulvany – BloombergScott Shellady, known in the trading pits of Chicago for his trademark “cow jacket,” isn’t going to let a historic blast of Arctic freeze on Wednesday keep him away from the options pits at the world’s largest derivatives exchange, even though many of the city’s workers are planning to hunker down at home. “I come from a family of farmers,” said Shellady, who commutes into the city from northwest Indiana. “And there’s a word in English that describes the weather we’re having. Winter.”/bloom.bg/2sVPOO6***** For Scott Shellady and me, it does not hurt we have some extra insulation to guard from the cold.~JJL++++Why investors suck at selling stocks; Research suggests portfolio managers take the process of buying shares more seriouslyKatie Martin – FTProfessional portfolio managers have two basic functions in life: buying stuff and selling stuff. New research suggests they do a shockingly bad job of the latter, and it is costing them dearly. What is more, they do not even seem to realise they are doing it./on.ft.com/2FUhrPS***** My father always said people know when to buy, but don’t know when to sell. I guess he was right.~JJL++++Is Free Fair To All? (Editorial)Phil Mackintosh – NasdaqIt seems we’re all getting used to getting things for free. Cloud storage, email, social media and lots of the apps we download to our phones.But is free good for a stock market too?The economic problem with providing anything for free is well knownóyou get too much consumption of the free goodówhich is not an efficient use of resources. It’s known as the free-rider problem./goo.gl/n7QxpZ****** Free….Free, Free, Free!++++Tuesday’s Top ThreeOur top story of the day yesterday was Forbes’ How This 24-Year-Old Former NYSE Equity Trader Made History. Second was the info story on Chicago’s mayoral candidates from WBEZ, Chicago Mayoral Election Candidate Questionnaire. There you can see which candidates support or oppose a transaction tax on the financial markets. Third was The Wall Street Journal’s Two Groups Account for $1 Billion in Cryptocurrency Hacks++++MarketsWiki Stats141,230,010 pages viewed; 23,394 pages; 216,374 editsMarketsWiki Statistics++++

CryptoMarketsWiki Website»
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 Recently updated pages includeTRONArwenTrezorBitMEXCryptoMarketsWiki Stats920 pages; 8,157 editsCryptoMarketsWiki Statistics

Lead Stories

Nasdaq makes move to acquire Oslo Bors by outbidding Euronext; Exchange group has said it has unanimous approval from the board of directors at Oslo Bors to acquire the Norwegian exchange for $770 million.Hayley McDowell – The TradeUS exchange operator Nasdaq has officially launched a rival bid for Norwegian stock exchange Oslo Bors with an offer that exceeds Euronext’s initial bid made earlier this month.bit.ly/2FY5vwMLondon Stock Exchange acquires stake in Euroclear; UK exchange group acquires 4.92% stake in Euroclear as two look to work together on commercial collaboration and product development.Jon Watkins – The TradeThe London Stock Exchange (LSE) has acquired a 4.92% stake in Euroclear for EUR278.5 million, following a similar move by one of its trading venue rivals last year.bit.ly/2FZ7DUJFidelity Is Said to Plan March Launch of Bitcoin Custody ServiceMatthew Leising and Alastair Marsh – BloombergService may help institutional investors ease into crypto; Commonplace in other assets, custody’s absence keeps pros outFidelity Investments is targeting a March launch date for its Bitcoin custody service, according to three people with knowledge of the matter, as the mutual-fund giant moves forward with a plan that could help ease fears of trading cryptocurrencies./bloom.bg/2FZ5bxINYSE, Nasdaq Rival Aims to Shed Light on Fee Profits; The exchanges don’t disclose profit margins for these kinds of servicesGretchen Morgenson – WSJBrokerage firms and banks have complained for years about rising fees at big stock exchanges. Now, they are getting a glimpse of the potential profits the exchanges could be making from them. On Tuesday, Investors Exchange, a small exchange that competes with the NYSE, Nasdaq Inc. and Cboe Global Markets Inc. CBOE -1.23% for stock trades, filed an analysis with the Securities and Exchange Commission comparing its costs of providing comparable market data and connectivity to clients with fees levied by the big exchanges./on.wsj.com/2FWy3GJLondon Stock Exchange buys stake in settlement house Euroclear; UK bourse boosts presence in Europe with EUR278m share in one of biggest settlement housesSarah Provan – FTThe London Stock Exchange Group has snapped up a 4.9 per cent stake in Belgian-based settlement house Euroclear, looking to increase its influence in one of the key utilities of global market plumbing./on.ft.com/2FYOanlLSE’s Schwimmer Makes Dealmaking Debut With Euroclear StakeViren Vaghela – BloombergLondon Stock Exchange Group Plc unveiled the first deal under its new leadership, agreeing to take a minority stake in settlement giant Euroclear Holding SA/NV./bloom.bg/2FZ5jNvLondon’s renminbi trading eclipses pound-euro; Trading volumes in the Chinese currency against the US dollar rise 17 per centEva Szalay – FTLondon’s push to become a major trading hub for the Chinese currency is paying off, with trading volumes for the renminbi eclipsing those for the pound against the euro for the first time last year, according to a survey from the Bank of England./on.ft.com/2FWELg0The Brexit Bill: Here’s the Damage So Far; The divorce from the EU might be delayed, softened or even abandoned, but the cost of separation is already apparent.Joe Mayes – BloombergBritain’s vote to leave the European Union has already come at a cost regardless of where Brexit goes from here. Some of the damage is tangible, such as jobs, investment and capital; some of it less so, like international clout and talent./bloom.bg/2FWuPTDTheresa May Survives a Critical Brexit VoteStephen Castle – NY TimesBritish Prime Minister Theresa May survived a critical vote in Parliament on Tuesday that could have delayed Brexit, undermining her strategy for leaving the European Union and undercutting the country’s constitutional protocol./nyti.ms/2DGWUfvJohn Phizackerley receives no further payout from TP ICAPPhilip Stafford – FTJohn Phizackerley received only the minimum legal and contractual entitlements to settle his sacking from TP ICAP last year, the UK interdealer broker disclosed on Wednesday./on.ft.com/2FWAPfbTP ICAP downgrade triggers spat with Moody’s; Agency said lower rating reflected interdealer broker’s increased costs and debt levelsPhilip Stafford – FTTP ICAP has become embroiled in a public dispute with Moody’s Investor Services after the UK interdealer broker was downgraded by the credit rating agency./on.ft.com/2FX2j4jMiFID II sees global equities trade execution rates decline; Analytics on average global commissions shows that rates have declined across developed and emerging markets.Hayley McDowell – The TradeExecution rates on equity trades globally have fallen significantly over the course of 2018 as MiFID II unbundling rules in Europe take hold, according to Greenwich Associates.bit.ly/2FY4DIkEurope should beware the lure of bigger banks; As long as continent-wide deposit insurance remains out of reach, mergers will be riskySimon Samuels – FTIn many ways it was hardly a surprise that the chairman of UBS, Axel Weber, said recently, when commenting on European banks, that “what Europe needs in order to catch up with American firms is European champions, banks that are larger in size”. Last year was a bad one for European bank shares, capping a torrid decade after which, for most large banks, profits and share prices are still well below pre-crisis levels./on.ft.com/2FV1F7D‘Exchanges owe us answers’ says IEX as it discloses market data and connectivity costs; IEX becomes first exchange operator to disclose its costs with the detailed report revealing incumbent exchanges are grossly marking up fees.Hayley McDowell – The TradeInvestors Exchange (IEX) has publicly disclosed its costs of producing market data and connectivity, suggesting that incumbent exchanges could be marking up charges for such services by as much as 4,000%.bit.ly/2G0tbQQLondon Metal Exchange quizzed by regulators on phone trades; European regulations calling for price transparency pose a problem for LME’s phone-tradingBy Samuel Agini – Financial NewsEurope’s top financial regulator has clashed with one of the City of London’s oldest exchanges over a quaint method of trading employed in the metals markets.bit.ly/2FVSMuj

Exchanges, OTC and Clearing

Nasdaq to Make an Offer to Acquire Oslo B¯rs VPS with Unanimous Support from Oslo B¯rs VPS Board of DirectorsGlobeNewswireNasdaq starts bidding war on the Oslo Stock Exchange; While Euronext has secured control over more than half of the shares in the Oslo Stock Exchange, the US Nasdaq comes in from the sidelines. They offer seven kroner more per share than Euronext.Marius Lorentzen, Asgeir Aga Nilsen and Anders Nybakken Kvale -E24Nasdaq AB, which is owned by the US Nasdaq stock exchange, announces on Wednesday that they are now making an offer to buy all the shares in Oslo B¯rs at NOK 152 per share.bit.ly/2FYpfA3Nasdaq bids $771 million for Oslo Bors in Euronext challengeTerje Solsvik, Gwladys Fouche – ReutersNasdaq Inc on Wednesday made a rival bid for Oslo Bors VPS, setting up a takeover battle with Euronext for the 200-year-old Norwegian stock market operator./reut.rs/2G0rhzGNasdaq Announces Quarterly Dividend of $0.44 Per ShareGlobeNewswireThe Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.44 per share on the company’s outstanding common stock. The dividend is payable on March 29, 2019 to shareowners of record at the close of business on March 15, 2019. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.bit.ly/2FY519KNasdaq Private Market Facilitates a Record $12 Billion in Transaction Volume in 2018; Strong market activity and investor demand drives record-setting jump in secondary liquidityGlobeNewswireThe Nasdaq Private Market, LLC (NPM), a leading provider of liquidity solutions for today’s private securities, has released its 2018 Year End Private Company report, which summarizes private company liquidity activity on the NPM platform.bit.ly/2FYRGOGLondon Stock Exchange Group plc announces acquisition of 4.92% stake in Euroclear Holding SA/NVLondon Stock Exchange GroupLondon Stock Exchange Group plc (“LSEG”) announces it will acquire an aggregate 4.92% stake in Euroclear’s share capital for EUR278.5 million (£241.9 million)bit.ly/2G1mDBEStaying ahead of the curve: the fintech trends 2019 (part II)EurexIn the first part of this article, we reported on the most important technology trends that experts expect to disrupt, shift and change the way our industry will do business in 2019. What will Deutsche Bˆrse and especially Eurex do to further implement new technologies such as artificial intelligence (AI), machine learning and blockchain? We spoke to our in-house experts about “what’s cooking” at Deutsche Bˆrse and Eurex.bit.ly/2G0mr5uEquity derivatives: Introduction of Single Stock Futures and equity options; withdrawal of admission of Single Stock Futures and equity optionsEurexThe Management Board of Eurex Deutschland took the following decisions with effect from 4 February 2019:bit.ly/2FUjPWQEEX And GDT Take Next Steps Towards Joint Venture For A European Dairy AuctionMondoVisioneThe European Energy Exchange (EEX) and Global Dairy Trade (GDT) have successfully concluded the initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products.bit.ly/2FWDTb7‘Next steps taken’ towards European dairy auction ventureSylvester Phelan – Agriland.ieThe initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products has been concluded by the European Energy Exchange (EEX) and Global Dairy Trade (GDT).bit.ly/2FUp60A

Fintech

Barchart Announces Integration of OnDemand APIs into MATLABBarchartBarchart, a leading provider of financial market data and technology, has announced a partnership with MathWorks. New integration with MATLAB, the programming environment from MathWorks for algorithm development, data analysis, visualization, and numeric computation will now allow traders, financial engineers, risk managers and analysts currently using MATLAB and its Datafeed Toolbox to directly access Barchart’s OnDemand API solutions and to gain access to Barchart’s data from within MATLAB.bit.ly/2FZeLjXTickSmith Achieves Amazon Web Services Financial Services Competency as well as Advanced Technology Partner Status in the AWS Partner NetworkPR WebTickSmith, a FinTech software company specialized in Big Data technology, announced today that they have achieved Amazon Web Services (AWS) Financial Services Competency status as well as Advance Technology Partner status in the AWS Partner Network (APN). These designations recognizes TickSmith for delivering solutions built on AWS to help financial clients better ingest, manage, and categorize the growing amount of data that firms need to cope with to minimize risk, navigating compliance requirements, and improve the performance of running advanced analytics at scale./goo.gl/pWT8pvAnt Financial raised almost as much money in 2018 as all fintechs in US and EuropeJohn Detrixhe – QuartzWhen it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.bit.ly/2MKHE4cA George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steamDakin Campbell – Business InsiderA fintech startup that acts as a data hub for Wall Street bond investors has raised new money to fuel its expansion just as analysts grow worried about a softening mortgage market and the implications for the American consumer.dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board./read.bi/2ME8ESEGlobal fintech funding has soared but big banks are shying away from buying disruptive upstart firmsMadeline Shi – Business InsiderGlobal fintech funding hit record high last year, but M&A in the space hasn’t followed suit.VC-backed fintech companies raised nearly $40 billion (up 120%) across 1,707 deals globally (up 15%) over the past year, according to data tracker CB Insight’s latest fintech report on Tuesday.Despite this funding surge, big banks have largely stayed on the sidelines when it comes to buying these upstarts./read.bi/2MF3e9Z

Cryptocurrencies

IHS Markit buys stake in blockchain start-up Cobalt; Investment comes as banks hunt for cost savings in currencies trade processingEva Szalay – FTData and analytics company IHS Markit has bought a stake in currencies start-up Cobalt, in an effort to boost the use of blockchain technology to handle the fiddly business of trade processing./on.ft.com/2FW1GrPJPMorgan Says Blockchain Is Making Progress Outside CryptoJoanna Ossinger – BloombergResearch chair Chang says meaningful impact 3-5 years away; Trade finance, supply chain seen as areas for advancementIt may take a few years for blockchain’s impact to be felt meaningfully, but it will provide some advancements in certain areas even as cryptocurrencies falter, according to JPMorgan Chase & Co./bloom.bg/2FY4nt2What Gemini’s ‘Revolution Needs Rules’ Campaign Means For The Crypto CommunitySamantha Radocchia – ForbesRegulations are a tricky subject in even the most established and traditional industries.But in an emerging space, the debate can quickly get heated. For instance, Geminióa crypto exchange headed by the Winklevoss twinsórecently splashed advertising all over NYC. The ads were adorned with the catchy, albeit somewhat cryptic, phrase “Revolution Needs Rules.”bit.ly/2MMKPsdSWIFT Chief Announces Trial DLT Integration With R3Ian Allison – CoindeskSWIFT, the global banking payments network, is to begin testing its gpi payments standard with R3’s Corda platform. Speaking on stage at the Paris Fintech Forum this morning, SWIFT CEO Gottfried Leibbrandt said: “Later today we are announcing integration with R3.”bit.ly/2FYkx5xBlockFi scores new funding from Coinbase Ventures, sets sights on international expansionRyan Todd – The Block CryptoCoinbase Ventures is joining the growing list of investors backing crypto lending, providing an extension of BlockFi’s $4 million convertible note issuance in December.bit.ly/2FYtZplBlow To Bitcoin As CEO Warns Crypto Winter Could Turn ‘Nuclear’Billy Bambrough – ForbesBitcoin and the wider cryptocurrency market has been suffering through a year-long bear market that was branded “crypto winter” late last year for its debilitating effect on the industry.bit.ly/2FYcd5KEuropean Union: ESMA And EBA Publish Supervisory Policy Statements On Crypto-AssetsMichael Huertas – MondaqQuickTake: With a range of issues identified, can the EU afford inaction?The European Banking Authority (EBA) and more recently its sister European Supervisory Authorities (ESAs), the European Securities and Markets Authority (ESMA), as well as the European Insurance and Occupational Pensions Authority (EIOPA) have used 2018 to accelerate their further policymaking or delivery of actions that flow from various “FinTech Action Plans1 as well as their multi-annual supervisory priorities.bit.ly/2FYd5Y4Bitcoin’s Three Biggest Problems In Reaching The MassesPanos Mourdoukoutas – ForbesBitcoin has gained a great deal of buzz in recent years. And it has made a few people very rich in the process. Those who were on the right side of the market at the right time, that is.bit.ly/2FYJKwM

Politics

Trump Says the Economy Is Unstoppable. Most Economists Say OtherwiseJim Tankersley – NY TimesThe Trump administration’s rosy view of the economy is increasingly diverging from a decidedly more cautious outlook from other prognosticators, including economists at the Federal Reserve and elsewhere, who are warning that growth is slowing, in part because of the president’s own policies./nyti.ms/2FW2IEdHarley-Davidson Profit Is Wiped Out by President Trump’s TariffsGabrielle Coppola – BloombergEarnings per share miss estimates by widest margin since 2009; Retail deliveries in home market dropped 10% in fourth quarterHarley-Davidson Inc. barely broke even in the last quarter of a year in which the struggling American icon got caught up in President Donald Trump’s trade wars. The motorcycle maker’s shares plunged the most in a year./bloom.bg/2FW0eFTMalpass emerges as leading contender to head World Bank; US Treasury undersecretary has struck a sceptical tone on multilateral institutionsSam Fleming – FTThe US is narrowing its list of potential nominees to lead the World Bank, with David Malpass, a senior Treasury official, emerging as one of its finalists, people familiar with the matter said./on.ft.com/2FYkF4PSteven Mnuchin Draws Claims of Conflict of Interest in Decision on Russian OligarchKenneth P. Vogel – NY TimesDemocrats in Congress raised ethical concerns on Tuesday about connections between Treasury Secretary Steven Mnuchin and a billionaire Republican donor who stands to benefit financially from the Trump administration’s decision to lift sanctions on the Russian oligarch Oleg V. Deripaska’s companies./nyti.ms/2FWvEffTrump Will ‘Never Be Safe’ From Russian Intelligence and Will Have ‘No Defense,’ Retired General SaysJason Lemon- NewsweekRetired four-star General Barry McCaffrey warned that President Donald Trump will “never be safe” from Russian intelligence due to his one-on-one private meeting with President Vladimir Putin in Helsinki last year.bit.ly/2G2mCh1

Regulation

ESMA appoints new chair of the Investment Management Standing CommitteeESMAThe Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed the following individual to serve as chair of its Investment Management Standing Committee (IMSC):bit.ly/2G0nBOoESMA updates Q&A on Benchmark RegulationESMAThe European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmark Regulation (BMR).bit.ly/2FXAwkqProposed Rule Change to Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps)FINRAFinancial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 12, 2020. FINRA Rule 0180 temporarily limits, with certain exceptions, the application of FINRA rules with respect to security-based swaps.bit.ly/2FY5U24Proposed Rule Change to Expand Time for Non-Parties to Respond to Arbitration Subpoenas and Orders of Appearance of Witnesses or Production of DocumentsFINRAFinancial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 12512(d) through (e) and FINRA Rule 12513(d) through (e) of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rule 13512(d) through (e) and FINRA Rule 13513(d) through (e) of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to expand time for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents, and to make related changes to enhance the discovery process for forum users.bit.ly/2G1o2IqProposed Rule Change Relating to FINRA Rule 6750 (Dissemination of Transaction Information)FINRAFinancial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 6750 to provide that FINRA may publish or distribute aggregated transaction information and statistics on non-disseminated TRACE-Eligible Securities at no charge.bit.ly/2FWYMmzCFTC’s Release Schedule for Delayed Market Data ReportsCFTCThe Commodity Futures Trading Commission’s (CFTC) Market Intelligence Branch of the Division of Market Oversight today announced an updated release schedule for CFTC market data reports that were delayed during the lapse in appropriations. The goal of the new report schedule is to provide market participants with data as quickly as possible, given the agency’s resource constraints.bit.ly/2FZ9hWCFCA proposes new measures to encourage effective stewardshipUK FCAThe FCA is proposing new measures and gathering views on how to encourage effective stewardship in the interests of investors. Most UK consumers hold investments, for example through their pensions, which are looked after by asset managers. Asset managers have a duty to oversee these investments in their clients’ interests.bit.ly/2FYRFtZFCA launches consultation on General Insurance value measures dataUK FCAToday the Financial Conduct Authority (FCA) has launched a consultation proposing new rules requiring firms to report General Insurance (GI) value measures data to the FCA for publication. Alongside the Consultation Paper, the FCA has also published a third annual value measures dataset, covering the period August 2017-August 2018.bit.ly/2FXoqI3Commissioner Berkovitz states his opposition to proposed swap trading rulesBrad Rosen – Wolters KluwerIn remarks before the Commodity Markets Council State of the Industry 2019 conference, Commissioner Dan Berkovitz lays out a comprehensive argument that the CFTC’s proposed swaps trade execution requirement undermines competition/goo.gl/b63wRWStandard Chartered fined $40M for currency rigging ‘cartel’Kevin Dugan – NY PostA top Wall Street watchdog on Tuesday slapped a big bank with a $40 million fine over a brazen currency rigging scheme that had traders referring to themselves as a “cartel” and openly boasting about their ability to “bully” other currency traders./nyp.st/2G2aBbpAs the EUR500 note slowly dies, Harvard economist Kenneth Rogoff is getting his wishJohn Detrixhe – QuartzFor lovers of large-denomination paper money, Harvard economist Kenneth Rogoff is enemy No. 1. His book, The Curse of Cash, outlines the case for getting rid of as much of paper money as possible, and larger notes in particular, because of the role cash plays in money laundering and tax evasion.bit.ly/2FX1d8U

Investing and Trading

New UK stewardship code to look at adoption of ESG criteria; Auditing watchdog consults on principles to dictate how asset managers will police investee groupsOwen Walker – FTThe UK’s auditing watchdog has proposed that fund managers take environmental, social and governance factors into account when overseeing the companies in which they invest./on.ft.com/2FUhPPwC and EY to ban non-essential consulting for audit clients; Industry has faced criticism after string of high-profile accounting scandalsMadison Marriage – FTPwC and EY said on Tuesday that they will stop providing non-essential consulting services to audit clients by 2020./on.ft.com/2FYavByConflict of interest changes open doors for specialist consultancies; Proposals increase scrutiny of big firms but create opportunities for smaller rivalsAndrew Hill – FTAdvice about risk and regulation has been a big growth area for the largest consultants in recent years. Now the biggest firms ó notably the Big Four accountancy and professional services groups ó may need to take their own medicine./on.ft.com/2FWPJ5aGE Powered the American CenturyóThen It Burned Out; How the company that was once America’s biggest, the maker of power turbines, the seller of insurance, the broadcaster of ‘Seinfeld,’ became a shadow of its former selfThomas Gryta and Ted Mann – WSJThey came by the dozens in luxury sedans, black Ubers and sleek helicopters. As they did each August, General Electric’s most important executives descended on a hilltop above the Hudson River for their annual leadership gathering./on.wsj.com/2FY95a0Charting GE’s Historic Rise and Tortured DownfallBloombergGeneral Electric Co. has unraveled. The onetime icon of American industry last year suffered its biggest annual stock decline of the modern era as it was booted from the Dow Jones Industrial Average; investors were blindsided by multiple multibillion-dollar charges against earnings; and the board ousted the chief executive officer, handing the reins to an outsider for the first time ever. Meanwhile, the company’s pension remains the most underfunded in the country, its accounting is under federal investigation and its power segment is searching for a way out of a terrible slump./bloom.bg/2FYntz5SanBio’s crash causes margin calls, drags down Japan’s start-up marketAyai Tomisawa – ReutersA crash by a Tokyo biopharmaceutical firm’s shares on Wednesday ended a month-long rally in Japan’s start-up market that was fueled by retail investors feeling small-cap stocks could rise despite global economic risks./reut.rs/2FXTVS3Disclosure is a lure for green bond investors; Saving the planet is not first priority for some in the environmental finance marketKate Allen – FTSales of green bonds have boomed from zero to almost $200bn a year in just over a decade. This explosive growth has been largely ascribed to investors’ eagerness to back companies promising to improve the environment, but there is another powerful reason why green bonds have become popular: disclosure./on.ft.com/2G0tZoQ

Institutions

SocGen Plans Investment Bank Job Cuts After Trading SlumpFabio Benedetti Valentini – BloombergBank said to plan saving at least 100 million euros annually; SocGen said to be weighing cuts in areas such as fixed incomeSociete Generale SA is making a last-ditch effort to boost its performance after a trading slump threatened Chief Executive Officer Frederic Oudea’s targets./bloom.bg/2FYJPRcCredit Suisse Wins Bid to See Secret Bank Bonus Data in Tax CaseKaye Wiggins – BloombergLondon court lets Swiss lender see how much other banks paid; Figures to be disclosed in lawsuit over crisis-era bonus levyCredit Suisse Group AG won a court bid to see how much money its rivals paid under a one-time U.K. banker bonus tax that was levied amid public anger in the wake of the financial crisis./bloom.bg/2G0kDJKVenezuela Has 20 Tons of Gold Ready to Ship. Address UnknownPatricia Laya and Andrew Rosati – BloombergLawmaker claims Russian airplane has come to whisk it away; Gold accounts for much of the country’s remaining hard assetsVenezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank./bloom.bg/2FYIcD4Treasury agency had role in controversial RBS unit GRGAndy Verity – BBCEvidence has emerged of a government agency’s role in the Royal Bank of Scotland’s (RBS) controversial Global Restructuring Group (GRG). The Asset Protection Agency influenced GRG’s strategy including decisions that determined business customers’ fortunes, the BBC has learnt./bbc.in/2FUe8YYExclusive: U.S. regulator drops fine against Citi over fair-lending claims – sourcesPatrick Rucker – ReutersA top U.S. bank regulator has decided not to fine Citigroup for discriminating against minority mortgage borrowers, dropping the public rebuke that some officials had sought, two people familiar with the matter told Reuters./reut.rs/2FYhPgiJanus Henderson closes Australian equities funds worth $352 millionPaulina Duran – ReutersFund manager Janus Henderson is closing down its three Australian equities funds due to tough fund-raising conditions, and will return nearly A$490 million ($352.65 million) to investors, a company spokeswoman said on Wednesday./reut.rs/2FYcOo0Goldman Sachs securities division engineering co-head to retire: memoReutersGoldman Sachs Group Inc said on Tuesday that Konstantin Shakhnovich, co-head of engineering for the U.S. bank’s securities division, is retiring, according to a memo seen by Reuters./reut.rs/2FYpEmf

Regions

S&P route into China’s $12tn bond market faces perils; First licence for foreign credit-rating agency promises to unlock flows from abroadDon Weinland and Emma Dunkley – FTS&P Global’s breakthrough into China’s domestic ratings scene is promising to bring a new level of clarity to foreign investors hoping to take a bigger slice of the country’s $12tn bond market./on.ft.com/2FW1NDLEuropean Cannabis Products Have Been More Popular Than ExpectedSam Unsted – BloombergThe pot growth story has mostly focused on developments in Canada and the U.S., but one broker says medical cannabis and wellness products are proving a bigger money spinner than it had expected in Europe./bloom.bg/2FZbCR8U.S. Midwest Freezes, Australia Burns: This Is the Age of Weather ExtremesSomini Sengupta – NY TimesIn Chicago, officials warned about the risk of almost instant frostbite on what could be the city’s coldest day ever. Warming centers opened around the Midwest. And schools and universities closed throughout the region as rare polar winds streamed down from the Arctic./nyti.ms/2FYkyWXEight Asian Billionaires Aged Over 90 Control $125 BillionVenus Feng – BloombergIt’s been a mournful start to 2019 for two of Asia’s richest families. Eka Tjipta Widjaja, who began as a coconut and palm-oil trader at age 15 before building a multibillion-dollar empire in Indonesia, died Saturday at 98. A week earlier, Henry Sy, a shoe salesman who became the wealthiest man in the Philippines, died at 94. Their combined fortunes exceeded $16.5 billion./bloom.bg/2FYZMXABrazilian coffee glut weighs on global growers; Record output drives down prices and piles pressure on farmersEmiko Terazono – FTAll eyes in the coffee market are on Brazil, as record production levels have knocked global prices to near 12-year lows./on.ft.com/2FYowPxJapan’s 10-day holiday stirs concern in traders and investorsHideyuki Sano, Tomo Uetake – ReutersTo mark the ascension of Japan’s new emperor, the government has declared an unprecedented 10-day holiday from late April to early May, worrying investors, who say a market shutdown could cause disruption and unsettle the yen./reut.rs/2FYetdqWant to Bet on Currency Market Risk? The Aussie Is Fast Becoming Main Game in TownCormac Mullen – BloombergAUD correlations with stocks higher than other DM and EM FX; Currency one of the cheapest risk-off hedges in FX, RBC SaysAustralia’s dollar, a favorite among traders for betting on risk in currency markets, is even more attractive than usual as a proxy, Royal Bank of Canada says./bloom.bg/2G2lOJ1Canada Is Holding a Lottery to Decide Who Gets the Stock Ticker POTKristine Owram – BloombergExchanges to hold first random lottery to determine winner; POT likely to join tickers WEED and MJ in cannabis lexiconThe stock symbol POT is up for grabs on Canadian exchanges and demand is so high that they’re holding a lottery for the first time ever to determine who gets it./bloom.bg/2FX455t

Brexit

Parliamentary backing sets May on Brexit collision course with EU; Prime minister’s U-turn persuades Eurosceptics to support her move to renegotiate dealGeorge Parker, Laura Hughes and Alex Barker – FTTheresa May faces a clash with Brussels after the House of Commons backed her efforts to rewrite her own draft Brexit treaty, an attempt to break the deadlock at Westminster./on.ft.com/2FY2JYc

Miscellaneous

After 15 years on Wall Street, I use a 100-year-old psychology framework to show bankers and hedge funders how to get to the topJustin Doyle, Level Up with JDI am an executive coach for senior professionals in investment banking, private equity and hedge funds. I help them get promoted and make more money in smarter ways with less stress. I was an M&A banker at Goldman Sachs and worked at top funds like Perry Capital and Moore Capital for 15 years before I became a coach. We are all smart and have the technical skills to do the job; getting ahead is about improving how we interact with our colleagues and clients./read.bi/2FYqDTt

John Lothian Newsletter

So you want to know what’s happening in the financial markets?We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

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CEO, Trading Technologies

Past Newsletters

Wave Goodbye to Libor. Welcome Its Successor, SOFR

Wave Goodbye to Libor. Welcome Its Successor, SOFR

First Read Grayscale wants digital asset regulators and investors to get along Matt Raebel - John Lothian News When you lose your digital assets, there isn't exactly a 1-800 number you can call to seek legal recompense. It's still the Wild West...

Math Whiz Trades Without Humans to Build a $700 Million Fortune

Math Whiz Trades Without Humans to Build a $700 Million Fortune

First Read Hits & Takes By JLN Staff Dan Stern is the subject of today's MarketsWiki Education Open Outcry Traders History Project video. Stern is part of a prominent Chicago Board of Trade family of traders and lovers of soccer.~JJL John...

London Startup Aims to Bring Bond Sales Closer to Automation

London Startup Aims to Bring Bond Sales Closer to Automation

First Read Hits & Takes By JLN Staff ADM Investor Services Singapore has joined the Singapore Exchange as a Derivatives Trading and Clearing Member. And Singapore is a long way from Decatur, so this is big news for ADMIS.~JJL Did you know the CME Group offers a...

Nasdaq moves to acquire Oslo Bors by outbidding Euronext; LSE acquires stake in Euroclear

Jan 30, 2019

First Read

Hits & Takes
JLN Staff

Cold. Cold. Cold. Don’t go outside unless you have to if you are in the U.S. Midwest. It is just plain, frostbite creating, death-inducing cold.~JJL

Minneapolis is very smart as they have a skyway system between buildings where you don’t have to wear a coat to walk around town. I would still wear a sweater. Other northern cities have them too. The CBOT Building has one that connects to the Cboe, but it has been closed for years.~JJL

My daughter Katherine turned 21 last week. I can’t believe time went by so fast.~JJL

EEX shared this: Yesterday, #EEX reached a new daily record volume of 16.9 TWh in Phelix-DE Futures, the benchmark product for European #power trading. The previous record of 16.8 TWh was traded on 14th September 2018.~JJL

The Chinese government started looking at a new version of the long languishing foreign investment law that would address foreign ownership of enterprises in China as part of the country’s opening up initiative. In other China news, Chinese investors, leery of the stock market, are increasingly looking at provincial bonds.~SD

Bloomberg is reporting that Canada is holding a lottery to decide who gets the stock ticker “POT.”~JJL

It’s an ever-changing market: for a cool infographic, check out this depiction of U.S. stock market sector weightings from 1800 on. (Obviously, there are some approximations in this.)~SD

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The Exchange Traded Product That Lost 99% Of Its Value Is Finally Dying
Luke Kawa – Bloomberg
VXX matures this week after 10 years betting on volatility; Futures market expected to absorb any large liquidations
The most popular way to play volatility is going to its grave this week, but the impending death of an exchange-traded note sold by Barclays Plc is not the end of the story for futures traders.
/bloom.bg/2TjHKlK

****The transition out of VXX, and its numerous related VIX futures hedges, to new positions appears to have been orderly, even though VXX headed into Tuesday with a good chunk of its historical AUM in tow (~$500m). For an in depth look at some of the mechanics involved in the maturation of a exchange traded debt obligation that uses derivatives on an index that is calculated using derivatives based upon an index, see this Six Figure Investing blog.~SD

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U.S. Slips Out of Top 20 in Global Corruption Index
Casey Quackenbush – Time
The U.S. has plummeted in an annual corruption index, falling out of the top 20 countries for the first time since 2011, watchdog Transparency International said in a new report that links the global erosion of democracy and tidal wave of autocrats to an uptick in graft.
bit.ly/2sS2sNM

****** Did they take Chicago out of the index?~JJL

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‘Life-threatening’ temperatures hit record daily low in Chicago
David Struett – Chicago Sun-Times
Temperatures fell early Wednesday to make it the coldest Jan. 30 in Chicago on record.
By 4 a.m., it was already minus 19 degrees, which beats the last record daily low of minus 15 on Jan. 30, 1966, the National Weather Service said.
Temperatures will continue to fall throughout Wednesday, possibly reaching between minus 20 and minus 28 degrees, the weather service said.
bit.ly/2ME5ZZa

***** Whatever you want to do today, just don’t do it outside.~JJL

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Chicago Pit Traders Have Weathered Worse Than an Arctic Freeze
Lydia Mulvany – Bloomberg
Scott Shellady, known in the trading pits of Chicago for his trademark “cow jacket,” isn’t going to let a historic blast of Arctic freeze on Wednesday keep him away from the options pits at the world’s largest derivatives exchange, even though many of the city’s workers are planning to hunker down at home. “I come from a family of farmers,” said Shellady, who commutes into the city from northwest Indiana. “And there’s a word in English that describes the weather we’re having. Winter.”
/bloom.bg/2sVPOO6

***** For Scott Shellady and me, it does not hurt we have some extra insulation to guard from the cold.~JJL

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Why investors suck at selling stocks; Research suggests portfolio managers take the process of buying shares more seriously
Katie Martin – FT
Professional portfolio managers have two basic functions in life: buying stuff and selling stuff. New research suggests they do a shockingly bad job of the latter, and it is costing them dearly. What is more, they do not even seem to realise they are doing it.
/on.ft.com/2FUhrPS

***** My father always said people know when to buy, but don’t know when to sell. I guess he was right.~JJL

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Is Free Fair To All? (Editorial)
Phil Mackintosh – Nasdaq
It seems we’re all getting used to getting things for free. Cloud storage, email, social media and lots of the apps we download to our phones.
But is free good for a stock market too?
The economic problem with providing anything for free is well knownóyou get too much consumption of the free goodówhich is not an efficient use of resources. It’s known as the free-rider problem.
/goo.gl/n7QxpZ

****** Free….Free, Free, Free!

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Tuesday’s Top Three
Our top story of the day yesterday was Forbes’ How This 24-Year-Old Former NYSE Equity Trader Made History. Second was the info story on Chicago’s mayoral candidates from WBEZ, Chicago Mayoral Election Candidate Questionnaire. There you can see which candidates support or oppose a transaction tax on the financial markets. Third was The Wall Street Journal’s Two Groups Account for $1 Billion in Cryptocurrency Hacks

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MarketsWiki Stats
141,230,010 pages viewed; 23,394 pages; 216,374 edits
MarketsWiki Statistics

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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.

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Lead Stories

Nasdaq makes move to acquire Oslo Bors by outbidding Euronext; Exchange group has said it has unanimous approval from the board of directors at Oslo Bors to acquire the Norwegian exchange for $770 million.
Hayley McDowell – The Trade
US exchange operator Nasdaq has officially launched a rival bid for Norwegian stock exchange Oslo Bors with an offer that exceeds Euronext’s initial bid made earlier this month.
bit.ly/2FY5vwM

London Stock Exchange acquires stake in Euroclear; UK exchange group acquires 4.92% stake in Euroclear as two look to work together on commercial collaboration and product development.
Jon Watkins – The Trade
The London Stock Exchange (LSE) has acquired a 4.92% stake in Euroclear for EUR278.5 million, following a similar move by one of its trading venue rivals last year.
bit.ly/2FZ7DUJ

Fidelity Is Said to Plan March Launch of Bitcoin Custody Service
Matthew Leising and Alastair Marsh – Bloomberg
Service may help institutional investors ease into crypto; Commonplace in other assets, custody’s absence keeps pros out
Fidelity Investments is targeting a March launch date for its Bitcoin custody service, according to three people with knowledge of the matter, as the mutual-fund giant moves forward with a plan that could help ease fears of trading cryptocurrencies.
/bloom.bg/2FZ5bxI

NYSE, Nasdaq Rival Aims to Shed Light on Fee Profits; The exchanges don’t disclose profit margins for these kinds of services
Gretchen Morgenson – WSJ
Brokerage firms and banks have complained for years about rising fees at big stock exchanges. Now, they are getting a glimpse of the potential profits the exchanges could be making from them. On Tuesday, Investors Exchange, a small exchange that competes with the NYSE, Nasdaq Inc. and Cboe Global Markets Inc. CBOE -1.23% for stock trades, filed an analysis with the Securities and Exchange Commission comparing its costs of providing comparable market data and connectivity to clients with fees levied by the big exchanges.
/on.wsj.com/2FWy3GJ

London Stock Exchange buys stake in settlement house Euroclear; UK bourse boosts presence in Europe with EUR278m share in one of biggest settlement houses
Sarah Provan – FT
The London Stock Exchange Group has snapped up a 4.9 per cent stake in Belgian-based settlement house Euroclear, looking to increase its influence in one of the key utilities of global market plumbing.
/on.ft.com/2FYOanl

LSE’s Schwimmer Makes Dealmaking Debut With Euroclear Stake
Viren Vaghela – Bloomberg
London Stock Exchange Group Plc unveiled the first deal under its new leadership, agreeing to take a minority stake in settlement giant Euroclear Holding SA/NV.
/bloom.bg/2FZ5jNv

London’s renminbi trading eclipses pound-euro; Trading volumes in the Chinese currency against the US dollar rise 17 per cent
Eva Szalay – FT
London’s push to become a major trading hub for the Chinese currency is paying off, with trading volumes for the renminbi eclipsing those for the pound against the euro for the first time last year, according to a survey from the Bank of England.
/on.ft.com/2FWELg0

The Brexit Bill: Here’s the Damage So Far; The divorce from the EU might be delayed, softened or even abandoned, but the cost of separation is already apparent.
Joe Mayes – Bloomberg
Britain’s vote to leave the European Union has already come at a cost regardless of where Brexit goes from here. Some of the damage is tangible, such as jobs, investment and capital; some of it less so, like international clout and talent.
/bloom.bg/2FWuPTD

Theresa May Survives a Critical Brexit Vote
Stephen Castle – NY Times
British Prime Minister Theresa May survived a critical vote in Parliament on Tuesday that could have delayed Brexit, undermining her strategy for leaving the European Union and undercutting the country’s constitutional protocol.
/nyti.ms/2DGWUfv

John Phizackerley receives no further payout from TP ICAP
Philip Stafford – FT
John Phizackerley received only the minimum legal and contractual entitlements to settle his sacking from TP ICAP last year, the UK interdealer broker disclosed on Wednesday.
/on.ft.com/2FWAPfb

TP ICAP downgrade triggers spat with Moody’s; Agency said lower rating reflected interdealer broker’s increased costs and debt levels
Philip Stafford – FT
TP ICAP has become embroiled in a public dispute with Moody’s Investor Services after the UK interdealer broker was downgraded by the credit rating agency.
/on.ft.com/2FX2j4j

MiFID II sees global equities trade execution rates decline; Analytics on average global commissions shows that rates have declined across developed and emerging markets.
Hayley McDowell – The Trade
Execution rates on equity trades globally have fallen significantly over the course of 2018 as MiFID II unbundling rules in Europe take hold, according to Greenwich Associates.
bit.ly/2FY4DIk

Europe should beware the lure of bigger banks; As long as continent-wide deposit insurance remains out of reach, mergers will be risky
Simon Samuels – FT
In many ways it was hardly a surprise that the chairman of UBS, Axel Weber, said recently, when commenting on European banks, that “what Europe needs in order to catch up with American firms is European champions, banks that are larger in size”. Last year was a bad one for European bank shares, capping a torrid decade after which, for most large banks, profits and share prices are still well below pre-crisis levels.
/on.ft.com/2FV1F7D

‘Exchanges owe us answers’ says IEX as it discloses market data and connectivity costs; IEX becomes first exchange operator to disclose its costs with the detailed report revealing incumbent exchanges are grossly marking up fees.
Hayley McDowell – The Trade
Investors Exchange (IEX) has publicly disclosed its costs of producing market data and connectivity, suggesting that incumbent exchanges could be marking up charges for such services by as much as 4,000%.
bit.ly/2G0tbQQ

London Metal Exchange quizzed by regulators on phone trades; European regulations calling for price transparency pose a problem for LME’s phone-trading
By Samuel Agini – Financial News
Europe’s top financial regulator has clashed with one of the City of London’s oldest exchanges over a quaint method of trading employed in the metals markets.
bit.ly/2FVSMuj

Exchanges, OTC and Clearing

Nasdaq to Make an Offer to Acquire Oslo B¯rs VPS with Unanimous Support from Oslo B¯rs VPS Board of Directors
GlobeNewswire
Nasdaq starts bidding war on the Oslo Stock Exchange; While Euronext has secured control over more than half of the shares in the Oslo Stock Exchange, the US Nasdaq comes in from the sidelines. They offer seven kroner more per share than Euronext.
Marius Lorentzen, Asgeir Aga Nilsen and Anders Nybakken Kvale -E24
Nasdaq AB, which is owned by the US Nasdaq stock exchange, announces on Wednesday that they are now making an offer to buy all the shares in Oslo B¯rs at NOK 152 per share.
bit.ly/2FYpfA3

Nasdaq bids $771 million for Oslo Bors in Euronext challenge
Terje Solsvik, Gwladys Fouche – Reuters
Nasdaq Inc on Wednesday made a rival bid for Oslo Bors VPS, setting up a takeover battle with Euronext for the 200-year-old Norwegian stock market operator.
/reut.rs/2G0rhzG

Nasdaq Announces Quarterly Dividend of $0.44 Per Share
GlobeNewswire
The Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.44 per share on the company’s outstanding common stock. The dividend is payable on March 29, 2019 to shareowners of record at the close of business on March 15, 2019. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
bit.ly/2FY519K

Nasdaq Private Market Facilitates a Record $12 Billion in Transaction Volume in 2018; Strong market activity and investor demand drives record-setting jump in secondary liquidity
GlobeNewswire
The Nasdaq Private Market, LLC (NPM), a leading provider of liquidity solutions for today’s private securities, has released its 2018 Year End Private Company report, which summarizes private company liquidity activity on the NPM platform.
bit.ly/2FYRGOG

London Stock Exchange Group plc announces acquisition of 4.92% stake in Euroclear Holding SA/NV
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG”) announces it will acquire an aggregate 4.92% stake in Euroclear’s share capital for EUR278.5 million (£241.9 million)
bit.ly/2G1mDBE

Staying ahead of the curve: the fintech trends 2019 (part II)
Eurex
In the first part of this article, we reported on the most important technology trends that experts expect to disrupt, shift and change the way our industry will do business in 2019. What will Deutsche Bˆrse and especially Eurex do to further implement new technologies such as artificial intelligence (AI), machine learning and blockchain? We spoke to our in-house experts about “what’s cooking” at Deutsche Bˆrse and Eurex.
bit.ly/2G0mr5u

Equity derivatives: Introduction of Single Stock Futures and equity options; withdrawal of admission of Single Stock Futures and equity options
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 4 February 2019:
bit.ly/2FUjPWQ

EEX And GDT Take Next Steps Towards Joint Venture For A European Dairy Auction
MondoVisione
The European Energy Exchange (EEX) and Global Dairy Trade (GDT) have successfully concluded the initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products.
bit.ly/2FWDTb7

‘Next steps taken’ towards European dairy auction venture
Sylvester Phelan – Agriland.ie
The initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products has been concluded by the European Energy Exchange (EEX) and Global Dairy Trade (GDT).
bit.ly/2FUp60A

Fintech

Barchart Announces Integration of OnDemand APIs into MATLAB
Barchart
Barchart, a leading provider of financial market data and technology, has announced a partnership with MathWorks. New integration with MATLAB, the programming environment from MathWorks for algorithm development, data analysis, visualization, and numeric computation will now allow traders, financial engineers, risk managers and analysts currently using MATLAB and its Datafeed Toolbox to directly access Barchart’s OnDemand API solutions and to gain access to Barchart’s data from within MATLAB.
bit.ly/2FZeLjX

TickSmith Achieves Amazon Web Services Financial Services Competency as well as Advanced Technology Partner Status in the AWS Partner Network
PR Web
TickSmith, a FinTech software company specialized in Big Data technology, announced today that they have achieved Amazon Web Services (AWS) Financial Services Competency status as well as Advance Technology Partner status in the AWS Partner Network (APN). These designations recognizes TickSmith for delivering solutions built on AWS to help financial clients better ingest, manage, and categorize the growing amount of data that firms need to cope with to minimize risk, navigating compliance requirements, and improve the performance of running advanced analytics at scale.
/goo.gl/pWT8pv

Ant Financial raised almost as much money in 2018 as all fintechs in US and Europe
John Detrixhe – Quartz
When it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.
bit.ly/2MKHE4c

A George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steam
Dakin Campbell – Business Insider
A fintech startup that acts as a data hub for Wall Street bond investors has raised new money to fuel its expansion just as analysts grow worried about a softening mortgage market and the implications for the American consumer.
dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board.
/read.bi/2ME8ESE

Global fintech funding has soared but big banks are shying away from buying disruptive upstart firms
Madeline Shi – Business Insider
Global fintech funding hit record high last year, but M&A in the space hasn’t followed suit.
VC-backed fintech companies raised nearly $40 billion (up 120%) across 1,707 deals globally (up 15%) over the past year, according to data tracker CB Insight’s latest fintech report on Tuesday.
Despite this funding surge, big banks have largely stayed on the sidelines when it comes to buying these upstarts.
/read.bi/2MF3e9Z

Cryptocurrencies

IHS Markit buys stake in blockchain start-up Cobalt; Investment comes as banks hunt for cost savings in currencies trade processing
Eva Szalay – FT
Data and analytics company IHS Markit has bought a stake in currencies start-up Cobalt, in an effort to boost the use of blockchain technology to handle the fiddly business of trade processing.
/on.ft.com/2FW1GrP

JPMorgan Says Blockchain Is Making Progress Outside Crypto
Joanna Ossinger – Bloomberg
Research chair Chang says meaningful impact 3-5 years away; Trade finance, supply chain seen as areas for advancement
It may take a few years for blockchain’s impact to be felt meaningfully, but it will provide some advancements in certain areas even as cryptocurrencies falter, according to JPMorgan Chase & Co.
/bloom.bg/2FY4nt2

What Gemini’s ‘Revolution Needs Rules’ Campaign Means For The Crypto Community
Samantha Radocchia – Forbes
Regulations are a tricky subject in even the most established and traditional industries.
But in an emerging space, the debate can quickly get heated. For instance, Geminióa crypto exchange headed by the Winklevoss twinsórecently splashed advertising all over NYC. The ads were adorned with the catchy, albeit somewhat cryptic, phrase “Revolution Needs Rules.”
bit.ly/2MMKPsd

SWIFT Chief Announces Trial DLT Integration With R3
Ian Allison – Coindesk
SWIFT, the global banking payments network, is to begin testing its gpi payments standard with R3’s Corda platform. Speaking on stage at the Paris Fintech Forum this morning, SWIFT CEO Gottfried Leibbrandt said: “Later today we are announcing integration with R3.”
bit.ly/2FYkx5x

BlockFi scores new funding from Coinbase Ventures, sets sights on international expansion
Ryan Todd – The Block Crypto
Coinbase Ventures is joining the growing list of investors backing crypto lending, providing an extension of BlockFi’s $4 million convertible note issuance in December.
bit.ly/2FYtZpl

Blow To Bitcoin As CEO Warns Crypto Winter Could Turn ‘Nuclear’
Billy Bambrough – Forbes
Bitcoin and the wider cryptocurrency market has been suffering through a year-long bear market that was branded “crypto winter” late last year for its debilitating effect on the industry.
bit.ly/2FYcd5K

European Union: ESMA And EBA Publish Supervisory Policy Statements On Crypto-Assets
Michael Huertas – Mondaq
QuickTake: With a range of issues identified, can the EU afford inaction?
The European Banking Authority (EBA) and more recently its sister European Supervisory Authorities (ESAs), the European Securities and Markets Authority (ESMA), as well as the European Insurance and Occupational Pensions Authority (EIOPA) have used 2018 to accelerate their further policymaking or delivery of actions that flow from various “FinTech Action Plans1 as well as their multi-annual supervisory priorities.
bit.ly/2FYd5Y4

Bitcoin’s Three Biggest Problems In Reaching The Masses
Panos Mourdoukoutas – Forbes
Bitcoin has gained a great deal of buzz in recent years. And it has made a few people very rich in the process. Those who were on the right side of the market at the right time, that is.
bit.ly/2FYJKwM

Politics

Trump Says the Economy Is Unstoppable. Most Economists Say Otherwise
Jim Tankersley – NY Times
The Trump administration’s rosy view of the economy is increasingly diverging from a decidedly more cautious outlook from other prognosticators, including economists at the Federal Reserve and elsewhere, who are warning that growth is slowing, in part because of the president’s own policies.
/nyti.ms/2FW2IEd

Harley-Davidson Profit Is Wiped Out by President Trump’s Tariffs
Gabrielle Coppola – Bloomberg
Earnings per share miss estimates by widest margin since 2009; Retail deliveries in home market dropped 10% in fourth quarter
Harley-Davidson Inc. barely broke even in the last quarter of a year in which the struggling American icon got caught up in President Donald Trump’s trade wars. The motorcycle maker’s shares plunged the most in a year.
/bloom.bg/2FW0eFT

Malpass emerges as leading contender to head World Bank; US Treasury undersecretary has struck a sceptical tone on multilateral institutions
Sam Fleming – FT
The US is narrowing its list of potential nominees to lead the World Bank, with David Malpass, a senior Treasury official, emerging as one of its finalists, people familiar with the matter said.
/on.ft.com/2FYkF4P

Steven Mnuchin Draws Claims of Conflict of Interest in Decision on Russian Oligarch
Kenneth P. Vogel – NY Times
Democrats in Congress raised ethical concerns on Tuesday about connections between Treasury Secretary Steven Mnuchin and a billionaire Republican donor who stands to benefit financially from the Trump administration’s decision to lift sanctions on the Russian oligarch Oleg V. Deripaska’s companies.
/nyti.ms/2FWvEff

Trump Will ‘Never Be Safe’ From Russian Intelligence and Will Have ‘No Defense,’ Retired General Says
Jason Lemon- Newsweek
Retired four-star General Barry McCaffrey warned that President Donald Trump will “never be safe” from Russian intelligence due to his one-on-one private meeting with President Vladimir Putin in Helsinki last year.
bit.ly/2G2mCh1

Regulation

ESMA appoints new chair of the Investment Management Standing Committee
ESMA
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed the following individual to serve as chair of its Investment Management Standing Committee (IMSC):
bit.ly/2G0nBOo

ESMA updates Q&A on Benchmark Regulation
ESMA
The European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmark Regulation (BMR).
bit.ly/2FXAwkq

Proposed Rule Change to Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps)
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 12, 2020. FINRA Rule 0180 temporarily limits, with certain exceptions, the application of FINRA rules with respect to security-based swaps.
bit.ly/2FY5U24

Proposed Rule Change to Expand Time for Non-Parties to Respond to Arbitration Subpoenas and Orders of Appearance of Witnesses or Production of Documents
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 12512(d) through (e) and FINRA Rule 12513(d) through (e) of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rule 13512(d) through (e) and FINRA Rule 13513(d) through (e) of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to expand time for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents, and to make related changes to enhance the discovery process for forum users.
bit.ly/2G1o2Iq

Proposed Rule Change Relating to FINRA Rule 6750 (Dissemination of Transaction Information)
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 6750 to provide that FINRA may publish or distribute aggregated transaction information and statistics on non-disseminated TRACE-Eligible Securities at no charge.
bit.ly/2FWYMmz

CFTC’s Release Schedule for Delayed Market Data Reports
CFTC
The Commodity Futures Trading Commission’s (CFTC) Market Intelligence Branch of the Division of Market Oversight today announced an updated release schedule for CFTC market data reports that were delayed during the lapse in appropriations. The goal of the new report schedule is to provide market participants with data as quickly as possible, given the agency’s resource constraints.
bit.ly/2FZ9hWC

FCA proposes new measures to encourage effective stewardship
UK FCA
The FCA is proposing new measures and gathering views on how to encourage effective stewardship in the interests of investors. Most UK consumers hold investments, for example through their pensions, which are looked after by asset managers. Asset managers have a duty to oversee these investments in their clients’ interests.
bit.ly/2FYRFtZ

FCA launches consultation on General Insurance value measures data
UK FCA
Today the Financial Conduct Authority (FCA) has launched a consultation proposing new rules requiring firms to report General Insurance (GI) value measures data to the FCA for publication. Alongside the Consultation Paper, the FCA has also published a third annual value measures dataset, covering the period August 2017-August 2018.
bit.ly/2FXoqI3

Commissioner Berkovitz states his opposition to proposed swap trading rules
Brad Rosen – Wolters Kluwer
In remarks before the Commodity Markets Council State of the Industry 2019 conference, Commissioner Dan Berkovitz lays out a comprehensive argument that the CFTC’s proposed swaps trade execution requirement undermines competition
/goo.gl/b63wRW

Standard Chartered fined $40M for currency rigging ‘cartel’
Kevin Dugan – NY Post
A top Wall Street watchdog on Tuesday slapped a big bank with a $40 million fine over a brazen currency rigging scheme that had traders referring to themselves as a “cartel” and openly boasting about their ability to “bully” other currency traders.
/nyp.st/2G2aBbp

As the EUR500 note slowly dies, Harvard economist Kenneth Rogoff is getting his wish
John Detrixhe – Quartz
For lovers of large-denomination paper money, Harvard economist Kenneth Rogoff is enemy No. 1. His book, The Curse of Cash, outlines the case for getting rid of as much of paper money as possible, and larger notes in particular, because of the role cash plays in money laundering and tax evasion.
bit.ly/2FX1d8U

Investing and Trading

New UK stewardship code to look at adoption of ESG criteria; Auditing watchdog consults on principles to dictate how asset managers will police investee groups
Owen Walker – FT
The UK’s auditing watchdog has proposed that fund managers take environmental, social and governance factors into account when overseeing the companies in which they invest.
/on.ft.com/2FUhP

PwC and EY to ban non-essential consulting for audit clients; Industry has faced criticism after string of high-profile accounting scandals
Madison Marriage – FT
PwC and EY said on Tuesday that they will stop providing non-essential consulting services to audit clients by 2020.
/on.ft.com/2FYavBy

Conflict of interest changes open doors for specialist consultancies; Proposals increase scrutiny of big firms but create opportunities for smaller rivals
Andrew Hill – FT
Advice about risk and regulation has been a big growth area for the largest consultants in recent years. Now the biggest firms ó notably the Big Four accountancy and professional services groups ó may need to take their own medicine.
/on.ft.com/2FWPJ5a

GE Powered the American CenturyóThen It Burned Out; How the company that was once America’s biggest, the maker of power turbines, the seller of insurance, the broadcaster of ‘Seinfeld,’ became a shadow of its former self
Thomas Gryta and Ted Mann – WSJ
They came by the dozens in luxury sedans, black Ubers and sleek helicopters. As they did each August, General Electric’s most important executives descended on a hilltop above the Hudson River for their annual leadership gathering.
/on.wsj.com/2FY95a0

Charting GE’s Historic Rise and Tortured Downfall
Bloomberg
General Electric Co. has unraveled. The onetime icon of American industry last year suffered its biggest annual stock decline of the modern era as it was booted from the Dow Jones Industrial Average; investors were blindsided by multiple multibillion-dollar charges against earnings; and the board ousted the chief executive officer, handing the reins to an outsider for the first time ever. Meanwhile, the company’s pension remains the most underfunded in the country, its accounting is under federal investigation and its power segment is searching for a way out of a terrible slump.
/bloom.bg/2FYntz5

SanBio’s crash causes margin calls, drags down Japan’s start-up market
Ayai Tomisawa – Reuters
A crash by a Tokyo biopharmaceutical firm’s shares on Wednesday ended a month-long rally in Japan’s start-up market that was fueled by retail investors feeling small-cap stocks could rise despite global economic risks.
/reut.rs/2FXTVS3

Disclosure is a lure for green bond investors; Saving the planet is not first priority for some in the environmental finance market
Kate Allen – FT
Sales of green bonds have boomed from zero to almost $200bn a year in just over a decade. This explosive growth has been largely ascribed to investors’ eagerness to back companies promising to improve the environment, but there is another powerful reason why green bonds have become popular: disclosure.
/on.ft.com/2G0tZoQ

Institutions

SocGen Plans Investment Bank Job Cuts After Trading Slump
Fabio Benedetti Valentini – Bloomberg
Bank said to plan saving at least 100 million euros annually; SocGen said to be weighing cuts in areas such as fixed income
Societe Generale SA is making a last-ditch effort to boost its performance after a trading slump threatened Chief Executive Officer Frederic Oudea’s targets.
/bloom.bg/2FYJPRc

Credit Suisse Wins Bid to See Secret Bank Bonus Data in Tax Case
Kaye Wiggins – Bloomberg
London court lets Swiss lender see how much other banks paid; Figures to be disclosed in lawsuit over crisis-era bonus levy
Credit Suisse Group AG won a court bid to see how much money its rivals paid under a one-time U.K. banker bonus tax that was levied amid public anger in the wake of the financial crisis.
/bloom.bg/2G0kDJK

Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown
Patricia Laya and Andrew Rosati – Bloomberg
Lawmaker claims Russian airplane has come to whisk it away; Gold accounts for much of the country’s remaining hard assets
Venezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank.
/bloom.bg/2FYIcD4

Treasury agency had role in controversial RBS unit GRG
Andy Verity – BBC
Evidence has emerged of a government agency’s role in the Royal Bank of Scotland’s (RBS) controversial Global Restructuring Group (GRG). The Asset Protection Agency influenced GRG’s strategy including decisions that determined business customers’ fortunes, the BBC has learnt.
/bbc.in/2FUe8YY

Exclusive: U.S. regulator drops fine against Citi over fair-lending claims – sources
Patrick Rucker – Reuters
A top U.S. bank regulator has decided not to fine Citigroup for discriminating against minority mortgage borrowers, dropping the public rebuke that some officials had sought, two people familiar with the matter told Reuters.
/reut.rs/2FYhPgi

Janus Henderson closes Australian equities funds worth $352 million
Paulina Duran – Reuters
Fund manager Janus Henderson is closing down its three Australian equities funds due to tough fund-raising conditions, and will return nearly A$490 million ($352.65 million) to investors, a company spokeswoman said on Wednesday.
/reut.rs/2FYcOo0

Goldman Sachs securities division engineering co-head to retire: memo
Reuters
Goldman Sachs Group Inc said on Tuesday that Konstantin Shakhnovich, co-head of engineering for the U.S. bank’s securities division, is retiring, according to a memo seen by Reuters.
/reut.rs/2FYpEmf

Regions

S&P route into China’s $12tn bond market faces perils; First licence for foreign credit-rating agency promises to unlock flows from abroad
Don Weinland and Emma Dunkley – FT
S&P Global’s breakthrough into China’s domestic ratings scene is promising to bring a new level of clarity to foreign investors hoping to take a bigger slice of the country’s $12tn bond market.
/on.ft.com/2FW1NDL

European Cannabis Products Have Been More Popular Than Expected
Sam Unsted – Bloomberg
The pot growth story has mostly focused on developments in Canada and the U.S., but one broker says medical cannabis and wellness products are proving a bigger money spinner than it had expected in Europe.
/bloom.bg/2FZbCR8

U.S. Midwest Freezes, Australia Burns: This Is the Age of Weather Extremes
Somini Sengupta – NY Times
In Chicago, officials warned about the risk of almost instant frostbite on what could be the city’s coldest day ever. Warming centers opened around the Midwest. And schools and universities closed throughout the region as rare polar winds streamed down from the Arctic.
/nyti.ms/2FYkyWX

Eight Asian Billionaires Aged Over 90 Control $125 Billion
Venus Feng – Bloomberg
It’s been a mournful start to 2019 for two of Asia’s richest families. Eka Tjipta Widjaja, who began as a coconut and palm-oil trader at age 15 before building a multibillion-dollar empire in Indonesia, died Saturday at 98. A week earlier, Henry Sy, a shoe salesman who became the wealthiest man in the Philippines, died at 94. Their combined fortunes exceeded $16.5 billion.
/bloom.bg/2FYZMXA

Brazilian coffee glut weighs on global growers; Record output drives down prices and piles pressure on farmers
Emiko Terazono – FT
All eyes in the coffee market are on Brazil, as record production levels have knocked global prices to near 12-year lows.
/on.ft.com/2FYowPx

Japan’s 10-day holiday stirs concern in traders and investors
Hideyuki Sano, Tomo Uetake – Reuters
To mark the ascension of Japan’s new emperor, the government has declared an unprecedented 10-day holiday from late April to early May, worrying investors, who say a market shutdown could cause disruption and unsettle the yen.
/reut.rs/2FYetdq

Want to Bet on Currency Market Risk? The Aussie Is Fast Becoming Main Game in Town
Cormac Mullen – Bloomberg
AUD correlations with stocks higher than other DM and EM FX; Currency one of the cheapest risk-off hedges in FX, RBC Says
Australia’s dollar, a favorite among traders for betting on risk in currency markets, is even more attractive than usual as a proxy, Royal Bank of Canada says.
/bloom.bg/2G2lOJ1

Canada Is Holding a Lottery to Decide Who Gets the Stock Ticker POT
Kristine Owram – Bloomberg
Exchanges to hold first random lottery to determine winner; POT likely to join tickers WEED and MJ in cannabis lexicon
The stock symbol POT is up for grabs on Canadian exchanges and demand is so high that they’re holding a lottery for the first time ever to determine who gets it.
/bloom.bg/2FX455t

Brexit

Parliamentary backing sets May on Brexit collision course with EU; Prime minister’s U-turn persuades Eurosceptics to support her move to renegotiate deal
George Parker, Laura Hughes and Alex Barker – FT
Theresa May faces a clash with Brussels after the House of Commons backed her efforts to rewrite her own draft Brexit treaty, an attempt to break the deadlock at Westminster.
/on.ft.com/2FY2JYc

Miscellaneous

After 15 years on Wall Street, I use a 100-year-old psychology framework to show bankers and hedge funders how to get to the top
Justin Doyle, Level Up with JD
I am an executive coach for senior professionals in investment banking, private equity and hedge funds. I help them get promoted and make more money in smarter ways with less stress. I was an M&A banker at Goldman Sachs and worked at top funds like Perry Capital and Moore Capital for 15 years before I became a coach. We are all smart and have the technical skills to do the job; getting ahead is about improving how we interact with our colleagues and clients.
/read.bi/2FYqDTt

John Lothian Newsletter

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Past Newsletters

Wave Goodbye to Libor. Welcome Its Successor, SOFR

Wave Goodbye to Libor. Welcome Its Successor, SOFR

First Read Grayscale wants digital asset regulators and investors to get along Matt Raebel - John Lothian News When you lose your digital assets, there isn't exactly a 1-800 number you can call to seek legal recompense. It's still the Wild West...

Math Whiz Trades Without Humans to Build a $700 Million Fortune

Math Whiz Trades Without Humans to Build a $700 Million Fortune

First Read Hits & Takes By JLN Staff Dan Stern is the subject of today's MarketsWiki Education Open Outcry Traders History Project video. Stern is part of a prominent Chicago Board of Trade family of traders and lovers of soccer.~JJL John...

London Startup Aims to Bring Bond Sales Closer to Automation

London Startup Aims to Bring Bond Sales Closer to Automation

First Read Hits & Takes By JLN Staff ADM Investor Services Singapore has joined the Singapore Exchange as a Derivatives Trading and Clearing Member. And Singapore is a long way from Decatur, so this is big news for ADMIS.~JJL Did you know the CME Group offers a...

Nasdaq moves to acquire Oslo Bors by outbidding Euronext; LSE acquires stake in Euroclear

Jan 30, 2019

First Read

Hits & TakesJLN StaffCold. Cold. Cold. Don’t go outside unless you have to if you are in the U.S. Midwest. It is just plain, frostbite creating, death-inducing cold.~JJLMinneapolis is very smart as they have a skyway system between buildings where you don’t have to wear a coat to walk around town. I would still wear a sweater. Other northern cities have them too. The CBOT Building has one that connects to the Cboe, but it has been closed for years.~JJLMy daughter Katherine turned 21 last week. I can’t believe time went by so fast.~JJLEEX shared this: Yesterday, #EEX reached a new daily record volume of 16.9 TWh in Phelix-DE Futures, the benchmark product for European #power trading. The previous record of 16.8 TWh was traded on 14th September 2018.~JJLThe Chinese government started looking at a new version of the long languishing foreign investment law that would address foreign ownership of enterprises in China as part of the country’s opening up initiative. In other China news, Chinese investors, leery of the stock market, are increasingly looking at provincial bonds.~SDBloomberg is reporting that Canada is holding a lottery to decide who gets the stock ticker “POT.”~JJLIt’s an ever-changing market: for a cool infographic, check out this depiction of U.S. stock market sector weightings from 1800 on. (Obviously, there are some approximations in this.)~SD++++++++The Exchange Traded Product That Lost 99% Of Its Value Is Finally DyingLuke Kawa – BloombergVXX matures this week after 10 years betting on volatility; Futures market expected to absorb any large liquidationsThe most popular way to play volatility is going to its grave this week, but the impending death of an exchange-traded note sold by Barclays Plc is not the end of the story for futures traders./bloom.bg/2TjHKlK****The transition out of VXX, and its numerous related VIX futures hedges, to new positions appears to have been orderly, even though VXX headed into Tuesday with a good chunk of its historical AUM in tow (~$500m). For an in depth look at some of the mechanics involved in the maturation of a exchange traded debt obligation that uses derivatives on an index that is calculated using derivatives based upon an index, see this Six Figure Investing blog.~SD++++U.S. Slips Out of Top 20 in Global Corruption IndexCasey Quackenbush – TimeThe U.S. has plummeted in an annual corruption index, falling out of the top 20 countries for the first time since 2011, watchdog Transparency International said in a new report that links the global erosion of democracy and tidal wave of autocrats to an uptick in graft.bit.ly/2sS2sNM****** Did they take Chicago out of the index?~JJL++++‘Life-threatening’ temperatures hit record daily low in ChicagoDavid Struett – Chicago Sun-TimesTemperatures fell early Wednesday to make it the coldest Jan. 30 in Chicago on record.By 4 a.m., it was already minus 19 degrees, which beats the last record daily low of minus 15 on Jan. 30, 1966, the National Weather Service said.Temperatures will continue to fall throughout Wednesday, possibly reaching between minus 20 and minus 28 degrees, the weather service said.bit.ly/2ME5ZZa***** Whatever you want to do today, just don’t do it outside.~JJL++++Chicago Pit Traders Have Weathered Worse Than an Arctic FreezeLydia Mulvany – BloombergScott Shellady, known in the trading pits of Chicago for his trademark “cow jacket,” isn’t going to let a historic blast of Arctic freeze on Wednesday keep him away from the options pits at the world’s largest derivatives exchange, even though many of the city’s workers are planning to hunker down at home. “I come from a family of farmers,” said Shellady, who commutes into the city from northwest Indiana. “And there’s a word in English that describes the weather we’re having. Winter.”/bloom.bg/2sVPOO6***** For Scott Shellady and me, it does not hurt we have some extra insulation to guard from the cold.~JJL++++Why investors suck at selling stocks; Research suggests portfolio managers take the process of buying shares more seriouslyKatie Martin – FTProfessional portfolio managers have two basic functions in life: buying stuff and selling stuff. New research suggests they do a shockingly bad job of the latter, and it is costing them dearly. What is more, they do not even seem to realise they are doing it./on.ft.com/2FUhrPS***** My father always said people know when to buy, but don’t know when to sell. I guess he was right.~JJL++++Is Free Fair To All? (Editorial)Phil Mackintosh – NasdaqIt seems we’re all getting used to getting things for free. Cloud storage, email, social media and lots of the apps we download to our phones.But is free good for a stock market too?The economic problem with providing anything for free is well knownóyou get too much consumption of the free goodówhich is not an efficient use of resources. It’s known as the free-rider problem./goo.gl/n7QxpZ****** Free….Free, Free, Free!++++Tuesday’s Top ThreeOur top story of the day yesterday was Forbes’ How This 24-Year-Old Former NYSE Equity Trader Made History. Second was the info story on Chicago’s mayoral candidates from WBEZ, Chicago Mayoral Election Candidate Questionnaire. There you can see which candidates support or oppose a transaction tax on the financial markets. Third was The Wall Street Journal’s Two Groups Account for $1 Billion in Cryptocurrency Hacks++++MarketsWiki Stats141,230,010 pages viewed; 23,394 pages; 216,374 editsMarketsWiki Statistics++++

CryptoMarketsWiki Website»
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 Recently updated pages includeTRONArwenTrezorBitMEXCryptoMarketsWiki Stats920 pages; 8,157 editsCryptoMarketsWiki Statistics

Lead Stories

Nasdaq makes move to acquire Oslo Bors by outbidding Euronext; Exchange group has said it has unanimous approval from the board of directors at Oslo Bors to acquire the Norwegian exchange for $770 million.Hayley McDowell – The TradeUS exchange operator Nasdaq has officially launched a rival bid for Norwegian stock exchange Oslo Bors with an offer that exceeds Euronext’s initial bid made earlier this month.bit.ly/2FY5vwMLondon Stock Exchange acquires stake in Euroclear; UK exchange group acquires 4.92% stake in Euroclear as two look to work together on commercial collaboration and product development.Jon Watkins – The TradeThe London Stock Exchange (LSE) has acquired a 4.92% stake in Euroclear for EUR278.5 million, following a similar move by one of its trading venue rivals last year.bit.ly/2FZ7DUJFidelity Is Said to Plan March Launch of Bitcoin Custody ServiceMatthew Leising and Alastair Marsh – BloombergService may help institutional investors ease into crypto; Commonplace in other assets, custody’s absence keeps pros outFidelity Investments is targeting a March launch date for its Bitcoin custody service, according to three people with knowledge of the matter, as the mutual-fund giant moves forward with a plan that could help ease fears of trading cryptocurrencies./bloom.bg/2FZ5bxINYSE, Nasdaq Rival Aims to Shed Light on Fee Profits; The exchanges don’t disclose profit margins for these kinds of servicesGretchen Morgenson – WSJBrokerage firms and banks have complained for years about rising fees at big stock exchanges. Now, they are getting a glimpse of the potential profits the exchanges could be making from them. On Tuesday, Investors Exchange, a small exchange that competes with the NYSE, Nasdaq Inc. and Cboe Global Markets Inc. CBOE -1.23% for stock trades, filed an analysis with the Securities and Exchange Commission comparing its costs of providing comparable market data and connectivity to clients with fees levied by the big exchanges./on.wsj.com/2FWy3GJLondon Stock Exchange buys stake in settlement house Euroclear; UK bourse boosts presence in Europe with EUR278m share in one of biggest settlement housesSarah Provan – FTThe London Stock Exchange Group has snapped up a 4.9 per cent stake in Belgian-based settlement house Euroclear, looking to increase its influence in one of the key utilities of global market plumbing./on.ft.com/2FYOanlLSE’s Schwimmer Makes Dealmaking Debut With Euroclear StakeViren Vaghela – BloombergLondon Stock Exchange Group Plc unveiled the first deal under its new leadership, agreeing to take a minority stake in settlement giant Euroclear Holding SA/NV./bloom.bg/2FZ5jNvLondon’s renminbi trading eclipses pound-euro; Trading volumes in the Chinese currency against the US dollar rise 17 per centEva Szalay – FTLondon’s push to become a major trading hub for the Chinese currency is paying off, with trading volumes for the renminbi eclipsing those for the pound against the euro for the first time last year, according to a survey from the Bank of England./on.ft.com/2FWELg0The Brexit Bill: Here’s the Damage So Far; The divorce from the EU might be delayed, softened or even abandoned, but the cost of separation is already apparent.Joe Mayes – BloombergBritain’s vote to leave the European Union has already come at a cost regardless of where Brexit goes from here. Some of the damage is tangible, such as jobs, investment and capital; some of it less so, like international clout and talent./bloom.bg/2FWuPTDTheresa May Survives a Critical Brexit VoteStephen Castle – NY TimesBritish Prime Minister Theresa May survived a critical vote in Parliament on Tuesday that could have delayed Brexit, undermining her strategy for leaving the European Union and undercutting the country’s constitutional protocol./nyti.ms/2DGWUfvJohn Phizackerley receives no further payout from TP ICAPPhilip Stafford – FTJohn Phizackerley received only the minimum legal and contractual entitlements to settle his sacking from TP ICAP last year, the UK interdealer broker disclosed on Wednesday./on.ft.com/2FWAPfbTP ICAP downgrade triggers spat with Moody’s; Agency said lower rating reflected interdealer broker’s increased costs and debt levelsPhilip Stafford – FTTP ICAP has become embroiled in a public dispute with Moody’s Investor Services after the UK interdealer broker was downgraded by the credit rating agency./on.ft.com/2FX2j4jMiFID II sees global equities trade execution rates decline; Analytics on average global commissions shows that rates have declined across developed and emerging markets.Hayley McDowell – The TradeExecution rates on equity trades globally have fallen significantly over the course of 2018 as MiFID II unbundling rules in Europe take hold, according to Greenwich Associates.bit.ly/2FY4DIkEurope should beware the lure of bigger banks; As long as continent-wide deposit insurance remains out of reach, mergers will be riskySimon Samuels – FTIn many ways it was hardly a surprise that the chairman of UBS, Axel Weber, said recently, when commenting on European banks, that “what Europe needs in order to catch up with American firms is European champions, banks that are larger in size”. Last year was a bad one for European bank shares, capping a torrid decade after which, for most large banks, profits and share prices are still well below pre-crisis levels./on.ft.com/2FV1F7D‘Exchanges owe us answers’ says IEX as it discloses market data and connectivity costs; IEX becomes first exchange operator to disclose its costs with the detailed report revealing incumbent exchanges are grossly marking up fees.Hayley McDowell – The TradeInvestors Exchange (IEX) has publicly disclosed its costs of producing market data and connectivity, suggesting that incumbent exchanges could be marking up charges for such services by as much as 4,000%.bit.ly/2G0tbQQLondon Metal Exchange quizzed by regulators on phone trades; European regulations calling for price transparency pose a problem for LME’s phone-tradingBy Samuel Agini – Financial NewsEurope’s top financial regulator has clashed with one of the City of London’s oldest exchanges over a quaint method of trading employed in the metals markets.bit.ly/2FVSMuj

Exchanges, OTC and Clearing

Nasdaq to Make an Offer to Acquire Oslo B¯rs VPS with Unanimous Support from Oslo B¯rs VPS Board of DirectorsGlobeNewswireNasdaq starts bidding war on the Oslo Stock Exchange; While Euronext has secured control over more than half of the shares in the Oslo Stock Exchange, the US Nasdaq comes in from the sidelines. They offer seven kroner more per share than Euronext.Marius Lorentzen, Asgeir Aga Nilsen and Anders Nybakken Kvale -E24Nasdaq AB, which is owned by the US Nasdaq stock exchange, announces on Wednesday that they are now making an offer to buy all the shares in Oslo B¯rs at NOK 152 per share.bit.ly/2FYpfA3Nasdaq bids $771 million for Oslo Bors in Euronext challengeTerje Solsvik, Gwladys Fouche – ReutersNasdaq Inc on Wednesday made a rival bid for Oslo Bors VPS, setting up a takeover battle with Euronext for the 200-year-old Norwegian stock market operator./reut.rs/2G0rhzGNasdaq Announces Quarterly Dividend of $0.44 Per ShareGlobeNewswireThe Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.44 per share on the company’s outstanding common stock. The dividend is payable on March 29, 2019 to shareowners of record at the close of business on March 15, 2019. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.bit.ly/2FY519KNasdaq Private Market Facilitates a Record $12 Billion in Transaction Volume in 2018; Strong market activity and investor demand drives record-setting jump in secondary liquidityGlobeNewswireThe Nasdaq Private Market, LLC (NPM), a leading provider of liquidity solutions for today’s private securities, has released its 2018 Year End Private Company report, which summarizes private company liquidity activity on the NPM platform.bit.ly/2FYRGOGLondon Stock Exchange Group plc announces acquisition of 4.92% stake in Euroclear Holding SA/NVLondon Stock Exchange GroupLondon Stock Exchange Group plc (“LSEG”) announces it will acquire an aggregate 4.92% stake in Euroclear’s share capital for EUR278.5 million (£241.9 million)bit.ly/2G1mDBEStaying ahead of the curve: the fintech trends 2019 (part II)EurexIn the first part of this article, we reported on the most important technology trends that experts expect to disrupt, shift and change the way our industry will do business in 2019. What will Deutsche Bˆrse and especially Eurex do to further implement new technologies such as artificial intelligence (AI), machine learning and blockchain? We spoke to our in-house experts about “what’s cooking” at Deutsche Bˆrse and Eurex.bit.ly/2G0mr5uEquity derivatives: Introduction of Single Stock Futures and equity options; withdrawal of admission of Single Stock Futures and equity optionsEurexThe Management Board of Eurex Deutschland took the following decisions with effect from 4 February 2019:bit.ly/2FUjPWQEEX And GDT Take Next Steps Towards Joint Venture For A European Dairy AuctionMondoVisioneThe European Energy Exchange (EEX) and Global Dairy Trade (GDT) have successfully concluded the initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products.bit.ly/2FWDTb7‘Next steps taken’ towards European dairy auction ventureSylvester Phelan – Agriland.ieThe initial consultation period regarding the establishment of a joint venture to operate a European-based auction mechanism for European dairy products has been concluded by the European Energy Exchange (EEX) and Global Dairy Trade (GDT).bit.ly/2FUp60A

Fintech

Barchart Announces Integration of OnDemand APIs into MATLABBarchartBarchart, a leading provider of financial market data and technology, has announced a partnership with MathWorks. New integration with MATLAB, the programming environment from MathWorks for algorithm development, data analysis, visualization, and numeric computation will now allow traders, financial engineers, risk managers and analysts currently using MATLAB and its Datafeed Toolbox to directly access Barchart’s OnDemand API solutions and to gain access to Barchart’s data from within MATLAB.bit.ly/2FZeLjXTickSmith Achieves Amazon Web Services Financial Services Competency as well as Advanced Technology Partner Status in the AWS Partner NetworkPR WebTickSmith, a FinTech software company specialized in Big Data technology, announced today that they have achieved Amazon Web Services (AWS) Financial Services Competency status as well as Advance Technology Partner status in the AWS Partner Network (APN). These designations recognizes TickSmith for delivering solutions built on AWS to help financial clients better ingest, manage, and categorize the growing amount of data that firms need to cope with to minimize risk, navigating compliance requirements, and improve the performance of running advanced analytics at scale./goo.gl/pWT8pvAnt Financial raised almost as much money in 2018 as all fintechs in US and EuropeJohn Detrixhe – QuartzWhen it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.bit.ly/2MKHE4cA George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steamDakin Campbell – Business InsiderA fintech startup that acts as a data hub for Wall Street bond investors has raised new money to fuel its expansion just as analysts grow worried about a softening mortgage market and the implications for the American consumer.dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board./read.bi/2ME8ESEGlobal fintech funding has soared but big banks are shying away from buying disruptive upstart firmsMadeline Shi – Business InsiderGlobal fintech funding hit record high last year, but M&A in the space hasn’t followed suit.VC-backed fintech companies raised nearly $40 billion (up 120%) across 1,707 deals globally (up 15%) over the past year, according to data tracker CB Insight’s latest fintech report on Tuesday.Despite this funding surge, big banks have largely stayed on the sidelines when it comes to buying these upstarts./read.bi/2MF3e9Z

Cryptocurrencies

IHS Markit buys stake in blockchain start-up Cobalt; Investment comes as banks hunt for cost savings in currencies trade processingEva Szalay – FTData and analytics company IHS Markit has bought a stake in currencies start-up Cobalt, in an effort to boost the use of blockchain technology to handle the fiddly business of trade processing./on.ft.com/2FW1GrPJPMorgan Says Blockchain Is Making Progress Outside CryptoJoanna Ossinger – BloombergResearch chair Chang says meaningful impact 3-5 years away; Trade finance, supply chain seen as areas for advancementIt may take a few years for blockchain’s impact to be felt meaningfully, but it will provide some advancements in certain areas even as cryptocurrencies falter, according to JPMorgan Chase & Co./bloom.bg/2FY4nt2What Gemini’s ‘Revolution Needs Rules’ Campaign Means For The Crypto CommunitySamantha Radocchia – ForbesRegulations are a tricky subject in even the most established and traditional industries.But in an emerging space, the debate can quickly get heated. For instance, Geminióa crypto exchange headed by the Winklevoss twinsórecently splashed advertising all over NYC. The ads were adorned with the catchy, albeit somewhat cryptic, phrase “Revolution Needs Rules.”bit.ly/2MMKPsdSWIFT Chief Announces Trial DLT Integration With R3Ian Allison – CoindeskSWIFT, the global banking payments network, is to begin testing its gpi payments standard with R3’s Corda platform. Speaking on stage at the Paris Fintech Forum this morning, SWIFT CEO Gottfried Leibbrandt said: “Later today we are announcing integration with R3.”bit.ly/2FYkx5xBlockFi scores new funding from Coinbase Ventures, sets sights on international expansionRyan Todd – The Block CryptoCoinbase Ventures is joining the growing list of investors backing crypto lending, providing an extension of BlockFi’s $4 million convertible note issuance in December.bit.ly/2FYtZplBlow To Bitcoin As CEO Warns Crypto Winter Could Turn ‘Nuclear’Billy Bambrough – ForbesBitcoin and the wider cryptocurrency market has been suffering through a year-long bear market that was branded “crypto winter” late last year for its debilitating effect on the industry.bit.ly/2FYcd5KEuropean Union: ESMA And EBA Publish Supervisory Policy Statements On Crypto-AssetsMichael Huertas – MondaqQuickTake: With a range of issues identified, can the EU afford inaction?The European Banking Authority (EBA) and more recently its sister European Supervisory Authorities (ESAs), the European Securities and Markets Authority (ESMA), as well as the European Insurance and Occupational Pensions Authority (EIOPA) have used 2018 to accelerate their further policymaking or delivery of actions that flow from various “FinTech Action Plans1 as well as their multi-annual supervisory priorities.bit.ly/2FYd5Y4Bitcoin’s Three Biggest Problems In Reaching The MassesPanos Mourdoukoutas – ForbesBitcoin has gained a great deal of buzz in recent years. And it has made a few people very rich in the process. Those who were on the right side of the market at the right time, that is.bit.ly/2FYJKwM

Politics

Trump Says the Economy Is Unstoppable. Most Economists Say OtherwiseJim Tankersley – NY TimesThe Trump administration’s rosy view of the economy is increasingly diverging from a decidedly more cautious outlook from other prognosticators, including economists at the Federal Reserve and elsewhere, who are warning that growth is slowing, in part because of the president’s own policies./nyti.ms/2FW2IEdHarley-Davidson Profit Is Wiped Out by President Trump’s TariffsGabrielle Coppola – BloombergEarnings per share miss estimates by widest margin since 2009; Retail deliveries in home market dropped 10% in fourth quarterHarley-Davidson Inc. barely broke even in the last quarter of a year in which the struggling American icon got caught up in President Donald Trump’s trade wars. The motorcycle maker’s shares plunged the most in a year./bloom.bg/2FW0eFTMalpass emerges as leading contender to head World Bank; US Treasury undersecretary has struck a sceptical tone on multilateral institutionsSam Fleming – FTThe US is narrowing its list of potential nominees to lead the World Bank, with David Malpass, a senior Treasury official, emerging as one of its finalists, people familiar with the matter said./on.ft.com/2FYkF4PSteven Mnuchin Draws Claims of Conflict of Interest in Decision on Russian OligarchKenneth P. Vogel – NY TimesDemocrats in Congress raised ethical concerns on Tuesday about connections between Treasury Secretary Steven Mnuchin and a billionaire Republican donor who stands to benefit financially from the Trump administration’s decision to lift sanctions on the Russian oligarch Oleg V. Deripaska’s companies./nyti.ms/2FWvEffTrump Will ‘Never Be Safe’ From Russian Intelligence and Will Have ‘No Defense,’ Retired General SaysJason Lemon- NewsweekRetired four-star General Barry McCaffrey warned that President Donald Trump will “never be safe” from Russian intelligence due to his one-on-one private meeting with President Vladimir Putin in Helsinki last year.bit.ly/2G2mCh1

Regulation

ESMA appoints new chair of the Investment Management Standing CommitteeESMAThe Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed the following individual to serve as chair of its Investment Management Standing Committee (IMSC):bit.ly/2G0nBOoESMA updates Q&A on Benchmark RegulationESMAThe European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmark Regulation (BMR).bit.ly/2FXAwkqProposed Rule Change to Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps)FINRAFinancial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 12, 2020. FINRA Rule 0180 temporarily limits, with certain exceptions, the application of FINRA rules with respect to security-based swaps.bit.ly/2FY5U24Proposed Rule Change to Expand Time for Non-Parties to Respond to Arbitration Subpoenas and Orders of Appearance of Witnesses or Production of DocumentsFINRAFinancial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 12512(d) through (e) and FINRA Rule 12513(d) through (e) of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rule 13512(d) through (e) and FINRA Rule 13513(d) through (e) of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to expand time for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents, and to make related changes to enhance the discovery process for forum users.bit.ly/2G1o2IqProposed Rule Change Relating to FINRA Rule 6750 (Dissemination of Transaction Information)FINRAFinancial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 6750 to provide that FINRA may publish or distribute aggregated transaction information and statistics on non-disseminated TRACE-Eligible Securities at no charge.bit.ly/2FWYMmzCFTC’s Release Schedule for Delayed Market Data ReportsCFTCThe Commodity Futures Trading Commission’s (CFTC) Market Intelligence Branch of the Division of Market Oversight today announced an updated release schedule for CFTC market data reports that were delayed during the lapse in appropriations. The goal of the new report schedule is to provide market participants with data as quickly as possible, given the agency’s resource constraints.bit.ly/2FZ9hWCFCA proposes new measures to encourage effective stewardshipUK FCAThe FCA is proposing new measures and gathering views on how to encourage effective stewardship in the interests of investors. Most UK consumers hold investments, for example through their pensions, which are looked after by asset managers. Asset managers have a duty to oversee these investments in their clients’ interests.bit.ly/2FYRFtZFCA launches consultation on General Insurance value measures dataUK FCAToday the Financial Conduct Authority (FCA) has launched a consultation proposing new rules requiring firms to report General Insurance (GI) value measures data to the FCA for publication. Alongside the Consultation Paper, the FCA has also published a third annual value measures dataset, covering the period August 2017-August 2018.bit.ly/2FXoqI3Commissioner Berkovitz states his opposition to proposed swap trading rulesBrad Rosen – Wolters KluwerIn remarks before the Commodity Markets Council State of the Industry 2019 conference, Commissioner Dan Berkovitz lays out a comprehensive argument that the CFTC’s proposed swaps trade execution requirement undermines competition/goo.gl/b63wRWStandard Chartered fined $40M for currency rigging ‘cartel’Kevin Dugan – NY PostA top Wall Street watchdog on Tuesday slapped a big bank with a $40 million fine over a brazen currency rigging scheme that had traders referring to themselves as a “cartel” and openly boasting about their ability to “bully” other currency traders./nyp.st/2G2aBbpAs the EUR500 note slowly dies, Harvard economist Kenneth Rogoff is getting his wishJohn Detrixhe – QuartzFor lovers of large-denomination paper money, Harvard economist Kenneth Rogoff is enemy No. 1. His book, The Curse of Cash, outlines the case for getting rid of as much of paper money as possible, and larger notes in particular, because of the role cash plays in money laundering and tax evasion.bit.ly/2FX1d8U

Investing and Trading

New UK stewardship code to look at adoption of ESG criteria; Auditing watchdog consults on principles to dictate how asset managers will police investee groupsOwen Walker – FTThe UK’s auditing watchdog has proposed that fund managers take environmental, social and governance factors into account when overseeing the companies in which they invest./on.ft.com/2FUhPPwC and EY to ban non-essential consulting for audit clients; Industry has faced criticism after string of high-profile accounting scandalsMadison Marriage – FTPwC and EY said on Tuesday that they will stop providing non-essential consulting services to audit clients by 2020./on.ft.com/2FYavByConflict of interest changes open doors for specialist consultancies; Proposals increase scrutiny of big firms but create opportunities for smaller rivalsAndrew Hill – FTAdvice about risk and regulation has been a big growth area for the largest consultants in recent years. Now the biggest firms ó notably the Big Four accountancy and professional services groups ó may need to take their own medicine./on.ft.com/2FWPJ5aGE Powered the American CenturyóThen It Burned Out; How the company that was once America’s biggest, the maker of power turbines, the seller of insurance, the broadcaster of ‘Seinfeld,’ became a shadow of its former selfThomas Gryta and Ted Mann – WSJThey came by the dozens in luxury sedans, black Ubers and sleek helicopters. As they did each August, General Electric’s most important executives descended on a hilltop above the Hudson River for their annual leadership gathering./on.wsj.com/2FY95a0Charting GE’s Historic Rise and Tortured DownfallBloombergGeneral Electric Co. has unraveled. The onetime icon of American industry last year suffered its biggest annual stock decline of the modern era as it was booted from the Dow Jones Industrial Average; investors were blindsided by multiple multibillion-dollar charges against earnings; and the board ousted the chief executive officer, handing the reins to an outsider for the first time ever. Meanwhile, the company’s pension remains the most underfunded in the country, its accounting is under federal investigation and its power segment is searching for a way out of a terrible slump./bloom.bg/2FYntz5SanBio’s crash causes margin calls, drags down Japan’s start-up marketAyai Tomisawa – ReutersA crash by a Tokyo biopharmaceutical firm’s shares on Wednesday ended a month-long rally in Japan’s start-up market that was fueled by retail investors feeling small-cap stocks could rise despite global economic risks./reut.rs/2FXTVS3Disclosure is a lure for green bond investors; Saving the planet is not first priority for some in the environmental finance marketKate Allen – FTSales of green bonds have boomed from zero to almost $200bn a year in just over a decade. This explosive growth has been largely ascribed to investors’ eagerness to back companies promising to improve the environment, but there is another powerful reason why green bonds have become popular: disclosure./on.ft.com/2G0tZoQ

Institutions

SocGen Plans Investment Bank Job Cuts After Trading SlumpFabio Benedetti Valentini – BloombergBank said to plan saving at least 100 million euros annually; SocGen said to be weighing cuts in areas such as fixed incomeSociete Generale SA is making a last-ditch effort to boost its performance after a trading slump threatened Chief Executive Officer Frederic Oudea’s targets./bloom.bg/2FYJPRcCredit Suisse Wins Bid to See Secret Bank Bonus Data in Tax CaseKaye Wiggins – BloombergLondon court lets Swiss lender see how much other banks paid; Figures to be disclosed in lawsuit over crisis-era bonus levyCredit Suisse Group AG won a court bid to see how much money its rivals paid under a one-time U.K. banker bonus tax that was levied amid public anger in the wake of the financial crisis./bloom.bg/2G0kDJKVenezuela Has 20 Tons of Gold Ready to Ship. Address UnknownPatricia Laya and Andrew Rosati – BloombergLawmaker claims Russian airplane has come to whisk it away; Gold accounts for much of the country’s remaining hard assetsVenezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank./bloom.bg/2FYIcD4Treasury agency had role in controversial RBS unit GRGAndy Verity – BBCEvidence has emerged of a government agency’s role in the Royal Bank of Scotland’s (RBS) controversial Global Restructuring Group (GRG). The Asset Protection Agency influenced GRG’s strategy including decisions that determined business customers’ fortunes, the BBC has learnt./bbc.in/2FUe8YYExclusive: U.S. regulator drops fine against Citi over fair-lending claims – sourcesPatrick Rucker – ReutersA top U.S. bank regulator has decided not to fine Citigroup for discriminating against minority mortgage borrowers, dropping the public rebuke that some officials had sought, two people familiar with the matter told Reuters./reut.rs/2FYhPgiJanus Henderson closes Australian equities funds worth $352 millionPaulina Duran – ReutersFund manager Janus Henderson is closing down its three Australian equities funds due to tough fund-raising conditions, and will return nearly A$490 million ($352.65 million) to investors, a company spokeswoman said on Wednesday./reut.rs/2FYcOo0Goldman Sachs securities division engineering co-head to retire: memoReutersGoldman Sachs Group Inc said on Tuesday that Konstantin Shakhnovich, co-head of engineering for the U.S. bank’s securities division, is retiring, according to a memo seen by Reuters./reut.rs/2FYpEmf

Regions

S&P route into China’s $12tn bond market faces perils; First licence for foreign credit-rating agency promises to unlock flows from abroadDon Weinland and Emma Dunkley – FTS&P Global’s breakthrough into China’s domestic ratings scene is promising to bring a new level of clarity to foreign investors hoping to take a bigger slice of the country’s $12tn bond market./on.ft.com/2FW1NDLEuropean Cannabis Products Have Been More Popular Than ExpectedSam Unsted – BloombergThe pot growth story has mostly focused on developments in Canada and the U.S., but one broker says medical cannabis and wellness products are proving a bigger money spinner than it had expected in Europe./bloom.bg/2FZbCR8U.S. Midwest Freezes, Australia Burns: This Is the Age of Weather ExtremesSomini Sengupta – NY TimesIn Chicago, officials warned about the risk of almost instant frostbite on what could be the city’s coldest day ever. Warming centers opened around the Midwest. And schools and universities closed throughout the region as rare polar winds streamed down from the Arctic./nyti.ms/2FYkyWXEight Asian Billionaires Aged Over 90 Control $125 BillionVenus Feng – BloombergIt’s been a mournful start to 2019 for two of Asia’s richest families. Eka Tjipta Widjaja, who began as a coconut and palm-oil trader at age 15 before building a multibillion-dollar empire in Indonesia, died Saturday at 98. A week earlier, Henry Sy, a shoe salesman who became the wealthiest man in the Philippines, died at 94. Their combined fortunes exceeded $16.5 billion./bloom.bg/2FYZMXABrazilian coffee glut weighs on global growers; Record output drives down prices and piles pressure on farmersEmiko Terazono – FTAll eyes in the coffee market are on Brazil, as record production levels have knocked global prices to near 12-year lows./on.ft.com/2FYowPxJapan’s 10-day holiday stirs concern in traders and investorsHideyuki Sano, Tomo Uetake – ReutersTo mark the ascension of Japan’s new emperor, the government has declared an unprecedented 10-day holiday from late April to early May, worrying investors, who say a market shutdown could cause disruption and unsettle the yen./reut.rs/2FYetdqWant to Bet on Currency Market Risk? The Aussie Is Fast Becoming Main Game in TownCormac Mullen – BloombergAUD correlations with stocks higher than other DM and EM FX; Currency one of the cheapest risk-off hedges in FX, RBC SaysAustralia’s dollar, a favorite among traders for betting on risk in currency markets, is even more attractive than usual as a proxy, Royal Bank of Canada says./bloom.bg/2G2lOJ1Canada Is Holding a Lottery to Decide Who Gets the Stock Ticker POTKristine Owram – BloombergExchanges to hold first random lottery to determine winner; POT likely to join tickers WEED and MJ in cannabis lexiconThe stock symbol POT is up for grabs on Canadian exchanges and demand is so high that they’re holding a lottery for the first time ever to determine who gets it./bloom.bg/2FX455t

Brexit

Parliamentary backing sets May on Brexit collision course with EU; Prime minister’s U-turn persuades Eurosceptics to support her move to renegotiate dealGeorge Parker, Laura Hughes and Alex Barker – FTTheresa May faces a clash with Brussels after the House of Commons backed her efforts to rewrite her own draft Brexit treaty, an attempt to break the deadlock at Westminster./on.ft.com/2FY2JYc

Miscellaneous

After 15 years on Wall Street, I use a 100-year-old psychology framework to show bankers and hedge funders how to get to the topJustin Doyle, Level Up with JDI am an executive coach for senior professionals in investment banking, private equity and hedge funds. I help them get promoted and make more money in smarter ways with less stress. I was an M&A banker at Goldman Sachs and worked at top funds like Perry Capital and Moore Capital for 15 years before I became a coach. We are all smart and have the technical skills to do the job; getting ahead is about improving how we interact with our colleagues and clients./read.bi/2FYqDTt

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Past Newsletters

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Wave Goodbye to Libor. Welcome Its Successor, SOFR

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Math Whiz Trades Without Humans to Build a $700 Million Fortune

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First Read Hits & Takes By JLN Staff Dan Stern is the subject of today's MarketsWiki Education Open Outcry Traders History Project video. Stern is part of a prominent Chicago Board of Trade family of traders and lovers of soccer.~JJL John...

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First Read Hits & Takes By JLN Staff ADM Investor Services Singapore has joined the Singapore Exchange as a Derivatives Trading and Clearing Member. And Singapore is a long way from Decatur, so this is big news for ADMIS.~JJL Did you know the CME Group offers a...

Nasdaq moves to acquire Oslo Bors by outbidding Euronext; LSE acquires stake in Euroclear

Jan 30, 2019

First Read

Hits & Takes
By JLN StaffOne takeaway from the CME’s second quarter earnings report yesterday: Average daily volume at the exchange through the first half of the year was 20.2 million. In 2000, ADV was just over 2.5 million.~JKB3, formerly BM&F Bovespa, posted a volume increase of 52 percent on 1.3 billion contracts for the first half of 2018. FOW noted that it topped the Intercontinental Exchange‘s volume, moving B3 into third in terms of volume behind top exchange, CME Group up 20 percent with 2.5 billion contracts and the National Stock Exchange of India, up 43 percent to 1.6 billion contracts.~JKDo you know who invented the “Ring The Bell” marketing event at the stock exchange? Equities.com points to a man named Enzo Villani, now a board member of a new crypto markets infrastructure firm called Alt 5 Sigma.~JKHere is a video of Blythe Masters and her CTO about the partnership between Google and Digital Asset from the Google Next ’18.~JJLThis July, NFA partnered with Six Flags Great America to offer staff discounted admission for the month. NFA auditors will be double checking for fake hand stamps and making sure rider harnesses are nice and tight.~JJL~JK++++Global Blockchain Company AlphaPoint Adds Industry Veteran Kristin Boggiano as Chief Legal Officer to Executive Team
AlphaPoint
AlphaPoint, a leading blockchain company focused on enabling institutions to launch, scale, and operate digital asset networks and exchanges all over the world, today announced the appointment of Kristin Boggiano as its Chief Legal Officer. In this role, Boggiano will oversee the company’s legal, regulatory, and government relations functions as well as contribute as a member of AlphaPoint’s executive team.
/jlne.ws/2LrzdNR**Kristin spoke at our MarketsWiki Education event in New York in 2016 about her trek through the jungles of Ecuador.~JK++++Kudlow says US GDP figure will be ‘big’; Top economic adviser says he has no specific knowledge but wanted to ‘help’
Mamta Badkar – FT
US President Trump’s top economic adviser on Thursday told Fox Business that he expected Friday’s US GDP figure to be “big” but denied knowing the specifics, less than two months after Mr Trump’s tweet in advance of a jobs report drew fire.
/jlne.ws/2JZMcR2***** This is irresponsible.~JJL++++Trump Predicts Data Will Show U.S. Economy in ‘Terrific’ Shape
Greg Sullivan and Toluse Olorunnipa – Bloomberg
Bloomberg survey points to 4.2% expansion in second quarter; Data to be released at 8:30 a.m. in Washington on Friday
President Donald Trump predicted data on Friday will show the U.S. economy is in “terrific” shape amid forecasts that growth topped 4 percent in the second quarter, the fastest since 2014.
/jlne.ws/2JXaZFj***** And so is this.~JJL++++Fake news of Napoleon’s death cited in guidance to help traders
Huw Jones – Reuters
Fake news that Napoleon had died is cited in new analysis aimed at helping commodity, bond and forex traders to stop fraud, an industry body said on Friday.
/jlne.ws/2mLvZWr***** Seems fake news, which we once called rumors, has been around a while.~JJL++++The Girl Scouts have gone from baking and sewing to cybersecurity and financial literacy
Myelle Lansat and Richard Feloni – Business Insider
The Girl Scouts is much more than selling cookies; it’s an organization that provides a foundation for young women to take leadership roles in society. And since Sylvia Acevedo was named CEO of Girl Scouts in 2017, it’s also teaching its members about STEM (science, technology, engineering, and math) — shifting the sole focus away from traditionally female tasks, like baking and sewing.
/goo.gl/kwHCjs***** In the name of fairness, some Girl Scout news.~JJL++++Thursday’s Top Three
Yesterday’s top stories were led by Bloomberg’s How Traders Have Changed Since the Massive Selloff Earlier This Year. Second was Equities.com’s From Exchanges Old To Exchanges New: Chicago Mercantile Exchange and Alt 5 Sigma about new crypto trading systems. Third went to Financefeeds’ FCA approves ION-Fidessa deal++++MarketsWiki Stats
130,088,709 pages viewed; 23,215 pages; 214,399 edits
MarketsWiki Statistics++++

Lead Stories

Up to Two-Thirds of Bitcoin Transactions Have No Economic Value
Olga Kharif – Bloomberg
Services developing tools to add clarity to blockchain data; Value of activity about half of what appears, researcher says
On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency.
/jlne.ws/2K5LOAMBitcoin Drops as U.S. Rejects Winklevoss ETF for Cboe Trading
Todd White – Bloomberg
Technical indicator also moves into bearish territory; Digital currency has declined after more than 30% July rally
Bitcoin fell for a third day, slipping below $8,000, after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss.
/jlne.ws/2K14LEnFacebook’s $119 Billion One-Day Rout Makes U.S. History
Sophie Caronello – Bloomberg
It’s official. Facebook Inc. just had the biggest stock-market wipeout in American history. Shares tumbled 19 percent on Thursday to close at $176.26 after sales and user growth disappointed investors. The drop translates to a $119.4 billion decline in market capitalization, the largest-ever loss of value in one day for a U.S. traded company.
/jlne.ws/2JWxavvFINRA Announces Enforcement Structure, Senior Leadership Team; Integration of Enforcement Functions Complete; Unified Enforcement Program Key Outcome of FINRA360
FINRA
FINRA announced today the Department of Enforcement’s new structure and senior leadership team. This marks the completion of the final phase of the integration of FINRA’s enforcement functions—a process that began with the July 2017 promotion of Susan Schroeder to FINRA’s Head of Enforcement to create a unified enforcement function.
/jlne.ws/2K02VDGTwitter Shares Plunge 17% as Monthly Users Decline
Selina Wang – Bloomberg
Company reports 1 million fewer visitors from previous quarter; Revenue climbs to $711 million, topping analyst’ projections
Twitter Inc. said monthly users dropped by 1 million in the second quarter, and predicted that number will decline further as the company continues to fight against spam, fake accounts and malicious rhetoric on its social network. The shares plunged 17 percent in early trading.
/jlne.ws/2JWSiBOHedge Fund Titans Who Bet Big on India Now Say They Were Scammed
Olivia Carville, Anto Antony, and Jeanette Rodrigues – Bloomberg
Axon Capital, CIFF say they are victims of a massive fraud; Dispute is playing out in courts in India and Mauritius
The $1.5 billion India wager that went horribly wrong for some of the world’s biggest hedge funds began with a tantalizing offer.
/jlne.ws/2K0v9hOJuncker’s Trade Pitch to Trump: ‘I Can Be Stupid, as Well’; How bravado, flip cards and a White House ally helped European official sell U.S. president on trade detente
Valentina Pop and Vivian Salama – WSJ
When Jean-Claude Juncker arrived at the White House on Wednesday, he had no idea how the meeting with President Donald Trump would end.
/jlne.ws/2K01wNFHigh speed trader Virtu’s profits miss the mark
Nicole Bullock – FT
Virtu Financial, the high speed trader, reported adjusted net income of $59.6m in the second quarter below Wall Street expectations amid a “markedly worse” operating environment, the company said.
/jlne.ws/2LunLRp‘F’ Is For? This ETF Is Named After FANGs and Holds No Facebook
Carolina Wilson and Sarah Frier – Bloomberg
Fund, known by ticker FNG, sold out of Facebook during scandal; Earlier, ETF had dumped Apple holdings ahead of earnings boost. What’s in a name? When hearing the acronym FANG, four technology stocks come to mind: Facebook Inc., Amazon.com. Inc., Netflix Inc., and Alphabet Inc.’s Google.
/jlne.ws/2JXeQ5fSeveral banks dismissed from U.S. metals price-fixing lawsuits
Jonathan Stempel – Reuters
A U.S. judge has dismissed five large banks from two antitrust lawsuits by investors alleging multi-year conspiracies to rig prices for hundreds of billions of dollars of transactions in the global silver and gold markets.
/jlne.ws/2JWBVFnFyre Festival Promoter Pleads Guilty to Ticket-Scam Charges
Bob Van Voris – Bloomberg
Billy McFarland, the architect of the failed 2017 Fyre Festival, pleaded guilty to new charges that he ran a fraudulent ticket business while on bail facing earlier fraud charges connected to the disastrous luxury concert series in the Bahamas.
/jlne.ws/2K0AoOwFannie Mae Debt Sale Sets Milestone For New Borrowing Benchmark; New index taking aim at scandal-ridden Libor passes $6 billion test.
Vipal Monga and Daniel Kruger – WSJ
A benchmark lending rate that regulators and investors hope can replace the scandal-plagued Libor as the foundation for trillions of dollars of debt from credit cards to business loans easily passed a key test.
/jlne.ws/2JYY9GR

Exchanges, OTC and Clearing

CME to launch six gasoline futures contracts
Reuters Staff
CME Group says it plans to launch six gasoline futures contracts effective on Aug. 26 and for trading from Aug. 27
/jlne.ws/2K0xN7eCME Group Achieves International Average Daily Volume of 4.2 Million Contracts in Q2 2018, Up 13 Percent from Q2 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved quarterly international (defined as outside of the US) average daily volume (ADV) of 4.2 million contracts during the second quarter of 2018, up 13 percent over the same period last year.
/jlne.ws/2K07pdJCME profits miss despite bump in trading volumes; Concerns around global protectionism sparked higher trade, particularly in agricultural products
Joe Rennison – FT
CME Group, the world’s largest futures exchange, today reported mixed earnings, tempered by trade concerns fuelling volumes as investors sought to protect against price fluctuations.
/jlne.ws/2K1xgSmCME quarterly earnings boosted by volumes, market data
John McCrank – Reuters
CME Group Inc (CME.O), the world’s largest futures exchange operator, said on Thursday its second-quarter earnings rose on the back of higher trading volumes and market data fees, as it works toward the close of its $5.5 billion acquisition of NEX Group (NXGN.L).
/jlne.ws/2K5ifiuMGEX Reports 25th Best Electronic Volume Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports July 25th as the fourth July date on the Daily Electronic Volume’s top 25 records list. Coming in at 19,396 contracts and beating out the previous title holder by 160 contracts, yesterday’s electronic volume now occupies the 25th-best overall spot.
/jlne.ws/2K0yeP4While the ECB holds on to its monetary policy, why not visit the home of the euro yield curve?
Eurex
The European Central Bank has decided to keep its monetary policy unchanged and freeze its benchmark interest rate on the deposit facility at -0.40 per cent. This is again a good opportunity to take a closer look at what Eurex interest rate derivatives have to offer.
/jlne.ws/2LqwSCwExchange Publishes CG Code Consultation Conclusions and Guidance for Boards and Directors
HKEX
Proposed changes to CG Code and related Listing Rules receive strong support; Amendments to CG Code and related Listing Rules to take effect 1 January 2019; Exchange publishes “Guidance for Boards and Directors” to help directors to be more effective
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) conclusions from its consultation on its Corporate Governance Code (CG Code) and related Listing Rules (Consultation Conclusions on Review of the Corporate Governance Code and Related Listing Rules, or Consultation Conclusions)1 along with “Guidance for Boards and Directors”.
/jlne.ws/2LuV7iW

Fintech

FIA Announces Partnership With Rise New York, Created By Barclays, To Promote Innovators Pavilion
Press Release
FIA today announced that Rise New York, created by Barclays, has joined the FIA Innovators Pavilion as a community partner. Rise New York will help FIA promote the Innovators Pavilion, FIA’s annual fintech showcase. Now in its fourth year, the Innovators Pavilion is part of FIA Expo, the world’s largest gathering of professionals in the derivatives markets. This year’s FIA Expo will take place in Chicago on Oct. 16-18.
bit.ly/2vbiG5HGoodbye HipChat: Slack and Atlassian Team Up on Chat Software; Stewart Butterfield’s startup will subsume Atlassian’s corporate chat tools to take on Microsoft.
Dina Bass and Ellen Huet – Bloomberg
Atlassian Corp. is selling its corporate chat software to rival Slack Technologies Inc. and taking a small stake in the startup, as they face greater competition from Microsoft Corp.
/jlne.ws/2JYY3isFortnite Mania Fuels Epic Growth to $8.5 Billion; Epic Games’ profits on the game have made “legendary character” Tim Sweeney a billionaire.
Devon Pendleton, Christopher Palmeri – Bloomberg
Tim Sweeney made Fortnite a phenomenon by doing something that sounds crazy: He gave it away. That strategy has made him a billionaire. In an industry chock-a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than $1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
/jlne.ws/2LoVcF5Schroders CEO: fintech is the ‘greatest opportunity we face’
Mark Cobley – Financial News
Peter Harrison, the boss of one of the UK’s largest asset managers, has said innovations in financial technology are the “single biggest opportunity” for his industry right now — as his firm Schroders steps up its efforts to build links with fintech entrepreneurs.
Speaking as the fund manager reported its first-half results on July 26, Harrison told Financial News the “really interesting step-change for our industry will come from technological innovation”. He added: “We are working with 25 or 26 fintechs across the business, across a whole range of different things — I see this as the single biggest opportunity we face.”
bit.ly/2v5pTnECySEC to Establish FinTech Innovation Hub with Focus on Blockchain
David Kimberley – Finance Magnates
Regulatory financial technology (FinTech) initiatives have been springing up across the globe over the past few years. This Friday, the main Cypriot regulator, the Cyprus Securities and Exchange Commission (CySEC), announced that it would also be creating an innovation hub.
bit.ly/2vaVB2ZAlexa, What’s Wall Street Saying About Amazon’s Earnings Beat?
Joe Easton and Jeran Wittenstein – Bloomberg
Shares up 4 percent pre-market amid cloud, advertising boost; Goldman Sachs, others raise price targets for the stock
Amazon.com Inc.’s record second-quarter profit drew a flurry of price target boosts on Wall Street. Analysts say strength in the cloud and advertising business, as well as operational improvements, have positioned the company for long-term growth. The shares rose 4 percent in pre-market trading in New York and are on track to open at a record high.
/jlne.ws/2K1e4nNThomson Reuters unit to be renamed Refinitiv after Blackstone deal
Reuters Staff
Thomson Reuters Corp’s (TRI.TO) Financial and Risk unit, in which U.S. private equity firm Blackstone Group (BX.N) is buying a majority stake, will be renamed Refinitiv once the deal closes, the company said in a statement on Friday.
/jlne.ws/2LptpnM

Cryptocurrencies

The Winklevoss Twins Want To Sell You A Bitcoin Fund; The Winklevoss twins filed a form with the SEC that’s the first step to selling shares in a fund that would track the price of Bitcoin. A look at the next move for the Facebook-suing twins.
Matthew Zeitlin – BuzzFeed News
Tyler and Cameron Winklevoss, impossibly strong-jawed and broad-shouldered rowers, tech entrepreneurs, and famous litigators of Mark Zuckerberg, are now two of the biggest and most famous players in Bitcoin, the cryptographic, digital currency whose wild price gyrations and security issues captivated the business press for a few weeks in March and April of this year. In April, the twins revealed to The New York Times that they owned some $11 million worth of Bitcoin.
/jlne.ws/2K14a5XWinklevoss-Backed Bid for Bitcoin-ETF Rejected by Regulators
Benjamin Bain – Bloomberg
Cryptocurrency declines after SEC announces its decision; Agency raises concern about oversight of Bitcoin’s spot market
Bitcoin fell after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss, showing the regulator remains skeptical that the market for the cryptocurrency is sufficiently free of abuse to bring trading to the masses.
/jlne.ws/2K1syEaBrock Pierce: The Hippie King of Cryptocurrency
Neil Strauss – Rolling Stone
Twenty-six men and women are seated along four folding tables laid end to end in the ballroom of a former Masonic lodge in Old San Juan, Puerto Rico. An eclectic mix, ranging from local charity workers to Silicon Valley investors to cryptocurrency early adopters, they all believe that they’re about to make history. Specifically, they are here to help Brock Pierce – a child actor turned video-game entrepreneur turned crypto titan – give away a billion dollars to charity. Not in a will after his death, but now, in the prime of his life and the peak of his career, at age 37.
/rol.st/2v8YBwBBitcoin $500,000 Creates a Buzz, But Technicals Point to Rally
Olivia Schaber – Bloomberg
Hedge fund manager predicts correction, then massive rally; Directional index shows biggest divergence since last year=
Comments from Morgan Creek Capital Management hedge fund manager Mark Yusko that Bitcoin could reach $500,000 in six years are heartening battered crypto bulls. They may be better served taking a look at some underlying technicals in the meantime.
/jlne.ws/2K5gIJgCrypto Futures Expansion Won’t Happen Soon, CME’s Duffy Says
Brian Louis – Bloomberg
Exchange head reiterates cautious approach to other contracts; Rival Cboe has hinted at wanting to expand crypto derivatives=
CME Group Inc. Chief Executive Officer Terry Duffy said that in his nearly four decades in trading, Bitcoin futures “might have been the most controversial launch of a product” and he reiterated the company’s not in a hurry to list more cryptocurrency-related contracts.
/jlne.ws/2K1Qdo9The World’s Dominant Crypto-Mining Company Wants to Own AI; In a rare interview, Bitmain’s Jihan Wu talks about his plans to take on Nvidia, Intel, and AMD.
Max Chafkin and David Ramli – Bloomberg
Even by the standards of Bitcoin, things are crazy in China. As the boom in cryptocurrencies has become the biggest speculative bubble in recorded history, a single company in Beijing’s Haidian District has been selling the chips that generate as much as 80 percent of the world’s cryptocoins. “We feel lucky,” says Jihan Wu, the co-chief executive of Bitmain Technologies Ltd., which was more or less unknown two years ago and, according to Wu, booked revenue of $3.5 billion in 2017. (On June 4, a Bitmain spokesman said Wu misspoke and the actual figure was $2.5 billion.)
/jlne.ws/2K1LT8jCrypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin – Bloomberg
In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.
/jlne.ws/2KjhdViSelf-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Setting Aside Action by
Delegated Authority and Disapproving a Proposed Rule Change, as Modified by Amendments
No. 1 and 2, to List and Trade Shares of the Winklevoss Bitcoin Trust
SEC
/jlne.ws/2K1BbP9As Crypto Meets Prediction Markets, Regulators Take Notice
Matthew Leising – Bloomberg
The next confrontation between government regulators and a blockchain startup appears set to ensnare a prediction market platform that goes by the name Augur.
/jlne.ws/2K0zFNiMike Novogratz’s Crypto Firm Lost $134 Million in the First Quarter
Doug Alexander – Bloomberg
Crypto-focused merchant bank releases first financial results; Quarterly losses led by trading digital assets, investments
Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, posted a $134 million loss in its first quarter, when the value of Bitcoin and other cryptocurrencies plunged.
/jlne.ws/2K0dYwN

Politics

Butina Sought a Secret Kremlin Line to the U.S. A Rockefeller May Have Helped
Polly Mosendz , Greg Farrell , and Ilya Arkhipov – Bloomberg
O’Neill hosted 2017 dinner for prayer-breakfast delegates; A Russian-language guide to Rohrabacher and other guests
A scion of the Rockefeller clan, George D. O’Neill Jr., was one of the U.S. conservatives who allegedly helped Mariia Butina’s efforts to build a secret line of communication back to the Kremlin, judging by details in recent U.S. filings.
/jlne.ws/2JZwAgDMueller Examining Trump’s Tweets in Wide-Ranging Obstruction Inquiry
Michael S. Schmidt and Maggie Haberman – NY Times
For years, President Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself.
/jlne.ws/2K07PRfSteve Bannon’s plot for the downfall of old Europe; The next EU parliament elections are a chance to defeat the far-right
FT
As an architect of Donald Trump’s 2016 presidential election victory, Steve Bannon knows a thing or two about unconventional political warfare. Now the godfather of the US alt-right is gearing for combat in Europe. His arena is the campaign for the next European Parliament elections, scheduled for May 23-26 2019. His chosen weapons, as in the US, are set to be the stoking of social tensions, economic nationalism, incitement of public anger at elites, systematic attempts to discredit reasoned argument and the spread of misinformation.
/jlne.ws/2K5jAWy

Regulation

U.S. regulator stands by decision to block Winklevoss bitcoin ETF
Trevor Hunnicutt, Michelle Price – Reuters
The U.S. Securities and Exchange Commission on Thursday stood by a decision blocking an exchange-traded fund that would have tracked bitcoin, citing concerns about market manipulation.
/jlne.ws/2K06iuzFinTech Regulation Bridges Silicon Valley and Washington D.C.
Stephanie MacConnell – Forbes
The FinTech community is closely watching the latest developments within the Consumer Financial Protection Bureau (CFPB). Recently, Kathy Kraninger was nominated as Director of the CFPB and, if confirmed, she will succeed acting Director Mike Mulvaney, who previously attacked the Bureau’s very existence and has worked to change policies and cut budget since taking the helm in November 2017.
/jlne.ws/2JZzO3JThe regulator is looking at platforms and so should you
Taha Lokhandwala – InvestorsChronicle
The Financial Conduct Authority (FCA), the financial services regulator, is investigating whether investment platforms are competitive and work in the interests of investors. It has recently published an interim report on its Investment Platforms Market Study, which has highlighted a number of areas of concern, including the difficulties in switching platforms and the poor rates of interest they offer on cash.
/jlne.ws/2K0xM3kCFTC Chairman Giancarlo To Keynote The West Texas Legislative
CFTC
/jlne.ws/2K1aXMDPodcast: CFTC Talks EP053: MARK YALLOP FMSB Part Two
CFTC
This week on CFTC Talks, we speak with Mark Yallop, chair of the Fixed Income, Currencies and Commodities Markets Standards Board. We cover the enormous cost to the world financial system of bad behavior, how to historically break down market misconduct into 7 categories and why trust is the heart of the financial markets.
/jlne.ws/2K1qLz8Nordic Credit Rating AS registered as Credit Rating Agency
ESMA
The EFTA Surveillance Authority (EFTA SA) has registered today the Nordic Credit Rating AS (NCR) as a credit rating agency under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (the CRA Regulation), as incorporated into the Agreement on the European Economic Area (EEA Agreement). This decision comes into effect on 3 August 2018. NCR is based in Oslo, Norway, with a branch in Stockholm, Sweden. NRC intends to issue corporate ratings.
/jlne.ws/2mMeNQzFCA proposes changes to rules for crowdfunding platforms
FCA
Following a post-implementation review of its crowdfunding rules, the Financial Conduct Authority (FCA) is opening a consultation on new rules for loan-based crowdfunding platforms.
/jlne.ws/2mSFeo5

Investing and Trading

Is the Key to Beating the Market Written in the Stars?; Henry Weingarten invests his clients’ money by charting the movement of heavenly bodies.
Simon van Zuylen-Wood – Bloomberg
It’s 11 a.m. at the Princeton Club in Midtown Manhattan. A number of financial professionals have gathered here for the “AFund June 2018 Natural Resources Investment Symposium.” Our first speaker is HSBC’s chief precious metals analyst, the aptly named James Steel, who promotes gold as a hedge against populist upheaval. After Steel, there are slideshows from several mining companies seeking investors. After that, lunch. A generic networking event, by all appearances.
/jlne.ws/2K1DDVRECB Keeps to Policy Path to End Bond Purchases
Carolynn Look – Bloomberg
Mario Draghi holds media briefing at 2:30 p.m. in Frankfurt; President will be quizzed on economic risks as QE exit nears
The European Central Bank stuck to its plan to end bond purchases as the European Union and U.S. stepped back from a trade war and the currency bloc’s economic expansion remained solid.
/jlne.ws/2K0B2LOU.S. domestic stock funds report more demand than peers abroad: Lipper
James Thorne – Reuters
Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.
/jlne.ws/2K1vfFMWall Street faces up to “bombshell guidance” at Facebook
Jamie Powell
Facebook’s second-quarter results — which prompted the company’s shares to plunge as much as 24 per cent (!!) overnight — was the first time the surveillance-capitalism machine’s revenue growth had missed expectations since 2015.
/jlne.ws/2K5QE0UIt’s All About Social Media Contagion, Not FAANGs: Taking Stock
Arie Shapira – Bloomberg
Stock futures are holding on to their slight gains thanks to Amazon decoupling from most of its FAANG peers, though momentum gets hit from another whiff from a social media bellwether as Twitter plunges ~16% on weak monthly active user numbers.
/jlne.ws/2K5lDKe

Institutions

What Does a Bank Meltdown Cost? Not Much, Actually; Sabadell hasn’t suffered enough from the fiasco at Britain’s TSB.
Edward Evans – Bloomberg
It was a spectacular fiasco, made even worse by the clumsy way in which it was handled. TSB Banking Group Plc’s attempt in April to transfer the records of its 5 million customers to a new IT system left about a million of them unable to access their accounts and vulnerable to fraud. At first, TSB said things were running smoothly. It makes you wonder what their idea of chaos is.
/jlne.ws/2JWQvN6A $14 Billion Fund Manager Feels ‘Vindicated’ by Facebook Plunge
Olivia Carville and Emily Chasan – Bloomberg
John Streur, an investor who sold his fund’s Facebook Inc. holding after the Cambridge Analytica privacy scandal, said he felt “vindicated” watching the social media giant’s free-fall Thursday.
/jlne.ws/2JWSUaAHere’s How ETFs With Biggest Facebook Exposure Traded Today
Elena Popina , Sarah Ponczek , and Carolina Wilson – Bloomberg
A six-week old Communication Services Select Sector SPDR Fund just had its worst day ever. A rout in Facebook Inc. is to blame for that.
/jlne.ws/2K5PBy0UBS to review misconduct policies after rape claim; Woman alleged she was assaulted by a more senior bank employee
Laura Noonan in New York – FT
UBS is reviewing how it handles sexual misconduct allegations after an employee who claimed she was raped by a colleague contacted the head of its investment bank, Andrea Orcel, to complain about how the bank dealt with her case.
/jlne.ws/2JZQGHmUBS Is Cutting Dozens of Staff in Wealth-Management Revamp
Emily Chasan and Sonali Basak – Bloomberg
16.18CHF+0.18+1.16%
UBS Group AG is laying off dozens of staff at its wealth-management division as it revamps the unit’s leadership team, according to people briefed on the matter.
/jlne.ws/2K1BjhwThe $5 Trillion Question: How Did the Firm That Pioneered ETFs Lose Its Lead?; State Street developed a hit investment product 25 years ago. Then more-focused rivals came along with better marketing and lower costs. Now the trust bank is No. 3 in the market it started.
Asjylyn Loder – WSJ
For State Street Corp. STT -0.32% , the company that pioneered the $5 trillion exchange-traded fund industry, it’s been a long way down.
/jlne.ws/2JZIqr5

Regions

Why Is China’s Currency Falling?; Worries about competitive devaluation are almost certainly misplaced.
Christopher Balding – Bloomberg
Since April, the yuan has fallen by almost 8 percent against the U.S. dollar. This has led many analysts and politicians to speculate that China is intentionally trying to devalue its currency to offset the effect of President Donald Trump’s tariffs. It almost certainly isn’t.
/jlne.ws/2K1K2QZHey Buddy, Can You Spare 2 Million for Coffee?
Vivianne Rodrigues – Bloomberg
ONE. MILLION. PERCENT. That’s how high inflation will climb in Venezuela by year’s end, according to the latest forecast by the International Monetary Fund.
/jlne.ws/2JYUKryChina should really start to worry about Trump; As Europe wins a reprieve over trade the portents for Beijing have commensurately darkened
Edward Luce- FT
It was Wednesday so Europe went from being a “foe” of America to a “great friend”. Next Monday might be different. Perhaps Europe will still be in Donald Trump’s good books. The only person who can say for sure is Mr Trump. Even he probably has little idea. But my hunch is that the ceasefire he struck with Jean-Claude Juncker, president of the European Commission, will hold. Mr Trump loves applause and the last-minute trade agreement with Brussels earned a transatlantic ovation. Europe has won a reprieve. The portents for China have commensurately darkened.
/jlne.ws/2K5RWZOMizuho Eyes $11 Trillion Held by Japan’s Rich Elderly
Gareth Allan and Yuki Hagiwara – Bloomberg
Bank began offering tailor-made trusts for wealthy retirees; Also expanding consulting for Japan pension funds, CEO says
Mizuho Financial Group Inc.’s trust banking arm has its sights set on exactly where the wealth is in Japan: the $11 trillion held by the nation’s elderly.
/jlne.ws/2JZS8tiRussia Extends Rate Pause as Risks to Inflation Halt Easing
Olga Tanas and Anna Andrianova – Bloomberg
Benchmark kept at 7.25% for third meeting, in line with survey; Central bank stays just a step short of level deemed ‘neutral’
Russia’s central bank kept interest rates unchanged for a third consecutive meeting and warned that external risks and the highest inflation expectations in almost a year mean monetary easing probably won’t resume until 2019.
/jlne.ws/2K1O0cf

Brexit

U.K.’s Brexit Options Narrow as Perilous Choices Loom for May
Tim Ros , Emma Ross-Thomas, and Jess Shankleman – Bloomberg
Barnier rejects compromise at heart of May’s Brexit strategy; Chances of no-deal exit, another election creep higher
The U.K.’s Brexit options are narrowing, and most of the choices are hazardous for Prime Minister Theresa May.
/jlne.ws/2K0YwR5Major French Tech Company’s CEO Fears Effects of Hard Brexit
Giles Turner and Mark Barton – Bloomberg
Capgemini SE Chief Executive Officer Paul Hermelin is predicting a hard Brexit will cause a knock-on effect to its British clients, potentially weakening demand.
/jlne.ws/2JYXmpn

Miscellaneous

‘Disappeared’ U.S. Records on Detained Migrant Kids Sparks Probe
Erik Larson – Reuters
Claims by a U.S. ethics watchdog that the Department of Homeland Security and other agencies may have lost or destroyed files relating to the separation of migrant children at the border have triggered a government probe into the proper retention of records.
/jlne.ws/2K01vJm*****Unforgivable.~JJL

John Lothian Newsletter

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Past Newsletters

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Wave Goodbye to Libor. Welcome Its Successor, SOFR

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Math Whiz Trades Without Humans to Build a $700 Million Fortune

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First Read Hits & Takes By JLN Staff Dan Stern is the subject of today's MarketsWiki Education Open Outcry Traders History Project video. Stern is part of a prominent Chicago Board of Trade family of traders and lovers of soccer.~JJL John...

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First Read Hits & Takes By JLN Staff ADM Investor Services Singapore has joined the Singapore Exchange as a Derivatives Trading and Clearing Member. And Singapore is a long way from Decatur, so this is big news for ADMIS.~JJL Did you know the CME Group offers a...

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

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