THE JOHN LOTHIAN NEWS DAILY UPDATE – 12/02/2020

John Lothian

John Lothian

Executive Chairman and CEO

 

The John Lothian Daily Update is a podcast turning the daily JLN hits and takes comments, our original content and the stories and quips in the top box of First Read into a daily podcast.

 

Hits & Takes

JLN Staff

FIA Asia-V kicked off with comments from Bill Herder, Ian Nissen and Walt Lukken. This is the first remote or virtual FIA Asia conference. The advantages include having people who would not travel to Singapore participate in the event, including the China Securities Regulatory Commission Vice Chairman Fang Xinghai and the JLN editorial team.

What I love about FIA Asia-V is being able to watch all the panels, fireside chats and speeches when I want. I know I am sacrificing the social element of the conference, which I miss dearly, but there are advantages like access to all this sharing of intellectual property that help offset some of this loss. It allows me and other participants to think more strategically about issues surrounding Asia.

The kind people at FIA have gifted me three FREE FIA Asia-V passes to give away. If you are interested, please email me at johnlothian@johnlothian.com

The first panel for FIA Asia-V was “The Outlook for Asia-Pacific Exchanges.” There were two polling questions during the panel. The first was “What new product category are you most interested in for 2021?” The results this morning showed 41% ESG, 9% Volatility, 0% Single stock futures & options, 16% Mini contracts, 16% Technology indices and 19% New Asia country indices.

The second question was “What area for process improvement would you most like attention to in 2021?” The answers were 15% Execution, 19% Give-up/in process, 50% Margining and 15% Non-cash Collateral.

ICE has set an exchange-wide open interest record with futures open interest hitting 46.8 million contracts and open interest in global energy up 8% and natural gas up 14% year-over-year.

Ketan B. Patel, a Policy Advisor and Head of Financial Markets Risk Analysis at the Chicago Federal Reserve Financial Market Group has published a paper on funding cyclicality and CCPs.

It is Giving Tuesday today. One charity to consider giving to today is The Greenwood Project, whose mission is to introduce Black and Latinx students to the finance industry. You can donate HERE.

The Financial Times has a Special Report: Risk Management: Exchanges, Trading and Clearing today. The stories are all in the lead section below.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

Rockefeller Center in New York City has limited the time for viewing their epic Christmas Tree to five minutes in order to limit the spread of COVID-19.

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign.~JJL

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

*****

From FIA President and CEO Walt Lukken’s opening remarks for the FIA Asia-V conference: “FIA recently published a white paper that examines the increases in initial margin at derivatives clearinghouses during the March timeframe. While margin increases are expected during volatile times, we must make sure that margin levels are calibrated to be predictable and not overly procyclical, adding undue stress during these times of market turbulence. FIA’s paper makes several suggestions, which aim to promote an important dialogue within the industry and regulatory community on whether improvements need to be made.” ~SR

FIA also recently published a policy?paper on?“How derivatives markets are helping the world fight climate change.” The paper highlights existing industry solutions?and?potential partnerships to help build a more sustainable economy.~SR

They say multitasking is bad for you, but it seems since so many people are relying on video chat while working from home, a lot of folks are doing it anyway. During the “ETD Operations: Adapting to the New Normal” panel at FIA Asia-V, the presenters asked audience members if they multitask during online meetings or webinars. 87 percent of respondents said ‘yes’. ~MR

The American Financial Exchange (AFX) Monday said that it has formed a strategic alliance with Citi. It said the bank has agreed to join AFX, engage in position hedging in AMERIBOR futures and serve as a market maker in AMERIBOR interest rate swaps. AFX is an electronic marketplace that also facilitates the calculation of AMERIBOR, a benchmark interest rate that serves as an alternative to LIBOR. For more information, please see the release. ~SC

The Options Industry Council (OIC) has emailed out its save the date for the Options Industry Conference 2021, which is currently planned for April 28 – 29, 2021. It seems they aren’t taking any chances this year – the event will be totally virtual. You can email the event organizers at optionsconference@theocc.com for details. The email notice said registration and sponsorship info are to follow. ~MR

 

First Read

FIA Asia-V: “Timetable is a very tricky thing”
Thom Thompson – John Lothian News

At Asia-V’s panel on the challenges and opportunities for cross border trading and clearing in the region, Managing Director Sharon Shi from G.H. Financials talked about how her global customers are thinking about access to trading in China. She said that, unlike earlier when customers were deciding whether they wanted to get involved in Chinese markets, institutional customers are now evaluating how to do it.

G.H.’s customers from outside the region are watching closely as Chinese regulators modify and streamline the Qualified Foreign Institutional Investor (QFII) programs that have existed since 2002. According to Shi, the customers are looking at whether the legal environment created by the reforms will provide them enough protections for them to feel comfortable to trade in China.

To read the rest of this story, go here.

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AFX Forms Strategic Alliance with Citi
American Financial Exchange
AFX has formed a strategic alliance with Citi in which the Bank will join the American Financial Exchange (AFX). Citi will also engage in position hedging using AMERIBOR futures and provide market-making in AMERIBOR interest rate swaps.
/jlne.ws/33t457x

*****Big win for AFX.~JJL

++++

Millionaire Kelly Loeffler mocked for ad claiming she knows what it ‘feels like waiting on that paycheck’
Graeme Massie – The Independent
Millionaire Senator Kelly Loeffler was mocked for an ad claiming she knows what “it feels like waiting on that paycheck.” Ms Loeffler, who is fighting to retain her Georgia seat, is married to the chairman of the New York Stock Exchange, Jeffrey Sprecher. She is reportedly the wealthiest member of congress with a fortune estimated at between $800m and $1bn, according to Forbes.
/jlne.ws/36qxIbp

*****Sen. Kelly Loeffler is throwing out some harsh political statements and is getting it thrown right back at her. I believe this is called politics. Here is a story from Salon which mocks Sen. Loeffler. You don’t want to know the hashtags attached to some of the criticism of her.~JJL

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1918 Germany Has a Warning for America; Donald Trump’s “Stop the Steal” campaign recalls one of the most disastrous political lies of the 20th century.
Jochen Bittner – NY Times
It may well be that Germans have a special inclination to panic at specters from the past, and I admit that this alarmism annoys me at times. Yet watching President Trump’s “Stop the Steal” campaign since Election Day, I can’t help but see a parallel to one of the most dreadful episodes from Germany’s history.
/jlne.ws/2L06WP3

*****We can learn from history. But we need to pay attention.~JJL

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Trump Raises $170 Million as He Denies His Loss and Eyes the Future; The president’s campaign has ratcheted up its appeals for cash, but the first 75 percent of every contribution is going to a new political action committee that could fund his next political move.
Shane Goldmacher and Maggie Haberman – WSJ
President Trump has raised about $170 million since Election Day as his campaign operation has continued to aggressively solicit donations with hyped-up appeals that have funded his fruitless attempts to overturn the election and that have seeded his post-presidential political ambitions, according to a person familiar with the matter.
/jlne.ws/3qhj1zn

******$170 million is a lot of money to get a message out.~JJL

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Monday’s Top Three
Our top story Monday was The Wall Street Journal’s S&P Global Agrees to Buy IHS Markit for About $44 Billion. As if coffee drinkers need more encouragement, the second most read story was from Greatist, Is coffee actually good for you then? Third was a story expressing the problems facing families with children in Bloomberg’s My Son’s School Has Closed Again. Stop This.

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