The Post-Covid Trading Floor Is Here — With Buffet Lunches, No Masks; Turns Out Good Covid Management Is Good Politics and Economics

Oct 20, 2020

First Read

$8,241/$300,000 (2.7%)
Christopher McNulty


Hits & Takes
JLN Staff

New contributors to the JLN MarketsWiki Education GoFundMe campaign include Chris McNulty. McNulty, Sr. is a managing director and COO at Geneva Trading. Thank you to all who have given, and all who have yet to give. You can help us preserve the history of our industry by supporting this fundraising campaign.

FTSE Russell has a webinar on Thursday, October 22 at 12 PM ET about “What’s been driving US equity markets outperformance?” You can register HERE.

Reminder, the webinar with Quantitative Brokers and Eurex on “Transaction Cost Model Market liquidity impacted across European Interest Rate Futures,” is on Wednesday, October 21st at 11:30 EST. Register HERE.

One more note on the passing of Ross Prio, III. His family was asking for donations to the William Guy Forbeck Research Foundation or the American Heart Association. Here is the story on the Forbeck foundation. In 1983, at the age of 10, William (Billy) Guy Forbeck was diagnosed with neuroblastoma, a rare childhood cancer that affects only 650 children a year. Billy died thirteen months later. HIs parents, George and Jennifer Forbeck, established the foundation in his memory. George Forbeck was a longtime member of the Chicago Board of Trade and a large and influential corn pit broker. The foundation promotes advances in the field of oncology, particularly pediatric oncology, by shortening the cancer research timetable. This is just another example of the good done in the world by someone from the world of futures.

Last week the Wall Street Journal had a story about CBOE founder Joseph Sullivan III which made reference to a plywood contract at the CBOT and said the contract flopped. According to a paper written by then CBOT chief economist Richard Sandor, NYMEX actually listed an unsuccessful plywood contract in 1969. It traded 5299 contracts its first year. At the Chicago Board of Trade, interest in developing a plywood contract went as far back as 1957. A newly hired researcher in what was to become the planning department researched the plywood market and delivered an extensive report in January of 1969. The CBOT members voted 514 to 25 on July 29, 1969 to approve trading in plywood futures. After some revisions to the contract specifications, plywood futures started trading on December 1, 1969. The plywood contract traded 394 contracts in 1969 and 47,426 in 1970. There were more than 1000 contracts settled by delivery in 1970. The paper by Sandor was published in the Journal of Law and Economics in April of 1973 as part of the University of Chicago. I would call that a successful contract, though it ultimately did not survive. It actually survived longer as the basis of an NFA Series 3 question. I remember the contract specifications were required to answer a question even though in 1985 the contract had not traded for several years.

The Chicago Board of Trade Clearing Corp. Foundation has pledged $25,000 to the LaSalle Street Trading Tech Awards fundraising event. This is the last year of the foundation, so this donation is especially precious to the Boy Scouts. Thank you to all the trustees for your unwavering support of the Boy Scouts of the Pathway to Adventure Council of the Boy Scouts of America, especially David Johnson, who has been an especially generous trustee. The LaSalle Street Trading Tech Awards event will be virtual this year and held on December 3. Pat Kenny of CQG is this year’s chairperson.

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


A reminder: The Annual Conference on Futures and Derivatives will be held today, October 20, at 1 p.m. Chicago time. Sponsored by Thompson Coburn and Exchange Analytics, the free online webinar will address the current state of industry regulation and enforcement. Speakers include James M. McDonald, the former director of enforcement for the CFTC, as well as ex-federal prosecutor and Thompson Coburn partner Renato Mariotti. To register and for more information, go HERE. ~SC


Money Laundering Detectives Have Been Out at the Pub; Australian regulators got caught up monitoring nickel-and-dime businesses for far too long. The Crown casino affair shows things are starting to change.
David Fickling – Bloomberg
Why did it take media reporting to get Australia’s money laundering investigators to start looking into casino operator Crown Resorts Ltd.? Shares in the gambling company previously controlled by billionaire James Packer slumped 8.2% Monday after it said the country’s financial-crimes regulator Austrac had started a probe into the handling of “high risk and politically exposed” individuals at its Melbourne casino. The investigation started two months after Nine Entertainment Co. newspapers published a series of articles about the activities of high-rolling Chinese gamblers at Crown’s properties.

*****What you catch all depends on the size of the hook you are using.~JJL


Cryptographers Are Always Going to Be ‘One Step Ahead’ of Regulators: Monero’s Spagni
Omkar Godbole – Coindesk
While regulators are trying to restrict privacy in crypto, their efforts may be futile, according to privacy-centric protocol Monero’s maintainer, Riccardo “Fluffypony” Spagni.

*****Funny, criminals say the same thing.~JJL


Economist Found $16 Trillion When She Tallied Cost of Racial Bias; Dana Peterson, who was a Citigroup global economist, recalled her own experiences of bigotry while researching how gaps between Black and White Americans eat into economic output.
Saijel Kishan – Bloomberg
As protests against racial injustice erupted across the U.S. in late May, an economist on Wall Street set aside her usual work of analyzing monetary policy and all things macro to try her hand at something few in her field have attempted: quantifying the cost of racism to the world’s largest economy.

******Discrimination, no matter who it is against, holds back economic growth. We reduce our human potential by succumbing to stupidity.~JJL


Monday’s Top Three
We went from Chicago to London in our top three stories Monday. First was Chicago is the ‘rattiest city’ in America for the sixth year in a row, from CNN. Second was Citadel Securities sues SEC, from Crain’s Chicago Business. Third was Bloomberg’s Trading Ring That Survived Two World Wars May Succumb to a Virus, about the “iconic” London Metal Exchange trading ring.


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Lead Stories

The Post-Covid Trading Floor Is Here — With Buffet Lunches, No Masks
Bloomberg News
JPMorgan, Citi have most workers back in place in Shanghai; Financial hub hasn’t reported a local Covid case since June
On the trading floor at Bank of Communications Co.’s $164 billion wealth management unit in Shanghai, traces of the worst pandemic in a century are hard to find.

Turns Out Good Covid Management Is Good Politics and Economics; Coronavirus leadership matters and has been richly rewarded in China and New Zealand. In Sweden, not so much.
Mark Gongloff – Bloomberg
Good Coronavirus Management Is Good Politics
In too many places around the world, coronavirus policies seem guided not by public health but by economics or, worse, politics. Leaders are loath to restrict people’s movements because that tends to make people unhappy and unable to buy stuff. But we keep discovering you can’t separate economics and politics from public health. Effective virus control eventually makes voters happier and economies stronger.

Euronext plagued by two glitches Monday, latest exchange to go down
Thyagaraju Adinarayan, John McCrank – Reuters
Exchange operator Euronext ENX.PA experienced two technical glitches on Monday, one which froze morning transactions in Amsterdam, Brussels, Lisbon and Paris and another at the close, when much of the key trading activity happens.

Technical Glitch Disrupts Trading on Major European Exchanges; Outage, closing-auction problems are the latest in a series of shutdowns on world’s biggest exchanges
Joe Wallace – WSJ
A technical problem halted trading on exchanges owned by Euronext ENX -0.10% NV, hitting activity at one of the busiest times of the year for European stock markets. Monday’s glitch stopped trading in stocks, bonds, commodities and derivatives on exchanges in Paris, Amsterdam, Lisbon and elsewhere. Before a fresh problem struck later in the day, Euronext initially fixed the cause of the outage, and trading in most markets resumed by early Monday afternoon in Europe, a spokesman for the exchange operator said.

City of London seeks to ‘reinvent itself’ after pandemic; Square Mile looks to start-ups and flexible ways of working with 5-year recovery plan
Daniel Thomas – FT
The City of London wants to encourage small businesses and those in the arts sector to “re-enter the city centre” to help the UK’s financial capital recover from the economic damage of the coronavirus pandemic.

Goldman Poised to Pay More Than $2 Billion in DOJ’s 1MDB Probe
Sridhar Natarajan, Tom Schoenberg, and Andrea Tan – Bloomberg
Deal to push Goldman’s tally of penalties to around $5 billion; Accord eases uncertainty over bank after years of negotiations
Goldman Sachs Group Inc. has reached a long-awaited pact with the U.S. Department of Justice to pay more than $2 billion for the bank’s role in Malaysia’s 1MDB scandal, and the deal may be announced within days, according to people familiar with the matter. The accord, part of an international action, will let the parent company avoid a U.S. criminal conviction, according to the people, who asked not to be named discussing the confidential talks. The payment to the Justice Department is broadly in line with the bank’s prior reserves and analysts’ estimates.

Never-Ending Brexit Sends Traders to Distant Market Corners
Todd White – Bloomberg
With FX options costly, alternative strategies look appealing; Irish-French spread, inflation, stock derivatives all in focus
As Brexit sends hedging costs soaring again, strategists are recommending a slew of less crowded ways to trade the never-ending political drama. From euro-area bond spreads and equity derivatives to the shape of the inflation curve, investors can place bets on Britain’s economic future, without speculating directly on its volatile currency.

SIFMA Statement And Testimony Opposing Proposed New Jersey Financial Transaction Tax
SIFMA today issued the following statement from SIFMA president and CEO Kenneth E. Bentsen, Jr. on the New Jersey S2902/A4402 proposal, in conjunction with SIFMA testimony given today at the hearing before the New Jersey Assembly Committee on Financial Institutions and Insurance:

OPEC+ Vows ‘Proactive’ Response to Precarious Oil Market
Javier Blas, Grant Smith, Dina Khrennikova, and Salma El Wardan – Bloomberg
Saudi Arabia says OPEC+ will nip negative trends ‘in the bud’; Group didn’t discuss plans to raise output in Jan.: delegates
The OPEC+ alliance warned of a “precarious” outlook as a resurgent coronavirus pandemic hurts oil demand, dropping further hints about a potential change of policy next month. Unless the coalition changes tack, it will add almost 2 million barrels a day from January. But increasingly traders have warned the market cannot absorb so much oil.

Exit of UBS CEO Ermotti Leaves Plenty for Successor
Marion Halftermeyer and Patrick Winters – Bloomberg
UBS posts one of its best results under departing CEO Ermotti; His successor must navigate a market in need of consolidation
Sergio Ermotti is leaving UBS Group AG with one of the best quarters since he took over nine years ago, but incoming Chief Executive Officer Ralph Hamers still has plenty to fix when he takes over. The world’s largest wealth manager on Tuesday reported better-than-expected profit, helped by a booming investment bank, unexpected inflows from rich clients, and some of the lowest provisions for bad loans in Europe. UBS even set aside $1.5 billion for share buybacks next year and plans to resume dividend payments next month.

EU’s First Social Bonds Smash Records With $275 Billion Orders
John Ainger, James Hirai, and Priscila Azevedo Rocha – Bloomberg
Bloc selling 10-, 20-year social bonds under job-support plan; Bond issuance across region tops 1.5 trillion euros this year
The European Union’s first offering of social bonds was said to receive orders of more than 233 billion euros ($275 billion), a record in the euro area.

What People Really Love (and Hate) About Remote Work; Seven months into the pandemic, many professionals say they like flexible schedules—’I actually eat real food now’—but miss colleagues and clients and cite frustrations such as Zoom fatigue.
Kathryn Dill – WSJ
For the millions of Americans working remotely since March, it has been a year of challenges, opportunities, and getting really, really comfortable with Zoom. Some have found unprecedented flexibility, fitting in workouts and lunch breaks where they couldn’t before, or moving to new places. Others have struggled to balance the demands of virtual school with back-to-back video conferences. Even those eager to keep working remotely in a post-pandemic future miss catching up with co-workers in the elevator and chatting in person with clients. Here’s how some of their lives have changed:

Markets Are Tuning Out a Lot of Unpleasantness; Stocks are showing a heroic faith in the prospects for fiscal stimulus, ongoing central bank support, and the swift arrival of a Covid vaccine.
John Authers -Bloomberg
Pandemic Equanimity
Covid-19 never goes away. Monday, a generally calm day for world markets, nevertheless brought the news that Ireland is locking down in the face of a fresh outbreak, while the world awaits what could be a crucial hearing of the U.S. Food and Drug Administration on Thursday that will consider whether any vaccine candidates are worthy of emergency approval.

Jack Ma’s Ant Receives Hong Kong Exchange Approval for IPO
Lulu Yilun Chen and Julia Fioretti – Bloomberg
Ant said to seek $35 billion in Hong Kong, Shanghai sales; China fintech giant may price shares as soon as next week
Jack Ma’s Ant Group Co. won approval from the Hong Kong stock exchange for its initial public offering, clearing a key hurdle as the Chinese fintech giant races to complete the sale ahead of the U.S. election.

Drought in western U.S. is biggest in years and predicted to worsen during winter months
Matthew Cappucci – Washington Post
The largest and most intense drought in years is engulfing the West and threatens to grow larger and more severe in the coming months. The drought has already been a major contributor to record wildfire activity in California and Colorado. Its continuation could also deplete rivers, stifle crops and eventually drain water supplies in some Western states.

China Is Experiencing a Boom in Share Sales; Local markets are outshining global peers, aided by the country’s economic recovery
Joanne Chiu – WSJ
China is claiming a record proportion of global initial public offerings and other debuts, aided by buoyant markets, a new tech board and companies seeking listings closer to home. So far this year, exchanges in Shanghai and Shenzhen have hosted more than $47.5 billion of IPOs and listings for firms that have shares already trading elsewhere, Refinitiv data shows.

LCH successfully completes transition to SOFR discounting
Over one million contracts transitioned with a total notional of $120 trillion; Scope of transition included cleared interest rate swaps in SwapClear, deliverable and non-deliverable forwards and options in ForexClear, and cross-currency swaps in SwapAgent; LCH calculated and processed compensation payments for resulting valuation changes and created compensating swap hedges for risk changes; Client swap hedges totalling $24bn net notional successfully auctioned off at close to zero cost; Auction very well-supported with 18 primary dealer banks submitting competitive bids; LCH, a leading global clearing house, today announced that it has successfully transitioned over one million cleared contracts from Fed Funds to SOFR discounting and Price Alignment Interest (PAI).
The move is an important component of industry-wide efforts to transition financial contracts from LIBOR to Risk Free Rates (RFR). The CCP discounting transition formed a key part of the Paced Transition Plan set in place by the ARRC (Alternative Reference Rates Committee) in 2018.

Oil Industry Turns to Mergers and Acquisitions to Survive; With the price of a barrel stuck around $40 and no recovery in sight, companies are combining to cut costs and ride out the pandemic.
Clifford Krauss – WSJ
The once mighty oil and gas industry is flailing, desperately trying to survive a pandemic that has sharply reduced demand for its products.

Investors Don’t Believe What They Are Seeing on Wall Street; Shares of Wall Street banks, notably Goldman Sachs, don’t reflect solid recent performance; investors may be too focused on the past
Telis Demos – WSJ
Investors just don’t seem to believe the good times can continue for Wall Street. Take Goldman Sachs GS -0.25% for instance. Last week it reported record quarterly earnings per share, which were 75% better than consensus forecasts. It also had its highest quarterly return on equity, an annualized 17.5% rate, in a decade. Yet in the days since the stock has edged lower, by more than 2% since its report.

Short Sellers Get a Warning to Come Clean; A hedge fund’s failure to disclose the U.K.’s largest-ever short was a challenge for the FCA. Still, the industry will sit up and listen.
Chris Hughes – Bloomberg
A Hong Kong hedge fund broke a record when, from 2017 to 2019, it built the U.K. stock market’s biggest-ever short position. But history is more likely to remember the trade as the first to be punished by Britain’s markets regulator for not being made public. Asia Research & Capital Management Ltd. took the Financial Conduct Authority into uncharted territory in this episode, and it shows.


‘We are now in a second surge’ of COVID in Chicago; City officials say the increase of cases now looks similar to when COVID first hit Chicago in March and April. So far, no new restrictions are set, but they could be coming.
A.D. Quig – Crain’s Chicago Business
Chicago Mayor Lori Lightfoot and Public Health Commissioner Dr. Allison Arwady said Chicago is in the beginning of a second surge of COVID-19, with cases increasing across age groups, neighborhoods and ethnicities. The mayor did not announce any new restrictions today, but warned the city could roll back to Phase Three if the curve is not bent.

Ireland Moves Back to Lockdown as Europe Seeks to Defeat Virus
Dara Doyle and Peter Flanagan – Bloomberg
Government plans to close most stores, bars and restaurants; Prime Minister sees risk of a ‘potentially grave situation’
Ireland imposed some of the most severe pandemic restrictions in Europe as countries across the region battle to overcome the virus. Non-essential stores, bars and restaurants will be forced to close for at least six weeks, Prime Minister Micheal Martin said late on Monday. Travel will be further restricted, with people told to stay within 5 kilometers (3.1 miles) of their home.

Covid-19’s Global Divide: As West Reels, Asia Keeps Virus at Bay; Coronavirus cases are surging again across Europe and the U.S., but infections have stayed at low levels in most Asian countries
Margherita Stancati and Dasl Yoon – WSJ
While a surge in coronavirus infections is forcing U.S. states and European countries to shut down bars, open field hospitals, and limit social gatherings to small groups of people, such measures are becoming distant memories in much of Asia.

EU enjoys ‘outrageous demand’ for first Covid-related bond; Debt issue linked to job support programmes draws Europe’s largest ever order book
Tommy Stubbington – FT
The EU met with huge demand for an issue of new coronavirus-related bonds on Tuesday, with bankers saying the sale had received the largest ever order book in Europe’s bond markets.

Heathrow to offer £80 rapid coronavirus test for departures; Government targets halving 2-week quarantine for passengers arriving at UK airports by December 1
George Steer and Jim Pickard – FT
Passengers flying from Heathrow airport will from Tuesday be able to get tested for coronavirus for £80 with a result within an hour, the UK airport has announced.

EU May Shut Door to Travel From Canada, Allow Singapore Visitors
Jonathan Stearns – Bloomberg
Non-essential travel still not allowed for U.S. residents; Tunisia, Georgia, also slated for removal from ‘white list’
The European Union plans to remove Canada, Tunisia and Georgia from its list of countries whose residents should be allowed to visit the bloc amid the coronavirus pandemic, according to EU officials familiar with the matter. The EU intends at the same time to reopen its doors to travelers from Singapore as a result of improved virus trends there, the officials said on the condition of anonymity because the deliberations on Tuesday in Brussels are confidential. The U.S. will remain blacklisted along with most other countries in the world.

Offices Resort to Sensors in Futile Attempts to Keep Workers Apart; Overcoming the human urge to mingle is almost impossible.
Jeff Green – Bloomberg
Millions of workers in recent months have returned to offices outfitted with new pandemic protocols meant to keep them healthy and safe. But temperature checks and plexiglass barriers between desks can’t prevent one of the most dangerous workplace behaviors for the spread of Covid-19 — the irresistible desire to mingle.

Heathrow Offers Pre-Departure Rapid Covid-19 Tests
Siddharth Vikram Philip – Bloomberg
Quick $104 Covid-19 tests will be available to travelers; Airlines have asked U.K. to replace quarantines with testing
London Heathrow airport will offer rapid Covid-19 tests to departing passengers as more territories require travelers to provide virus assessments as a condition of entry.

Ireland Moves Back to Lockdown as Europe Seeks to Defeat Virus
Dara Doyle and Peter Flanagan – Bloomberg
Government plans to close most stores, bars and restaurants; Prime Minister sees risk of a ‘potentially grave situation’
Ireland imposed some of the most severe pandemic restrictions in Europe as countries across the region battle to overcome the virus. Non-essential stores, bars and restaurants will be forced to close for at least six weeks, Prime Minister Micheal Martin said late on Monday. Travel will be further restricted, with people told to stay within 5 kilometers (3.1 miles) of their home.

CDC Issues ‘Strong’ Call for Wearing Masks on Airplanes, Trains
Emma Court
The U.S. Centers for Disease Control and Prevention has issued a “strong recommendation” for mask-wearing by both passengers and operators on planes, trains, buses and taxis to prevent the spread of the novel coronavirus. Masks should cover a person’s nose and mouth and be worn while traveling in and out of the U.S. as well as within the country, the agency said. Operators should require them for the entire time of travel and deny entry to anyone not wearing one.

Time’s up: After a reprieve, a wave of evictions expected across U.S.
Michelle Conlin, Christopher Walljasper – Reuters
On Sept. 1, U.S. health officials announced they would suspend evictions across the United States to help stem further spread of the novel coronavirus.

Argentina exceeds 1 million Covid-19 cases
Reuters Staff
Argentina has become the fifth country in the world to exceed one million coronavirus cases, its health ministry said on Monday, making it the smallest nation by far to reach the grim milestone after infections accelerated in recent weeks.

Wisconsin judge reimposes COVID restrictions as U.S. nursing homes sound alarm
Rich McKay, Lisa Shumaker – Reuters
As Wisconsin battled one of the worst coronavirus surges in the United States, a judge on Monday reinstated an order by the administration of Governor Tony Evers limiting the size of indoor public gatherings at bars, restaurants and other venues.

Airports screened more than one million travelers for the first time since mid-March.
Niraj Chokshi – NY Times
More than a million people passed through airport checkpoints on Sunday, the first time the Transportation Security Administration has screened that many people since mid-March.

Rogue Demographer Says Russia May Top Europe in Covid Deaths
Anna Andrianova and Stepan Kravchenko – Bloomberg
Former statistics agency employee has criticized virus data; Daily death numbers need to be tripled, demographer says
A former employee of the Kremlin’s statistics agency says Russia’s daily coronavirus mortality figures understate the real toll from the disease in a country where excess deaths could soon be the highest in Europe. Alexey Raksha worked as a demographic forecaster at the Federal Statistics Service for more than six years until he left in July amid a dispute over the virus data. He says he was asked to leave after he publicly criticized the government daily death numbers. Raksha also called on the agency, known as Rosstat, to release information about COVID-19 sooner. Rosstat says he left of his own accord.

Europe Takes a Swedish Turn on Tackling Covid-19; A more nuanced approach on lockdowns can make political and economic sense, but it takes very little for this pandemic to spiral out of control.
Ferdinando Giugliano – Bloomberg
Last spring, as the first wave of the Covid-19 pandemic swept through Europe, Sweden became the continent’s controversial exception on how to tackle the virus. As other countries — from Italy to the U.K. — enforced draconian lockdowns, the Swedes went for a light touch. That sparked outrage among people concerned by a seemingly cavalier approach to the death toll and enthusiasm from those more worried about individual freedom and protecting the economy.

Johns Hopkins Says U.S. Virus Deaths Could Triple
Johns Hopkins Bloomberg School of Public Health Vice Dean Joshua Sharfstein warns that Covid-19 deaths in the U.S. could triple without the right containment strategy. He speaks on “Bloomberg Surveillance.”

Exchanges, OTC and Clearing

Blockchain-Based Trading System Steps Closer to ASX Access
Daniel Palmer – Coindesk
A distributed ledger technology-based trading system is just a step away from being permitted to connect to the Australian Securities Exchange (ASX).

CME asks clients about changing implied UST futures coupon; Falling yields prompt review of 6% conversion factor for delivery-eligible bonds
Robert Mackenzie Smith –
CME Group has contacted clients about changing the way it values US Treasury bonds that can be delivered to satisfy expiring futures contracts. The current methodology has been cited by some as contributing to the market disruption in March – a charge strongly disputed by the Chicago-based exchange.

OTC IRS Production – SOFR Discounting Transition: Basis Swap Auction Process Completed – Trades Executed
CME Group
Please be advised that CME Clearing has successfully executed the SOFR Basis Swap Auction in Production and CME will book offsetting trades in the relevant Participating Account of each Participant to terminate/close out the Basis Swaps submitted to the auction. The auction proceeds when allocated to individual Participants was approximately 0.139152 basis points of gross discounting risk.

LME Week Farewell From Charles Li
London Metal Exchange
Sadly, we’ve needed to cancel our LME Dinner this year, and Charles Li won’t be able to deliver what would have been his final LME Dinner speech prior to stepping down from his role as HKEX Chief Executive at the end of December.

eToro Chooses Nasdaq to Expand U.S. Market Insight for Global Investors;
15 million registered users can access a greater U.S. market view through Nasdaq Basic
Nasdaq (Nasdaq: NDAQ) announced today that it is providing real-time market data to eToro, a global multi-asset investment platform empowering its more than 15 million registered users to trade and invest in a simple and transparent way.

House of Control admitted to trading
The software as a service company House of Control has today been admitted to trading on Merkur Market (ticker code: HOC-ME). Founder and CEO, Lasse Sten, says both the company and the solutions are built on the vision to become the CFO’s best friend: “The platform gives full control of contracts, assets and liabilities. Both the basic solution and the modules are developed in close collaboration with CFOs.”

Spanish consulting company Making Science lists on Euronext Growth Paris
Euronext, Europe’s leading capital markets operator, announced today that 7,062,300 shares of Making Science, a technology and digital marketing consultancy firm specialising in e-commerce and digital transformation, have begun trading through a dual listing on Euronext Growth Paris. The incorporation of the Spanish firm confirms Euronext’s position as the leading market for European companies in the technology sector and for expanding SMEs that are looking to enjoy greater international exposure. The listing brings to 20 the number of Spanish companies listed on Euronext’s markets.

MIAX Options Exchange – SPIKES Special Settlement Auction Settlement Reference Price Opening Width And Valid And Priority Quote Width Tables Used In The October 21, 2020 SPIKES Special Settlement Auction
Due to sustained market volatility, MIAX Options will continue to use the Settlement Reference Price Opening Width and Valid and Priority Quote Width tables detailed in MIAX Options Regulatory Circular 2020-11 for opening the SPY November 20, 2020 options used in the October 21, 2020 SPIKES Special Settlement Auction.

Euro-Fixed-Income Futures: Adjustment of the obligations for performance for the delivery of Short-Term Euro-BTP futures contracts on debt securities of the Republic of Italy
Eurex Circular 080/20 Euro-Fixed-Income Futures: Adjustment of the obligations for performance for the delivery of Short-Term Euro-BTP futures contracts on debt securities of the Republic of Italy

Eurex Exchange Readiness Newsflash | Eurex T7 Release 9.0 updates: Readiness Statement availability; Decommissioning of four low-frequency gateways in the T7 simulation environment

Navigating you through market uncertainties: New expiration dates on certain Dividend Futures
To counteract uncertainty and offer a broader choice to its customers, Eurex has introduced new maturities on Stock Dividend Futures and EURO STOXX 50® Index Dividend Futures.

Cboe Becomes Primary Listing Exchange for O’Shares ETFs
Cboe Global Markets
OUSA, OGIG, OUSM, OEUR began trading on Cboe BZX Exchange on October 19; O’Shares ETFs recently celebrated $1.0 billion AUM milestone and five-year anniversary since launch
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced that the entire suite of O’Shares ETFs successfully transferred to Cboe BZX Exchange from NYSE Arca on Monday, October 19.

BME: MARF Admits A 100 Million-Euro Commercial Paper Programme To Trading From Metrovacesa
BME’s Fixed Income Market, MARF, today has admitted Metrovacesa’s first Commercial Paper (CP) Programme to trading. This programme will allow the company to access new qualified investors to diversify its financing sources and place CPs with an outstanding balance of up to 100 million euros.


Trading Technologies Contracts with Applied Derivatives for Distribution of the TT® Platform from South Africa
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and Applied Derivatives PTY LTD, a leading securities trading and brokerage firm based in Cape Town, today announced they have entered into an agreement whereby Applied Derivatives becomes the first broker to distribute the TT platform from South Africa. Applied Derivatives is providing international clients with access to the Johannesburg Stock Exchange (JSE) for trading of all equity and currency derivatives, including futures and options, listed on the JSE Derivatives Market.

Traders at RBC Capital Markets develop AI-based electronic trading platform; Known as Aiden, the AI-powered execution platform from RBC Capital Markets uses deep reinforcement learning techniques to adapt to market conditions.
Hayley McDowell – The Trade
RBC Capital Markets has launched a new electronic trading platform using artificial intelligence technology, which was developed by its traders in partnership with AI scientists.

KPMG was engaged as auditor to group used in suspicious Wirecard deals; Accountancy firm had second thoughts about working with Mauritian-based fund
Olaf Storbeck and Dan McCrum – FT
KPMG, which this year revealed its rival accounting firm EY had missed a chance to stop Wirecard’s fraud, was engaged as the auditor* to a suspicious vehicle that investigators believe may have been used to siphon off the payments group’s funds.

Refinitiv Debuts Country Sustainable Development Scores To Measure How Extensively A Country Meets UN SDGs
Building on its commitment to connect and advance the global financial community through data and analytics, Refinitiv today announced Country Sustainable Development Goals (SDGs) Scores as a pivotal data-metric in the transition to sustainable investing – providing comparisons at the country level for fund managers, advisors and investors.

Mercury Derivatives Trading Selects Eventus Systems for Trade Surveillance
Eventus Systems
Eventus Systems, Inc., a multi-award winning global trade surveillance and risk management software platform provider, today announced that Mercury Derivatives Trading, a global futures proprietary trading firm with more than 500 traders operating in markets on six continents, has deployed Eventus’ Validus platform for trade surveillance.


Does a digital euro challenge the dollar’s global dominance?
Claire Jones – FT
A European Central Bank research paper on the feasibility of the digital euro has garnered a lot of attention over the past couple of weeks. It would, as the FT’s Martin Sandbu writes here, appear as though the writing is on the wall and the eurozone will launch its own central bank-backed digital currency in the not too distant future: After six months of consultation and initial technical experimentation, the ECB’s governing council will decide on an investigation phase that could take about a year and a half, then take another decision on whether to actually develop a digital euro, which could take another couple of years depending on the chosen design. So let me stick my neck out and predict an official digital euro will come to an e-wallet near you by the end of 2025. You heard it here first.

Powell Says Fed Has Made No Final Call on Digital Currency
Craig Torres – Bloomberg
Federal Reserve Chair Jerome Powell said the central bank hasn’t made a decision to issue a digital currency, citing the need for further work and “extensive” public consultation with stakeholders before doing so. “It’s more important for the United States to get it right than to be first,” Powell said Monday on a panel hosted by the International Monetary Fund during its annual meeting. “We are committed to carefully and thoughtfully evaluating the potential costs and benefits of a central bank digital currency for the U.S. economy and payments system. We have not made a decision to issue a CBDC.”

Dissidents Are Turning To Cryptocurrency As Protests Mount Around The World
Roger Huang – Forbes
In a COVID-19 era marked by aggressive political consolidation and economic troubles, there have been sparks of protests around the world. From Hong Kong, to the United States to Nigeria, to Thailand, to Belarus and beyond no corner of the world has been untouched by a wave of fresh political protests. Their causes are diverse: fighting against established political classes, opposing police brutality or calling for reexaminations of elections with possibly fraudulent vote counts.

Filecoin miners are holding back their growth plans because of the network’s economic model
Wolfie Zhao – The Block
Several major Filecoin miners have halted or significantly reduced the growth of their mining power since the network’s officially went live last week. The power growth slowdown is due to Filecoin’s economic model that requires initial pledge collateral while vests block rewards linearly over 180 days. Protocol Labs is planning to revise the current model in order to solve miners’ liquidity issue.

“Robin Hood” Hackers Are Giving Cryptocurrency Ransoms To Charity
Scott Chipolina – Decrypt
A hacker group has been launching ransomware attacks and donating their takings in Bitcoin to charity. The hackers used Bitcoin charity donation service The Giving Block to make the donations. Ransomware attacks cost businesses up to $170 billion in 2019, taking into account the ransoms and ancillary costs.

The Yield Protocol — which enables fixed-rate lending on Ethereum — is live
Mike Orcutt – The Block
The Yield Protocol, an Ethereum-based platform aimed at decentralized fixed-rate lending and borrowing, is up and running on the Ethereum mainnet. The protocol, which was incubated by crypto investment firm Paradigm, is still in beta testing but is “fully functional,” according to a blog post by Allan Niemerg, founder of Yield, the startup behind the technology. At the heart of the system is what Niemerg called a “new core DeFi primitive,” called fyDai (fixed yield Dai). These ERC20 tokens are analogous to so-called zero-coupon bonds in traditional finance, which are debt instruments that don’t pay interest. Instead, they trade at a discount until they mature, at which point they can be redeemed for full face value. This capability opens the door to a crypto version of fixed-rate lending.

Fed chair Powell: A central bank digital currency could improve the payment system in the U.S.
Yogita Khatri – The Block
Fed chair Jerome Powell has acknowledged that a central bank digital currency (CBDC) might improve the payment system in the U.S. A CBDC could help with faster and cheaper payment transactions, said Powell, adding that it could also help modernize payment infrastructure and reach consumers traditionally underserved by financial institutions.

Fed Takes Cautious Approach to Possibly Issuing Digital Currency; Chairman Jerome Powell points to central bank’s concerns about theft, fraud and privacy
Yuka Hayashi – WSJ
The Federal Reserve is in no hurry to issue a digital currency, Chairman Jerome Powell said Monday, citing unresolved concerns including the potential for theft and fraud. Central banks around the world are stepping up research on the costs and benefits of central-bank digital currencies, which could supplement existing national currencies. China is ahead of other nations, after rolling out a homegrown digital currency in April across four cities in a pilot program.

FinCEN Fines Bitcoin-Mixing CEO $60M in Landmark Crackdown on Helix, Coin Ninja
Danny Nelson – Coindesk
Larry Dean Harmon, the Helix and Coin Ninja crypto-tumbling chief who in February was arrested for allegedly mixing bitcoin for criminals must pay $60 million in civil penalties, prosecutors at the Financial Crimes Enforcement Network (FinCEN) demanded Monday.

R3 Corda Network Set to Go DeFi With XDC Digital Currency
Ian Allison – Coindesk
A group of former bankers building on R3’s public Corda Network are touting the first digital currency for that ecosystem, dubbed XDC. Announced Tuesday, the Cordite Society, a co-operative registered in the U.K., released the XDC crypto token on public Corda, the open-source version of R3’s network. The new regulation-friendly cryptocoin will open the door, say its creators at Cordite, to various decentralized finance (DeFi) applications running on Corda’s distributed ledger technology (DLT). R3 began life as a pay-to-join DLT consortium of big banks, which over time realized the value of hosting a large developer community and created the open-source Corda Network alongside the commercial version of the software.

Japan’s LINE Launches CBDC Development Platform: Report
Daniel Palmer – Coindesk
LINE Corporation, best known for its popular messaging app, is launching a blockchain platform allowing central banks to develop digital currencies, South Korean newspaper Chosun reported Monday. A LINE representative reportedly said, “We want to provide CBDC platform technology to several central banks interested in CBDC.” The platform would be aimed to help central banks develop customized digital currencies backed by blockchain technology’s advantages of stability and scalability, the report said.

Does a digital euro challenge the dollar’s global dominance?
Claire Jones – FT
A European Central Bank research paper on the feasibility of the digital euro has garnered a lot of attention over the past couple of weeks. It would, as the FT’s Martin Sandbu writes here, appear as though the writing is on the wall and the eurozone will launch its own central bank-backed digital currency in the not too distant future:

Coinrule Launches Its Automated Trading Platform To The Wider Market
Coinrule is, this week, making its automated cryptocurrency trading platform available to the wider market, allowing more people access to automated, algorithmic crypto trading. Coinrule is a beginner-friendly and safe trading platform enabling you to send automated trading instructions to your favourite exchanges, including Binance, Kraken and Coinbase, etc. allowing you to compete with professional Algo Traders and Hedge Funds.


U.S. Broadens Sanctions to Thwart Completion of Russian Gas Pipeline; New measures target companies that would provide services or funding for vessels working on Nord Stream 2
Brett Forrest – WSJ
The State Department broadened the scope of sanctions targeting an unfinished Russian-backed natural-gas pipeline that has been a source of tension between Germany, Russia and the U.S. Sanctions enacted late last year focused on pipe-laying vessels for Nord Stream 2 and halted the $10.5 billion pipeline, which is designed to transmit Russian gas to Germany, 100 miles short of completion beneath the Baltic Sea.

US voters no longer see Donald Trump’s policies helping recovery; Final pre-election FT-Peterson poll shows more believe president is hurting the economy
Lauren Fedor and Christine Zhang – FT
Donald Trump’s handling of the US economy is no longer benefiting his candidacy just weeks before election day, with a Financial Times poll finding more Americans believe the president’s policies are hurting rather than helping the recovery.

Georgia’s Early Vote Soars 142% After GOP Attacks Mailed Ballots
Margaret Newkirk – Bloomberg
Trump criticism spurs a late switch by many to vote in person; Reliably conservative state has two tight U.S. Senate races
The record-smashing crowds casting ballots early in battleground Georgia owe their size at least in part to people changing their minds about voting by mail after President Donald Trump and other Republicans spent months criticizing the method. In the first eight days of voting, nearly 1.7 million Georgians voted absentee or in-person, a 142% increase from the same period in the 2016 race, state data show. Of those, more than 980,000 voted in person.

Trump Fundraisers Spun Wheels, Spending 77 Cents to Bring in $1
Bill Allison and Misyrlena Egkolfopoulou – Bloomberg
Committee pours money into upping grassroots fundraising; Outlays in search of more donors leave little for advertising
President Donald Trump’s campaign found it harder to raise money from small-dollar donors in the final months before the election, spending 77 cents of each dollar it received in the third quarter on future fundraising efforts, according to federal disclosures that highlighted the funding gap with Democratic nominee Joe Biden.

America Feels Like It’s Falling Apart. Time for Some Optimism; Some thinkers aren’t willing to just accept dystopia.
Noah Smith – Bloomberg
Octavia Butler’s classic futurist novel “Parable of the Sower” recently made the New York Times bestseller list for the first time. It depicts an America falling apart at the seams due to violence, economic decline, and governmental dysfunction. But despite the chaos, the protagonist, Lauren Olamina, spends much of her time thinking about space exploration. Faced with a dystopian Earth, she motivates herself and her followers to survive by dreaming of the stars.

The Law and Lore Behind ‘Packing’ the U.S. Supreme Court
Kimberly Strawbridge Robinson and Andrew Satter – Bloomberg
The likelihood of a solid conservative majority on the U.S. Supreme Court for years to come has some Democrats contemplating a legislative moonshot. They’re pressuring their candidate in the Nov. 3 presidential election, former Vice President Joe Biden, to endorse the idea of expanding, or “packing,” the court beyond its current nine seats. Others in this so-called progressive wing of the Democratic Party would replace the life tenure of Supreme Court justices with fixed terms. In the words of Chuck Schumer of New York, leader of Senate Democrats, “nothing is off the table.”

Final Trump-Biden debate will feature ‘mute’ button after chaotic first clash
Steve Holland, Andy Sullivan – Reuters
The final debate between President Donald Trump and Democratic rival Joe Biden will feature a mute button to allow each candidate to speak uninterrupted, organizers said on Monday, looking to avoid the disruptions that marred the first matchup.

Exxon Says Trump’s Hypothetical Call Was Just That, Hypothetical
Lynn Doan – Bloomberg
In an unusual political statement from one of the world’s largest oil producers, Exxon Mobil Corp. posted on Twitter late Monday to clarify that it never spoke with U.S. President Donald Trump about a contribution to his campaign.

Lawmakers on Both Sides Call for Antitrust Action Against Big Tech; Speaking at WSJ Tech Live Conference, GOP Sen. Hawley says an antitrust suit against Google has merit, while Democratic Rep. Cicilline calls for new government enforcement capabilities
Robert McMillan – WSJ
Democrats and Republicans have an issue they both agree on: tech companies have too much power and antitrust authorities should move to curb it. Where they disagree, however, is how to rein in the companies, especially when it comes to regulating perceptions of political bias on the platforms.

Farmers Stick With Trump, Despite Trade-War Pain; Many in agriculture say they believe a Biden presidency would bring stricter environmental regulations and higher taxes
Jacob Bunge – WSJ
About two months into the Trump presidency, Ron Prestage clutched a shovel and grinned at a photographer on an Iowa cornfield. He had $309 million riding on 160 acres near the town of Eagle Grove, the site of a future pork plant that would help his family’s company, Prestage Farms Inc., tap surging U.S. exports.

Trump Demands Attorney General Barr Investigate Hunter Biden
Misyrlena Egkolfopoulou – Bloomberg
President Donald Trump on Tuesday demanded that Attorney General William Barr open an investigation of former Vice President Joe Biden’s son, just two weeks before voters decide whether to return him to office.


Former SSGA trading head departs Abu Dhabi Investment Authority; Dale Brooksbank will relocate back to the UK after four years heading up equities trading for ADIA’s centralised dealing department.
Hayley McDowell – The Trade
The head of equities trading at the Abu Dhabi Investment Authority (ADIA) has departed after four years and will relocate back to the UK, The TRADE understands. Dale Brooksbank has left the sovereign wealth fund’s centralised dealing department and the division will redistribute Brooksbank’s responsibilities within the existing internal team, according to sources familiar with the matter.

Investing and Trading

In New 60/40 Portfolio, Riskier Hedges Are Displacing U.S. Debt
Vivien Lou Chen and Katherine Greifeld – Bloomberg
Surging demand seen in options to offset stocks at Swan Global; Currencies are another alternative ‘few are good at’: Toews
The hunt for new hedges is in full gear. While much has been made about the search for yield in a world of ultra-low interest rates, valuations in the U.S. Treasury market also leave very little room for price gains to counteract losses should the high-flying stock market turn lower. It’s a dilemma that could reshape the classic investing strategy of 60% stocks and 40% bonds as the Federal Reserve holds rates near zero for the foreseeable future.

Robots Encroach on Up to 800 Million Jobs Around the World
Lucy Meakin – Bloomberg
Bloomberg Economics estimates workers in high-risk sectors; Says greater automation could worsen income inequality
Advances in automation technology threaten a significant share of jobs in industries accounting for nearly a quarter of the global workforce, according to Bloomberg Economics’ estimates. In a report released Tuesday, economists Ziad Daoud and Scott Johnson said that could mean as many as 800 million people face a high exposure to the risk of their employment becoming obsolete. The Gulf Cooperation Council, Czech Republic, Slovakia and Japan are most vulnerable to disruption from automation, they wrote.

Cut-Price Deals Show Shale’s Rapid Decline From Debt-Fueled Boom
Kevin Crowley and David Wethe – Bloomberg
Permian star Concho sells to ConocoPhillips for 15% premium; Shale companies need scale to survive low oil prices: analyst
There is no more dramatic sign of the U.S. shale industry’s fall from grace than one of the best in the business being sold off for less than a third of its peak value. Concho Resources Inc., an early explorer of the Permian Basin’s once-coveted oil riches that was worth $32 billion just two years ago, is selling for $9.7 billion in stock. ConocoPhillips is paying a meager 15% premium over Concho’s closing price on Oct. 13, the last trading session before Bloomberg News first reported the companies were in talks.

SPAC Deal Will Make 25-Year-Old Luminar Founder a Billionaire
Jack Pitcher – Bloomberg
Austin Russell’s stake in tech startup is worth $1.1 billion; Stanford dropout among youngest self-made billionaires
Austin Russell, the 25-year-old founder and chief executive officer of Luminar Technologies Inc., is set to become one of the youngest self-made billionaires. Russell will hold 104.7 million shares of Luminar after it goes public, a roughly 35% stake that’s worth about $1.1 billion at the company’s current valuation, according to a proxy statement filed Monday.

Intel Casts Off More Memory Chip Business in $9 Billion Deal; The sale to SK Hynix of South Korea includes a major factory in China and follows the company’s decades-long shift into microprocessors.
Don Clark – NY Times
Intel moved to further distance itself from its original business, reaching a deal to sell a remaining memory chip unit to SK Hynix of South Korea for $9 billion.

With Concho, ConocoPhillips Is Playing Offense; This big oil deal isn’t born out of desperation
Jinjoo Lee – WSJ
When an industry is in a swoon, M&A tends to serve a defensive function for the hunter, the hunted, and often both. ConocoPhillips’s COP -3.17% $9.7 billion purchase of Concho Resources CXO -2.76% looks much more like an offensive strategy.

Top Fed Official Says Policy Response Could Speed Faster Recovery; Richard Clarida, the central bank’s No. 2 official, says easy monetary policy and more government spending will be needed
Nick Timiraos – WSJ
A top Federal Reserve official said Monday the U.S. economy could stage a faster recovery from the coronavirus-induced recession than it did following the 2008 global financial crisis. Fed Vice Chairman Richard Clarida said it is possible that the recession that began in March already has ended, though it could take another year before broad measures of economic output fully recover to their pre-pandemic levels.

Environmental, Social and Corporate Governance

Pioneer Natural Resources Is in Talks to Buy Parsley Energy; Oil-and-gas producers are discussing an all-stock deal, sources say
Cara Lombardo and Rebecca Elliott – WSJ
Pioneer Natural Resources Co. is in talks to buy Parsley Energy Inc., according to people familiar with the matter, as a wave of consolidation takes hold in the beleaguered oil patch. The two oil-and-gas companies, shale producers that operate in the Permian Basin of Texas and New Mexico, are discussing an all-stock deal that could be completed by the end of the month assuming the talks don’t fall apart, the people said.

Is Brussels green bond washing? European Commission’s plan to become world’s largest issuer of sustainable debt raises questions
Mehreen Khan – FT
Is the European Commission’s bid to become the world’s biggest issuer of green bonds an elaborate exercise in “green-washing”?

Gold chief calls for common ESG reporting standard; Boss of biggest London-listed gold miner Polymetal says ratings do not always reflect reality
Neil Hume and Henry Sanderson – FT
The head of the biggest London-listed gold producer has called for common reporting standards on environmental, social and governance performance in the mining sector, saying current methods of ESG scoring are often inconsistent, inaccurate and an exercise to “tick the boxes”.

ESG-Linked Loan Boom Hit by Pandemic Push for Short-Term Funds
Jacqueline Poh – Bloomber
Volumes this year have slumped because of Covid-19 impact; Issuance has soared to $275 billion since first deal in 2017
The global boom in loans to companies with interest rates pegged to their performance on sustainability goals is stalling this year as the pandemic forces more borrowers to seek short-term funds.

Conoco Pledges ‘Net-Zero’ Emissions in Break With U.S. Rivals
Kevin Crowley – Bloomberg
ConocoPhillips is breaking with its U.S. oil peers by aiming to eliminate carbon emissions from its operations and power providers by the middle of the century.


UBS Lines up $1.5 Billion for Buybacks
Marion Halftermeyer and Patrick Winters – Bloomberg
Bank beats estimates at private bank, driven by client trading; Ermotti to hand over CEO reins to Ralph Hamers at end of month
UBS Group AG posted better-than-expected third-quarter profit and set aside $1.5 billion for share buybacks next year as Chief Executive Officer Sergio Ermotti prepares to hand over to Ralph Hamers. The Zurich-based wealth manager — the world’s largest — followed U.S. banks in reporting earnings that benefited from increased market volatility and higher transaction-based income. It also unexpectedly saw inflows of new money at the private banking business and said fourth-quarter provisions are set to remain “markedly lower” than in the first half.

Citadel Securities transformed US hotel into ‘Noah’s Ark’ for traders at height of pandemic; A hotel in the US became home to 50 Citadel Securities traders and their close family members at the end of March.
Hayley McDowell – The Trade
Citadel Securities converted an entire hotel in the US into a bubble for its traders and their families at the height of the coronavirus pandemic to ensure they could continue working.

UBS Profit Doubles on Trading Surge; Lender posts strong performance at investment bank and wealth-management units as Sergio Ermotti nears end of term in charge
Margot Patrick – WSJ
UBS Group AG UBS 1.12% said its net profit nearly doubled in the third quarter on a surge in client trading and deal making, freeing up cash for dividends and share buybacks despite the coronavirus pandemic.

UBS pledges to boost payouts as pandemic impact diminishes; Swiss bank sets aside $2.5bn for shareholders after revenue surges and loan loss provisions drop
Stephen Morris and Sam Jones -FT
UBS has set aside $2.5bn to return to shareholders next year after a surge in quarterly earnings despite the coronavirus pandemic, marking a boost for departing chief executive Sergio Ermotti.

UBS Makes It Easier for Exiting Employees to Collect Bonuses
Marion Halftermeyer and Patrick Winters – Bloomberg
Bank changes deferred compensation to pay bonuses more quickly; Executives say staff should have more career flexibility
UBS Group AG is allowing employees to collect bonuses immediately after leaving the bank as the Covid-19 crisis prompts more workers to reconsider their careers.

UBS Profit Doubles on Trading Surge; Lender posts strong performance at investment bank and wealth-management units as Sergio Ermotti nears end of term in charge
Margot Patrick – WSJ
UBS Group AG UBS 1.12% said its net profit nearly doubled in the third quarter on a surge in client trading and deal making, freeing up cash for dividends and share buybacks despite the coronavirus pandemic.

Household Access to Banks Improved But Could Be Driven Lower by Covid-19, FDIC Says; Proportion of U.S. households lacking a checking or savings account fell to 5.4% in 2019 from 6.5% in 2017
Paul Kiernan – WSJ
The proportion of U.S. households without access to a bank account fell in recent years but could be driven up again by the coronavirus pandemic, according to a survey released Monday by the Federal Deposit Insurance Corp.


Ant Group Nears Giant IPO After Green Light From Hong Kong’s Exchange; Financial-technology giant is expected to file a revised IPO prospectus in the coming days
Stella Yifan Xie – WSJ
Hong Kong’s stock exchange gave Ant Group Co. a green light to proceed with its long-awaited initial public offering in the city, according to a person familiar with the matter, paving the way for what will likely be a record-breaking share sale.

The world must counter China’s dominance of rare earths; Country has grip on swath of minerals crucial to future key industries
James Conway and Peter Ackerman – FT
In 2019, a sentence in a Chinese government-funded report made clear Beijing’s strategic advantage behind capturing the supply chains of critical minerals. If the US-China trade war intensified, the report noted “China will not rule out using rare earth exports as leverage to deal with the situation”.

EU hires banks to start breakthrough joint bond programme; Brussels poised to become one of biggest debt issuers in the eurozone
Tommy Stubbington – FT
The EU has hired banks to sell new 10- and 20-year bonds this week, the start of a borrowing spree that is expected to transform Brussels into a major player in bond markets.

Japan’s Mothers market spurs new generation of investors; Sons and daughters of ‘Mrs Watanabes’ drive start-ups bourse to 14-year peak
Leo Lewis – FT
After 30 weeks of mostly unbroken gains, the Tokyo Stock Exchange’s Mothers market for start-ups last week barged excitedly through the doors of a 14-year high.

Turkish Banks Pause Plan to Offload Bad Loans in Recovery Bet
Kerim Karakaya and Cagan Koc – Bloomberg
Bid to form asset manager to take over souring debt suspended; EBRD says lenders face increasing risk of problematic loans
Turkish banks suspended a plan to create an asset-management firm to take over their problematic debt in a bet that they’d be better off recovering some of the loans themselves rather than unloading them at a discount.

Top-Ranked U.S. Business Schools Are Losing Vital Foreign Students; Facing visa restrictions, a deadly pandemic, and virtual classes, prized international candidates shun the American MBA.
Clare Roth – Bloomberg
The number of foreign students entering America’s top business schools is down sharply amid the Covid-19 pandemic and tight visa rules, even as overall enrollments and applications are up—a bad sign for U.S. programs that depend on international MBA candidates for diversity and full tuition.

Biggest Dubai Bank More Than Doubles Provisions; Profit Dips
Archana Narayanan – Bloomberg
Emirates NBD raises impairments to 6.4 billion dirhams; S&P warned Gulf banks face long period of lower profitability
Emirates NBD PJSC braced for credit losses by more than doubling the amount of money set aside in provisions amid the coronavirus pandemic as it reported a 55% slump in its nine-month profit.

Europe’s Riskiest Countries Find Debt Markets Wide Open; Greece’s borrowing costs shrank to the tightest point relative to Germany since 2009, a flashback to before last decade’s debt crisis exposed fault lines across the Continent
Anna Hirtenstein – WSJ
Borrowing costs for Europe’s riskiest governments are hitting record lows as investors bet on newfound European political cohesion. Also pushing yields lower are U.S. election dynamics reverberating across the Atlantic.


Business ignores ‘no-deal’ message to focus on Covid; UK companies urged to do more to prepare for end of Brexit transition period
Daniel Thomas and Peter Foster – FT
Business leaders fear that a government campaign to inject urgency into Brexit preparations might be too little, too late, with many companies already struggling to survive the coronavirus pandemic and still in the dark about the impact of leaving the EU.

U.K., EU Negotiators to Hold Call to Revive Brexit Talks
Ian Wishart and Joe Mayes – Bloomberg
The U.K. and European Union’s chief negotiators will hold talks for the second time in two days as they try to restart the Brexit discussions that Boris Johnson suspended last week. David Frost will hold talks with Michel Barnier, his EU counterpart, at 2 p.m. London time on Tuesday, according to a Downing Street spokesman. The call comes after the U.K. rebuffed the EU’s push to revive the deadlocked trade talks, holding out for more concessions from the bloc. On Monday, Barnier said he would be willing to intensify the discussions and begin work on the legal text of the accord following a conversation with Frost.

Bank of America names EU bank head as Brexit deadline closes in
Stephen Morris and Laura Noonan – FT
Bank of America has named Fernando Vicario the next chief executive of its new EU banking hub in Ireland as it puts the finishing touches on its Brexit preparations ahead of the year-end deal deadline. Mr Vicario, a 25-year veteran of BofA, succeeds Bruce Thompson who is moving back to the US to run a new group managing institutional credit exposure, according to an internal memo seen by the Financial Times. Mr Thompson helped establish the post-Brexit EU banking and trading headquarters in Dublin three years ago. He is the US lender’s former chief financial officer while Mr Vicario has held a variety of senior investment banking roles in Europe.

Brexit Britain adopts the Microsoft model
Robert Shrimsley – FT
How does a nation with an outsized ego adjust to life as a midsized power? For the UK, the answer has always been, with difficulty. But, post Brexit, the country is about to have another go at defining its global role. Leaving the EU is a hit to its clout. But Brexit is now a fact. As a Nato and UN Security Council member, G7 economy and nuclear power, the UK still matters. The new role, to be set out in the imminent security and foreign policy review, draws on Brexiters’ twin belief in UK exceptionalism but also that leaving the EU was the shock therapy needed to make a sluggish economy more competitive. In Prime Minister Boris Johnson’s words, the UK is “a nation that is now on its mettle”.

UK government signals post-Brexit changes to insurance rules
Oliver Ralph – FT
The UK government is planning post-Brexit changes to some of the most contentious aspects of insurance regulation in a move likely to signal a departure from EU rules. UK insurers must comply with Solvency II, the EU’s insurance capital regime, which came into force in 2016. But industry executives have long complained that the rules are too complex and do not suit the way the UK insurance sector works.

Brexit: UK calls for change as EU makes trade talks pledge
BBC News
The EU has said it is willing to “intensify” talks on a trade deal with the UK this week to try to break the impasse between the two sides. Its negotiator Michel Barnier said the bloc was prepared to discuss all areas of disagreement, including fishing and competition, based on legal texts. Michael Gove said he welcomed the bloc’s latest “constructive” step. Later, No 10 said there was “no basis to resume talks” unless there was a “fundamental change” from the EU.


Nobel Peace Prize 2020 Winner Urges Billionaires to Fight Hunger Crisis
Agnieszka de Sousa – Bloomberg
Next year ‘is frightening us beyond imagination,’ WFP says; Government hunger aid may be hit by coronavirus spending needs
The winner of this year’s Nobel Peace Prize is calling on the super rich to help fight a worsening global hunger crisis as governments divert efforts to helping battered economies.

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Past JLN Newsletters

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