Hits & Takes
By John Lothian & JLN Staff
Thank you to Don Wilson, Jerry Hanweck and Lee Betsill for participating in the Bachelier Options Model virtual panel yesterday. It was quick and went well for the most part, though I am out of practice as a moderator and virtual panels are different. Thank you to the audience who showed up.
John Lothian Productions, the video production division of John J. Lothian & Company, Inc., recently produced an animated video for ErisX. The video explains who ErisX is and the services and products they provide. The script was written by Thom Thompson and the animation was developed by Patrick Lothian.
This type of video is just one style that John Lothian Productions offers, but it is particularly effective today as shooting video is harder to do as we shelter in place in Chicago and elsewhere.
However, next week John Lothian Productions will be publishing a short course on how to shoot video yourself. Patrick Lothian put this five part course together.
It would be particularly helpful for those traders who would like to participate in our Open Outcry Traders History Project and The Path to Electronic Trading video project. Look for the first videos from the latter project soon. We are seeking sponsors of the series. If your firm has a story to tell about the move from open outcry to electronic trading, you should talk to me about us conducting an interview with you, but you may also be interested in sponsoring this project.
NFA is holding a webinar titled Regulatory Oversight in a Virtual Environment on Wed, May 27, 2020 9:30 AM CDT.
Have a good weekend. Stay safe!~JJL
DGCX is holding a webinar on May 19 in partnership with Energy Intelligence, DWF, Euro Petroleum Consultants, DMCC and Qamar Energy, addressing the impact of the global situation on businesses in the energy sector. It is titled “Renewable Energy Post-COVID-19 World” and is from noon to 1:00pm GMT+4. You can register here. ~SR
FIA commends and offers refinements to CFTC’s proposed position limits rule
FIA today commends the CFTC for proposing a workable and flexible rule on speculative position limits for derivatives. The rule, which has been proposed and re-proposed several times since the passage of the Dodd-Frank Act nearly 10 years ago, provides a pragmatic framework for the agency and market participants while enacting the market protections sought by Congress. FIA welcomes the new effort by the CFTC to complete the rule in a way that sets spot month limits on core referenced futures contracts based upon updated measures of deliverable supply, aligns better with current commercial hedging practices, removes unnecessary regulatory burdens on market participants and seeks to protect market liquidity and efficiency.
***** All of a sudden position limits become important again.~JJL
NYSE set to partially reopen trading floors later this month; The American options and equities trading floors at NYSE will open to a small number of personnel at the end of the month.
Kiays Khalil – The Trade
The New York Stock Exchange (NYSE) will soon begin to partially reopen its American options and equities trading floors, after being forced to close them due to the global coronavirus pandemic. Both trading floors will resume trading activity on 26 May, NYSE said, but they will function with a reduced headcount as part of health and safety precautions.
*****Will the Starbucks on the trading floor be open? That is what I want to know.~JJL
Quartz to Lay Off 80 Employees; Nearly half the employees at the international business news site will lose their jobs as the eight-year-old outlet emphasizes paid subscriptions over advertising revenue.
Marc Tracy – NY Times
Quartz, a business news site with offices around the world, is laying off nearly half its staff in a substantial restructuring after the economic fallout of the coronavirus pandemic drastically cut into its advertising revenue.
*****I am sorry to see this. Journalism is a tough business and getting tougher.~JJL
Thursday’s Top Three
Our most-read story Thursday was Reality Check, Thom Thompson’s commentary for JLN about Acuiti’s report on clearing firm data. Second was John Lothian’s commentary, FIA Negative Price Webinar Emphasizes Proactive Communications. Third was the actual Acuiti report referred to in Thom’s piece, GH Financials and JP Morgan top the list for customer satisfaction.
CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin underwent its third halving in history, a process by which the reward that miners get for successfully mining a bitcoin is systematically reduced by half, a primary feature in bitcoin’s protocol. The first block produced on the bitcoin blockchain after the halving was produced by Antpool, the fourth-biggest mining pool by processing power. Since the third halving, revenue from mining pools worldwide has decreased significantly, along with the bitcoin protocol’s hashrate.
177,557,255 pages viewed; 24,130 pages; 224,170 edits
|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
1,380 pages; 12,248 edits
New York Stock Exchange to Reopen Trading Floor; Traders will be required to wear masks and abide by social-distancing rules to limit the spread of coronavirus
Alexander Osipovich – WSJ
The New York Stock Exchange will reopen its iconic trading floor later this month, two months after the coronavirus pandemic forced its closure. Only a limited number of traders will return to the floor when it reopens May 26, and they will be required to wear masks and abide by social-distancing rules to limit the spread of Covid-19, NYSE President Stacey Cunningham said in an opinion article published on The Wall Street Journal’s website Thursday that unveiled the plan.
Pandemic stirs Wall Street’s social conscience
Swati Pandey, Simon Jessop, Ross Kerber – Reuters
Worker welfare is having a moment on Wall Street. The need to restart production lines and reopen offices idled by the coronavirus pandemic mean issues such as sick pay and working conditions are suddenly a top priority for the C-suite and, for some investors, a golden opportunity to apply the principles of ethical investing.
SEC Charges Two Companies Over Statements About Coronavirus Testing Products; The companies are the latest targeted by regulators for allegedly fraudulent claims
Dylan Tokar – WSJ
U.S. regulators have brought charges against two publicly traded companies for allegedly misleading investors about products intended to help combat the novel coronavirus. Turbo Global Partners Inc. and Applied BioSciences Corp. were charged Thursday for having issued news releases that contained false and misleading information about finger-prick tests and thermal scanning equipment used to detect the virus, according to complaints filed by the U.S. Securities and Exchange Commission. Turbo Global’s chief executive was also charged with participating in the alleged fraud.
How bank hedging jolted investors into talk of negative rates; Fed officials struggle to convince markets that sub-zero levels are off limits
Eric Platt, Colby Smith and Laura Noonan – FT
Hedging by some of the biggest banks in the US last week sparked a flurry of concern that the Federal Reserve could cut interest rates below zero for the first time, senior traders say. Rates on so-called fed funds futures contracts — key tools for investors seeking to bet on or hedge against interest-rate shifts — popped above 100 last week. That appeared to be a signal from the market that negative policy rates were on their way.
Nasdaq Launches Service to Track Environmental, Social, and Governance Impact; Investors and investment advisers can track ESG metrics by company or portfolio
Nasdaq (Nasdaq: NDAQ) today announced the launch of a new service, the Nasdaq ESG Footprint, to provide banks and institutional investors the ability to help their clients track the Environmental, Social, and Governance (ESG) impact of their portfolios and individual securities based on variety of parameters. The new service tracks a wide range of sustainability criteria, including carbon footprint, board diversity and companies flagged for human rights issues. The data is analyzed with the help of Nasdaq’s industry-leading data analytics tools. Nordea is the first bank to provide the service to their clients.
ABN Amro prioritises review of investment bank as new chief says more de-risking is necessary; New chief executive at ABN Amro, Robert Swaak, says exposure to two clients in the first quarter was disappointing as he ramps up review of the CIB division.
Hayley McDowell – The Trade
The recently appointed chief executive of ABN Amro will prioritise a review of the Dutch bank’s investment banking activities, after he expressed disappointment in its exposure to two clients following a EUR395 million loss in the first quarter.
Coronavirus is strengthening the hand of ESG investors; Pandemic has coincided with strong flows into funds with sustainability mandates
Billy Nauman – FT
Just a few months ago, it seemed as if the fight against climate change had built some real momentum. But now, with coronavirus bringing global commerce to a screeching halt, sustainability is feeling like an unaffordable luxury for some cash-strapped companies.
Fund managers pile into $65bn Covid-19 bond market; Companies and governments rush to issue debt to help ease the effects of the pandemic
Anna Gross and Patrick Temple-West – FT
A new coronavirus bond market has reached $65bn in just a few months and is set to keep growing, as companies and governments rush to issue debt to help ease the effects of the pandemic.
Whistleblower Wins $1 Million After He Was Fired for Blackmail
Gaspard Sebag – Bloomberg
Tereos executive warned of security, corruption concerns; Sugar maker says it will appeal ruling French appeal court
A former executive at a French sugar maker won nearly $1 million in a lawsuit that came down to whether he was a whistleblower or a blackmailer. Philippe Roux warned Tereos about his corruption suspicions and dangerous work conditions within weeks of taking over as head of its Romanian subsidiary in late 2016. He then asked to leave the sugar maker as he worried he’d been prompted to take the position under false pretenses and worried he’d be blamed for the previous management’s shortcomings.
Pandemic Punches 1.7-Billion-Barrel Hole in Global Oil Demand; IEA, EIA and OPEC agree on scale of demand destruction as lock-downs pass their peak
Julian Lee – Bloomberg
A fifth of global demand for oil will disappear this quarter. All three of the major forecasting agencies now agree that the world faces its biggest-ever slump in oil consumption, after governments imposed movement restrictions on billions of people to combat the coronavirus. The scale of the demand hit means that despite producers implementing unprecedented output cuts, stockpiles will soar this year.
IHS Markit Rolls Out New Buy-Side Derivatives Risk Modeling Platform; The product combines emerging technologies to offer speed, scale, and new perspectives on credit spreads and portfolio performance by overlaying financial data with alt data.
Rebecca Natale – Waters Technology
When Mark Findlay, global head of financial risk analytics at IHS Markit, joined the data giant in January, he had three major goals in mind, none of which were tied to the Covid-19 pandemic that has since gripped the world. Now they’re inextricable.
World to America: Why Are You Rewiring Your Markets?
Nandini Sukumar – Barron’s
The United States has a special affection for its stock markets. The three business news channels that dominate market-focused viewing globally are all American. In the U.S., 70% of financial intermediation takes place on (stock and bond) markets compared to 30% through banks; in Europe, the figures are about the reverse. With 55% of Americans owning equities, the push and pull of the bull and the bear have a huge influence on the confidence of the American consumer and the wealth of the American retiree.
Swamped bankruptcy courts threaten US recovery; White House must fix the process before the system is overwhelmed
Gillian Tett – FT
In early March, just as Covid-19 was spreading alarm in the west, the US sporting goods retailer Modell’s filed for bankruptcy. The company has long been blighted with excess debt and poor sales, and was overdue for a shakeout.
Coal’s U.S. Downfall Is a Lesson for Power Markets
Nathaniel Bullard – Bloomberg
Imagine that you’re a power engineer in 1975, designing and building the U.S. electrical grid. Coal is undoubtedly king, generating nearly three times as much as gas, oil, or hydropower. Nuclear power is a much smaller contributor, and there’s basically nothing else. Now imagine a time-traveling engineer from 2020 shows up and tells you that in 45 years nuclear power will be equal to coal, or even exceed it.
Awkward greetings and long queues as Hong Kong’s financiers return to work
Sumeet Chatterjee, Scott Murdoch – Reuters
The greetings are awkward and the skyscraper lifts half-empty. But Hong Kong’s cafes are filling and taxis are harder to find as the first wave of financial professionals return to their offices after an easing of coronavirus lockdown rules.
How One Hedge Fund Made Money Amid Singapore Hub Meltdown
David Scanlan – Bloomberg
Tradeflow targets steady returns in volatile trade finance; Fund has been getting inquiries in wake of Hin Leong saga
As Singapore was roiled by troubles at two commodity trading firms that may spark billions in bank losses, one hedge fund eked out a small gain.
U.S. food aid program launches with companies scrambling to deliver
Christopher Walljasper – Reuters
Texas-based CRE8AD8 LLC bid for a federal government contract to quickly rescue food from struggling farmers and deliver it to U.S. food banks as fallout from the coronavirus pandemic has put millions of Americans out of work and driven many to seek help putting food on the table.
Covid-19 Reality Has a Liberal Bias; Unfortunately, the virus doesn’t care about political spin.
Paul Krugman – NY Times
On Tuesday, the U.S. government’s top experts warned that Covid-19 was by no means under control, and that premature easing of social distancing could have disastrous consequences. As far as I can tell, their view is shared by almost all epidemiologists. But they were shouting into the wind. Clearly, the Trump administration and its allies have already decided that we’re going to reopen the economy, never mind what the experts say. And if the experts are right and this leads to a new surge in deaths, the response won’t be to reconsider the policy, it will be to deny the facts.
Investors warn Covid-19 crisis is paving the way for inflation; Huge stimulus could lead to ‘red hot’ price rises over the longer term, say fund managers
Robin Wigglesworth, and Tommy Stubbington and Laurence Fletcher – FT
Powerful shots of stimulus from governments and central banks will push up inflation once the immediate Covid-19 crisis fades, according to some high-profile fund managers.
The Covid-19 College Gap Year Exposes a Great Economic Divide; More students are considering deferral, and those who do tend to pay full tuition, which threatens campus budgets.
Janet Lorin – Bloomberg
Sunny Hostin, a host of ABC’s The View, shared some wonderful news several weeks ago on her program: Her son got into Harvard. But Gabriel Hostin won’t be going this fall. He deferred his admission so he can avoid burnout. He’ll also sidestep the worst of the pandemic. “I see a gap year as all about self-exploration, self-enrichment, community service, and maturity, learning where you are in the world,” Gabriel says. “I’m blessed to be in the position I am in.”
Feeding America Should Become a Federal Priority; The Sept. 11 attacks inspired a department of homeland security. Should Covid-19 do the same for food security?
Amanda Little – Bloomberg
It was mid-April when Rosa DeLauro, a Democratic Representative from Connecticut, realized that the U.S. had entered the early stages of a food crisis. Thousands of minimum-wage food workers were contracting Covid-19. Major meat-processing plants were shutting down. Livestock producers were euthanizing their animals by the tens of thousands. Vegetable growers were plowing unsold produce back into the soil. Millions of jobless, hungry Americans were signing up for food relief.
Food Banks Hunt Frantically for Meat and Help Amid Crisis; Demand surges as virus tosses 36 million Americans out of work
Gabrielle Coppola and David R Baker – Bloomberg
With U.S. meatpacking plants shut down by the coronavirus, one food bank desperate for donations is mending the broken supply chain itself. Midwest Food Bank, a nonprofit in Normal, Illinois, is raising money to pay area processors to cut and package pork from hog farmers with no buyers.
Purell’s Claim to Combat Disease Spurs Demand — and Lawsuits
Bob Van Voris and Gerald Porter Jr. – Bloomberg
Hand sanitizer sales surge as states begin to ease lockdowns; Consumers sue over claims gel can prevent viral infections
Everyone’s favorite hand sanitizer may have to stand trial for claiming it can stop you from getting sick. A trio of lawsuits has hit Purell’s maker, Gojo Industries Inc., since the World Health Organization declared the coronavirus outbreak a public health emergency on Jan. 30. The coveted alcohol gel doesn’t live up to its promises, according to the suits.
W.T.O. Chief Quits Suddenly, Adding to Global Turmoil; Roberto Azevêdo, director-general of the World Trade Organization, has been a proponent of international cooperation, putting him at odds with the Trump administration.
Jack Ewing – NY Times
The head of the organization charged with bringing a semblance of order to international trade relations resigned unexpectedly Thursday, adding another element of uncertainty to commerce in the midst of the coronavirus pandemic and escalating trade conflicts.
Coronavirus Drives 75% of Small Businesses to Seek Federal Aid; Just 38% of survey respondents have received funds through the Paycheck Protection Program
Amara Omeokwe – WSJ
Three out of four U.S. small businesses have sought federal aid to cope with fallout from the new coronavirus, according to a Census Bureau survey released Thursday, in another indication of the widespread damage caused by the pandemic.
Surging Pork Prices Highlight Pandemic Debates Sweeping America
Millie Munshi – Bloomberg
The meat crisis is reverberating across America. Not just because of the obvious concerns over supplies, but also because it hits right at the center of a number of debates stirred up by the pandemic.
Exchanges, OTC and Clearing
OCC Named Best Clearing House – Equities by Markets Media; Third Consecutive Year Highlights OCC’s Commitment to Providing World-Class Services to Users of U.S. Equity Derivatives Markets
OCC, the world’s largest equity derivatives clearing organization, announced today that it was named Best Clearing House – Equities by Markets Media for the third consecutive year. The award was announced today as part of the publication’s 8th Annual Markets Choice Awards.
CME to Make Changes to Livestock Markets
Blue Line Futures via Agweb
Two weeks ago, we wrote about the complaint we filed with CME, regarding the pre-market livestock markets. CME announced yesterday that they will shorten pre-market livestock markets to 8:00am-8:30am CT (previously 6:00am-8:30am CT). Little victories. For those of you who are unaware of what was happening in the pre-market, it was essentially spoofing. The market was showing limit up or limit down 75% of the time from 6:00am-8:29am CT, affecting how honest market participants prepare for the day’s trade.
B3 Announces Results For The First Quarter Of 2020 – Uncertainties Brought About By The Spread Of COVID-19 During The First Quarter Of 2020 Have Caused Intense Volatility In The Global Financial And Capital Markets
B3 S.A. – Brasil, Bolsa, Balcão (ticker: B3SA3) reports today its first quarter 2020 (1Q20) earnings. Total revenues reached R$2,125.2 million, a 38.7% increase over the same period of the previous year (1Q19), while EBITDA totaled R$1,569.3 million, up by 61.6%. The Company’s recurring net income totaled R$1,156.6 million.
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange Closed for Victoria Day
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, May 18, 2020 for the Victoria Day holiday The Exchanges will re-open for regular trading on Tuesday, May 19, 2020 .
Moscow Exchange announces results for the first quarter of 2020
Moscow Exchange (MOEX) today announces its financial results in accordance with International Financial Reporting Standards (IFRS) for Q1 2020. Record fee income on the Equities and Derivatives Markets, as well as strong performance by the FX Market, helped MOEX achieve an all-time high quarterly F&C income.
Stock exchange Berlin-Constituent Exchange Council meeting
At today’s meeting of the Exchange Council, the long-standing chairman Prof. Dr. Jörg Franke (Tradegate AG Wertpapierhandelsbank) was confirmed in office for the period 2020 to 2022. Deputy Chairman is Sascha Rinno (ICF Bank AG).
Nasdaq Repackages Clearing Platform for NFF Tech Stack; The exchange will add further portfolio applications to the NFF according to market demand.
Wei-Shen Wong – Waters Technology
Nasdaq is adopting a microservices model as it repackages its clearing platform for inclusion in the Nasdaq Financial Framework (NFF) tech stack. Lars Ottersgård, head of market technology at Nasdaq, tells WatersTechnology that the microservice components within the clearing platform include tools for multi-asset clearing, real-time risk, collateral management, OTC workflow management, settlement instruction, price calculation, validation, reporting, and services.
SGX and ESS launch essay competition on capital markets of the future
Singapore Exchange (SGX) and the Economic Society of Singapore (ESS) have partnered to launch the SGX-ESS Essay Competition that encourages participants to analyse and debate on how the networks and mechanisms of price formation are likely to evolve in the future. Markets are collections of individual sellers and buyers determining the prices of goods and services to enable transactions. This price formation and discovery is a key function of any benchmark market and has typically been centralised for millennia.
Fixed Income Highlights – May 2020 edition
Firstly, I would like to send all of our members my sincerest regards in these extraordinary times and thank them for their continued support. April was a mixed month for European Fixed Income (FIC) markets. Overall, our volumes were down across the German benchmarks except for our Schatz options, which saw a growth of 198.4%. The options were primarily driven by flows emanating from OTC markets in the cap/floor versus swaption space. With Euribor’s high relative to the same period last year, investors looked to position themselves in the spread between the two in the front end. The Italian and French segments continued to be well supported, with volume growths of 32% and 111.4% respectively in options as intra-month volatility spiked to circa 17% in BTP’s.
Equity Index Highlights – May 2020 edition
Global equity markets saw an impressive bounce back as investors chose to look towards positive data points on infection rates and vaccine hopes emerged. The initial leg of this rally came immediately after the first large quarterly expiry of the year, indicative that derivative positioning may have been a significant factor in triggering this short-term support. Volumes at Eurex remained elevated compared to the same month last year as on-going hedging demand was evident across our benchmark products:
Nasdaq launches ESG impact tracker; Nordea is the first bank to implement the new ESG impact tracker tool from Nasdaq, which analyses sustainability criteria for portfolios and securities.
Hayley McDowell – The Trade
US exchange group Nasdaq has launched a new service to help clients track the environmental, social and governance (ESG) impact of portfolios and securities based on various factors.
NYSE aims to partially reopen iconic trading floor on May 26
Thornton McEnery – NY Post
NYSE to shut down trading floor Monday due to coronavirus
The Big Board is switching back on. The head of the New York Stock Exchange on Thursday said the iconic trading floor will partially reopen on May 26 while adhering to strict new health guidelines.
Moscow Exchange To Donate RUB 100 Mln For Pandemic Relief
Moscow Exchange is donating RUB 100 mln to assist those affected by COVID-19. The funds will be used to purchase medical equipment and personal protective equipment and to aid healthcare professionals, social institutions and the elderly. The program will be rolled out in Moscow, St. Petersburg and Russia’s regions simultaneously, and will include:
Nigerian Stock Exchange Hosts First Virtual Automated Trading System (ATS) Broker Certification Training Programme
The Nigerian Stock Exchange (“NSE” or “The Exchange”) is sustaining its digital credentials with the commencement of its first online Automated Trading System (ATS) Certification Training for graduate members who desire to become Authorized Dealing Clerks of The Exchange. The first cohort under this new remote framework consists of 33 participants who will undergo this training from 8 – 14 May 2020.
Your Kids May Never Return to Normal Schooling; Socrates never had a classroom, but some of his students, such as Xenophon and Plato, turned out rather well.
Andreas Kluth – Bloomberg
As a side effect of Covid-19, about 70% of the world’s children aren’t sitting in physical classrooms anymore. And even where schools are gradually reopening, they’re not returning to normal. Here in Berlin this week, my children started going back in a complex rotation of short and staggered shifts; their class time for the remainder of this academic year is measured in hours, not weeks. All over the world and maybe for years to come, kids will spend much less time in brick-and-mortar schools.
Bloomberg upgrades data service with ‘click-to-buy’ function; The Enterprise Access Point at Bloomberg gets upgrade to simplify access, integration and data discovery.
Kiays Khalil – The Trade
Bloomberg has made several upgrades to its data website, Enterprise Access Point, to provide its Data License clients with more easily accessible content. The upgrade is in response to client demand for ‘application-ready’ data that is immediately useable, which Bloomberg said it has attempted to meet with two new features, data marketplace and dataset creator.
Northern Trust rolls out machine learning tech for FX management solutions; The new solution designed in partnership with Lumint will enable greater oversight of thoughts of daily data points in the currency management lifecycle.
Joe Parsons – The Trade
Northern Trust has deployed machine learning models within its FX currency management solutions business, designed to enable greater oversight of thoughts of daily data points.
INTL FCStone installs new risk management platform for FCM operations; The Technancial Company’s JANUS risk management platform will enable full visibility of client risk exposures across regions at INTL FCStone.
Kiays Khalil – The Trade
US futures broker INTL FCStone has said it will implement a risk management platform from The Technancial Company (TTC) to monitor its growing multi-asset business.
Eventus Systems wins 2020 Markets Choice Award for Best in RegTech – Surveillance and Financial Risk Management; Markets Media award is latest in series of award wins, recognitions
Eventus Systems, Inc., a leading global trade surveillance and risk management software platform provider, today won Markets Media’s 2020 Markets Choice Award (MCA) for Best in RegTech – Surveillance and Financial Risk Management. Eventus earned the honor for its leadership among providers of regulatory technology (RegTech) solutions in the financial industry.
Singapore’s Temasek throws weight behind Facebook’s Libra; Development could help breathe new life into under-fire digital currency project
Mercedes Ruehl and Hannah Murphy – FT
Singapore’s Temasek, one of the world’s biggest institutional investors, has thrown its support behind the Facebook-led digital currency Libra in a development that could help breathe new life into the under-fire project.
Singapore’s Temasek Joins Facebook-Backed Libra Association
David Ramli – Bloomberg
Singapore state investor Temasek Holdings Pte has joined the Libra Association — the organization behind Facebook Inc.’s proposed digital currency. Libra said in an emailed statement that San Francisco-based crypto investment firm Paradigm, as well as investor Slow Ventures, have also joined as new members.
Pantera Capital’s Crypto Hedge Funds Are Losing Double Digits, But Its Bitcoin Fund Is Up 10,000% to Date
Ada Hui – Coindesk
Heavy losses are rocking alternative crypto-asset funds at Pantera Capital, one of the oldest cryptocurrency investment managers, and providing stark contrast to its bitcoin fund’s gains. Pantera Capital’s flagship bitcoin fund – a fund holding bitcoin (BTC) since 2013 and bitcoin cash (BCH) since 2017 – lost 75.6% in 2018 and gained 87.7% in 2019, according to internal materials seen by CoinDesk. The last two years dragged the bitcoin fund’s historical returns to 10,162%, down 54% from 2017’s peak of 22,321% but still exceeding all-time returns at elite funds hundreds of times over.
Visa is seeking a patent for ‘digital fiat currency’ – and the filing points to a central bank use case
Yilun Cheng – The Block
Payment giant Visa has submitted a patent application concerning the creation of digital currencies on centralized computers. According to the filing, the technology aims to address central banks’ concerns about digital dollars by giving them control over the currency’s volume and value. In comments made at a JP Morgan conference, Visa CEO acknowledged digital currencies backed by fiat as a potential emerging payments technology.
CoinMarketCap updates exchange ranking system to include Web traffic, Binance now ranks first
Michael McSweeney – The Block
Crypto data aggregation site CoinMarketCap has unveiled a new change how it ranks exchanges, and now includes a metric of Web traffic as part of that calculation. The change went live on Thursday after CMC announced the move in a May 13 blog post. “In most cases, with crypto being a retail-driven market, for an exchange to have high volumes, it needs to have a large number of retail traders (i.e. buyers and sellers).
BitGo Now Providing Custody for India’s Largest Crypto Exchange
Sebastian Sinclair – Coindesk
BitGo is now providing its custody services to India’s largest cryptocurrency exchange by trading volume, CoinDCX. Announced Thursday, BitGo began storing cryptocurrencies held by CoinDCX last week, with the aim of ensuring the assets are kept “safe and secure.” The custodial services extend to deposits at the exchange’s lending arm, DCXLend.
Interview – FATF: How Will the Guidelines Affect Canada’s Crypto Industry?
Rachel McIntosh – Finance Magnates
Canada’s cryptocurrency industry is bracing for the implementation of FATF guidelines. As of June 2020, it will have been one year since the Financial Action Task Force (FATF) published Recommendation 16; it will also be the deadline for when countries should have entered the process of making these guidelines into laws.
50-Year-Old Australian Woman Charged With Unlawfully Exchanging Over $3M in Crypto
Sebastian Sinclair – Coindesk
An Australian woman in her fifties has been charged by New South Wales State Police for unlawfully exchanging millions of dollars-worth of cryptocurrency including bitcoin. As reported by 9News Australia, detectives from the New South Wales (NSW) Cybercrime Squad charged the unnamed woman after conducting a search of her car outside a shopping center in Burwood, Sydney, on Thursday and discovering AU$60,000 (US$38,736) in cash and 3.8 bitcoin on a hard wallet device.
Bitcoin hashrate futures go live on FTX exchange, for miners to hedge their risks
Yogita Khatri – The Block
Crypto derivatives exchange FTX has become the first notable platform to launch bitcoin hashrate futures. These products help miners to hedge against bitcoin’s mining difficulty adjustments.
Bitcoin Options Trading at CME Surged to New Highs in Halving Week
Omkar Godbole – Coindesk
Investor interest in bitcoin options listed on the Chicago Mercantile Exchange (CME) peaked to record highs in the days after the recent halving event.
US Senators Chuck Grassley (R-Iowa) and Jon Tester (D-Montana) propose bipartisan legislation to increase proportion of “spot” payments meat packers are required to negotiate.
Rolling out the second plank of the Rancher Relief Plan to bring critical support to Montana cattle producers who have been hit hard by the coronavirus pandemic, US Senator Jon Tester, the Senate’s only working farmer, introduced bipartisan legislation to increase the proportion of cash payments in the cattle market to improve pricing transparency and provide stability to independent producers and small feeders.
Treasury eyes lifting loan caps for ‘squeezed middle’ companies; Ministers look at revamp of scheme after poor uptake from midsized UK businesses
Daniel Thomas and Jim Pickard- FT
Ministers are looking at offering new help to the “squeezed middle” of larger British companies by sharply lifting the cap on state loans available during the coronavirus crisis.
Sen. Burr to Step Aside as Intelligence Panel Chairman While Facing Stock-Trade Probe; Move comes after FBI seized North Carolina Republican’s cellphone as part of investigation
Sadie Gurman and Andrew Duehren – WSJ
Sen. Richard Burr will temporarily step down as the chairman of the high-profile Senate Intelligence Committee after FBI agents seized his cellphone in their investigation of stock trades he made shortly before the coronavirus roiled markets.
Senate intelligence chair steps down during trading probe; Richard Burr relinquishes post while his stock sales after coronavirus briefing are examined
Lauren Fedor – FT
Richard Burr, the Republican senator from North Carolina, has stepped down as chairman of the Senate intelligence committee as federal investigators investigate his sale of millions of dollars in stock shortly before US markets fell in response to the coronavirus pandemic.
Trump threatens to cut off relations with China; New rhetorical blast comes as US increases criticism of Beijing over the coronavirus
Demetri Sevastopulo – FT
Donald Trump has warned that he could “cut off the whole relationship” with China, in the latest escalation of US tensions with Beijing as he increasingly blames China for the global spread of the coronavirus.
Sen. Kelly Loeffler gives feds records related to insider trading claims
Noah Manskar – NY Post
Sen. Kelly Loeffler gave the feds records related to her stock trades amid questions about sales she made before the coronavirus hammered global markets, according to reports.
CFTC Issues Additional Relief in Response to COVID-19
Morgan Lewis via JD Supra
The US Commodity Futures Trading Commission recently issued more no-action letters in response to the coronavirus (COVID-19) pandemic, providing relief from capital requirements and fingerprint requirements.
Business interruption insurance during the coronavirus pandemic – High Court test case; This statement sets out how we are engaging with policyholders and insurance intermediaries on business interruption (BI) insurance.
The coronavirus (Covid-19) pandemic and the Government controls imposed as a result are causing a substantial level of loss and distress for businesses, in particular for SMEs. A large number of claims are being made to insurers under the terms of business interruption (BI) insurance policies.
SEC Charges Companies and CEO for Misleading COVID-19 Claims
The Securities and Exchange Commission today announced charges in two cases involving companies that claimed in press releases to offer products to combat the COVID-19 virus – one against Applied BioSciences Corp. and one against Turbo Global Partners, Inc. and its CEO, Robert W. Singerman. The SEC previously suspended trading temporarily in the securities of Applied BioSciences and Turbo Global.
ESMA sees potential decoupling of financial market performance and underlying economic activity
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today publishes the first complete risk dashboard for 2020, and highlights the very high risks in all areas of ESMA’s remit. The assessment remains at the same level as the separate risk update published on 2 April.
ESMA supports ESRB actions to address COVID-related systemic vulnerabilities
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, has published a statement supporting the recommendations issued by the General Board of the European Systemic Risk Board (ESRB). These recommendations are part of a set of actions to address the Coronavirus emergency from a macroprudential perspective.
Australia’s regulator lifts trading restrictions for big brokers; After equity markets in Australia exceeded processing capacity on 13 March, the regulator imposed restrictions on the number of trades large brokers could execute.
Hayley McDowell – The Trade
The securities regulator in Australia has lifted trading restrictions for large brokers following an exponential increase in the number of trade executions at the height of the coronavirus pandemic.
ASIC sets expectations for maintaining equity market resilience
ASIC has outlined its expectations for all market participants to act appropriately to ensure Australia’s equity markets remain resilient. In a letter published today [14 May, 2020], all equity market participants are requested to take reasonable steps to ensure the number of trades matched from their orders:
U.S. commodities regulator warns of more volatility, possible negative prices
David Gaffen – Reuters
The top U.S. commodities markets regulator warned exchanges and brokerages on Thursday that they should be prepared for volatility and possible negative pricing for certain contracts, nearly one month after U.S. oil futures plunged into negative territory for the first time in history.
EU watchdogs to confer over extensions to short-selling bans
European Union countries that introduced temporary bans on short-selling of shares will together decide this week whether they should lapse or be extended, French markets regulator AMF said on Thursday.
Investing and Trading
Barclay CTA Index Gains 0.12% in April, According to Backstop BarclayHedge; Managed futures continue to produce positive results even as the coronavirus pandemic causes massive economic disruptions
As the economic toll of the novel coronavirus mounted, managed futures posted another positive month in April and gained 0.12% according to the Barclay CTA Index, compiled by BarclayHedge, a division of Backstop Solutions. Year-to-date, CTAs gained 1.43% through the end of April.
The Stock Market Is Finally Beginning to Accept Reality; The possibility of a ‘V-shaped recovery’ is looking more remote, but not every stock this week was a loser
Paul Vigna – WSJ
For weeks, skeptical market observers have been asking: Why are stocks rising? The rally seemed particularly at odds with the backdrop of a global pandemic and the worst economy in decades. Enter reality. It is becoming clearer that the economy isn’t going to come roaring back quickly, and investors are catching on. The Dow lost 4.5% from Monday to Wednesday, its largest three-day drop since hitting bottom in March. Economically sensitive sectors such as energy and industrials were hit hardest, down 7.4% and 5.6% through Thursday, respectively.
How to prepare financially for the unexpected; Seven ways to tackle changes to your financial plans
Michael Martin – FT
Black swan events come along periodically. My job as a wealth manager is to prepare my clients, as much as possible, for the unexpected. As we become more accustomed to the lockdown, dragging out paperwork, having a reality check and adapting financial plans is activity many of us are already undertaking.
Nickel investing comes with a heavy price; The metal is in short supply and hard to source ethically
John Dizard – FT
Financial gloomsters have been in much better spirits lately. While the world’s health and economy are in deep trouble, contrarians can now prove they were right all along.
The ECB must shift to a wholesale acceptance of junk bonds
Jens van ‘t Klooster – FT
When the euro’s monetary guardian was set up, a decision was made to allow each national central bank to keep its existing practices in place. The decision ensured that a hodgepodge of systems exists to this day. For example, the Banque de France – unlike most other central banks – has historically accepted bank loans from non-financial companies. It still visits 50,000 firms as part of a labour-intensive credit-evaluation process. Some central banks have internal credit-rating facilities; others do not.
British Pound Becomes Pariah of World Currencies
Anooja Debnath – Bloomberg
Sterling is the worst-performing G-10 currency of past month; EU-U.K. talks fraught with no compromise yet on key issues
The pound is back to being the pariah of the currency world as renewed Brexit risks worsen the troubles of a market still reeling from the shock of the pandemic.
Why Big Investors Aren’t Betting It All on a Coronavirus Cure; Successful efforts that could help billions of people might not result in big profits for shareholders
Gregory Zuckerman – WSJ
As drug companies race to discover treatments for the new coronavirus, big investment firms are placing cautious bets on likely winners.
Acquitted former Barclays rainmaker Jenkins plots gentler comeback
Kirstin Ridley – Reuters
A near decade-long battle to clear his name has ended in victory, but the star rainmaker credited with playing a pivotal role in saving one of Britain’s biggest banks from a government bailout in 2008 is still waiting to put his life back on track.
BNP Paribas Securities Services Begins Operations in Mexico
BNP Paribas USA Inc.
BNP Paribas Securities Services, a leading global custodian with USD 11.8 trillion in assets under custody as of December 31, 2019, is pleased to announce that it has begun operations in Mexico.
UK stockpicker Mark Barnett to leave Invesco; Departure of Woodford protégé comes after years of poor performance in funds he managed
Attracta Mooney and Siobhan Riding – FT
Mark Barnett, one of the UK’s best-known stockpickers and a former protégé of Neil Woodford, is set to leave Invesco after suffering years of bad performance and heavy redemptions across the funds he managed.
JonesTrading appoints new operating chief; Andrew Volz, who led the expansion into prime services and outsourced trading at JonesTrading, has been named COO.
Hayley McDowell – The Trade
US-based institutional equities and derivatives broker JonesTrading has named its new chief operating officer, following several years of expansion into prime services, outsourced trading, and most recently private markets.
PNC says fears for US economy prompted sale of BlackRock stake; Disposal of $17bn holding gives US lender a ‘bulletproof’ balance sheet, says chief Bill Demchak
Laura Noonan and Robert Armstrong – FT
PNC’s decision to sell its $17bn stake in BlackRock was prompted by the bank’s increasing fears over the US economy, chief executive Bill Demchak told the Financial Times.
A $22 Billion Manager Bets on Shorter Covid Crisis Than 2008
Jonas Cho Walsgard – Bloomberg
In Scandinavia’s richest country, a former JPMorgan Chase & Co. banker overseeing $22 billion in stocks says he’s not expecting the fallout from Covid-19 to last as long as the pain that followed the 2008 meltdown.
Goldman Sachs to buy boutique wealth management custodian Folio
Elizabeth Dilts Marshalls – Reuters
Goldman Sachs Group Inc plans to buy a boutique wealth management custodian and technology company called Folio Financial Inc for an undisclosed amount of money, according to a letter that Folio sent to its customers on Thursday and was viewed by Reuters.
A $3.5 Billion Hedge Fund Lures Cash With Rare Fee Discount
Nishant Kumar and Suzy Waite – Bloomberg
Selwood offers investors deal seen after last financial crisis; Credit hedge fund’s assets have grown from $85 million in 2015
Selwood Asset Management, one of the fastest growing hedge fund firms in London, is enticing new clients with a type of fee structure that hasn’t been seen in the industry since the last financial crisis.
Headwinds Mount for Chinese Firms Seeking U.S. IPOs
Julia Fioretti – Bloomberg
Chinese companies looking to do initial public offerings in the U.S. face mounting headwinds. On Thursday, President Donald Trump said he was looking at firms from the Asian nation that are listed on American exchanges but do not follow U.S. accounting rules. That came in the wake of the spectacular downfall of Luckin Coffee Inc., once a poster child for Chinese startups, which saw its stock nosedive in April after it revealed an internal investigation into an accounting fraud. The Securities and Exchange Commission later issued a statement cautioning investors about emerging-market companies listed in the U.S., particularly Chinese ones, and the quality of their financial reporting.
Japan Banks Expect Highest Bad-Loan Costs Since Financial Crisis
Taiga Uranaka and Yuki Hagiwara – Bloomberg
Combined profit projected to slump to weakest in 11 years; Join global banks in bracing for defaults amid pandemic
Japan’s top banks forecast the biggest bad-loan costs since the aftermath of the global financial crisis, joining other global lenders in bracing for the fallout from the coronavirus pandemic.
Swedish Central Bank Hires BlackRock in Feud With Parliament
Love Liman, Rafaela Lindeberg, and Niclas Rolander – Bloomberg
Sweden’s central bank just hired consultants from BlackRock to help it buy the corporate bonds at the center of a legal dispute with the country’s parliament. BlackRock’s Financial Markets Advisory unit will assist the 352-year-old Riksbank in figuring out how best to approach purchases of an asset class never before included in its crisis packages. New York-based BlackRock has done similar work for the Federal Reserve, among others, as central banking moves into unfamiliar territory.
Australia’s Westpac admits to breaches of money-laundering laws
Westpac Banking Corp (WBC.AX) admitted to millions of breaches of anti-money laundering and counter-terrorism laws in a filing in Australia’s Federal Court on Friday, but denied accusations it enabled illegal payments between known child sex offenders.
India’s farmers gather record wheat crop, but cannot move it
Mayank Bhardwaj – Reuters
Late last month, Sukrampal had to beg and borrow farmhands from nearby villages to gather his part of the country’s largest-ever wheat harvest in Haryana state near New Delhi.
Why Brexit divorce deal still hangs over EU-UK future-relationship talks; Brussels and London must settle how to implement border checks in Irish Sea or risk souring trade negotiations
Peter Foster and Jim Brunsden – FT
Even as the UK and EU hold intensive talks on their future relationship, the two sides are only beginning to grapple with the complexity of implementing the first part of Brexit: Prime Minister Boris Johnson’s withdrawal agreement signed in Brussels last October.
Rancorous Brexit Talks End With Little Progress Toward Deal
Ian Wishart – Bloomberg
Talks between the U.K. and European Union about their future relationship descended into rancor, with both sides blaming each other for the failure to move forward as time runs out to get a deal. The pound slipped. After a third round of talks broke up on Friday, Britain’s chief Brexit negotiator, David Frost, said the two sides had made “very little progress” toward a deal this week. His EU counterpart, Michel Barnier, described the negotiations as “disappointing” and said he wasn’t optimistic about reaching a deal.
Brexit Talks Head to Brink With Key Disagreements Unresolved
Edward Evans and Ian Wishart – Bloomberg
Britain and the European Union’s talks about their future relationship are stumbling toward the brink, with few signs of progress being made ahead of a key deadline next month. As the latest round of negotiations end Friday, the U.K. is refusing to compromise in key areas — most notably on the conditions the EU wants the country to accept in return for a trade deal, but also on fisheries and on the role of the bloc’s courts.
Brexit: UK urges EU to uphold rights of British expats
The UK has said the EU is in danger of breaching the terms of the Brexit agreement by failing to uphold the rights of British expats. Ministers said Britons on the continent risked not being given enough time to register to stay, as procedures were complex and there was little guidance. Cabinet Office minister Michael Gove said there was a “major imbalance” between the EU and UK’s approaches. Citizens’ rights were a key aspect of the terms of the UK’s January exit.
We are all Zoombies now, but it has to stop; Seeing others on video calls is a false intimacy and leaves us grieving for face-to-face life
Gianpiero Petriglieri – FT
The author is a medical doctor and associate professor of organisational behaviour at Insead Exhausted. Shattered. Consumed. If you are working and socialising from home by way of video conferencing, you might have felt that way. Have you noticed your idle body feel oddly spent by the end of virtual gatherings, as if overwhelmed and deprived at once? We are turning into Zoombies.