Jeff Gilfillan and Peter Maragos
Covering Your Downside – Shielding Against Market Downturns
By Matt Raebel – John Lothian News
The year 2020 has been a time of political and economic turbulence, resulting in significant volatility. For investors, it is a good time to look for strategies for mitigating downside risk exposure. An October 12 webinar from Cboe Global Markets offered to teach attendees how VIX products can be used for this purpose.
The webinar, titled, “Shielding Against Drawdowns Using VIX Tradeable Products,” was moderated by Cboe’s Matt Moran, head of index insights at the Cboe Options Institute. The speakers included Edward Szado, chair of the Department of Finance and associate professor at Providence College, and Joshua Lisser, senior vice president and head of the index strategies team at AllianceBernstein. The webinar was clearly not aimed at rookie options traders – attendees appeared to consist primarily of fund managers and experienced traders, and the language used by Szado, Lisser, and Moran reflected that.
Szado highlighted several of Cboe’s benchmark indices based on the VIX, Cboe’s signature volatility index based on the real-time, mid-quote prices of S&P 500 Index (SPX) call and put options. He said the VIX Premium Strategy Index (VPD), the Cboe Capped VIX Premium Strategy Indexes (VPN), the VIX Strangle Index (VSTG), and several others are useful tools for protecting against downside risk.
To read the rest of this commentary, go here.
Hits & Takes
John Lothian & JLN Staff
There is no clear winner of the U.S. Presidential election yet. Hang on. Relax. Stay cool. Let the process work.
Senator Kelly Loeffler has advanced to a run-off election in her attempt to hold onto the Senate seat to which she was appointed. She recieved 1,229,561 votes, or 26.5% of the total. Rev. Raphael Warnock, a Democrat in the race, had 1,479,590 votes, or 31.9% of the total votes cast.
There is still time to register for FIA’s virtual Futures and Options Expo, taking place this 10-12 November. Expo-V brings you three days of programming including keynote sessions with Dr. Kathy Neuzil, SEC Commissioner Hester Peirce, revered Silicon Valley journalist Kara Swisher and CFTC Chairman and Chief Executive Heath Tarbert as well as 1:1 interviews with exchange leaders from Cboe Global Markets, CME Group, Eurex, ICE and Nasdaq. Industry experts will also explore lessons learned from the pandemic, trends shaping what’s next for cleared derivatives and opportunities to diversify the industry. Expo-V features a robust exhibit hall with more than 20 exhibitors and 9 fintech start ups in the Innovators Pavilion. This is your opportunity to connect with the cleared derivatives community. Learn more at FIA.org/expo and REGISTER!
The CME traded their first emini IPOX Futures Trades (IPOZ0) on Globex yesterday. This comes on top of the IPOX ETFs having surpassed $2 billion in AUM in late October.
ISDA’s Scott O’Malia has his latest podcast, “Episode 3: Building Momentum in Alternative Rates.” He will discuss how LIBOR is on the way out and what will replace it.
It is too late now, but states like Georgia should use a ranked-choice voting method for their statewide elections in cases where there are multiple candidates and no one gets a majority of votes. In this type of election, a vote ranks all of the candidates. All of the information about who the voters prefer is with the election officials. The election officials methodically remove the candidate who received the least number of votes and replace that voters’ choice with their next choice. The votes are then counted again. This proceeds until someone has over 50% of the vote. It would have saved a lot of money for a runoff election and given the state and the country greater certainty. Also, this method was suggested on a Scouting blog for use in a Senior Patrol Leader election as a way to reduce bad feelings about who did or did not get votes.
How much trading was there in October in front of the U.S. Presidential election? Well, the OCC reported October 2020 total cleared contract volume was 636,709,236 contracts, up 41.1 percent from October 2019. This marks the highest October ever and the fourth-highest month on record. Year-to-date average daily cleared contract volume through October was 28,862,569 contracts, up 46.3 percent from October 2019.
There were two new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Peter Maragos, the CEO of Dash Financial, made a contribution, as did Jeff Gilfillan, vice president of Phillip Capital. Gilfillan is a veteran futures broker and strategist. Maragos is the CEO of one of the most interesting firms in the markets. You never know what they are going to do next.
Peak6 has a story on their website “Meet coder turned trader Roxy Rong.” You can read about how coding is Rong’s superpower!
The word of the day is “scupper.” A secondary definition is “to defeat or put an end to.” I saw this word used in an Ant Financial story, not a Presidential election story.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
What the South Sea Company can teach us
Two books explore historical financial frenzies and the lessons they hold for investors today
John Plender – FT
Financial bubbles are a perennially fascinating phenomenon. Some modern economists, notably of the Chicago variety, deny their very existence, arguing that investors are rational and markets are efficient in the sense that prices accurately reflect all known, relevant information. Others offer refined versions of the irrationality thesis advanced by Charles Mackay in 1841 in his celebrated book Extraordinary Popular Delusions and the Madness of Crowds.
*****The first book I read about the markets, recommended to me when I was a reporter with Commodity News Service, was Charles Mackay’s 1841 book “Extraordinary Popular Delusions and the Madness of Crowds.” I strongly recommend it.~JJL
Covid Is the Big Story on Campus. College Reporters Have the Scoop; University outbreaks are significant contributors to the pandemic. And the campus paper might be the only one left to cover them.
Amelia Nierenberg – NY Times
Before classes had even started at the University of Missouri this August, Eli Hoff, the managing editor of the student newspaper, got a hot tip: A fraternity member had tested positive for the coronavirus.
*****I have great confidence in the college journalists to cover this story.~JJL
How to Worry More Mindfully; It’s possible. Here’s how to cope when stressful thinking seems constant.
Jenny Taitz – NY Times
During times of high-stakes uncertainty, it’s normal to stress about potential threats and negative outcomes, and it can be tougher to resist anxious thoughts given that the coronavirus has disrupted the usual ways we comfort ourselves. But getting lost in worries is emotionally depleting, and it interferes with moving forward. That’s why it’s worth improving how you handle this pesky mental habit.
******Maybe the most important story of the day.~JJL
Tuesday’s Top Three
Our top story Tuesday was Bloomberg’s Ken Griffin’s Macro ‘Dream’ Propels Net Worth to $20 Billion. Second was a repeat from Monday’s top three, Nate Silver’s I’m Here To Remind You That Trump Can Still Win, at FiveThirtyEight. Third was the Bloomberg Opinion piece The Money Says Prepare for a Long Night, and Week. Indeed.
191,830,644 pages viewed; 24,510 pages; 226,614 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,468 pages; 13,018 edits
Two Bad Election Scenarios Come Back to Haunt Global Markets
Joanna Ossinger and Ruth Carson – Bloomberg
Divided government makes big stimulus look less likely; A contested election could keep results unknown for weeks
Heading into the U.S. election, two potential outcomes were giving investors heartburn: A contested election, or a Joe Biden presidency with a Republican Senate. Now, both look more likely than 24 hours ago. President Donald Trump falsely called himself the victor and said he would ask the Supreme Court to intervene as results look to close to call in many battleground states. U.S. stock futures swung between gains and losses, Treasuries jumped and cross-asset volatility rose on renewed fears over protracted post-election wrangling.
Trump-Biden Election Battle Could Be Too Close to Call for Days
Jordan Fabian and Josh Wingrove – Bloomberg
Biden ahead 238-213 in Electoral College race against Trump; Trump roils race by falsely claiming win with Biden undeterred
Close contests in five key states mean the U.S. presidential election may not be decided for days, or longer, even as President Donald Trump’s falsely claimed victory over Democrat Joe Biden with millions of ballots still to be counted. As of 6 a.m. New York time Wednesday, Biden had 238 electoral votes while Trump had 213, leaving both shy of the 270 needed to secure immediate victories.
The Election Leaves Markets—and the Country—in Suspended Animation; The chance of a government with a much more coordinated approach to economic recovery from the pandemic has been reduced substantially
Mike Bird – WSJ
With the election result still up in the air, potentially for days to come, one thing investors had hoped for can now be all but ruled out: a coordinated and consistent economic policy from Washington. In the grand scheme of things, market moves this time haven’t been colossal, but they have been telling, especially in the bond market.
UK allows firms to trade on EU venues in ‘simple’ approach to share trading obligation; The FCA has outlined its approach to the share trading obligation and will maintain access to EU venues for UK market participants.
Hayley McDowell – The Trade
Banks and investors in the UK will still be able to trade on venues based in the European Union at the end of the Brexit transition period, in a more holistic approach from the UK regulator to the controversial rules.
Beijing says it halted $37bn Ant IPO to protect market stability; China’s regulators scuppered record stock market debut after summoning founder Jack Ma
Beijing said its suspension of the $37bn listing of Ant Group, controlled by China’s richest man Jack Ma, was needed to protect the country’s capital markets as investors reeled from the eleventh-hour decision.
Suspended Ant IPO Shows Growing Regulatory Focus on Fintech Giant; Move prompts reassessment of whether the company’s growth and profitability will be severely crimped by Beijing in the years ahead
Jing Yang, Xie Yu and Joanne Chiu – WSJ
The sudden halt to Ant Group Co.’s giant initial public offering left investors hanging, employees shellshocked and shareholders trying to come to grips with why China pulled the plug on the record-breaking deal when it was so close to the finish line.
LSEG shareholders give go ahead for Borsa Italiana sale; The sale of LSEG’s Borsa Italiana business is dependent on approval from the European Commission on the exchange group’s Refinitiv acquisition.
Annabel Smith – The Trade
London Stock Exchange Group (LSEG) shareholders have unanimously approved the sale of its Borsa Italiana business, as the exchange operator creeps towards completing its takeover of Refinitiv. Results of the LSEG General Meeting, which took place on 3 November, saw 291,694,564 votes submitted in favour of the transaction versus 4,193 submitted against.
Transaction reporting errors surge amid pandemic for majority of firms, research finds; New and changing regulations, CME Group’s decision to exit regulatory reporting, and the pandemic were key reasons for transaction reporting failures.
Annabel Smith – The Trade
The majority of firms have been forced to change transaction reporting throughout this year due to inefficiencies and errors, research from compliance technology specialist Cappitech has found. According to Cappitech’s annual global regulatory reporting survey, which polled 89 market participants from banks, brokers, asset managers, hedge funds and corporates, revealed that 65% of firms overhauled their reporting in the last year.
Companies Ban Work Travel, Warn Employees of Civil Unrest in Election Week; Employers urge workers to be vigilant while voting and to prepare for possible delays in results, with some discouraging travel to nation’s capital
Chip Cutter – WSJ
U.S. companies geared up for Election Day with a flurry of memos and emails urging employees to avoid work travel and be on guard against civil unrest and potential disruptions. Top executives at consulting firms, airlines, health care companies and others have sent notes to employees in recent days, some with strikingly different messages than in previous elections. Some employers, like Seattle construction and engineering company McKinstry Co. LLC, banned work travel and urged employees to stay home this week, while others shared corporate-security hotlines for employees to call if they feel unsafe. The efforts reflect anxiety across the corporate sphere, where many executives worry how their operations might be affected should widespread protests or election-related violence occur.
Ant Founder Jack Ma Faces Backlash From Regulators; IPO suspension caps a monthslong tug of war between the billionaire and China’s top regulators
Lingling Wei and Jing Yang – WSJ
Jack Ma is getting a lesson about who is in charge. Chinese regulators on Tuesday suspended the $34 billion initial public offering of Ant Group, the online-finance operation carved out of e-commerce giant Alibaba Group, BABA -8.13% just two days ahead of what was planned to be the world’s largest-ever initial public offering.
Hedge-Fund Manager Crispin Odey to Step Down From Running His Firm; The embattled founder of one of Europe’s best-known hedge-fund firms will focus solely on managing money instead
Julie Steinberg – WSJ
Crispin Odey, one of Europe’s highest profile hedge-fund managers, is stepping down from running the firm he founded nearly 30 years ago to concentrate on managing money instead.
Derailing of Jack Ma’s Mega Ant IPO Shows Xi Jinping’s in Charge
Enda Curran, Sofia Horta e Costa, and Lulu Yilun Chen – Bloomberg
China moves to quash risk to political, financial stability; Decision shows party takes precedence on business decisions
China’s move to abruptly halt the world’s biggest stock-market debut sends global investors a clear message: Any financial opening will only be done on terms that benefit President Xi Jinping and the Communist Party.
UK fires warning shot at Brussels over post-transition share trading; FCA says it may deviate from EU financial rules if City of London not granted equivalence
Philip Stafford and Jim Brunsden – FT
UK regulators have threatened to deviate from EU rules on share trading if Brussels does not deliver market-access permissions to the City of London.
The Bank of England Has a Transmission Problem; Until the economic fog clears, the best thing the central bank can do is continue to act “big and fast.”
Marcus Ashworth and Mark Gilbert – Bloomberg
The Bank of England meets on Thursday against the backdrop of a newly imposed lockdown that’s designed to curb the spread of the coronavirus, but will also crimp the economy. For lenders who were already nervous about borrowers being unable to pay their debts, the prospect of a second collapse in growth will prompt them to rein in their support even further.
China Plans Deeper Ant Crackdown With Bank Funding Curbs
Regulator plans to discourage lenders from working with Ant; Authorities abruptly halted the fintech giant’s IPO on Tuesday
The shock suspension of Ant Group Co.’s $35 billion initial public offering is just the beginning of a renewed campaign by China to rein in the fintech empire controlled by Jack Ma. Authorities are now setting their sights on Ant’s biggest source of revenue: its credit platforms that funnel loans from banks and other financial institutions to millions of consumers across China, according to people familiar with the matter.
French Covid Deaths Rise by 854, Biggest Jump Since April 15
Rudy Ruitenberg and Alan Katz – Bloomberg
France reported the biggest increase in coronavirus deaths since mid-April, with half coming in nursing homes, underscoring the urgency facing authorities to control the disease.
UK spends £1bn on Boris Johnson’s rapid coronavirus testing ‘moonshot’; Questions remain over accuracy of new 20-minute tests and reliance on overseas suppliers
Anna Gross and Ian Bott – FT
Boris Johnson has placed his faith in millions of cheap, reliable tests that provide results in minutes as a route out of future lockdowns caused by a resurgence of coronavirus. Speaking a few hours before Tuesday’s announcement that Liverpool would be the first city in the UK to conduct population-wide testing for Covid-19, the prime minister declared that the quick turnround tests would “enable us to defeat this virus by the spring”.
Pandemic sets off a scramble to snap up outdoor heaters; Soaring demand in the UK, US and Europe intensifies pressure on global supply chain
Harry Dempsey and Alice Hancock – FT
After transforming the fortunes of hand-sanitiser and soap producers, the pandemic looks set to do the same for another previously unheralded industry — the manufacturers of outdoor heaters.
Belgium’s fight against Covid hindered by regional rivalries; A long history of weak central government is contributing towards the country’s suffering
Michael Peel -FT
Belgium’s unwanted position at the head of Europe’s second coronavirus surge has dismayed Philippe Devos, head of the country’s association of medical unions. Rates of cases and hospital admissions in the country are more than double European averages and medics in Belgium feared they would soon be faced with agonising decisions of selecting which patients to save if the health system was overwhelmed.
Covid-19 Surge Forces Europeans to Stay Home, Dragging on Economy; Even as Europeans shun face-to-face services such as entertainment, some Asian economies see a rebound, underscoring East-West divide
Paul Hannon – WSJ
Europe’s service providers reported a fresh decline in activity as a surge in coronavirus infections in October pushed consumers to avoid face-to-face services ranging from entertainment to eating out, a contrast with Asian countries such as China, which continued to see a rebound. Data firm IHS Markit said its services Purchasing Managers Index for the eurozone fell to 46.9 in October from 48.0 in September. A reading above 50.0 indicates that activity is increasing, while a reading below points to a decline.
Coronavirus Live Updates: Daily U.S. Cases Second-Highest on Election Day
The U.S. reported its second-highest daily increase in Covid-19 cases on the day Americans voted in a presidential election in which the pandemic was a key issue.
Natural-Gas Drillers Outshine Oil Peers as Covid-19 Surges; Coronavirus worries hold down crude prices, helping to reverse fortunes among fracking companies
Collin Eaton and Rebecca Elliott – WSJ
A split reality is emerging for U.S. shale drillers: Those that primarily pump oil are still struggling to survive, while those that produce natural gas are slowly seeing signs of recovery. Oil-focused fracking companies are under extreme financial strain, as renewed concerns about the coronavirus pandemic are weighing down crude prices. But gas-focused drillers are getting a long-awaited reprieve. Natural-gas prices are climbing ahead of winter, and are less sensitive to lockdowns that erode demand for transportation fuels.
Saudis, Other OPEC Producers Consider Deeper Cuts Amid Pandemic; Cartel had hoped to gradually reverse steep production cuts put in place to prop up prices amid demand shock
Benoit Faucon and Summer Said – WSJ
Saudi Arabia and other OPEC members are considering deepening oil production cuts amid rising Covid-19 cases in the West and fresh economic lockdowns in Europe that could curb oil demand further, according to oil officials and advisers in these countries.
England Puts Doctors on Alert for Covid Vaccine Before Christmas
Emily Ashton – Bloomberg
Johnson’s government hopes vaccine will end cycle of lockdowns; NHS chief says roll-out more likely in first part of next year
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. Doctors in England have been put on standby for the possible roll-out of a coronavirus vaccine before Christmas, which would potentially turn the tide in the fight against the pandemic.
Sweden Fights ‘Very Serious’ Covid Resurgence With New Curbs
Niclas Rolander – Bloomberg
Swedes face a new wave of restrictions after daily coronavirus cases hit a record, with the government warning of a grim winter ahead. Prime Minister Stefan Lofven, speaking to reporters on Tuesday, said his country is now facing a “very serious situation” that requires tougher measures if the virus is to be fought back.
Exchanges, OTC and Clearing
Mini-DAX. Maximum success. 5 years Eurex Mini-DAX Futures trading.
Five years ago, in October 2015, Eurex launched Mini-DAX Futures – designed in parallel to the established DAX Futures contract. The aim was to give investors the opportunity to hedge and gain exposure to the German benchmark index with significantly lower contract values. The DAX index comprises the 30 largest and most actively traded German companies, which include Daimler, Deutsche Bank, Volkswagen, Adidas and SAP.
Intercontinental Exchange Reports October Statistics
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today reported October 2020 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Nasdaq October 2020 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for October 2020, on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics
Ag Economy Barometer rises to record high on improving financial conditions
The Purdue University/CME Group Ag Economy Barometer rose 27 points to a reading of 183 in October and set an all-time high for the index. Farmers were more optimistic about both the future and current financial situation on their farms, the Current Conditions Index rose 36 points to a reading of 178 and the Future Expectations Index rose 23 points to a reading of 186. The Ag Economy Barometer is based on survey responses from 400 U.S. agricultural producers and was conducted between October 19-23, 2020.
Treasury Spot Month Position Limits in the Dec 2020 Contracts
The applicable position limits for CBOT Treasury futures are set forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations & Special Notices Section of Chapter 5.
BME: The Spanish Stock Market Trades 28 Billion Euros In October
The Spanish stock market traded 28 billion euros in Equities in October, down 40.4% from the same month the previous year and down 11% from the previous month. The accumulated effective volume traded up the end of October totalled 350.5 billion euros, 9.7% less than in the previous year.
Cboe Global Markets to Present at the Bank of America Future of Financials Virtual Conference Tuesday, November 10
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, announced today that Ed Tilly, Chairman, President and Chief Executive Officer, and Brian Schell, Executive Vice President, Chief Financial Officer and Treasurer, will present at the Bank of America Future of Financials Virtual Conference on Tuesday, November 10 at 11:20 a.m. ET.
Shanghai Stock Exchange: Decision To Suspend The Listing Of Ant Group Co., Ltd. On The STAR Market
Your company had previously applied to list on the STAR Market of the Shanghai Stock Exchange (SSE) on November 5, 2020. Lately, the ultimate controller, the executive Chairman, and the Chief Executive Officer of your company have been summoned to a joint regulatory interview by the relevant regulators, and your company has also reported on material matters including a change in the regulatory environment on financial technology
Shenzhen Stock Exchange Revises And Releases Implementation Rules For QFIIs And RQFIIs To Further Promote High-level Opening-Up Of The Capital Market
On October 30, with the approval of China Securities Regulatory Commission (“CSRC”), SZSE released the new revised edition of the Implementation Rules on Securities Trading of Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors on the Shenzhen Stock Exchange (the “Implementation Rules”), effective from November 1, 2020.
Shenzhen Stock Exchange Earnestly Studies And Implements The Guiding Principles Of The Fifth Plenary Session Of The 19th CPC Central Committee
On October 30, the center group of CPC SZSE Committee held a meeting to earnestly studied the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee, and made plans to implement the principles based on the main objectives of the 14th Five-year Plan for economic and social development and the vision for 2035 while accounting for the realities of SZSE.
Tokyo Stock Exchange To Start Proof Of Concept Testing For HTML Disclosure Of Earnings Reports (Kessan Tanshin)
In conjunction with the replacement of TDnet planned for December 2021, Tokyo Stock Exchange, Inc. (hereinafter “TSE”) is starting Proof of Concept (PoC) testing to enable earnings reports and quarterly earnings reports of listed companies* and earnings reports and interim earnings reports of listed REITs (hereinafter “kessan tanshin, etc.”) to be disclosed in HTML format with the cooperation of PRONEXUS Inc. and TAKARA & COMPANY LTD. (hereinafter “printing companies”).
CCP12 Releases New Public Quantitative Disclosure Documents
CCP12 – The Global Association of Central Counterparties – updates the Public Quantitative Disclosure Template, and provides a Frequently Asked Questions Guide.
Thailand Futures Exchange Launches Silver Online Futures On November 9 http://mondovisione.com/media-and-resources/news/thailand-futures-exchange-launches-silver-online-futures-on-november-9/
Thailand Futures Exchange (TFEX) will launch Silver Online Futures, a cash settled futures contract that tracks global silver price, starting from November 9, 2020.
Spectrum Markets Sets New Trading Record In October
In October 55.9 million securitised derivatives were traded. This represents a 51% increase over the previous month and sets a record. The share of out-of-hours trading (i.e. 1730-0900) was 38.9%.
Ant Group Can No Longer Pretend It’s Just a Tech Company; Company was valued like a tech darling even though it is a giant of China’s financial system
Jacky Wong – WSJ
Ant Group has grown into a giant creature, but it still isn’t top of the food chain in China, a fact that the company and legions of eager new investors were forced to confront anew on Tuesday. The Chinese financial-technology company, an affiliate of e-commerce giant Alibaba, was forced by regulators to suspend its concurrent initial public offerings in Shanghai and Hong Kong just two days before the record $34 billion listings. The company cited “recent changes in the fintech regulatory environment” as one of the reasons for the sudden pause.
What’s next for world’s largest fintech company after Chinese regulators trampled on Ant Group’s blockbuster stock sale? Ant may update regulators on how it would comply with new micro-financing rules; Ant’s valuation will likely fall as it is regulated more as a financial firm than a technology company, said analysts
Alison Tudor-Ackroyd – South China Morning Post
The shock suspension on Tuesday of the largest stock listing in global finance has sent Ant Group’s management scrambling to align the financial technology giant’s lending business with China’s regulations to tamp down risk in the world’s second-largest economy.
PayPal’s Growth May Fade, but Its Future Is Still Bright; A historic windfall for PayPal might be slowing, but opportunities still abound
Telis Demos – WSJ
When it comes to online spending growth, PayPal Holdings PYPL -4.23% may no longer be able to just hold out a bucket in a historic downpour. But that doesn’t mean its potential is drying up.
Itiviti’s Linda Middleditch wins European Women in Finance Award for Excellence in FinTech
Itiviti Group AB
Itiviti, a leading technology and service provider to financial institutions worldwide, today announced that Linda Middleditch, Chief of Product Strategy and Engineering, has won the Markets Choice Awards – European Women in Finance Awards in the category for Excellence in FinTech.
How can Big Tech best tackle conspiracy theories? It’s about more than separating dangerous theories from less dangerous ones
Gillian Tett – FT
During the 2016 US election campaign, a conspiracy theory known as #Pizzagate went viral on rightwing websites. The theory, which claimed that Democratic presidential candidate Hillary Clinton was involved in a child sex ring run from a Washington pizza restaurant, seemed laughable. Until a #Pizzagate believer used an assault rifle to fire at the restaurant.
Jack Ma’s Blunt Words Just Cost Him $35 Billion; China just showed the billionaire who’s boss in derailing fintech giant Ant Group’s monster IPO. Regulators might do better to heed his words instead.
Shuli Ren – Bloomberg
Jack Ma is a very busy man. China’s richest man has been busy launching the world’s biggest IPO. He has been busy preparing for Alibaba Group Holding Ltd.’s grandest four-day Double Eleven shopping extravaganza. And yet two weeks ago, Ma somehow found the time to opine on China’s banking system at a high-profile financial forum in Shanghai, once again throwing himself into the eye of the storm.
Bitcoin Haul of $1 Billion on Move, Possibly With Silk Road Tie
Olga Kharif – Bloomberg
Elliptic says it’s 60% certain the funds relate to the site; Bitcoin is holding up after reaching the $13,000 range
Almost $1 billion worth of Bitcoin that likely originated from Silk Road is on the move, according to blockchain tracker Elliptic. Some 69,369 Bitcoins have been moved out of a wallet that may be associated with the website, Elliptic said. Silk Road peddled everything from drugs to murder-for-hire before being busted by U.S. agents in 2013. Some Bitcoins associated with the site have been sold in government auctions in prior years.
Bitcoin SV now is available for trading against euros at a regulated crypto exchange, NovaDAX
NovaDAX, the popular global digital asset exchange that originated in Brazil, today announces that it has introduced support for buying and trading Bitcoin SV [BSV] for its European customers. With immediate effect, a BSV/EUR trading pair is available for use on NovaDAX, part of a range of new offerings following the launch of its European operations earlier this month.
Ethereum miners generated $214M in revenue in October
MK Manoylov – The Block
Ethereum miners accrued $214 million in revenue in October, down from $321 million in September, according to data compiled by The Block. Last month, miners on Ethereum saw a 66.8% drop in transaction fee revenue compared to September, from $171 million to $57 million. Compared to September, transaction fees on Ethereum, as a share of total miner revenue, dropped from 53.4% to 26.5% in October.
Chinese Payments Giant UnionPay to Support Crypto Spending With New Virtual Card
Daniel Palmer – Coindesk
China’s UnionPay, the world’s biggest credit and debit card company, will support payments with a South Korea-developed cryptocurrency for an upcoming virtual card offering. Under a freshly inked deal, UnionPay has teamed up with Korean payments firm Danal to offer its Paycoin cryptocurrency as an option on the card, slated to launch later this year.
‘Digital Mercenaries’: Why Blockchain Analytics Firms Have Privacy Advocates Worried
Benjamin Powers – Coindesk
Privacy advocates argue that blockchain analysis is essentially blockchain surveillance and, by contracting with governments, firms offering analytics are laying the groundwork for additional forms of mass surveillance. Western tech firms aided dictators during the Arab Spring and helped shut down the internet during protests in Belarus, leading to concerns that blockchain surveillance may eventually be used by more authoritarian countries.
October was a massive month for bitcoin options
Bitcoin options interests reach new heights in October, according to data compiled by The Block Research. The aggregated open interest of bitcoin options reached an all-time high of $2.4 billion by the end of October, a month-over-month increase of 54.7%. On October 29, the open interest of Bitcoin options hit a new daily all-time high of $2.6 billion.
U.S. 2020 election boosts use of decentralized prediction markets
The 2020 U.S. election has been a boon for decentralized prediction markets, according to data compiled by The Block Research. On Augur, open interest recently passed $4 million, primarily driven by Catnip.exchange, a simple end-user interface for Augur’s U.S. election market. According to The Block researcher Mika Honkasalo, open interest on Augur has been steadily increasing by over $1 million or 25% daily, leading up to election day.
Binance Recovers $344K From DeFi ‘Exit Scam’ That Launched on Its Platform
Omkar Godbole – Coindesk
Cryptocurrency exchange Binance says it has successfully followed the money trail left by the operator of a scam decentralized finance (DeFi) project and recovered nearly all the stolen funds. In an announcement provided to CoinDesk on Thursday, Binance said that it has gained custody of an estimated 99.9% of $345,000-worth of cryptocurrency stolen by purported automated market maker Wine Swap in October. Having raised the funds at launch on Binance Smart Chain in October, the operator fled with users’ cryptocurrency “within an hour,” Binance said.
U.S. Exits Paris Climate Pact With Election Outcome Uncertain; Trump began the process to pull out of the deal exactly one year ago, Biden says he will rejoin if he’s elected
Will Wade and Jess Shankleman – Bloomberg
The U.S. has officially become the first nation to quit the Paris climate agreement, even as the outcome of the country’s presidential race remains undetermined.
Biden ‘Blue Wave’ Fails to Materialize as GOP Bests Expectations
Justin Sink – Bloomberg
Trump fared surprisingly well in key states despite pandemic; Senate likely to remain in Republican control after few upsets
Democrats entered the U.S. election hoping for a repudiation of Donald Trump that would sweep them back to power in Washington. Instead, they were denied their “blue wave” by the president and congressional Republicans who defied polls to make races for the White House and Senate control too close to call.
Can Biden Still Win? Yes. Here Are the Paths for Him and Trump; The president was able to close off several avenues to an early Biden win, but the former vice president still has a number of options.
Reid J. Epstein and Glenn Thrush – NY Times
Joseph R. Biden Jr. started election night with many paths to 270 electoral votes, but by Wednesday morning President Trump had won Florida, Ohio and Texas and was within striking distance of winning North Carolina.
Federal Reserve staffers boost political giving to Democrats’ benefit
Noah Manska – NY Post
Federal Reserve staffers more than doubled their political donations during the 2020 election season, with most of their money going to Democrats. Employees of the central bank gave more than $1.1 million to political candidates and causes from the beginning of last year through Oct. 22, according to campaign-finance figures compiled by OpenSecrets.org.
Banks rushing to pay fines in case Biden wins election
Thornton McEnery – NY Post
Fines are in season on Wall Street — and yes, there just might be a connection with election season. Big banks are lately paying record penalties to US regulators, with insiders blaming the trend on bankers looking to settle scores under a Trump administration rather than risk paying more under a less-friendly Biden White House.
JPMorgan Faces Possible Fine Related to Internal Controls; Bank said it was in discussions to resolve claims over historical deficiencies with an unnamed U.S. regulatory agency
Dylan Tokar and David Benoit – WSJ
A JPMorgan Chase & Co. subsidiary is facing a potential regulatory fine over internal controls, the bank disclosed late Monday. The potential fine would address historical deficiencies it has already taken steps to fix, JPMorgan said. The bank said it was in discussions with an unnamed U.S. regulator to resolve the matter.
ESAs’ Board of Appeal dismisses case against EIOPA on alleged non-application of Union law as manifestly inadmissible
The Joint Board of Appeal of the European Supervisory Authorities (ESAs – European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority) published today its decision in relation to an alleged non-application of Union law by six national competent authorities brought by Mr Howerton against the European Insurance and Occupational Pensions Authority (EIOPA). In its decision, the Board of Appeal dismisses the Appellant’s claim as inadmissible as the facts described do not seem to involve insurances and occupational pension funds or any other subject-matter within the remit of EIOPA nor of the Board of Appeal.
SEC Issues Agenda for Nov. 9 Meeting of the Small Business Capital Formation Advisory Committee
The Securities and Exchange Commission today released the agenda for the Monday, Nov. 9, 2020, meeting of its Small Business Capital Formation Advisory Committee, which will be hosted via video conference.
SEC Awards Over $28 Million to Whistleblower
The Securities and Exchange Commission today announced an award of over $28 million to a whistleblower who provided significant information that aided the SEC in bringing a successful enforcement action. The whistleblower internally reported information that prompted the company to initiate an internal investigation, and saved the staff time and resources by providing testimony and identifying a key witness.
FCA announces proposals for further support to consumer credit borrowers impacted by coronavirus
In September, the FCA announced tailored support for borrowers affected by coronavirus (Covid-19) after 31 October, which it would keep under review as the pandemic evolved.
FCA sets out its approach to the share trading obligation
The FCA has confirmed its approach to the share trading obligation (STO) at the end of the Brexit transition period, if mutual equivalence is not agreed.
New Zealand’s Financial Markets Authority Appoints Specialist Roles In FinTech And Integrated Financial System
The Financial Markets Authority (FMA) has announced the appointment of two new specialist roles focused on deepening the regulator’s expertise in two evolving and important sectors: financial technology (FinTech) and environmental, social and corporate governance (ESG) impacts on financial markets.
Monetary Authority Of Singapore Steps Up Enforcement Actions Against Market Abuse And Financial Misconduct
The Monetary Authority of Singapore (MAS) has taken several strong actions against financial institutions (FIs) and individuals for market abuse, financial misconduct, and control breaches related to money laundering. In its Enforcement Report (933.8 KB)published today, covering the period January 2019 to June 2020, MAS detailed various enforcement actions taken for breaches of MAS regulations and requirements.
SEC Whistle-Blower Gets $28 Million in Another Huge 2020 Payout
Matt Robinson – Bloomberg
Tipster’s information led to a successful enforcement action; Agency has paid out $715 million since first award in 2012
The U.S. Securities and Exchange Commission paid $28 million to a whistle-blower who provided information that led to a successful enforcement action, adding to the eye-popping awards that tipsters have received from the agency this year.
Investing and Trading
Bond Market’s Big-Short Scenario Teeters With Blue Wave in Doubt
Vivien Lou Chen, Ruth Carson, and John Ainger – Bloomberg
U.S. 10-year yield falls most since March, German bonds rally; Heavy bets against Treasuries struggle as Blue Sweep odds fade
The U.S. election was supposed to pave the way for a sell-off in Treasuries. Yet the opposite has happened in a race that still remains too close to call. Treasuries jumped along with the dollar and most other major government bond markets as ballots tallied so far dashed expectations for a Democratic sweep and upended bets for major debt-financed stimulus spending. A victory claim by President Donald Trump added to the bids.
Here’s Everything You Need to Know About Ant’s Pulled IPO
China’s shocking decision to halt Ant Group Co.’s initial public offering is reverberating across financial markets, sending Hong Kong shares lower and raising questions about the future of Jack Ma’s fintech juggernaut.
Volatility Bets Looking Smart as Messy Election Whipsaws Market
Yakob Peterseil – Bloomberg
VIX stays elevated as presidential election too close to call; Slew of short-volatility wagers seen in options recently
Stock traders who paid historic premiums to insure against wild swings are looking smart as Wall Street sizes up a contested election outcome with a divided Congress — a worst-case scenario. As post-vote disputes look more likely, S&P 500 futures swung violently between gains and losses in early London trading. The Cboe Volatility Index stayed well above its historic average at around 35 while the volatility futures curve remained firmly elevated.
Contrarian Who Punted on Trump Upset Now Sees Biden as Top Risk
John Ainger – Bloomberg
Aberdeen’s Athey stays overweight Treasuries, adds yen longs; Vote-result clarity unlikely for a ‘good while yet,’ he says
James Athey, a money manager at Aberdeen Standard Investments, was one of the few betting against market predictions of a comfortable U.S. election win for Joe Biden and a likely Democrat sweep of the Senate. Now, as votes are being counted and with the outcome looking like a protracted affair, Athey is doubling down on buying safer assets. He is keeping overweight holdings in U.S. Treasuries and has boosted a long position in the Japanese yen, betting the uncertainty won’t be resolved soon. The main risk for markets is that Biden wins presidency while Republicans hold onto the senate, creating a policy deadlock, he said.
Here’s What Some Market Watchers Are Saying About the Election
Joanna Ossinger and Vivien Lou Chen – Bloomberg
The U.S. election remains too close to call after a dramatic night of swinging fortunes for Democratic nominee Joe Biden and President Donald Trump. In the latest twist, Trump falsely declared early Wednesday that he’d won re-election and said he would ask the Supreme Court to intervene, even as key battleground states continued vote counts that may take some time to resolve. The Senate appears likely to remain in the hands of Republicans.
Election Day Means Sitting Tight for Some Young Stock Traders; Individual investors are confronting one of the most extraordinary votes in U.S. history
Caitlin McCabe – WSJ
For young Americans, Tuesday is significant for more reasons than just one: Many aren’t just voting in a presidential election for the first time—some are also trying their hands at trading around it. As a rush of individual investors have flooded the market this year, hoping to take advantage of commission-free trading and 2020’s wild stocks swings, many are confronting the tall task of trying to navigate one of the most extraordinary elections in U.S. history.
‘It’s a joke’: retail investors shocked as China halts Ant Group’s IPO
Yoyo Chow, Clare Jim – Reuters
Mom-and-pop investors who put in bids worth a record $3 trillion in China’s Ant group – equivalent to Britain’s annual economic output – were stunned after regulators abruptly suspended what would have been the world’s largest stock market debut.
Environmental, Social and Corporate Governance
We can avert irreversible climate change; Action is both essential and affordable — but it demands international leaders’ co-operation
Martin Wolf – FT
A renewed presidency for Donald Trump is likely to be nowhere more consequential than for climate change. The coming decades will determine whether the threat of damaging and irreversible change is averted, or not. Without active US engagement, success seems inconceivable. Even with it, it would be unlikely. But, crucially, it would be conceivable. We know what to do and we know, too, that it is affordable. What is unaffordable is not to do what we need to do. But will we? That is the question.
Ethical investment is about morals not markets; The case for helping the environment or improving diversity should not depend on high returns
Jonathan Ford – FT
Here is a story that shows how very fuzzy the boundaries can get when you attempt to define what is a “green” or “socially responsible” investment. It involves a large US private equity firm and, yes, an oil company based in Texas.
Coking Coal Futures Boom: SSY Futures Leading Broker
Strong volatility and new market participants helped drive a record volume of 2.193m tonnes of coking coal futures cleared on the Singapore Exchange (SGX) this October, with inter-dealer brokerage SSY Futures maintaining its position as the leading broker for both swaps and options.
Credit Agricole Gets Boost From Bond Sales, Lower Provisions
Alexandre Rajbhandari – Bloomberg
French bank takes smaller charge for expected pandemic losses; Capital markets revenue up almost 25% on fixed income activity
Credit Agricole SA got a boost from clients selling bonds and set aside less money for expected bad loans, joining peers in taking a benign view of the pandemic as Europe enters a second phase of lockdowns.
Hedge funds bet against lasting US election-induced market turmoil; Firms wager that Wall Street expectations for increased volatility in months ahead are overdone
Eric Platt, Robin Wigglesworth and Laurence Fletcher – FT
Some hedge funds are betting that fears over a delayed and disputed US presidential election result are overblown, and that stock market volatility will simmer down in the coming months.
Prudential Kicks Off Insurance Earnings With Profit Increase of Almost 5%; Firm says it has already cut $135 million this year out of its $140 million cost-cutting goal
Logan Moore – WSJ
Prudential Financial Inc. PRU 2.81% posted growth in the third quarter despite a low interest-rate environment and fallout from the coronavirus pandemic. Prudential’s profit increased almost 5% to $1.49 billion in the quarter ended Sept. 30, up from $1.42 billion the same quarter last year, the company reported Tuesday evening.
British tycoon Crispin Odey drops reins at firm amid sexual assault trial
Thornton McEnery – NY Post
A controversial British hedge fund titan is giving up control at his $3.5 billion firm as he faces courtroom allegations of sexual assault in addition to lackluster financial performance. Crispin Odey — a personal friend of Prime Minister Boris Johnson who famously profited off Brexit after fiercely advocating for it — said Tuesday he will step down as the boss of his hedge fund Odey Asset Management.
NatWest Markets to use BNP Paribas for listed derivatives trading and clearing; RBS confirmed NatWest Markets would shut its client clearing and execution business for listed derivatives in the first quarter this year.
Joe Parsons – The Trade
NatWest Markets has partnered with BNP Paribas for the execution and clearing of its listed derivatives activity after the UK broker announced earlier this year it would pull back from the business.
Goldman Plaintiffs Demand Files With Words They Say Prove Bias
Bob Van Voris – Bloomberg
Women suing Goldman Sachs Group Inc. for gender discrimination are going after any internal documents with words like “babe,” “bimbo” or worse that they say would show bias by executives who administered the bank’s promotion and evaluation policies.
Bankers Reel as Ant IPO Collapse Risks $400 Million Payday
Jennifer Surane, Vinicy Chan, Cathy Chan, and Julia Fioretti – Bloomberg
Big investors struggle to get answers as sale abruptly pulled; With bankers’ windfall on ice, ‘are they bummed? Absolutely.’
For bankers, Ant Group Co.’s initial public offering was the kind of bonus-boosting deal that can fund a big-ticket splurge on a car, a boat or even a vacation home. Hopefully, they didn’t get ahead of themselves. Dealmakers at firms including Citigroup Inc. and JPMorgan Chase & Co. were set to feast on an estimated fee pool of nearly $400 million for handling the Hong Kong portion of the sale. Instead, they were left reeling after the listing there and in Shanghai abruptly derailed days before the scheduled trading debut. Top executives close to the transaction said they were shocked and trying to figure out what lies ahead.
JPMorgan’s Kolanovic Accuses Colleagues of Political Bias
Michelle F Davis – Bloomberg
Top quant strategist says forecasts based on party preference; Kolanovic has also been ridiculing polling analyst Nate Silver
Election Day tensions are rippling through one of Wall Street’s premier research units. Marko Kolanovic, a top quant strategist at JPMorgan Chase & Co., accused his colleagues of allowing political bias to influence their market research.
Here’s what banks are telling City staff about the new UK lockdown; Citigroup, JPMorgan, Goldman Sachs, Deutsche Bank and UBS are among banks sending memos to staff about new plans once the stricter London lockdown kicks in
Paul Clarke – Financial News
After months of encouraging hundreds of bankers and traders back to the office amid easing Covid-19 restrictions, City firms are now reversing course — unwinding plans in the wake of a fresh nationwide lockdown.
Amazon gold rush: Brazil grapples with illegal mining in the rainforest; Swaths of forest have been razed to make way for the equipment needed to extract the metal
Bryan Harris, Sam Cowie and Gideon Long – FT
When Brazilian military helicopters swooped over the Maicuru Biological Reserve in the Amazonian state of Pará in October, they discovered an illegal mining operation that was surprising in its sophistication.
Market ties between China, U.S. set to deepen regardless of who wins White House
Samuel Shen, Andrew Galbraith – Reuters
As the world awaited definitive results from the U.S. presidential election, Chinese investors betting on the re-election of Donald Trump sent shares of a Shenzhen-listed air traffic control software firm soaring on Wednesday.
World’s Largest Fertilizer Firm Sees Boon From China Hog Farming
Marcy Nicholson – Bloomberg
Nutrien CEO sees China demand for corn, soy helping farmers; Large feedlots need crops that require fertilizer, Magro says
Changes to China’s hog-farming practices may prove to be a boon for fertilizer companies and farmers around the world, according to Nutrien Ltd.’s top executive.
EU considering further legal action in Brexit standoff
The European Union is considering stepping up its legal action against Britain over legislation that would breach parts of the legally binding Brexit agreement that the EU and the British government reached late last year.
The fight over the government’s proposed bill continued Tuesday as the two sides were deep in negotiations on a free trade agreement. A trade deal must reached within weeks for it to be in place on Jan 1, when an 11-month Brexit transition period ends.
Brexit and payments: The impact of a ‘no deal’ on the industry
Brad Hyett – Finextra
At the time of writing, we are in the home stretch of the UK’s transition period with the European Union, with new rules for UK businesses that deal with Europe set to come into force on 1 January 2021.
Given that the much-hyped “Brexodus” of companies from the UK has not materialised during the grace period, what are the real short term and long term effects of leaving the common market, without a deal, for the payments industry?
Brexit: Boris Johnson misses EU deadline to explain breach of international law
Jon Stone – The Independent
Boris Johnson is facing further legal action from the EU after he missed a deadline to explain why he is planning to break international law over Northern Ireland.
At the start of October the European Commission sent a letter of formal notice to the UK over the prime minister’s planned Internal Market Bill, which breaches the Brexit agreement signed earlier this year.
Brexit Negotiators Race to Reach Breakthrough as Time Runs Short
Ian Wishart – Bloomberg
Brexit negotiators will begin a brief break on Wednesday, with time running out for both sides to reach a breakthrough over their biggest disagreements. The U.K. and EU teams, which have been working round the clock in Brussels since last week, each plan to hold internal discussions before formal talks resume in London on Sunday. The EU’s chief negotiator, Michel Barnier, will brief ambassadors from the bloc’s 27 countries, most likely on Wednesday, while his opposite number, David Frost, is set to update Prime Minister Boris Johnson.
M&S Warns Brexit Could Weigh on Retailer’s Business in Ireland
Deirdre Hipwell – Bloomberg
Marks & Spencer Group Plc warned its businesses in Ireland and France could be materially impacted if Britain fails to reach a trade deal with the European Union before the Brexit transition period finishes at the end of the year. The London-based clothing and food retailer said it is facing increased administration costs as a result of Britain’s exit from the EU, even if a deal is agreed, which is looking more probable now. If no free trade agreement is signed with the EU and significant tariffs on food are imposed, it warned that retail prices will also rise.
Michel Barnier to signal lack of Brexit breakthrough on key issues; Negotiators take stock of progress after 13 days of intensified talks over UK-EU trade deal
Jim Brunsden and Peter Foster and George Parker – FT
Michel Barnier is set to report on Wednesday that close to two weeks of intensified Brexit talks have yielded progress in crafting an EU-UK trade treaty but no breakthroughs on the main sticking points.
Elite Wine Group Suspends Master Sommeliers; After recent sexual harassment allegations by many women, the Court of Master Sommeliers has apologized and announced next steps.
Julia Moskin – NY Times
Seven members of the Court of Master Sommeliers, Americas, an elite body of wine professionals, have been suspended from all court activities, and another has resigned after a New York Times report last week on the group’s longtime pattern of sexual harassment and conflicts of interest.
International M.B.A. Students Look for Alternatives to U.S.; Top American business schools report fewer foreign students amid Covid-19 travel restrictions and shifting immigration policies
Patrick Thomas – WSJ
With fewer international students entering many of the top M.B.A. programs in the U.S. this fall, some of their overseas competitors are getting a boost. International M.B.A. programs, especially those in Europe and Canada, are seeing an increase in interest from prospective students who want to stay closer to home and from students in Asia and Latin America increasingly turned off to studying in the U.S.