Peter Reitz, CEO EEX: “We are a globally operating commodities exchange”

Jul 17, 2019

First Read

MarketsWiki Education World of Opportunity 2019 Day One Held Tuesday in Chicago
Sarah Rudolph – John Lothian News

Cryptocurrencies and blockchain were not the only themes at the MarketsWiki Education World of Opportunity event at the headquarters of Trading Technologies on Tuesday, but they kept cropping up.

The first presenter, Colleen Sullivan, is the CEO and cofounder of CMT Digital, a company that is all about crypto and blockchain. Sullivan got started in the trading world when her uncle, who worked for Michael Milken, gave her a t-shirt that said “Junk Bonds Keep America Fit.” She worked as a runner at First Options and then later in the legal department, and went on to law school. Her legal background led her to Sidley Austin, where she first heard about blockchain when she read the bitcoin white paper. In 2013 she told the partners they should start investing in bitcoin. But bitcoin was a big unknown then, and not regulated at all. She ended up co-founding CMT and launching a bitcoin trading desk there in 2016. Her legal expertise tells her that “we need to get the regulatory environment right” for cryptocurrencies – as Switzerland has done – or the U.S. will end up being a follower rather than a leader in the space, she said.

Rumi Morales, a partner in Outlier Ventures, talked about blockchain and how that and other technology is transforming finance, giving a brief history of hundreds of years of trading in about five minutes. The biggest change in trading is of course – as she showed in photographs – that it is now driven by machines, and the crowded, jostling floors have been replaced by rows of computer desks nearly empty of people. Morales said blockchain is revolutionary because there is no central counterparty needed. She is also excited about the “trillions” of communication devices now coming online, as well as things like self-driving cars and intelligent sprinkler systems that “can create and hedge their own water risk.” She said we will be seeing a Convergence Ecosystem driven by the Internet of Things (IOT), blockchain, and Artificial Intelligence (AI).

To read the rest of this report, go here.


Hits & Takes
JLN Staff

Yesterday’s sessions of MarketsWiki Education World of Opportunity in the offices of Trading Technologies was a success. We had a good turnout and some super presentations from our group of industry professionals. Thank you to TT for hosting the event, and our speakers and sponsors. Today the series moves to the Stuart School of Business at Illinois Tech.~JJL

Harvey Nieves, a market regulation intern at CME Group, posted this to LinkedIn after attending the Marketswiki Education World of Opportunity event yesterday: Had the pleasure of attending both the FSP Chicago conference along with the @MarketsWikiEducation conference with John Lothian. Incredibly inspired by the speakers at both events. Cannot thank CME Group enough for the opportunity to attend both of these events. This internship has been both thought provoking and incredibly valuable. Cannot wait to see what the future has in store.~JJL

Harvey told me the event made up his mind to pursue a career in financial services rather than other alternatives he was considering.~JJL

Thank you to Spencer Doar for being the master of ceremonies for yesterday’s session of MarketsWiki Education World of Opportunity. Except for the part where he referred to an off-color flavor of ice cream, he did great.~JJL

Nodal Exchange hit a new quarterly trading record in power futures with a total volume of 520 million MWh in Q2 2019, up 117 percent from a year earlier and breaking the previous record of 405 million MWh set in Q1 2019. The total industry market grew just 15% over the same time period.~JK

From today’s Q&A piece with Peter Reitz, CEO of the European Energy Exchange Group: Revenues in 2010 was EUR40 million. In 2018, EEX posted revenues of EUR268 million, and trading volumes in 2019 are ahead of last year.~JK

Catie Lee of ADMIS reported: Women in Listed Derivatives (WILD) and ADM Investor Services co-sponsored a Trivia Night fundraiser on July 11th to help promising young women earn an associate’s degree in finance or technology from the City Colleges of Chicago. WILD and ADMIS co-hosted the event — which attracted 140 guests representing various brokerage firms and exchanges — on the Chicago Board of Trade rooftop.~JJL

WILD has committed to running this scholarship program on an ongoing basis as part of its mission to support the advancement of women in listed and over the counter derivatives. It is entitled the “Next Generation Women in Finance” scholarship program, and recipients will receive full scholarships, mentoring and help with summer internships.~JJL

Attendees at Trivia Night who helped to raise scholarship funds included representatives from ADM Investor Services, ABN AMRO, BP, CME Group, ED&F Man, Eris Exchange, Financial Markets Consulting, Nuveen, OCC, Rice Dairy, Societe Generale, TEKsystems and Tokyo Commodity Exchange. Generous donations and support were also given by many others including Trean Group, Ceres Café, GlenStar Properties, Alter Brewing, Luke’s Italian Beef and Parlor Pizza.~JJL


Fight for press freedom or watch it wither away; Democratic governments are falling down on their responsibilities
Roula Khalaf – FT
I am reminded often these days of the words of Walter Cronkite: freedom of the press, said the US broadcaster, “is not just important to democracy, it is democracy”. At a time when democratic values are under assault, from the dodgy corners of autocratic states to the capitals of the great democracies, journalists are among the most visible victims, attacked, vilified and scapegoated.

***** The press is the only industry specifically protected in the U.S. Constitution. I believe free markets are not possible without free press. Walter Conkite said something even more important. See above.~JJL


Blue Trading Systems Expands Connectivity to Include the ICE Futures Markets
Blue Trading Systems (BTS) today announced the expansion of their market connectivity coverage to include the futures exchanges operated by Intercontinental Exchange (NYSE: ICE). Futures traders are now able to leverage Blue Trading Systems’ low latency trading platform, BTS Spark, to trade products on ICE Futures U.S. and ICE Futures Europe, which together offer access to a broad range of global energy, financial and agricultural markets.

*****Blue Trading Systems keeps on expanding its offerings.~JJL


Barchart Announces Grain Buyer Roadshow Across Multiple Midwest Cities – August 26-30
Barchart, a leading provider of data and analytics to the commodities industry, is excited to announce the launch of the cmdtyExchange Roadshow, a free conference series being held in five states across the Midwest this summer. Taking place August 26-30, the cmdtyExchange Roadshow will bring grain buyers, elevators/co-ops, processors, commodity professionals, and industry experts together to gain insights and perspectives on the 2019 grain market, and to share information on the latest data and tools used to manage physical grain buying.

*****These guys will do anything for a road trip in the summer.~JJL


Tuesday’s Top Three
There are names that will go down in infamy in this industry. Jon S. Corzine is one of them. Banned from trading certain commodities by the CFTC, Bloomberg’s piece revealed the other part of the story for his new hedge fund in Corzine Accepts Prop Trading Ban in His Wall Street Resurrection. Second was Stacey Cunningham‘s blog post Through My Eyes: The Floor of the New York Stock Exchange. Third was the FT’s “Why companies like Ocado produce gobbledegook.” I’ll return now to applying my “technology to adjacent markets and other verticals.” (Transcribed: I’ll start typing in another browser on another website.)


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Lead Stories

Peter Reitz, CEO EEX: “We are a globally operating commodities exchange”
In an interview with Börsen-Zeitung, Peter Reitz, CEO of the energy exchange EEX AG and its clearing house ECC AG, talks about the reasons for their success. He discusses how risk awareness and regulation are driving moves towards more clearing and gives details about EEX Group’s expansion into North America and Asia. He also touches on the emissions market and green energy and much more.

Wall Street finds blockchain hard to tame after early euphoria
Anna Irrera, John McCrank – Reuters
Two years ago Nasdaq Inc (NDAQ.O) and Citigroup Inc (C.N) announced a new blockchain system they said would make payments of private securities transactions more efficient. Nasdaq Chief Executive Adena Friedman called it “a milestone in the global financial sector.”

Goldman, JPMorgan Turn Offices Into Summer Camps for Teen Coders
Elizabeth Rembert – Bloomberg
For the next three weeks, the offices of Wall Street’s biggest banks are becoming summer camps for coders.

The world’s finance chiefs are worried about Facebook’s Libra disrupting their own currencies
John Detrixhe – Quartz
Since the dawn of the internet, multinational tech companies have grown in power, size, and influence. But issuing their own currencies—as Facebook and its partners are proposing with their Libra coin—could be a step too far for government officials, who worry about the effect on their own sovereign money.

Mark Carney’s climate warning; SEC threatens governance crackdown
Carney warns companies: get involved or get left behind
If you snooze, you lose. That is the bracing message that Mark Carney is delivering to asset managers and bankers these days on reporting requirements around climate change.

Hedges funds doubling down on algos; The 2019 algorithmic trading survey finds that brokers are stepping up to the plate in the post-MIFID II landscape to provide consistent execution to hedge fund firms that are more knowledgeable and discerning than ever before.
John Brazier – The Trade
The first part of this year’s algorithmic trading survey, published in Issue 59 of The TRADE, found that brokers had begun to outpace their banking counterparts when it came to satisfying the needs of their long-only buy-side clients in almost every facet of performance.

Outsourced trading: The future of the buy-side desk?; With an increasing number of buy-side firms turning to outsourced trading providers in recent years, Hayley McDowell finds out how providers really operate and differ from agency brokers, and examines what benefits opting for outsourced execution can offer to the asset management industry.
Hayley McDowell – The Trade
Outsourcing hasn’t historically been linked to front-office activities and the buy-side trading desk, but the notion of outsourcing trading and execution is starting to turn heads at asset management firms, both large and small. Industry headwinds and changes in market structure due to increased regulation have seen the buy-side evaluate the tangible benefits of outsourced trading, while the future of the industry remains somewhat uncertain.

The lawyer thrust into the front line of Deutsche Bank clean-up; Stefan Simon advised the bank on Libor scandal — now he is its head of regulation
Olaf Storbeck – FT
Without the Libor scandal, Stefan Simon’s career switch from law to banking is unlikely to have happened.

Financial watchdog head criticises Woodford fund; FCA’s Andrew Bailey says investment vehicle appeared not to follow ‘spirit of rules’
Caroline Binham- FT
The head of the UK’s financial regulator said the meltdown of Neil Woodford’s flagship equity fund, which has frozen £3.7bn of investor money, was an example of a firm appearing to “be following the letter of the rules but not the spirit”.

BNP Could Rise as Top Prime Broker in Asia on Deutsche Bank Deal
Bei Hu – Bloomberg
German lender has solid toehold among China managers; But BNP will have to deal with smaller, less-profitable funds
BNP Paribas SA could gain a top-10 spot among prime brokers in Asia as a result of its agreement to back up and potentially assume control of the electronic trading and prime services of Deutsche Bank AG, according to Eurekahedge Pte.

Exchanges, OTC and Clearing

NY Judge dashes attempt by seven US stock exchanges to dismiss HFT case
Finance Feeds
The Exchanges are accused of selling certain services to high-frequency trading firms, which then used those services to engage in allegedly manipulative trading schemes at the plaintiffs’ expense. A market manipulation case targeting some of the biggest US stock exchanges, including BATS Global Markets, Inc., Chicago Stock Exchange, Inc., Direct Edge ECN, LLC, New York Stock Exchange, LLC, NYSE Arca, Inc., Nasdaq OMX BX, Inc., and the Nasdaq Stock Market LLC, continues at the New York Southern District Court.

London Stock Exchange Group Board Appointment
London Stock Exchange Group
London Stock Exchange Group plc (LSEG) today announces that Dominic Blakemore will join the Board as a Non-Executive Director, effective 1 January 2020. Dominic will assume the Chair of the Audit Committee from Paul Heiden after the conclusion of the AGM in April 2020, when Paul will step down from the LSEG Board.

Equity Index Dividend Futures: Introduction of EURO STOXX® and STOXX® Europe 600 Automobiles & Parts Dividend Futures
Eurex Circular 072/2019 Equity Index Dividend Futures: Introduction of EURO STOXX® and STOXX® Europe 600 Automobiles & Parts Dividend Futures

Hedge Funds Club: interview with Flow Traders on our MSCI offering
The Hedge Funds Club had a chat with Roeland Pot, Managing Director of Flow Traders in Hong Kong about the derivatives markets, changing regulations and new business opportunities. The interview was first published on the Hedge Funds Club website on 15 July in partnership with Eurex.

LMAX Exchange Group continues global expansion with the acquisition of a broker in Cyprus; Transaction broadens LMAX Exchange Group’s reach within the EU and beyond
LMAX Globa
LMAX Global (‘The Company’), a leading FCA-regulated broker for FX and part of LMAX Exchange Group, is pleased to announce that CySEC has formally approved its application for a purchase of Cyprus-regulated broker CB Capital Business ltd. Once complete, the deal will allow LMAX Global to build out and better serve its Southern European, Cypriot and Middle Eastern institutional and intermediary client-base.

Hong Kong stock exchange operator launches inline warrants, first new structured product in 13 years as part of plan to be Asia’s asset management hub
Enoch Yiu – South China Morning Post
The operator of Hong Kong’s tock exchange will introduce inline warrants trading on Thursday, marking the first roll-out of a new structured product in 13 years, part of its three-year plan to diversify into a leading Asian asset management centre.


Trading Technologies extends platform to European derivatives market with ICE; TT has launched its services through the ICE Data Services European Liquidity Centre in Basildon.
Hayley McDowell – The Trade
Trading Technologies (TT) has expanded its platform into the European derivatives market through a partnership with ICE Data Services.

Fintech Startup Finix Raises $18 Million, Aims To Become The Twilio Of Payments
Jeff Kauflin – Forbes
Finix CEO Richie Serna aims to help other companies become their own payment processors.
In the U.S., electronic payments is a highly regulated business whose esoteric ins and outs can make your eyes glaze over. But for those who master its complexities, it can be extremely lucrative.

IBM Lands AT&T as Client in Cloud Deal; Telecom company will move business applications to IBM’s cloud
Agam Shah – WSJ
International Business Machines Corp. said Tuesday that AT&T Inc. is shifting its business service applications to IBM ‘s cloud. The terms weren’t disclosed, but IBM said the multiyear deal is worth billions of dollars.

Are you in FinTech? Then listen up…
Joshua M Brown – The Reformed Broker
Josh here – I want to personally invite any and all venture-backed startups in wealthtech to pitch our audience, do demos and appear on stage at Stack Stadium this September. Your potential customers are all there!

TradingScreen integrates EMS with IHS Markit’s thinkFolio platform; TradingScreen and IHS Markit are looking to reduce costs and provide scalability for their mutual client base with a certified integration.
Hayley McDowell – The Trade
TradingScreen and IHS Markit have teamed up to integrate their technology platforms in a bid to reduce costs and provide scalability for clients.

Visa Invests in Go-Jek to Push Digital Payments in Southeast Asia
Yoolim Lee – Bloomberg
Visa joins Go-Jek’s series F funding round; terms undisclosed; Both firms want to provide more cashless payments options
Visa Inc. has become the latest investor in ride-hailing giant Go-Jek as the two companies push digital payments across Southeast Asia.

Deutsche Bank Is Cutting Tech Spending as Digital Revolution Rages
Nicholas Comfort – Bloomberg
IT costs to fall below 3 billion euros from 4.2 billion euros; German bank’s computer systems have been a handicap for years
At the heart of Chief Executive Officer Christian Sewing’s turnaround plan for Deutsche Bank AG is a contrarian bet: that he can cut spending on technology while gaining ground on the competition.


Overstock’s tZERO Lures New Execs from Barclays and IMAX
Anna Baydakova – Coindesk
Overstock’s security token platform subsidiary tZERO is growing its leadership team as it prepares to onboard more tokens.

Facebook to face more scrutiny from Congress on Libra
Pete Schroeder – Reuters
Facebook Inc will face more questioning on Wednesday by U.S. lawmakers over its planned cryptocurrency after a bruising first bout when senators from both parties condemned the project, saying the company had not shown it could be trusted.

‘I Don’t Trust You Guys’: Lawmakers Unite to Take Aim at Big Tech; Executives from Amazon, Apple, Facebook and Google faced a grilling on Capitol Hill on Tuesday as lawmakers questioned their business practices.
Steve Lohr, Mike Isaac and Nathaniel Popper – NY Times
Lawmakers leveled stinging criticism and sharp questions at Big Tech executives on Tuesday, attacking Amazon, Apple, Facebook and Google for their market power, their perceived bias as gatekeepers of communication and Facebook’s ambitions to reshape the financial industry.

Tether’s $5 Billion Error Exposes Crypto Market’s Fragility; Sudden flood of digital coins spooked market and drove down price of bitcoin by about 12%
Paul Vigna – WSJ
Investors got a reminder this weekend that the market infrastructure for trading cryptocurrency is still under construction. On Saturday, the company behind Tether mistakenly created more than $5 billion of the digital coins in an instant—more than doubling the amount in circulation. The sudden flood spooked the market and drove down the price of bitcoin, the most actively traded cryptocurrency, by about 12%.

Bitcoin Loses Almost a Third of Its Value as Libra Hype Fades; Scrutiny of Facebook’s plan to release its own digital coin has spoiled bitcoin’s big rally
Steven Russolillo – Bloomberg
Facebook Inc. FB -0.03% ‘s struggle to convince lawmakers it can create a viable cryptocurrency is rubbing off on bitcoin.

Anybody Can Now Bet on Bitcoin $100,000 With New Call Options
Olga Kharif – Bloomberg
LedgerX says its institional clients have asked for the option; ‘Dozens and dozens’ of users say Bitcoin could hit that value
The most bullish of Bitcoin backers can now bet on the largest cryptocurrency soaring to $100,000.

Libra’s Biggest Challenge May Be Facebook’s Tarnished Reputation
Kurt Wagner – Bloomberg
Facebook executive Marcus testified Tuesday before the Senate; Lawmakers took turns bashing Facebook’s new crypto effort
Facebook wants to build the cryptocurrency of the future, but first it has to contend with its past. When U.S. senators gathered on Tuesday to ask questions about Libra, the proposed digital currency Facebook Inc. is developing, they took turns blasting the tech giant over years of missteps. Facebook’s failures around user privacy, the company’s immense power, and even its role in the 2016 elections were mentioned repeatedly by members of the Senate Banking Committee, whose statements reflected a near-unanimous refrain: Facebook shouldn’t be trusted to create a new global currency.

It’s Not Up to Facebook to Decide What Libra Is, Ex-CFTC Advisor Says
Wolfie Zhao – Coindesk
“Is it a security? Is it a commodity pool? Is it a payment token? Is it a utility token? It’s a particularly important question … not just domestically, but also internationally. So said Jeff Bandman, a former fintech advisor at the U.S. Commodity Futures Trading Commission (CFTC), speaking to CoinDesk about Facebook’s Libra cryptocurrency in a live broadcast on Tuesday.

Cryptocurrency Crimefighter Chainalysis Becomes First Blockchain Company To Make Next Billion-Dollar Startups List
Michael del Castillo – Forbes
Two years ago, Jonathan Levin testified in front of a U.S. financial services panel that his little-known company, Chainalysis, had located 650,000 missing bitcoin stolen from Mt Gox, then the largest cryptocurrency exchange in the world. His sleuthing uncovered $1.2 billion in bitcoin (or $6.5 billion in current prices) investigators thought was lost for good. Not so, Levin told the stunned panel. He had found the money — and Chainalysis had found its calling, as a tool to crack crypto crime.


Facebook’s Crypto Plan Called ‘Delusional’ as Senate Digs In
Robert Schmidt , Benjamin Bain , and Kurt Wagner – Bloomberg
Democrats and Republican lawmakers skeptical of Libra token; Facebook’s David Marcus defends project at Senate Hearing
Republican and Democratic Senators sharply questioned Facebook Inc.’s plan to create its own digital money, adding to a chorus of skepticism across Washington and underscoring the challenges the company faces in getting its cryptocurrency off the ground.

In Donald Trump vs. Jay Powell, New Battle Lines Are Being Drawn; The president’s tweets are a mere nuisance compared with his push to pack the Fed with partisans.
Christopher Condon – Bloomberg
Stoicism, the classical philosophy of emotional resilience, logic, and virtue, has long been a handy guide for anyone dealing with a crazy boss. Seneca the Younger, a first-century Roman statesman, found it helpful in managing the famously volatile Emperor Nero. Federal Reserve Chairman Jerome Powell also seems to be a fan. He has a mantra, a simple phrase he uses frequently in private and occasionally in public, that sounds straight from the stoic’s guide to a happy life: “Control the controllable.”

Congress Targets the Wrong Tech Monopolies; Industrial firms are the real antitrust problem. The solution? Welcome rather than shun Chinese competition.
Dan Wang – Bloomberg
On Tuesday, members of the House antitrust subcommittee plan to grill the representatives of major internet companies on the supposedly pernicious impact of their market dominance. Lawmakers have the right idea: There is indeed a crisis of market consolidation when it comes to technology companies. But they’re aiming at the wrong target.

Am I an American?; President Trump’s tirade against four minority congresswomen prompts the question: Whom does he consider to be American?
Ibram X. Kendi – The Atlantic
I live in envy. I envy the people who know their nationality. All the people whose nationality has never been a question in their mind.


FCA Chief Says Woodford Didn’t Follow the ‘Spirit’ of the Rules
Shelley Smith – Bloomberg
Andrew Bailey was speaking at the regulator’s annual meeting; Bailey says Woodford’s actions raise questions about the rules
The head of the U.K.’s financial watchdog called out embattled fund manager Neil Woodford for not following the spirit of the rules.

Amazon says it will cooperate with EU antitrust regulator probe
U.S. online retailer Amazon said on Wednesday that it would cooperate fully with EU antitrust regulators investigating its use of merchants’ data.

The UK FCA is looking for cryptocurrency specialists
The Financial Conduct Authority (FCA) has shown a very serious attitude towards cryptocurrency regulation. FCA posted a job search recruiting for Crypto Intelligence Associate.

FCA to reassess conduct regulation post-Brexit
Imogen Tew – FT
The Financial Conduct Authority will reassess its conduct regulation in financial services after Britain has left the European Union, the regulator’s chief executive has said.

Charles Randell speech at the Annual Public Meeting 2019
Speech by Charles Randell, Chair of the FCA, delivered at our 2019 Annual Public Meeting.

Andrew Bailey speech at the Annual Public Meeting 2019
Speech by Andrew Bailey, Chief Executive of the FCA, delivered at our 2019 Annual Public Meeting.

Former REIT Manager and Executives to Settle SEC Charges for more than $60 Million
The Securities and Exchange Commission today charged AR Capital LLC, its founder Nicholas S. Schorsch, and its former CFO Brian Block with wrongfully obtaining millions of dollars in connection with two separate mergers between real estate investment trusts (REITs) that were sponsored and externally managed by AR Capital. The defendants agreed to settle the matter by, among other things, cumulatively agreeing to over $60 million in disgorgement, prejudgment interest and civil penalties.

Upcoming Board Meeting
This week, the FINRA Board of Governors will meet in Washington, DC. In lieu of our standard FINRA Board meeting—which typically includes a full schedule of committee meetings and a review of rule proposals—this meeting will instead revolve around a series of strategic planning discussions. Select topics include the SEC’s Regulation Best Interest, our long-term financial planning, and challenges facing small firms.

The Retirement Confidence and Preparation Gap
Americans are the most confident about their future in retirement since the 2008 financial crisis, according to a new study by the Employee Benefit Research Institute (EBRI) and independent research firm Greenwald & Associates. But the majority of Americans haven’t actually tried to calculate how much money they will need—a key facet of retirement preparation.

Firm Guidance – Private Placement Filings
This reference guide covers a range of private placement topics, from the basic question of “What is a private offering?” to more technical discussions on broker-dealer compliance with FINRA’s private placement rules.

ESMA Reports on NCAS’ Use of Sanctions Under MIFID II
The European Securities and Markets Authority (ESMA), the EU’s securities markets’ regulator, has published today its first report concerning sanctions and measures imposed under MiFID II by National Competent Authorities (NCAs).

ESMA issues an opinion on product intervention measures by the Czech Republic
The European Securities and Markets Authority (ESMA), the EU’s securities markets’ regulator, has today issued a positive opinion on product intervention measures taken by the National Competent Authority (NCA) of the Czech Republic.

IMF chief Christine Lagarde resigns following ECB nomination
Matthew Rocco – FT
Christine Lagarde submitted her resignation as managing director of the International Monetary Fund on Tuesday following her nomination to serve as the next European Central Bank chief.

Bretton Woods twins need to keep adapting; The IMF and World Bank have reached 75 by reinventing themselves
The editorial board – FT
Seventy-five is an age at which many look back with a mixture of satisfaction and regret — and, perhaps, feel grateful they are still alive. The International Monetary Fund and the World Bank were founded at a conference in Bretton Woods, New Hampshire, in the summer of 1944. They have managed to find new roles and maintain their relevance as the global economy has completely changed around them.

Epstein Says Suspicious Passport Was to Fend Off Hijackers
Chris Dolmetsch – Bloomberg
An ‘affluent member of the Jewish faith,’ he says he needed it; Prosecutors say the document is more proof Epstein might flee
Lawyers for Jeffrey Epstein once again urged that the accused child sex trafficker be released on bail, asking a federal judge not to be swayed by the discovery of a foreign passport in their client’s mansion, with his photo but a different name. Epstein kept the Austrian document on hand in case he was taken hostage in a hijacking, not to deceive authorities, they said.

Biggest Banks Feel Fed Pain as Lower Rates Start to Hit Revenue
Michelle Davis and Elizabeth Rembert – Bloomberg
JPMorgan cuts interest-income forecast as streak snapped; Dimon says NII ‘like the wind blowing’ and won’t change plans
Jamie Dimon compared the fickleness of banks’ biggest revenue source to the wind. For the first time in years, it’s blowing against them.

Investing and Trading

Carbon credit costs soar as EU toughens stance on environment; Structural reforms and a bullish political backdrop have pushed prices to record highs
Nikou Asgari – FT
Carbon prices have soared to a record high as polluters and speculative investors scramble for credits amid an environmental crackdown from the EU.

Currency intervention: how would the US do it, and would it work?; Washington’s FX policy has oscillated between heavy interventions and benign neglect
Eva Szalay – FT
The US dollar is near a multi-decade high, on a trade-weighted basis, and President Donald Trump is not happy about it. His increasingly blustery rhetoric, accusing other countries of manipulating their currencies lower to boost exports, could mean that the US Treasury Department intervenes in FX markets for the first time in years.

Anjli Raval – FT
Report warns that declining use of fossil fuels poses significant risks to shipping industryAnjli Raval – FT
The world’s oil tankers risk losing almost a third of their value should a shift away from fossil fuels gain momentum in the coming decades, a new report has warned.

Wall Street’s Most Crowded Trade Has a Problem; July pain for bond bulls leads market commentary. Plus, a dollar dilemma, cocoa’s cartel and more.
Robert Burgess – Bloomberg
Bank of America Merrill Lynch released its widely-followed survey of money managers on Tuesday, and for the second month in a row, being “long” U.S. Treasuries was deemed to be the world’s “most crowded trade.” That worked out just fine in June, but this month it’s looking more like the very definition of a “pain trade.”

Wall Street’s Great Ice Cream Buyout; Private equity is snapping up refrigerated warehouses. That could make it harder for small food makers to sell their wares.
Prashant Gopal – Bloomberg
While his friends played in the Florida sunshine, Elliot Greenbaum, then 11, was often bundled up in coat and hat, sweeping the floors in his dad’s refrigerated warehouse. As a teenager, he drove the forklift, loading Danish canned hams into station wagons bound for Cuban sandwich shops.


Barclay CTA Index Gains 1.59% in June as Interest Rates Go Down and Stocks Go Up, According to Backstop BarclayHedge
PR Web
CTA funds posted a 1.59% return in June, according to the Barclay CTA Index compiled by BarclayHedge, a division of Backstop Solutions. Year-to-date, the Index has gained 3.84% through June.

Illiquidity Threatens an Early Winter for Funds
Mark Gilbert- FT
The Bank of England and Financial Conduct Authority have stepped up their rhetoric about the dangers posed by funds offering customers daily redemption rights while investing in stuff that may prove hard to sell when times get tough.

Vote now in the Risk Interdealer Broker Rankings 2019; Help us identify the market’s top brokers in a range of over-the-counter derivatives products
Risk staff
You are invited to participate in Risk’s Interdealer Broker Rankings 2019, which identifies the market’s top brokers in a range of over-the-counter derivatives products.

PNC Financial’s Profit Lifted By Loans, Revenue; Total revenue at one of the country’s largest regional banks rose 2.7%
Kimberly Chin – WSJ
PNC Financial PNC -1.03% Services Group Inc.’s profit increased in the second quarter, driven by strong growth in loans, deposits and revenue.

Goldman stands out from rivals with equities trading rebound; Growth helps offset drag of fixed income division ahead of CEO David Solomon’s strategic overhaul
Laura Noonan and Robert Armstrong – Ft
Goldman Sachs stood out from its rivals by trumpeting a rebound in equity trading in the first quarter, helping the Wall Street bank to outstrip analysts’ expectations despite a drop in both profits and revenues from the previous year.

JPMorgan warns low rates will crimp interest income; Bank says ‘positive momentum’ from US consumer and ‘pristine’ credit boost outlook
Robert Armstrong — FT
The likelihood of further US interest rate cuts prompted JPMorgan Chase to cuts its guidance on net interest income for 2019, but America’s biggest bank insisted the outlook was sunny, with “positive momentum” from the US consumer and “pristine” credit cushioning the blow from falling trading and investment banking revenues.

Deutsche woos 13 wealth bankers from Credit Suisse; Ultra-high net worth team to be paid ‘danger money’ at troubled lender
Alice Ross – FT
Deutsche Bank is poaching a team of 13 bankers from Credit Suisse in Italy as the troubled lender seeks to increase its wealth management business even as it has been forced to make dramatic cuts to its staff elsewhere.

Steve Cohen’s Point72 Loses Long-Tenured Money Managers; At least five managers have left for rival Citadel, upsetting the billionaire hedge-fund manager
Rachael Levy – WSJ
About 20 portfolio managers have left Steven A. Cohen’s hedge-fund firm this year, including several who worked with Mr. Cohen for more than a decade, according to people familiar with the matter.

Bank of America Second-Quarter Profit Climbs; Higher interest rates have boosted banks’ performance since Fed started raising them in 2015
Rachel Louise Ensign – WSJ
Bank of America Corp. BAC -0.79% said Wednesday that second-quarter profit rose. Quarterly profit at the Charlotte, N.C.-based bank, the second-largest in the U.S. by assets, was $7.35 billion, compared with $6.78 billion a year earlier. Per share, earnings were 74 cents. Analysts polled by FactSet had expected 71 cents per share.

T Rowe Price latest fund manager to cover research costs globally; Move comes amid overhaul to $15bn investment research business prompted by Mifid II
Richard Henderson – FT
T Rowe Price, one of the world’s largest asset managers, has become the latest — and largest — fund manager to cover research costs globally in response to sweeping changes to the investment research business.

Deutsche Bank Raids Rival Talent to Target European Wealthy
Patrick Winters and Nicholas Comfort – Bloomberg
German lender hires about a dozen bankers from Credit Suisse; Deutsche Bank said to offer some bankers up to 40% more pay
Deutsche Bank AG hired a team of around a dozen private bankers from Credit Suisse Group AG as Germany’s largest lender shifts resources to wealth management while slashing tens of thousands of trading jobs worldwide.

Deutsche Bank Raids Rival Talent to Target Wealthy Europeans
Patrick Winters and Nicholas Comfort – Bloomberg
German lender hires about a dozen bankers from Credit Suisse; Deutsche Bank said to offer some bankers up to 40% more pay
Deutsche Bank AG hired a team of around a dozen private bankers from Credit Suisse Group AG as Germany’s largest lender shifts resources to wealth management while slashing thousands of trading jobs worldwide.


‘Expect craziness’ as China readies debut of Nasdaq-style board
Samuel Shen, John Ruwitch – Reuters
In a packed Shanghai classroom on a hot afternoon, nearly a hundred “mom-and-pop” investors were honing their trading skills ahead of the first opening bell for China’s Nasdaq-style tech board.

India Considers Breaking Up World’s Top Coal Miner
Debjit Chakraborty , Rajesh Kumar Singh , and Siddhartha Singh – Bloomberg
Finance ministry proposed listing of five Coal India units; State-run miner has struggled to meet production targets
India may spin off units of Coal India Ltd., the world’s largest coal miner, into separate listed companies to boost competition and raise government funds, according to people with knowledge of the matter.

Foreign investors pour back into Ukrainian debt; Near-boycott ends as Kiev emerges from past crises
Steve Johnson – FT
Foreign investors have ended their near-boycott of Ukrainian local currency government debt, returning en masse in recent months amid an improving political and economic backdrop.

Australia Bank Regulator Faces Overhaul After Damning Review
Peter Vercoe – Bloomberg
APRA has ‘culture of conformity,’ is slow to act, review finds; Regulator should create department to monitor pension firms
Australia’s banking regulator is set for a major overhaul after a government-commissioned review found it had a “culture of conformity” and needed to become more forceful.


EU-Swiss relations and Brexit: Trading Places
Stéphane Monier – Lombard Odier Private Bank
alks over how to consolidate a patchwork of bilateral accords into a single agreement between Switzerland and the European Union have faltered with both sides trying to use financial markets as leverage. The disagreement is required watching for anyone interested in what may lie ahead for the UK and the continent’s biggest trading market post Brexit.

Johnson ‘closing off escape routes’ on road to no-deal Brexit; Refusal to compromise on backstop makes leaving EU without an agreement more likely
George Parker, Jim Brunsden, and Arthur Beesley – FT
When Boris Johnson and Jeremy Hunt ruled out any compromise on the vexed Brexit issue of the Irish backstop on Monday night, their principal objective was to win over the last remaining votes in the Conservative party leadership contest.

Brexit Secretary Says Risk of No-Deal Exit Is ‘Underpriced’
Emma Ross-Thomas – Bloomberg
U.K. Brexit Secretary Steve Barclay said the risk of a no-deal split with the European Union is “underpriced.”


Accenture appoints Julie Sweet Chief Executive Officer
Economic Times
Accenture’s board of directors announced Julie Sweet as CEO effective September 1st, 2019 onwards. Prior to this, she has been Accenture’s general counsel, secretary and chief compliance officer.

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