First Read

Identifying Problems And Solutions
By Jim Kharouf, JLN

At the FIA IDX conference in London earlier this month, the second day of the event concentrated heavily on post-trade issues and trends. We spoke with six executives from firms that are focused on the problems and solutions in that space. Take a look at the two short videos below to hear what they said about each question.

The post-trade arena has fast become one of the most competitive sectors in recent years with new firms jumping into the space and incumbents launching new platforms. In April, we wrote about ION’s XTP Trading solution, which brings a real-time post-trade technology to customers.

Regulations are pushing additional answers in that space, especially in the area of collateral management. Clive Furness of Contango Markets and Collin Platt of Dpactum, a blockchain firm, are looking at new ways to bring more efficiency and flexibility to that area.

The videos are short and offer a brief snapshot of challenges and solutions. But they open the door to a much larger and robust conversation about how dynamic this sector will be in the coming months and beyond.

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The Problem With Post-Trade Is…
JohnLothianNews.com

The post-trade clearing space is full of new entrants and innovation from incumbents. Firms are looking at everything from collateral management to new back office systems to finding new efficiencies to real-time reporting with current back office systems.

John Lothian News spoke with six professionals at the FIA IDX 2017 conference in London earlier this month about the key problem they see in the post-trade space today. We followed it up with their solutions to that problem. JLN spoke with [[Clive Furness]], managing director, Contango Markets, Collin Platt, co-founder, Dpactum, Jaki Walsh, chief product officer, Sernova, [[John Avery]], director, client & industry engagement, derivatives utility, FIS, Nachi Muthu, global head of derivatives, Broadridge and [[Patrick Tessier]], COO, [[Cinnober]].

See what they had to say about the key challenge for the financial industry in post-trade services today.

Read the rest and watch the video »

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The Solutions To All Your Post-Trade Problems
JohnLothianNews.com

The post-trade clearing space is full of new entrants and innovation from incumbents. Firms are looking at everything from collateral management to new back office systems to finding new efficiencies to real-time reporting with current back office systems.

John Lothian News spoke with six professionals at the FIA IDX 2017 conference in London earlier this month about solutions to key challenges in the post-trade space today. We first spoke with them about their key problem. JLN spoke with Clive Furness, managing director, Contango Markets, Collin Platt, co-founder, Dpactum, Jaki Walsh, chief product officer, Sernova, John Avery, director, client & industry engagement, derivatives utility, FIS, Nachi Muthu, global head of derivatives, Broadridge and Patrick Tessier, COO, Cinnober.

See what they had to say about the key solutions for the financial industry in post-trade services today.

Read the rest and watch the video »

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Bits & Pieces
By John J. Lothian

We have added the most interesting man in the world to the lineup of speakers in Chicago for our MarketsWiki Education World of Opportunity. Pat Kenny of CQG will make his second appearance at the series on Thursday, July 19.

Additionally, we have added Dave Kelbaugh of Tacklebox as a speaker in Chicago. Kelbaugh is a marketing professional who will speak about branding, including corporate and personal branding.

We are in negotiations to add JB McKenzie and JJ Kinahan to the Chicago and New York events. Both are executives with TD Ameritrade. Kinahan was a popular speaker last year in Chicago.

Duncan Niederauer, formerly CEO of NYSE Euronext, will be speaking on Wednesday, July 12 at Reuters on the subject of “Your Self Awareness Quotient.” I am looking forward to hearing Mr. Niederauer and wondering if he will be wearing a fleece vest in July.

You can find details about the event here

We want to fill up the room for all these events. To that end we cut the price in half if you send us 9 or more attendees. The room for Friday July 21st’s session at Trading Technologies is limited to 110 people, so if you want to attend you’d better sign up soon.

In New York we can fit 130 people at Nasdaq and about 150 at Reuters. In Chicago the Stuart School of Business at illinois Tech takes about 230 people.

If you want to secure a spot for your interns, please sign up soon. There will be a big sign-up push next week, despite the holiday, so get your reservations in ASAP.

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Industry optimism explored at FOW-JLN Trading Chicago – Dodd Frank debates, crypto-currency conversations and options industry optimism explored at FOW-JLN Trading Chicago
Jessica Darmoni – The Title Connections
FOW, a news and events organizer for the derivatives space, teamed up with John Lothian News (JLN) to put on the Trading Chicago conference this week at the Swissotel. The conference covered major issues in the derivatives space, such as; the Dodd Frank debate and if legislation should be repealed, how the rise of populism is impacting the markets and the always controversial topic of how many exchanges the options industry needs.
bit.ly/2s5bRj8

***** Jessica Darmoni was near the very front and center covering this event.

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MGEX Reports 2nd Best Volume Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports a total volume of 30,979 from Tuesday, making it the 2nd best volume day. There are now three days from June that have reached top five daily volume records.
/goo.gl/3vDXFk

***** Congratulations to an exchange who knows how to roll with the wheat trade.

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WFE Focus Magazine – June Issue
The WFE’s latest magazine is out with interviews and stories on Nicky Newton-King, CEO of the JSE (an interview from JLN), Robert Scharfe, CEO of the Luxembourg Stock Exchange and Anton Govor, head of strategy at MOEX. Also there are also interviews with DTCC’s Rob Palatnick, managing director and chief technology architect, Anne Clayton, head: public policy, Johannesburg Stock Exchange (JSE) on potential consequences of regulation such as MiFIR and MiFID II on emerging exchanges.
/goo.gl/ncmzsX

**JK: Also from this issue: global equity trade volume was up 9.7 percent from April, options were up 4.4 percent and futures up 7.3 percent.

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Cyberattack Launched for Pain, Not Profit, Experts Say; Hackers devised software to damage businesses, not extort money, investigators say
Robert McMillan – WSJ
This week’s global virus outbreak that grounded airplanes in Ukraine, slowed FedEx courier deliveries in Europe and disrupted Maersk container ships around the world was devised simply to damage businesses, not earn profits for the hackers behind it, security experts now believe.
/goo.gl/wGEyn3

***** Cybersadists?

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Shkreli’s Hedge Fund Went From Success to Bust in 31 Minutes
Patricia Hurtado and Misyrlena Egkolfopoulou – Bloomberg
Investor testifies against Shkreli at start of fraud trial; Sarah Hassan made $2.7 million by investing with Shkreli
In 31 minutes a hedge fund managed by Martin Shkreli in 2012 went from a roaring success to an empty shell, one of his investors told a jury.
/goo.gl/rXsLER

***** 31 minutes might not even be a record.

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Thursday’s Top Three
Our top story yesterday was, unfortunately, all about the Land of Lincoln – Illinois Is in Deep Trouble: What Investors Need to Know. In second was the Bloomberg piece Yes, Your Parents’ Status Does Influence Your Earning Power. The third place finisher came via Benzinga – How A Day Trader Is Finding Success In Today’s High Frequency Market.

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MarketsWiki Stats
103,555,313 pages viewed; 22,581 pages; 206,806 edits
MarketsWiki Statistics

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Lead Stories

Senate panel votes to advance CFTC chairman nomination
Sarah N. Lynch – Reuters
The U.S. Senate Agriculture Committee voted on Thursday to advance the nomination of J. Christopher Giancarlo to lead the Commodity Futures Trading Commission to the full chamber for a vote to confirm him.
reut.rs/2s8Yaj9

CFTC reaches first non-prosecution deal with ex-Citigroup traders
Sarah N. Lynch – Reuters
The U.S. Commodity Futures Trading Commission struck its first-ever non-prosecution deal with three former traders from a unit of Citigroup on Thursday, in what could signal part of a broader new enforcement strategy to win cooperation from Wall Street.
reut.rs/2uoMHwN

TP ICAP reshuffles senior management; Nicolas Breteau will assume responsibility for the global broking business at TP ICAP.
Hayley McDowell – The Trade
TP ICAP has made several new appointments within its senior management team, including a new head of its global broking business. Nicolas Breteau will assume sole responsibility for global broking at TP ICAP as the firm looks to streamline its overall management structure.
/goo.gl/ZBY5F8

Traders Who Left Banks for Hedge Funds Now Heading Back to Banks
Stefania Spezzati and Nishant Kumar – Bloomberg
Traders who fled banks for hedge funds are on their way back to Wall Street. This month, Barclays Plc hired Chris Leonard, a founder of two hedge funds in the decade since he left JPMorgan Chase & Co., to turn around U.S. rates trading. At the end of last year, ex-bankers Roberto Hoornweg and Chris Rivelli, both of Brevan Howard Asset Management, left that London hedge fund for banks.
/goo.gl/dgMVuF

CFTC slaps Chicago trading firm with $5 million fine
Lynne Marek – Crain’s Chicago Business
DV Trading, a Chicago firm that’s been expanding lately, will pay $5 million to settle charges that several of its traders engaged in illegal trading strategies.
/goo.gl/Z1AWNF

CFTC Orders Rosenthal Collins Capital Markets LLC, Now Known as DV Trading LLC, to Pay a Civil Penalty of $5 Million for Engaging in Illegal Wash Sales Designed to Generate Exchange Rebate Fees
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges against Rosenthal Collins Capital Markets, LLC, now known as DV Trading LLC (RCCM), of Chicago, Illinois, for engaging in illegal wash sales in order to generate rebates of exchange fees based upon increased trading volumes.
/goo.gl/2HtZpN

***** DV Trading LLC separated from RCG in 2016.

CFTC Won’t Prosecute Ex-Citigroup Traders Over ‘Spoofing’; Three former traders admitted to market manipulation in 2011 and 2012
Gabriel T. Rubin – WSJ
Three former Citigroup Inc. traders struck nonprosecution agreements with the Commodity Futures Trading Commission thanks to their cooperation in a larger investigation of “spoofing” in U.S. Treasury markets, the CFTC said Thursday.
/goo.gl/KNyKp8

China to Open Mainland-Hong Kong Bond-Connect Link on July 3; Investors with accounts in Hong Kong will gain entry into China’s $9 trillion interbank bond market
Shen Hong – WSJ
Starting next week global investors will have a new way to invest in the world’s third-largest bond market.
/goo.gl/kHBJdp

It’s Whac-A-Mole for Chinese Regulators Trying to Clamp Down on Speculation
Shen Hong – WSJ
One of Chinese banks’ favorite tools for increasing leverage has staged a remarkable but worrisome comeback just two months after a regulatory crackdown on leveraged investment, highlighting the difficulties Beijing faces in its effort to cure the economy’s addiction to debt-fueled growth and investment booms.
/goo.gl/Q5aExy

The financial crisis is over
Nicole Sinclair – Yahoo Finance
America’s 34 biggest banks have passed the Federal Reserve’s stress test, giving them the green light to pay out dividends and buy back stock. It’s a sign that regulators have finally closed the book on the 2008 financial crisis, a time when banks starved for capital were forced to do the opposite.
/goo.gl/cw3P93

Feel Good About the Markets? Maybe You Shouldn’t Read This
James B. Stewart – NY Times
Throughout the turbulence of his first months in office, President Trump has been able to point to one bastion of support: the stock market. Earlier this month he tweeted the “great economic news” he thinks the mainstream media has been ignoring: The Dow Jones industrial average was up 16 percent and the Nasdaq up 19.5 percent since his election. Commerce Secretary Wilbur Ross maintained that the Trump administration had bestowed $4 trillion in gains on investors.
/goo.gl/uYJAJv

Quitting Your Job Means Wage Growth, Says Economist Leaving BOE; Policy maker Kristin Forbes says workers choosing to leave their jobs are a sign of confidence and higher pay
Lucy Meakin – Bloomberg
Telling the boss to shove it may be a fantasy for many workers, but for outgoing Bank of England policy maker Kristin Forbes, it’s a sign that all is right in the labor market.
/goo.gl/qoQZJd

Here’s why the stock market is spooked by central bankers, Trump agenda delays
Mark DeCambre – MarketWatch
A one-two punch, centered on continued doubts about President Donald Trump’s Wall Street-friendly agenda and hawkishly interpreted comments from global central bankers, is knocking investors around, sparking a surge in yields and sharp swings in currencies.
/goo.gl/MQX2Tw

Twisted Geniuses or Bumbling Ex-Academics?; Why it’s best to take central bankers at face value; ‘watch what they do’
James Mackintosh – WSJ
Are central bankers twisted geniuses manipulating the markets in order to meet their inflation goals? Or are they bumbling ex-academics whose ramblings are overinterpreted by investors besotted with their brilliance?
/goo.gl/XyWCzv

BRIEF-E*TRADE execs said to urge CEO to define co’s future by end 2018 or face possible sale – WSJ
Reuters
E*TRADE executives said to urge CEO to define co’s future by end 2018 or face possible sale – WSJ Source
/goo.gl/pQXnJ7

Exchanges, OTC and Clearing

SGX Sends Message to Trading Community with $200K Fine and Expulsion for Spoofing
Jay Biondo, Neurensic’s Director of Surveillance Products Design – Medium
Despite implementation of their Futures Trading Rules back in September 2006, the Singapore Exchange Derivatives Trading Disciplinary Committee (“SGX-DT”) had not initiated a single disciplinary action for spoofing in the SGX derivatives market for almost 11 years.
/goo.gl/f2NpDW

DTCC Opens New Era of Repo Clearing As Citadel and Morgan Stanley Send First Trade Through CCIT Service
Mondovisione
Institutional cash lender clearinghouse membership enhances tri-party repo market by providing risk reduction and the potential for capital relief
New York/London/Singapore/Hong Kong/Sydney, June 29, 2017 – The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that the new Centrally Cleared Institutional Tri-Party (CCIT) Service of its Fixed Income Clearing Corporation (FICC) subsidiary is live, and the first trade has been executed between Citadel and Morgan Stanley.
/goo.gl/sVkF43

CFETS and HKEX’s Bond Connect Joint Venture BCCL Launches Website
HKEX
China Foreign Exchange Trade System (CFETS) and Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) released the website of Bond Connect Company Limited (BCCL), their joint venture company that handles Bond Connect-related trading services, support and assist admission preparation for Northbound investors and investor education etc.
/goo.gl/V5mcPF

Rural Electrification Corporation of India launches first Green Bond in London
London Stock Exchange Group
London Stock Exchange today welcomes Rural Electrification Corporation’s (REC) first green bond, which will be admitted to trading on London’s International Securities Market (ISM). The ten year dated green bond raised $450 million, with an annual yield of 3.965 per cent. The bond was 3.9 times oversubscribed on the final order book and secured strong international investor interest, with Asian investors making up 68 per cent of the order book and investors from the EMEA region making up 32 per cent.
/goo.gl/fGvZYK

Interest Rate Margins – Effective June 30, 2017
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/goo.gl/WwuCyN

HKEX CEO Charles Li: Latest Charles Li Direct: Hong Kong’s Next 20 Years
MondoVisione
It’s been 20 years since Hong Kong was returned to Chinese sovereignty, and many people have recently been reflecting on the past 20 years and how our city has changed. From a financial standpoint, we have proven to be nimble and competitive, which has allowed us to reap the benefits of Mainland China’s economic expansion.
/goo.gl/XcfB5H

It identified the best traders among students of Siberian universities
MOEX
June 22, 2017 announced the results of the first phase of the tournament “Cup of the Governor of the Novosibirsk region for the exchange of financial markets”, organized with the participation of the Novosibirsk Region and the Moscow Stock Exchange Government.
/goo.gl/yMbMqL

**** Forgive the Russian translation.

Fintech

Boston Preps for Fintech’s ‘Second Wave’
Rob Daly – Markets Media
Move over New York and California, the Commonwealth of Massachusetts wants fintech startups to pick the Bay State as home sweet home.
/goo.gl/ck3SAQ

We have Apple to thank for a decade of fintech revolution
Bindi Karia – City AM
Today marks the 10 year anniversary of when the iPhone first went on sale, and to say it has transformed how we work, interact, and run our day-to-day lives is an understatement.
/goo.gl/4EjND6

Politics

EQDerivatives: “Attention Turns To German, Italian Elections As VSTOXX Solidifies Its Status As Event Risk Barometer”
Georgia Reynolds, EQDerivatives via Eurex Exchange
Despite the French elections coming to a close in June, liquidity in the Euro Stoxx 50 Volatility Index (VSTOXX) has continued to remain strong. The VSTOXX has this year solidified its position as the most efficient underlying to trade event risk in Europe, made evident by increased appetite in recent weeks in V2X Sept. futures as expectations increased for an Italian General Election in October. Georgia Reynolds sets out how market participants are progressively identifying the benefits of the VSTOXX when trading around events and why heightened liquidity in the underlying is here to stay.
/goo.gl/NPpMYg

Trudeau Versus Trump Is a Win for Toronto Tech and Innovation
Natalie Wong – Bloomberg
Okta opens 60-seat office following Uber, Amazon expansions; Canada’s top universities are seeing foreign applications rise
Silicon Valley startups are tapping into Toronto’s tech talent. Okta Inc., which JPMorgan Chase & Co. calls one of the fastest growing public software firms, opened a 60-seat office this month on trendy King Street West. Lured by a deepening pool of engineers in a city routinely ranked among the world’s most innovative, the company is following peers such as Uber Technologies Inc. and Amazon.com Inc. across the border.
/goo.gl/nkz25H

Deutsche Bank rejects Democrats’ call for Trump finance details
Reuters
Deutsche Bank’s external counsel in Washington, D.C. rejected on Thursday demands by U.S. House Democrats to provide details of President Donald Trump’s finances, citing privacy laws.
/goo.gl/WHRx7n

GOP Operative Sought Clinton Emails From Hackers, Implied a Connection to Flynn; Peter W. Smith portrayed the former general as an ally in an effort, independent of the Trump campaign, to find personal emails deleted by Hillary Clinton
Shane Harris – WSJ
Before the 2016 presidential election, a longtime Republican opposition researcher mounted an independent campaign to obtain emails he believed were stolen from Hillary Clinton’s private server, likely by Russian hackers.
/goo.gl/Txw91S

Regulation

Senate Agriculture Committee Votes Overwhelmingly to Confirm Giancarlo as Chairman for the CFTC Paving Way for Full Senate Consideration
CFTC
The U.S. Senate Committee on Agriculture, Nutrition, and Forestry this morning voted overwhelmingly to confirm the nomination of J. Christopher Giancarlo as Chairman for the U.S. Commodity Futures Trading Commission. He has served as Acting Chairman since January. This paves the way for his nomination to move forward to consideration on the Senate floor.
/goo.gl/HcGA4r

U.S. Senate panel votes to advance CFTC chairman nomination
Sarah N. Lynch – Reuters
The U.S. Senate Agriculture Committee voted on Thursday to advance the nomination of J. Christopher Giancarlo to lead the Commodity Futures Trading Commission to the full chamber for a vote to confirm him.
reut.rs/2uoyjon

U.S. SEC to allow firms to file confidential draft statements before IPOs
Reuters
The U.S. Securities and Exchange Commission said on Thursday it was expanding the Jumpstart Our Business Startups (JOBS) Act, by allowing all public companies to file confidentially prior to initial public offerings, in a move designed to revitalize the IPO market.
/goo.gl/haaCCc

SEC seeks to boost market listings through privacy move; US regulator will allow large companies to make confidential filings ahead of an IPO
Nicole Bullock in New York – FT
US regulators moved to try to boost the flagging number of stock market listings on Thursday, telling large companies that they will be able to keep their financial information secret while they prepare for a public offering.
/goo.gl/uJJuxh

ESMA provides market size calculations for MiFID II ancillary test
ESMA
The European Securities and Markets Authority (ESMA) has issued an opinion helping market participants to assess whether their activities in commodity derivatives can be considered as ancillary to their main business.
/goo.gl/57Yee6

ESMA issues statement on preparatory work in relation to CFDs, binary options and other speculative products
ESMA
The European Securities and Markets Authority (ESMA) has issued a statement updating on its work in relation to the sale of contracts for differences (CFDs), binary options and other speculative products to retail investors.
/goo.gl/bTnEUS

SEC’s Division of Corporation Finance Expands Popular JOBS Act Benefit to All Companies
SEC
The Securities and Exchange Commission today announced that the Division of Corporation Finance will permit all companies to submit draft registration statements relating to initial public offerings for review on a non-public basis. This process will be available for IPOs as well as most offerings made in the first year after a company has entered the public reporting system. It will take effect on July 10, 2017.
/goo.gl/PeSAV1

Commodity hedge funds see low position limits, tax as hurdles; Last week, Sebi allowed few Category III AIFs or hedge funds, to invest in commodity derivates
Rajesh Bhayani
Hedge funds in commodity derivatives may begin business cautiously, exactly the way the regulator intended it.
/goo.gl/Rtn3EL

Investing and Trading

Millennial investing in derivatives like options and futures
Akin Oyedele – Business Insider
Millennials are big users of some of the most speculative investing instruments in the stock market, according to TD Ameritrade.
read.bi/2tpY0ay

Shkreli Had No Trouble Courting Investors, Financier Says at Trial
Stephanie Clifford – NY Times
In 2010, Sarah Hassan met at a Manhattan restaurant with a man she had been told was a “rising star in the hedge-fund world”: Martin Shkreli.
/goo.gl/ZLHA95

Solar Trade Case, With Trump as Arbiter, Could Upend Market
Diane Cardwell – NY Times
Millions of Americans now get their electricity, at least in part, from the solar panels that have rapidly spread throughout the country since 2010, thanks to their sharply declining cost. For customers ó including homeowners, businesses and utilities ó as well as for the companies that promote and install them, cheap solar panels have been a good thing.
/goo.gl/VEAp1r

Pine River Capital Management Plans to Spin Off Nearly $2 Billion Hedge Fund; Renos Dimitriou expects to launch Elan Capital Management in London Jan. 1
Juliet Chung – WSJ
Pine River Capital Management plans to spin off a nearly $2 billion government bond-trading fund into a stand-alone firm Jan. 1, in what is likely to be one of the biggest new hedge-fund launches next year.
/goo.gl/QRH4Fb

A New Problem for Keystone XL: Oil Companies Don’t Want It; After weathering years of protests, pipeline operator TransCanada is struggling to attract customers amid low crude prices and competing oil-transportation options
Christopher M. Matthews and Bradley Olson – Bloomberg
Keystone XL is facing a new challenge: The oil producers and refiners the pipeline was originally meant to serve aren’t interested in it anymore.
/goo.gl/rAvAHx

Oil Price Outlook Darkens; Long-sought recovery for crude grows more distant in latest poll
Georgi Kantchev – WSJ
Big banks cut their oil price forecasts for a second month in a row amid signs that the global crude glut would take longer to abate.
/goo.gl/hyZqB8

Binary Won’t Be the Last Venture Discrimination Story
Eric Newcomer – Bloomberg
Hi all, it’s Eric. The Binary Capital revelations over the past week have been disturbing.
/goo.gl/g7A2c4

Institutions

All-Clear for Big Banks Raises Fears of a Return to Risk
Nelson D. Schwartz – NY Times
It took a decade ó and $200 billion in fines ó but the big banks are back. The Federal Reserve’s passing grade for all 34 of the institutions it checks annually for financial soundness ó the first all-clear since the Fed tests began in 2011 ó is a watershed moment.
/goo.gl/5YUcLx

Fed gives nod to ‘payout party time’ for banks; Buybacks and dividends set to soar after industry passes latest stress test
Ben McLannahan – FT
In late June 2007 Bear Stearns was battling to save a stricken bond fund, marking a key moment in the gathering storm of the financial crisis.
/goo.gl/ekSNhD

Morgan Stanley and Citadel commence DTCC repo expansion; The DTCC’s Fixed Income Clearing Corporation subsidiary is now live and has executed its first trade between Citadel and Morgan Stanley.
Paul Walsh – The Trade
Citadel and Morgan Stanley have executed the first trade on the DTCC’s Centrally Cleared Institutional Triparty (CCIT) service of its Fixed Income Clearing Corporation (FICC) subsidiary.
/goo.gl/51ST2Z

Deutsche Bank Refuses Democrats’ Request for Reports on Trump
Billy House – Bloomberg
Lender cites U.S. law saying documents cannot be provided; Bank says individual lawmakers aren’t entitled to information
Deutsche Bank AG intensified its fight with Democrats over their requests for information related to loans to President Donald Trump, saying the German lender cannot legally turn over the documents.
/goo.gl/PkaNve

Goldman Commodity Analysts Ask: How Did We Get It So Wrong?
Alex Longley and Mark Burton – Bloomberg
Bank remains bullish commodities, cuts oil forecast by $7.50; Brent, WTI crude prices slipped into bear markets last week
Goldman Sachs Group Inc. analysts might not be the only ones to have incorrectly called commodity prices this year, but they are at least trying to figure out how they misjudged the market.
/goo.gl/Arxgfs

HSBC gets approval for China securities joint venture; British lender becomes the first foreign bank to be granted approval for majority-owned JV business
Don Weinland in Hong Kong – FT
HSBC has received approval from regulators to set up a majority-owned securities joint venture in China, the first for a foreign group in the country.
/goo.gl/y4N4Xt

Berkshire to become BofA’s top shareholder after share swap
Reuters
Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) will swap its preferred shares in Bank of America Corp (BAC.N) into common shares worth about $17 billion, making it the biggest shareholder of lender.
/goo.gl/AE4X7S

Regions

A “dark side” to the commodity boom in Africa
Tim Hyde – American Economic Association
The 2000s decade was a boom time for the African economy. Rising prices for industrial inputs like copper, zinc, and nickel – mostly driven by new demand in China and India – meant higher incomes and more investment on the resource-rich continent.
/goo.gl/XPWcxs

****SD: Cool interactive graphic in this one. You can toggle between differing metals/resources to see price change during the commodity boom and where they’re mined on the continent.

India and the Visible Hand of the Market
Kaushik Basu – NY Times
In 1776, Adam Smith described the power of the market’s “invisible hand.” Although some economists have since overstated this power, dismissing the role of government regulation, it’s true that the market, when left to itself, often manages to meet a society’s economic needs in ways that no one fully understands. It’s a mistake for the state to disrupt it wantonly and for bureaucrats to try to do its job.
nyti.ms/2uoqFds

Once a Model City, Hong Kong Is in Trouble
Keith Bradsher – NY Times
When the British left 20 years ago, Hong Kong was seen as a rare blend of East
and West that China might seek to emulate. Now, increasingly, it’s a cautionary tale.
nyti.ms/2up3i3x

Bond Rout Hits Asian Markets; Europe, U.S. bonds show signs of stabilizing after heavy losses
Saumya Vaishampayan, Suryatapa Bhattacharya and Christopher Whittall – WSJ
The global bond selloff spread to Asia on Friday, pushing the yield on Japan’s benchmark 10-year government bond to the highest level in more than three months, after Western central bankers this week hinted their economies had strengthened enough to scale back monetary stimulus.
/goo.gl/rSFrdh

Brexit

Baffled by Brexit: With So Much Unknown, London Bankers Struggle to Plan; Banking chiefs are wondering whether or not to step up plans to relocate operations to the EU
Max Colchester – WSJ
The City of London is back in the dark over Brexit after this month’s U.K. general election muddied the outlook for the U.K.’s departure from the European Union. Banking chiefs here have been left to wonder whether to accelerate plans to move operations into the EU.
/goo.gl/BKjJPc

In New York, France promises English-law contracts after Brexit
Jonathan Spicer – Reuters
France will set up a special court to handle English-law cases for financial contracts after Britain leaves the European Union, Finance Minister Bruno Le Maire said on Thursday as Paris steps up its charm offensive to attract banks.
/goo.gl/einWsw

EU considers new taxes as it scratches its head over the budget funding shortfall from Brexit
Helen Cahill – City AM
When the UK leaves the EU, the bloc will have to carry out the politically onerous task of finding that money somewhere else.
/goo.gl/4zYcio

Miscellaneous

New York Times newsroom walks out after editors, reporters send letters decrying direction of paper
Trey Williams – MarketWatch
Editors and reporters in the New York Times Co. newsroom can no longer keep quiet about their growing frustrations regarding the direction of the paper.
After a pair of letters sent to Executive Editor Dean Baquet and Managing Editor Joseph Kahn by Times reporters and copy editors, the New York Times editorial staff walk out of the newsroom on Thursday as a demonstration of solidarity as management threatens jobs.
on.mktw.net/2up8RPt

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