Vanguard to Test Giving Retail Investors More Voting Power

Nov 2, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Martin Mosbacher, the former Intermarket Communications principal who sold his firm to Lansons, has joined Cognito as a senior advisor. Mosbacher is a longtime JLN friend who represented many leading financial service players and hired and mentored dozens of public relations professionals serving the financial services community throughout his career. Welcome back, Martin.

SIFMA is holding a Listed Options Symposium on November 9 at etc.venues, 360 Madison Avenue, New York, NY from 9:15 a.m. – 6:00 p.m. ET. After a welcome from SIFMA’s Managing Director, Equity and Options Market Structure Ellen Greene, Cboe Global Markets’ Henry Schwartz will give a keynote address to kick things off. We mentioned this yesterday, but Henry deserves a second plug as he is always interesting and as you can see from below, options trading is doing rather well.

Option trading at the U.S. options exchanges was robust in October; OCC reported that “year-to-date average daily volume through October 2022 was 41.1 million contracts, up 5.6 percent compared to year-to-date average daily volume through October 2021. Total volume was 910.0 million contracts, up 10.2 percent compared to October 2021 and the fifth highest month in OCC’s history.” You can find the complete OCC October volume recap HERE.

Here’s looking at you, kid? According to Bloomberg, Belgrade has turned into the new “Casablanca” for Russians seeking haven from Putin. This could be the start of a beautiful friendship.

Poland is building its version of the Maginot Line, but is using a barbed wire fence along its border with Russia. Not sure how well that will work, except to keep the wildlife from moving across the border.

The U.S. Securities and Exchange Commission Division of Examination seeks to hire a senior officer-chief counsel located in Washington, DC. Check. You can check out the position HERE.

Qontigo CEO Sebastian Ceria was honored with the ‘Alumni Achievement’ award at the Carnegie Mellon University Alumni Association’s Awards 2022.

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


Listen to ICE’s Caterina Caramaschi, VP of Financial Derivatives, discuss the breadth of the FTSE equity derivatives complex and the upcoming launch of ICE FTSE 100 Index Total Return Futures – a more flexible way to trade equity repo.


MWE SHORT: Steve Woodyatt – Blurring the Buy and Sell Sides

Over the last 10 years the buy and sell sides have undergone drastic shifts due to two main factors: unbundling and fragmentation. In this talk from MarketsWiki Education’s London event, Steve Woodyatt, CEO of Datarwe, discusses those two phenomena.

Watch the video »


The volatility laundering, return manipulation and ‘phoney happiness’ of private equity; Are investors the mark, or in on it?
Robin Wigglesworth – Financial Times
The widening performance gap between public and private markets is a huge topic these days. Investors are often seen as the gormless dupes falling for the “return manipulation” of cunning private equity tycoons. But what if they are co-conspirators? That’s what a new paper from three academics at the University of Florida argues. Based on nearly two decades worth of private equity real estate funds data Blake Jackson, David Ling and Andy Naranjo conclude that “private equity fund managers manipulate returns to cater to their investors”.

***** Another must-read Robin Wigglesworth piece.~JJL


Martin Mosbacher joins Cognito as senior advisor; Appointment bolsters Cognito’s financial, technology and sustainability expertise in the US and internationally
Martin Mosbacher, who co-founded Intermarket in New York and led the agency for four decades, most recently as President of Lansons Intermarket, has become a senior advisor to Cognito, the specialist international financial services consultancy. Mosbacher will principally act as an advisor to Cognito and its growing US team as it continues to deepen its presence and capabilities in the US market for financial services communications.

****** They should have given Martin the title of “Very Senior Advisor.” I mean, he has earned it.~JJL


The Contango Hedge; Redesigning Commodities Risk Management
Clive Furness – Contango
“-.You can’t always get what you want
But if you try sometimes, well, you might find
You get what you need” (Jagger/Richards)
If you are a commodity hedger, futures markets seem pretty broken right now. It’s not that the futures markets aren’t liquid- they are. It’s not that participation isn’t diverse- it is more diverse than it has ever been. The problem is that the futures market and the underlying market are often no longer sufficiently price-correlated for the hedges to undertake the function that they are supposed to fulfil.

****** We will interview Clive at EXPO to find out more about this.~JJL


U.S. workers have gotten way less productive. No one is sure why; Employers across the country are worried that workers are getting less done- and there’s evidence they’re right to be spooked.
Taylor Telford – The Washington Post
In the first half of 2022, productivity- the measure of how much output in goods and services an employee can produce in an hour- plunged by the sharpest rate on record going back to 1947, according to data from the Bureau of Labor Statistics. The productivity plunge is perplexing, because productivity took off to levels not seen in decades when the coronavirus forced an overnight switch to remote work, leading some economists to suggest that the pandemic might spark longer-term growth. It also raises new questions about the shift to hybrid schedules and remote work, as employees have made the case that flexibility helped them work more efficiently. And it comes at a time when “quiet quitting”- doing only what’s expected and no more- is resonating, especially with younger workers.

****** Not true at JLN. No commute does not mean more naps for everyone, though my coworkers here in the home office, Indy and Bella, seem to take a lot. ~JJL


Officials: Saudis tell US that Iran may attack the kingdom
Samer Madhani, Matthew Lee, Lolita C. Baldor – Associated Press
Saudi Arabia has shared intelligence with American officials that suggests Iran could be preparing for an imminent attack on the kingdom, three U.S. officials said Tuesday. The heightened concerns about a potential attack on Saudi Arabia come as the Biden administration is criticizing Tehran for its crackdown on widespread protests and condemning it for sending hundreds of drones- as well as technical support- to Russia for use in its war in Ukraine.

****** Perfect time to attack, when the U.S. and Saudis are not getting along.~JJL


Tuesday’s Top Three
Our top story Tuesday was the Financial Times’s Former Deutsche Bank trader seeks to overturn ‘spoofing’ conviction, about James Vorley, who was a London-based trader of precious metals futures. Second was a tie between Bloomberg’s The Accountant Shortage Threatens Capitalism’s Future and the job opening for a Director, Operations and NYSE Institute at ICE on LinkedIn. Third was CFTC Staff Recommends Rejecting Kalshi’s US Election Contracts: Bloomberg, from CoinDesk.


MarketsWiki Stats
27,054 pages; 241,478 edits
MarketsWiki Statistics


Lead Stories

Vanguard to Test Giving Retail Investors More Voting Power; Index-fund behemoth to roll out pilot program early next year; Asset managers’ power over proxy voting faces greater scrutiny
Silla Brush – Bloomberg
Vanguard Group is planning a trial to give retail clients more say over how their shares are voted at corporate meetings, as large money managers’ influence over hot-button issues faces mounting scrutiny. Instead of making decisions exclusively on its own, Vanguard will give individual investors in several equity index funds more options about how their shares are voted, the Valley Forge, Pennsylvania-based company said Wednesday in a statement. It will begin testing the strategy early next year.

There Are Two Americas When It Comes to ESG; Chicago’s decision to dump fossil fuel investments is the latest sign of the ideological divide that’s splitting the country.
Tim Quinson – Bloomberg
Add the Chicago Teachers’ Pension Fund to the list of groups taking a stand on the climate crisis. The Windy City’s retirement fund said it plans to sell all $350 million of its fossil-fuel holdings by the end of 2027, or invest enough in clean energy to fully offset its stakes in oil, gas and coal. The decision by the third-biggest US city is the latest sign of the ideological divide that’s sweeping the country’s public retirement system. While legislators in states like Texas and Florida actively punish asset managers, banks and companies that make business decisions based on environmental, social and governance factors, their counterparts in states such as Maine, Illinois and California are taking the opposite approach.

A Mark-to-Market Massacre Is Claiming a $10 Trillion Market; A painful moment for bond portfolios.
Tracy Alloway – Bloomberg
Investors with exposure to corporate bonds are facing sticker shock on their portfolios this year. This illustrative portfolio is down 34% this year, meaning a $1,000,000 investment made in January is now worth just $651,194. That eclipses the circa 17% decline in the S&P 500 in the same time frame. The portfolio contains 30 bonds covering 10 major sectors ranging from technology to utilities, energy and financials. They’re all rated investment-grade by major credit rating agencies (there’s no junk here) and the vast majority were trading near 100 cents on the dollar as of early January.

The SEC’s Rules Are Getting Unreal; ‘Regulation by hypothesis’ is bad for the capital markets.
Eric J. Pan – The Wall Street Journal
The Securities and Exchange Commission’s job is to make markets work. But today’s SEC leadership – which as of August had proposed 26 new rules this year alone – is ignoring the real-world effects of its regulations on market participants. Its approach can be described as “regulation by hypothesis.” If not remedied, it will prove disastrous. Examples of this pedantic approach to regulation abound. Take the SEC’s current rule proposal on money-market funds, which would require certain institutional money market funds to “swing,” or adjust the fund’s net asset value in the event of net redemptions. Swing pricing would remove features that investors value, such as same-day settlement and multiple net-asset-value strikes per day, and impose unpredictable costs. It may sound good in theory, proposing a way to charge investors leaving a fund, but in reality it will fundamentally alter the product, making it unattractive to investors and forcing sponsors to close and stop offering the funds. So much for healthy capital markets.

ECB warns banks of capital hit if they fail to tackle climate risk; Central bank sets 2024 deadline after finding’major gaps’ among lenders in assessing financial impact
Martin Arnold – Financial Times
The European Central Bank has warned banks that failing to tackle their financial risks from climate change in the next two years will result in higher capital requirements and fines, ramping up the pressure after finding widespread areas of concern. All the large eurozone banks have been sent letters by the ECB identifying 25 areas, on average, where it believes they are falling short in addressing climate risks and setting the 2024 deadline to address the issues.

China Markets Rally After Unconfirmed Social Posts on Reopening
Charlotte Yang and Tania Chen – Bloomberg
Chinese stocks roared back from a rout and the yuan strengthened as speculation mounted that policymakers are making preparations to gradually exit the stringent Covid Zero policy that’s been the biggest bugbear for investors. A gauge of Chinese stocks listed in Hong Kong surged almost 7% intraday, rebounding from its lowest close since late 2005, as unverified social media posts circulated online that a committee was being formed to assess scenarios on how to exit Covid Zero. Shares pared gains after Chinese Foreign Ministry spokesman Zhao Lijian said he’s “not aware” of such a committee.

Saudi Arabia, US Share Intel on Possible Iran Attack; Military posture is adjusted as intelligence is assessed; Pentagon, State Department decline to confirm assessment
Annmarie Hordern – Bloomberg
Saudi Arabia and the US have shared information indicating Iran may attack the kingdom or other nations in the region sometime soon, leading Washington and Riyadh to adjust their military posture, according to people familiar with the matter. The two countries as well as regional allies have raised their military alert level, said the people, who asked not to be identified discussing internal deliberations. They described the possible attacks as an effort to distract from nationwide protests that have roiled Iran in recent weeks.

Iran’s Leader Says Plans to Avenge US Strike on Top General Soleimani Ongoing
Yasna Haghdoost and Arsalan Shahla – Bloomberg
Iran’s Supreme Leader Ayatollah Ali Khamenei said his country continues to plan its response to the 2020 killing of its top general by the US. The remarks come after reports Saudi Arabia and Washington had shared intelligence of a possible Iranian attack in the region. It was not immediately clear if Khamenei’s comments referred to this.

We Told Big Oil Not to Invest. Don’t Complain Now; The invisible hand of the free market is not working like it used to in balancing oil supply and demand.
Javier Blas – Bloomberg
The cure for high oil prices is high prices, or so says the commodity industry’s adage. Let the invisible hand of the free market work its magic. High prices will simultaneously reduce demand and increase supply, eventually making the good less expensive. This has proven true for centuries: In commodities, a bust follows every boom. It happened after the Klondike Gold Rush in 1896, during the second oil crisis in 1979 and following the most recent US shale boom a decade ago. Generations of petroleum engineers, geologists and financiers have grown up swearing by it.

The $24 Trillion Market That Predicts and Influences Interest Rates; The market for U.S. government bonds, called the Treasury market, offers predictions on the path for interest rates and the economy.
Isabella Simonetti – The New York Times
How much higher will interest rates go? It’s a question nagging investors across the financial markets. Inflation is out of control, and traders fear that the Federal Reserve could tank the economy as it tries to wrestle prices lower by raising interest rates. In the stock market, the S&P 500 is down 19 percent this year, reflecting worries that a slow economy will hurt corporate profits. But even as the index jumped 8 percent in October, many analysts warned not to make too much of the rally.

How a Mysterious China Screenshot Spurred a $450 Billion Rally
Bloomberg News
Nobody is quite sure who wrote it, when it was written or if it’s even true. But a screenshot of four paragraphs detailing a China reopening plan was enough for traders to scoop up stocks for two days running. The unverified post, which contained black characters on a white background with no identifying marks, first began circulating on Monday night in WeChat social messaging groups filled with analysts and fund managers, according to accounts by a dozen investors who asked not to be identified. By the next morning, it was spreading like wildfire.

Markets Hate Covid Zero So Much, They’ll Believe Anything; Investors are so desperate for good news out of China, a rumor can spike share prices. A change in vaccination policy could be one key to turning hope into reality.
John Authers – Bloomberg
Even in China, social media have power to move markets. For dramatic proof, look at Tuesday’s rally in Chinese stocks after unsourced reports surfaced suggesting that the Communist Party was setting up a committee to oversee withdrawal of the “Covid Zero” policy, which this year has meant a succession of economically damaging lockdowns.

In Hong Kong, world bankers urged not to ‘bet against’ China
Zen Soo – Associated Press
Chinese regulators downplayed China’s real estate slump and slowing economic growth while Hong Kong’s top leader pitched Hong Kong as a unique link to the rest of China at a high-profile investment summit Wednesday. About 200 global financial executives gathered to network and discuss issues such as global risks and sustainable finance at Hong Kong’s first major conference since the city lifted COVID-19 quarantine restrictions.

Global bankers’very pro-China’, says UBS chair; Colm Kelleher makes remarks at Hong Kong financial forum designed to woo international investors
Hudson Lockett, Cheng Leng, Primrose Riordan and William Langley – Financial Times
Global bankers are all “very pro-China”, UBS chair Colm Kelleher said at a financial forum in Hong Kong, where Chinese officials sought to woo rattled international investors on Wednesday. Hong Kong is seeking to boost its status as an international financial centre at the conference, after a clampdown on civil society and years of strict pandemic restrictions triggered an exodus and raised concerns the city was losing business to rival Asian hub Singapore.

Hong Kong Wants to Be a Crypto Hub Again
Lavender Au – CoinDesk
On Monday, at the opening of Hong Kong FinTech Week, regulators declared the city’s ambitions to be a virtual asset hub. The government announced that it will hold consultations for allowing retail investors to invest on licensed platforms and is open to considering virtual asset futures exchange-traded funds (ETFs). The irony is that Hong Kong, just a few years back, was already a hub. Ask people who’ve been in the crypto scene for a while, and they’ll point to how Bitmex had an office, complete with a shark tank, right above the Securities and Futures Commission (SFC), Hong Kong’s financial regulator.

Hong Kong Bankers Fear Their Careers Are Coming to an End; Finance isn’t what it used to be in Xi Jinping’s new China.
Shuli Ren – Bloomberg
It was supposed to be a big celebration for Hong Kong. This week’s Global Financial Leaders’ Investment Summit, organized by the city’s central bank, was meant to showcase the revival of Hong Kong as Asia’s financial hub, after years of isolation that resulted from stringent Covid controls. But the mood is all gloom and doom. Since China’s Communist Party congress last month, bankers and asset managers I have spoken to are worried. They wonder whether they have viable careers at all.

What to Expect From Ethereum’s Next Big Upgrade
Sam Kessler – CoinDesk
Ethereum’s highly publicized recent update, “the Merge,” radically changed how the second-biggest blockchain network works by eliminating its reliance on cryptocurrency miners and dramatically reducing its energy costs. The network’s next upgrade, “Shanghai,” will focus on tying up loose ends.

Digital Currency Group Promotes Mark Murphy to President, Cuts Nearly 13% Staff: Report
Jamie Crawley – CoinDesk
Crypto venture capital company Digital Currency Group (DCG) has promoted chief operating officer (COO) Mark Murphy to president, amid a restructure which also saw the departure of some 13% of its staff, Bloomberg reported on Wednesday. Around 10 employees left the Connecticut-based firm, bringing its headcount to 66, the report said, citing a person familiar with the matter. Murphy has become the firm’s first president, having been at DCG for over four and a half years, including nearly three as COO.

Crypto Winter Spurs Delisting of Bitcoin, Ether ETFs in Australia; Cosmos pulls funds that were launched as crypto markets slid; The move is the latest leg of a global retrenchment in crypto
Sunil Jagtiani – Bloomberg
A clutch of crypto exchange-traded funds launched with much fanfare in Australia are headed for delisting, becoming the latest casualties of the this year’s digital-asset rout. The management teams behind the Cosmos Purpose Bitcoin Access ETF, Cosmos Purpose Ethereum Access ETF and Cosmos Global Digital Miners Access ETF applied to revoke their quotations on the exchange run by Cboe Australia Pty.

How to Trade an Unusually Boring Bitcoin; With an asset class steeped in volatility, how are investors reacting when there is no fluctuation?
Victoria Vergolina – Bloomberg
Crypto is notorious for its volatility. All its wild swings in prices have become a trademark of the market. And it’s also something that has for years now shaped the trading behaviors of investors looking to make a quick profit. But what happens when the market’s largest digital asset, Bitcoin, starts losing its volatility?

Energy cost curbs are impeding Europe’s renewables rollout, Vestas warns; Wind turbine maker bemoans pricing uncertainty as it cuts full-year earnings guidance
Shotaro Tani – Financial Times
Attempts by the EU to curb high energy prices are leading to a slowdown in the adoption of renewable energy just as the region tries to ramp it up, the chief executive of one of the world’s largest wind turbine manufacturers warned. “Every indication is that the EU and governments have spent more time in finding taxation methods or trying to limit energy prices, which has actually slowed the process and project accruals,” Henrik Andersen, chief executive of Danish wind turbine manufacturer Vestas, told the Financial Times.

Qatar Investment Authority plans to raise Credit Suisse stake; Deal will see up to a quarter of the Swiss bank being owned by Middle Eastern investors
Owen Walker and Samer Al-Atrush – Financial Times
The Qatar Investment Authority plans to increase its stake in Credit Suisse by investing in a share sale alongside Saudi National Bank, according to people with knowledge of the talks. The deal will result in up to a quarter of Credit Suisse stock being owned by Middle Eastern investors, as the scandal-plagued lender seeks to raise SFr4bn ($4bn) to fund a radical restructure.

Wall Street Firm Makes a $1.8 Billion Bet on Forest Carbon Offset; Oak Hill Advisors and partners bought 1.7 million acres of eastern hardwood forests to reduce logging and increase carbon deals
Ryan Dezember – The Wall Street Journal
A major player in credit markets has made one of the largest U.S. timberland purchases in years, laying Wall Street’s biggest wager yet on forest carbon markets. Oak Hill Advisors LP, a subsidiary of T. Rowe Price Group Inc. TROW -0.37%decrease; red down pointing triangle that manages $56 billion and is best known as a corporate-debt investor, said that it led a consortium to pay about $1.8 billion for 1.7 million acres of forest.

Broken Deal Triggered Currency Losses for Barclays, Deutsche Bank and Citigroup; The damage, around $100 million for Barclays, related to hedges the banks provided on Prosus’s failed deal for BillDesk
Ben Dummett and Patricia Kowsmann – The Wall Street Journal
Barclays PLC, BCS -0.43%decrease; red down pointing triangle Deutsche Bank AG DB 0.62%increase; green up pointing triangle and Citigroup Inc. C 0.14%increase; green up pointing triangle lost money on currency-hedging products they sold to a client for an acquisition that fell through, the latest example of the damage spread during the worst stretch for deal making in years. Prosus PRX -0.52%decrease; red down pointing triangle NV, best known as the largest investor in Chinese internet giant Tencent Holdings Ltd., TCEHY 8.14%increase; green up pointing triangle agreed in August 2021 to acquire India’s BillDesk, an online payments platform, for 345 billion rupees, equivalent to about $4.7 billion at the time. To protect the price against swings in the rupee, Prosus bought derivative contracts from the banks that allowed it to lock in the exchange rate ahead of the deal’s closure. Prosus had the flexibility to get rid of the hedge for no fee if the deal didn’t close.

Ukraine Invasion

Russian Tycoon Tinkov Renounces Citizenship Over War in Ukraine; Tinkov had called invasion’insane’ after facing UK sanctions; Storonsky, Milner among other billionaires cutting Russia ties
Blake Schmidt – Bloomberg
Oleg Tinkov, one of the first Russian billionaires to speak out against the country’s invasion of Ukraine, has renounced his citizenship. “I have taken the decision to exit my Russian citizenship,” Tinkov said Monday on his Instagram account. He said he didn’t want to be associated with a country “that started a war with their peaceful neighbour and killing innocent people daily. It is a shame for me to continue to hold this passport.”

Putin May Weaponize Oil, S&P’s Yergin Says
Paul Wallace and Manus Cranny – Bloomberg
The oil market could experience severe supply disruptions as the European Union tightens sanctions on Russia, according to energy historian Daniel Yergin. “Vladimir Putin has used gas as a weapon,” Yergin told Bloomberg TV at the Adipec conference in Abu Dhabi. “Would he use oil as a weapon? It may be in his interests to constrict supply and see prices go up. You don’t have to take a lot off to create panic in the market.”

Senior Russian military leaders reportedly discussed using tactical nukes as losses in Ukraine mount
Peter Weber – The Week
Senior Russian military leaders recently had discussions on when and how the Kremlin might use a tactical nuclear weapon in Ukraine, The New York Times reported early Wednesday, citing multiple senior U.S. officials. Russian President Vladimir Putin, the only one in Russia who could order a nuclear attack, was not part of the discussions.

Russia rejoins wartime deal on Ukrainian grain exports
Associated Press
Russia agreed Wednesday to resume its participation in a deal brokered by Turkey and the U.N. to keep grain and other commodities moving out of Ukraine’s ports during Russia’s invasion of Ukraine, Turkey’s president said.

***** Here is the FT version of this story.

Russia’s Invasion of Ukraine Moves Toward’War of Drones’ as Winter Looms
Marc Champion – Bloomberg
President Vladimir Putin’s swift and severe response to an attack on his Black Sea fleet reflects a war that is increasingly marked by a duel between long range Russian missiles and Ukraine’s innovative array of drones and truck bombs. Putin on Monday made clear why he was suspending Russia’s involvement in a deal that for three months had allowed much-needed Ukrainian grain to be shipped to global markets: He wants to secure the Russian Navy’s ships after an attack by air and sea drones.

Russians Find Refuge From Putin in Europe’s New’Casablanca’; Belgrade turned into a haven after the war started, but now more people are arriving and driving demand for property and work spaces.
Misha Savic and Rodney Jefferson – Bloomberg
Sitting behind an outsized black wooden desk next to stacks of papers, Belgrade lawyer Tijana Vujovic says she already has another five meetings with potential new clients in her diary for the next day. Four of them are Russian.

Russia’s Near-Record LNG Shipments Show World’s Struggle to Cut Reliance; France, China and Japan were top buyers from Russia in October; LNG shipments from Russia rose to highest since March
Stephen Stapczynski – Bloomberg
Russian liquefied natural gas shipments increased in October to nearly a record, illustrating how the world is struggling to curb its dependence on the major supplier ahead of winter. LNG exports from Russia rose 1.1% year on year in October to the highest level since March, according to ship-tracking data compiled by Bloomberg since 2016. That is in stark contrast to plummeting pipeline flows to Europe following the deterioration of relations between the West and the Kremlin over its invasion of Ukraine in February.

Poland Starts Building Fence on Border With Russia
Piotr Skolimowski and Maciej Onoszko – Bloomberg
Poland started building a barbed-wire fence on its 210-kilometer (130-mile) border with Russia’s Kaliningrad region to prevent the Kremlin from sending asylum-seekers into the country, Defense Minister Mariusz Blaszczak said.

Ukraine Supply to Take Spotlight at Bali Palm Oil Conference; Ukraine was largest exporter of sunflower oil before invasion; Striking a balance between food and fuel use is important too
Anuradha Raghu and Eko Listiyorini – Bloomberg
The supply outlook for cooking oil will be a hot topic at a conference in Indonesia this week after Russia suspended its participation in a pact to ensure safe transit of ships carrying grain and foodstuffs from Ukraine. Ukraine accounted for almost half of the world’s sunflower oil exports before the Russian invasion in February. The war choked off that supply, and helped drive prices of palm oil, the most consumed edible oil used in everything from margarine to ice cream and shampoo, to a record close in April. Indonesia is the top global supplier of palm oil and Malaysia is the No. 2 producer.

Exchanges, OTC and Clearing

‘It Is Unacceptable’: Investors React to Toronto Exchange Outage
Geoffrey Morgan – Bloomberg via YahooNews
A 40-minute outage across three stock exchanges stalled equity trading in Canada, leaving some investors frustrated and others refusing to place orders even after it reopened. Trading was halted on the Toronto Stock Exchange, TSX Venture and Alpha markets around 10:30 a.m. New York time and resumed at 11:10 a.m. All three exchanges are owned by TMX Group Ltd., which stopped trading due to a connection problem that affected order entries. The exchange sent its first notice that it was having trouble shortly after 10 a.m.

Hong Kong Exchange cuts trading fees to boost market
The Business Times
HONG Kong’s stock exchange (HKEX) will cut trading fees for its cash market starting next year in an effort to improve market efficiency and boost activity. Overall, the moves by the Hong Kong Exchanges & Clearing will lower the effective rate on cash market trades to 0.565 basis points from 0.576 basis points, according to a statement on Tuesday (Nov 1). The bourse is removing a fixed trading tariff of US$0.50 on each transaction while raising its ad valorem fee on all trades to 0.00565 per cent from 0.005 per cent.

OCC October 2022 Total Volume Up 10.2% Year-Over-Year, Fifth Highest Month on Record OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that year-to-date average daily volume through October 2022 was 41.1 million contracts, up 5.6 percent compared to year-to-date average daily volume through October 2021. Total volume was 910.0 million contracts, up 10.2 percent compared to October 2021 and the fifth highest month in OCC’s history. Highlights: ETF options cleared contract volume up 57.4% year-over-year; Index options cleared contract volume up 74.0% year-over-year; Stock Loan transaction volume up 11.6% year-over-year.

The Spanish Stock Market Trades 23.9 Billion Euros In October
2 November, 2022; Monthly Trading Statements For Bme’s Markets
The volume traded in Equities in October is down 1.2% on the previous month; Fixed-income trading in October increased 4.8% to 10.5 billion euros; Trading in Futures contracts on the IBEX 35 ® index increased by 7.4% in the first ten months of the year. The Spanish stock market traded 23.9 billion euros in Equities in October, down 42.1% year on year and down 1.2% from the preceding month. The number of trades in October was 2.7 million, down 4.5% from September 2022.

CME Group Reports 11% ADV Growth in October 2022
Highest-ever October ADV; Equity Index volume up 59%, with record E-mini S&P 500 options contracts; Record SOFR options volume and OI
CME Group
CME Group, the world’s leading derivatives marketplace, today reported its October 2022 market statistics, showing average daily volume (ADV) increased 11% to 22.7 million contracts during the month, representing the company’s highest October volume on record. Market statistics are available in greater detail at

Ag Economy Barometer declines again, producers express concern about interest rate policy
CME Group
Farmer sentiment weakened again in October as the Purdue University/CME Group Ag Economy Barometer dropped 10 points to a reading of 102. Both of the barometer’s sub-indices also declined this month. The Current Conditions Index dipped 8 points to a reading of 101 while the Future Expectations Index dropped 11 points to a reading of 102. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between October 10-14.

Cash market trading volumes in October
Deutsche Börse
Deutsche Börse’s cash markets generated a turnover of €98.16 billion in October (previous year: €123.49 billion / previous month: €113.63 billion).

ICE Bonds Receives Approval for Expansion in Canada
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced it has received approval to operate its ICE TMC fixed income trading platform in all Canadian jurisdictions, paving the way for full access to ICE’s leading electronic municipal bond marketplace.

Hearing Before The Disciplinary Committee Of Bourse De Montréal Inc. Credit Suisse Securities (USA) LLC
The Disciplinary Committee of Bourse de Montréal Inc. (the “Bourse”) will hold a hearing on December 1, 2022 at 9:30 a.m. by videoconference, in order to decide on the acceptance of a settlement agreement negotiated between the staff of the Regulatory Division of the Bourse and Credit Suisse Securities (USA) LLC (“CSSU”), in connection with a disciplinary complaint filed against CSSU.

Statistics From Nasdaq Nordic Exchange October 2022
Nasdaq Nordic
Monthly statistics including stock and derivative statistics. The value of average daily share trading amounted to EUR 3.0 billion, compared to EUR 3.7 billion during the past 12-month period. The average number of trades per trading day was 776,461 compared to 870,545 during the past 12-month period.

NSE Indices launches two new target maturity indices
NSE’s index services subsidiary, NSE Indices Limited today launched two new target maturity indices namely, Nifty SDL Sep 2026 Index and Nifty SDL Plus G-Sec Jun 2028 70:30 Index. The Nifty SDL Sep 2026 Index follows a target maturity structure with maturity date of September 30, 2026. It includes State Development Loans (SDLs) maturing during six month period ending September 30, 2026

NYSE Chicago – Equities Fee Changes Effective November 1, NYSE
Subject to effectiveness of a filing with the SEC, NYSE Chicago intends to make the following changes, beginning November 1, 2022. NYSE Chicago (the “Exchange”) proposes to introduce a new Participant credit and amend the existing Institutional Broker credits.


Eddie Ibanez and Team LIFE, announce open registration to NFT and Blockchain-driven Travel and Entertainment Marketplace
LIFE Group Holdings, Inc.
LIFE Group Holdings, Inc. today announced open registration ahead of its launch to users offering hotel reservations which will be digitized and converted into tradable, collectible NFT’s. Based on AI now servicing a large online travel agency, LIFE will launch with discounted prices on millions of hotels globally. LIFE will be the first platform to make large volumes of hotel bookings available for trading on secondary markets, just as baseball or Broadway tickets are today.

Jack Ma’s talent scheme lands in Hong Kong as Ant Group joins hands with government to train fintech professionals
South China Morning Post
Chinese financial technology giant Ant Group has teamed up with the Hong Kong government to introduce a global talent development initiative created by Alibaba Group Holding founder Jack Ma to the city. The two sides have agreed to collaborate on “10×1000 Tech for Inclusion”, a fintech training platform jointly created by Alipay, the e-payments unit of Ant Group, and International Finance Corp, a World Bank arm focused on the private sector in developing countries, according to a press release, which did not mention Ma.

Leaders in Trading 2022: Meet the nominees for-. Outstanding Market Data Provider; Learn more about the five firms shortlisted for our Editors’ Choice Award for Outstanding Market Data Provider this year: including big xyt, BMLL, Bloomberg, FactSet and Parameta Solutions, TP ICAP.
Wesley Bray – The Trade
The TRADE is delighted to introduce the shortlist for this year’s Editors’ Choice, Outstanding Market Data Provider. The shortlisted market data providers have all experienced great years and achieved outstanding performance. Learn more about our shortlisted candidates below, including big xyt, BMLL, Bloomberg, FactSet and Parameta Solutions, TP ICAP.

Leaders in Trading 2022: Meet the nominees for-. FinTech of the Year; Meet the industry innovators listed for The TRADE’s FinTech of the Year award, in partnership with Instinet. Appital, Capital Markets Gateway (CMG), Enfusion, Genesis Global, OpenGamma and Saphyre are fighting it out for the prize this year.
Laurie McAughtry – The Trade
One of our most hotly contested awards, FinTech of the Year recognises the pioneers shaking up the way the industry operates, creating new pathways and developing best-in-class, cutting edge technology solutions. This year we’ve got a diverse and eclectic crowd competing for the crown: including an algorithmic book-building platform, a cloud-based OEMS, a low-code app development platform, and more. Read on to discover the candidates for 2022’s FinTech of the Year.

Wyoming company uses blockchain to create payment system for truckers
Patrick Wolfenbarger – Wyoming Business Report
When Jacob Centner was contacted though LinkedIn in early 2021 about a blockchain startup that could potentially disrupt traditional shipping accounting and payment systems for the trucking industry, he didn’t believe it. Centner, who had recently earned his master’s degree in computer science from the University of Wyoming, was skeptical of a message sent by Todd Ziegler. A seasoned business founder, Ziegler had an idea involving blockchain from his decade-long experience in transportation management. He thought blockchain and the use of digital tokens could save the shippers and truckers millions of dollars in transaction fees and speed up the payment process.

Head of China’s digital yuan addresses blockchain’s role in mBridge, pushing digital currencies beyond their borders
South China Morning Post
While the People’s Bank of China (PBOC) has given no indication of what role blockchain plays in its digital yuan (eCNY), if any, distributed ledger technology (DLT) is playing a central role in the slow internationalisation of the yuan.


U.S. Treasury thwarted attack by Russian hacker group last month-official
David Lawder – Reuters
The U.S. Treasury last month repelled cyber attacks by a pro-Russian hacker group, preventing disruption and confirming the effectiveness of the department’s stronger approach to financial system cybersecurity, a U.S. Treasury official said on Tuesday. The Treasury has attributed the distributed denial of service (DDoS) attacks to Killnet, the Russian hacker group that claimed responsibility for disrupting the websites of several U.S. states and airports in October, said Todd Conklin, cybersecurity counselor to Deputy Treasury Secretary Wally Adeyemo.

The Federal Communications Commission (again) sets its sights on cybersecurity
Hogan Lovells – JDSupra
The field of regulators interested in the cybersecurity practices of private companies is getting crowded, with the Federal Communications Commission (FCC) becoming more and more active in this space. The FCC, which has jurisdiction over “all interstate and foreign communications by wire or radio,” pursuant to the Communications Act of 1934, as amended, has increasingly found bases for interpreting its authority broadly to encompass the cybersecurity of communications networks and devices. Three recent examples highlight various paths the FCC is pursuing to regulate cybersecurityâEUR”a trend which appears likely to continue.

Twitter’s verification chaos is now a cybersecurity problem
Zack Whittaker – TechCrunch
Cybercriminals are already capitalizing on Twitter’s ongoing verification chaos by sending phishing emails designed to steal the passwords of unwitting users.
The phishing email campaign, seen by TechCrunch, attempts to lure Twitter users into posting their username and password on an attacker’s website disguised as a Twitter help form.

Breaking Down Cybersecurity Effectiveness (Part 1): Processes
Steve Riley – Forbes
Managing your security program and tracking its progress over time requires measurement. You’ve probably seen recent report stats about the average time to detect and/or mitigate a breach. While those numbers can help tell an important story, they’re really about cybersecurity efficiencyâEUR”measuring how fast we’re doing something. But efficiency isn’t the same thing as effectiveness, which is measuring how well we’re doing something.

LSU researchers developing artificial intelligence-based cybersecurity tool
Business Report
LSU cybersecurity researchers are developing a new tool, called HookTracer, to speed up cybercrime investigations using artificial intelligence, according to a recent announcement from the university.
With increasingly more sophisticated computer capabilities come new ways for hackers to sabotage businesses or government organizations. HookTracer can be used by investigators such as the Louisiana State Police Cybercrime Unit to stop, or at least mitigate, cyberattacks by tracing viruses, worms, ransomware and spyware.

UK spy chief warns of growing threat from’hackers for hire’; Access to off-the-shelf software increasing risk of cyber attacks, says GCHQ director
John Paul Rathbone – Financial Times
“Hackers for hire” and the proliferation of sophisticated software that can be bought off the shelf are a growing threat to government and business cyber security, a top British spy has warned. Sir Jeremy Fleming, who heads the signals intelligence agency GCHQ, said the growing grey market was allowing countries and criminals with no capabilities to wield sophisticated cyber tools, increasing the risk and unpredictability of hacking attacks on governments, businesses and individuals.


Crypto Finance Firm Galaxy Digital to Cut One-Fifth of Workforce: Sources
Will Canny and Ian Allison – CoinDesk
Galaxy Digital (GLXY), the crypto-focused financial-services firm run by noted investor Michael Novogratz, plans to cut at least 20% of its global workforce, according to four people familiar with the matter. “While our industry continues to face macroeconomic headwinds, Galaxy remains focused on building for the future state of institutional adoption and on enhancing long-term shareholder value. We are always considering optimal team structure and strategy and will share future plans when finalized,” a Galaxy spokesman told CoinDesk via email.

Rogue Actor Disrupts Lightning Network With a Single Transaction
Frederick Munawa – CoinDesk
A Twitter user by the name “Burak” (@brqgoo) sent a large swath of the Lightning Network into turmoil on Tuesday morning, when he allegedly created a non-standard Bitcoin transaction that prevented users from opening new Lightning channels (connections between Lightning nodes).

Singapore Starts Two New Token Pilots With Standard Chartered, HSBC and Others
Parikshit Mishra – CoinDesk
The Monetary Authority of Singapore (MAS) said that it is starting two new pilot projects to explore the use of tokens in trade finance and wealth management. The first pilot is being lead by Standard Chartered (STAN) to explore tokens for trade finance, and another pilot to look at tokenisation of wealth management products. The wealth management pilot involves HSBC (HSBC), UOB working with Marketnode, a digital asset platform built by the Singapore Exchange (SGX) and Temasek.

Crypto Trading Platform Talos Taps Amber Group for Liquidity Amid Increased Buying Demand
Shaurya Malwa – CoinDesk
Institutional crypto trading platform Talos has onboarded Amber Group as its newest liquidity provider amid increased demand for crypto trading and investing in the Asia Pacific region. The partnership will allow Talos’ users to source liquidity for their trades from Amber Group’s WhaleFin platform. Head of APAC at Talos, Samar Sen, said that products aimed at institutional investors were essential for the industry’s growth among seasoned institutional investors.

France, Switzerland, Singapore to Test DeFi in Forex Markets
Jack Schickler – CoinDesk
Central banks from France, Switzerland and Singapore are attempting to automate foreign exchange markets, using decentralized protocols, to cut the cost of cross-border payments. Project Mariana, coordinated by the Innovation Hub of the Bank for International Settlements (BIS), is looking at whether protocols used in intermediary-free decentralized finance (DeFi) can replace traditional, more laborious processes for matching buyers and sellers of different fiat currencies.

The Web3 Twitter Fixes Elon Musk Could Actually Try
Daniel Kuhn – CoinDesk
Elon Musk is now “Chief Twit” after taking Twitter private last week, and the transition period seems as wracked with uncertainty as the months-long buyout negotiations. Musk, who is also CEO of Tesla and of SpaceX, has brought on a number of advisers with familiar faces in the crypto industry as he looks to revamp the social media platform and turn it profitable.

Cosmos Asset Management Intends to Delist Crypto ETFs in Australia
Jamie Crawley – CoinDesk
Cosmos Asset Management intends to apply to delist two of its cryptocurrency exchange-traded funds (ETFs) that trade on the Cboe stock exchange in Australia. The Sydney-based investment firm intends to delist its Purpose Bitcoin Access ETF (CBTC) and Purpose Ethereum Access ETF (CPET). The funds invest in bitcoin (BTC) and ether (ETH) through the Purpose Bitcoin ETF and Purpose Ether ETF, which are listed on the Toronto Stock Exchange.

Gibraltar Will Focus on Stablecoins and DeFi Lending After Market Turmoil
Camomile Shumba – CoinDesk
Gibraltar’s financial regulator is exploring whether it needs to further regulate stablecoins and decentralized finance lending after the recent collapses of Terra and crypto lenders like Celsius. Gibraltar Financial Services Commission (FSC) wants to bring decentralized finance lending and stablecoins into “sharp focus,” William Gracia, Head of distributed ledger technology (DLT) and markets at the FSC said at the country’s affair on Tuesday. Gibraltar was hosting an event in central London to celebrate the progress of blockchain and DLT within its borders.

Crypto exchange Huobi plans to move headquarters to the Caribbean; Region’s’super-friendly’ stance on crypto makes it an attractive base, says board member
William Langley and Chan Ho-him – Financial Times
Huobi Global, one of the world’s biggest cryptocurrency exchanges founded in China, is planning to move its headquarters to the Caribbean, marking the latest migration to the region as regulators around the world crack down on the industry. Justin Sun, who was appointed to the company’s board in October, said the region’s “super-friendly” crypto stance, common law systems and English language adoption made the countries attractive bases.

Crypto Fund Manager Bitwise Offers Active Trading Strategies in Institutional Push
Oliver Knight – CoinDesk
San Francisco-based fund manager Bitwise is offering active trading strategies, designed to capitalize on market inefficiencies across the crypto market to cater to institutional clients. The firm said it has hired Jeffrey Park, formerly of Corbin Capital and Morgan Stanley (MS), to head the new active strategy trading team. Active trading strategies are intended to deliver returns for clients by utilizing low-risk techniques to generate a yield, including arbitrage trade across multiple venues and delta neutral quantitive strategies.

NFTs Get a New Place to Live, With Ripple Aiming for Mass Adoption
Cameron Thompson – CoinDesk
Ripple Labs, whose XRP token is the world’s sixth-largest cryptocurrency by market cap, has gotten into non-fungible tokens (NFT). As of Oct. 31, the blockchain supports NFTs (through a standard Ripple calls XLS-20) after a vote approved rolling out the technology. The move comes after Ripple a year ago created a $250 million fund to explore NFT innovation on its XRPL blockchain.


Oil Industry Blasts Biden Over’Outrageous’ Claim of War Profits
David Wethe – Bloomberg
President Joe Biden’s suggestion that US oil companies are profiting from Russia’s war in Ukraine was “absolutely outrageous,” according to the trade group representing American oil and natural gas companies. The statement itself was outrageous, and I would certainly hope that the President would reconsider such statements in the future,” Mike Sommers, chief executive officer for the American Petroleum Institute, told reporters Tuesday on a conference call.

Top US trade official calls on EU to introduce green energy subsidies; Benefits for American production of solar panels and electric vehicles have attracted criticism from Brussels and elsewhere
Andy Bounds and Aime Williams – Financial Times
Katherine Tai, the Biden administration’s most senior trade official, has called on the EU to introduce subsidies as she offered a trenchant defence of the US’s bumper green energy package that critics say unfairly supports its own manufacturers. The White House’s Inflation Reduction Act, a $369bn flagship package to spur investment in green technologies, was signed into law in August, offering subsidies and tax credits for US-manufactured products ranging from solar panels to electric vehicles.

Saudi Arabia, US Share Intel on Possible Iran Attack; Military posture is adjusted as intelligence is assessed; Pentagon, State Department decline to confirm assessment
Annmarie Hordern – Bloomberg
Saudi Arabia and the US have shared information indicating Iran may attack the kingdom or other nations in the region sometime soon, leading Washington and Riyadh to adjust their military posture, according to people familiar with the matter. The two countries as well as regional allies have raised their military alert level, said the people, who asked not to be identified discussing internal deliberations. They described the possible attacks as an effort to distract from nationwide protests that have roiled Iran in recent weeks.

UK Lawmakers Slam Government for’Sub-Optimal’ City Reform Plan
Tom Metcalf – Bloomberg
A group of UK lawmakers has criticized the government’s approach to financial regulation reform, saying it risks sidelining parliamentary scrutiny. The Treasury Committee said it was “sub-optimal” that it would not be given time to examine the latest plans to change the rules, which will hand ministers the power to overrule regulators. Rishi Sunak’s new government has signaled it will introduce the controversial call-in power, but in a letter to the committee Monday said it would be added to the bill later.

China will support Pakistan in stabilising its financial situation – Xi
China will continue to support Pakistan as it tries to stabilise its financial situation, state media quoted President Xi Jinping as saying on Wednesday, during a visit by Pakistan’s prime minister to Beijing. Pakistan had been struggling with a balance of payments crisis even before devastating floods hit the country this summer, causing it an estimated $30 billion or more in losses.


Extreme market events put regulators to the test; Post-crisis approach to risk management limits preparations to the plausible
Laura Noonan – Financial Times
As the tide goes out on a long era of low interest rates, no one can confidently predict where the next wave of financial market turmoil will spring from. And that “expect the unexpected” territory raises uncomfortable questions about modern financial regulation. One is how much responsibility do regulators bear for the fallout from truly exceptional events? Another is, if they do have at least some responsibility, should they be doing more to discharge that?

Chairman Behnam to Keynote at the 2022 U.S. Treasury Market Conference
Chairman Rostin Behnam will give a keynote address at the 2022 U.S. Treasury Market Conference.

Chairman Behnam to Keynote at FIA Expo 2022
Chairman Rostin Behnam will participate in a keynote Q and A with FIA President and CEO Walt Lukken at FIA Expo 2022.

SEC Charges Incarcerated Felon and Five Friends in $2 Million Fraud Scheme
The Securities and Exchange Commission on October 31, 2022, charged six individuals, including a federal inmate, for conducting a freeriding scheme that defrauded multiple broker-dealers.

NFA orders Houston, Texas introducing broker Empire Energy Group LLC never to reapply for NFA membership
NFA has ordered Empire Energy Group LLC (Empire Energy), a CFTC-registered introducing broker and former NFA Member located in Houston, Texas, not to reapply for membership or act as a principal of an NFA Member at any time in the future. NFA also ordered Mark Fairchild, a principal and associated person of Empire Energy and former NFA Associate, not to reapply for NFA membership or act as a principal of an NFA Member for five years and to comply with other requirements if he seeks NFA membership or principal status following the five-year period.

Former responsible manager of Sirius Financial Markets handed eight-year ban
ASIC has banned Mark Bringans, the former responsible manager of over-the-counter derivatives provider Sirius Financial Markets Pty Ltd (Sirius Financial), for eight years.
Mr Bringans’ banning follows an ASIC investigation into Sirius Financial (trading as’Trade360′), which found that Sirius Financial acted unconscionably and breached its Australian financial services licence obligations when it failed to address the conduct of Toyga Media Ltd (Toyga), an off-shore call centre it hired to source clients to trade in its high-risk contracts-for-difference and margin foreign exchange contracts.

FCA prosecutes five individuals for role in ‘all-or-nothing’ investment scheme
It is alleged that between June 2016 and January 2020 Cameron Vickers, Raheel Mirza and Opeyemi Solaja (aka Opeyemi Olaja) ran a London based company called Bespoke Markets Group which defrauded £1.2 million from UK investors. It is alleged that that money was used to fund their lifestyles, rather than the binary options investments that were advertised. They were each charged with offences under the Financial Services and Markets Act 2000, the Proceeds of Crime Act 2002 and an offence of conspiracy to defraud contrary to common law.

Investing and Trading

How Australia is seeing a ‘big shift’ on plastic waste
Phil Mercer – BBC News, Sydney
On Tuesday, Australia takes another step towards reshaping its throw-away society. A range of single-use plastic, including straws, cutlery and micro beads in shampoo, will be banned in its most populous state, New South Wales (NSW), in a bid to reduce waste. “Australia has been very active over the last few years in moving to ban single-use plastics. We now have bans in place in over half of Australia’s states and territories,” says Shane Cucow, the plastics campaign manager at the Australian Marine Conservation Society.

Musk’s Twitter Investors Include Saudi Prince, Dorsey and Qatar
Andrew Pollack – Bloomberg
Elon Musk bought Twitter Inc. last week for $44 billion with the help of Wall Street bank loans and shareholders who agreed to roll over their interest in the social media service in exchange for a stake of the new private company. That means Twitter, whose shares were delisted last week after almost a decade as a public company, has a new lineup of top investors.

How operating system startup OpenFin landed an investment from the CIA’s VC firm and expanded from serving Goldman Sachs to the government sector
Stephanie Palazzolo – Insider
OpenFin, a startup that offers a user-friendly operating system, has announced a $10 million investment from corporate VC firm ING Ventures and an undisclosed investment from In-Q-Tel, a VC firm serving the CIA and broader US intelligence community. The funding comes as the New York-based startup, which has previously focused on finance companies like Goldman Sachs and JP Morgan, announced a move into the government sector through a partnership with In-Q-Tel.

BP Profit Boosted by Natural-Gas Trading, to Buy Back More Shares
Jenny Strasburg – The Wall Street Journal
BP PLC decrease; red down pointing triangle reported robust natural-gas trading profits and said it would buy back another $2.5 billion in shares, the latest mark of a year that has rained cash on oil giants while consumers and businesses struggle to pay energy bills. The London-based company didn’t give an exact figure for its gas-trading haul, but called the performance “exceptional” and said it helped offset weaker refining margins.

Don’t Fear the UK’s Coming Zombie Apocalypse; Legions of undead British companies due to finally fall as interest rates rise should give way to a healthier economy.
Matthew Brooker – Bloomberg
A hard winter is coming in Britain, not only for the living but also the undead. The spike in borrowing costs generated by the short-lived Truss government could very well accelerate a wave of liquidations among the country’s expanded population of zombie companies. The shakeout, while painful for those who lose jobs and see investments fail, may ultimately prove an overdue tonic for a listless economy.

Banks Bolster Metals-Trading Desks After Wild Year for Markets
Eddie Spence, Jack Farchy and Archie Hunter – Bloomberg
Top banks are reinforcing their metals divisions to cash in on the volatility that’s lifted trading profits over the past three years. Russia’s invasion of Ukraine and the Federal Reserve’s aggressive rate hikes have extended the wild swings in metals markets. Copper, gold and aluminum have all surged to records, before plummeting in the face of tighter monetary policy. The biggest banks are set for a bumper year in commodities, as the war in Ukraine whipsaws raw materials prices. That follows a sluggish decade during which many lenders scaled back or exited metals trading.

Options Traders Had the Fed Pegged. Then the S&P 500 Took Off; Little demand for crash-up, crash-down protection: Kochuba; Large long and short positions are offsetting each other: Citi
Elena Popina – Bloomberg
Betting on lower volatility coming out of this Federal Reserve meeting seemed like a sure thing to options pros just a couple of weeks ago, as dovish signals were seemingly emerging everywhere. But now they aren’t so sure. A two-week, 8% rally in the S&P 500 has left traders with little conviction as to what will happen next. While many closed out their put contracts during the rebound, they didn’t gorge on calls in the expectation that the gains would continue, based on the cost of bearish options versus bullish ones analyzed by SpotGamma.

US ETFs draw almost $500bn of inflows despite grim year for Wall St; Fresh surge in new client money contrasts $790bn suffered by mutual funds
Steve Johnson – Financial Times
US exchange traded funds have pulled in almost $500bn in new client money this year as investors continue a powerful shift into the asset class despite a historic pullback in stock and bond markets. The inflows are well below last year’s full-year tally of $935bn but in line to overtake the record before that of $501bn in 2020, according to data from the Investment Company Institute through October 26. In contrast, long-term US mutual funds- which exclude vehicles that act as alternatives to holding cash- have seen net outflows of $790bn in 2022, far worse than the decline of $59bn last year and $484bn in 2020.

FX Voices: From the Floor; The TRADE caught up with a selection of senior buy-side traders and dealers to discuss their key themes, priorities, strategies and expectations for the future.
Laurie McAughtry – The Trade
PETER WELSBY, Senior Multi-Asset Trader, Manulife Investment Management
At the start of 2021, the majority of NDF flow was on Primary markets, however, new entrants have been gaining traction, with mid-matching venues and secondaries growing their market share.

Environmental, Social and Corporate Governance

@UNEP’s 2022 EmissionsGap report highlights urgency for action at COP27 to cut emissions and avoid climate disaster. The finance sector is uniquely positioned to enable system-wide transformation.
UN Environment Programme – Twitter

How Australia is seeing a ‘big shift’ on plastic waste
Phil Mercer – BBC News, Sydney
On Tuesday, Australia takes another step towards reshaping its throw-away society. A range of single-use plastic, including straws, cutlery and micro beads in shampoo, will be banned in its most populous state, New South Wales (NSW), in a bid to reduce waste. “Australia has been very active over the last few years in moving to ban single-use plastics. We now have bans in place in over half of Australia’s states and territories,” says Shane Cucow, the plastics campaign manager at the Australian Marine Conservation Society.

Climate Change Is Already Wreaking Havoc On The COP27 Host
The Big Take Podcast – Bloomberg
On November 6, leaders around the world will gather for the annual UN Climate Change conference, known this year as COP27. The aim: finding ways to slow the warming of the planet, before it’s too late. Take EgyptâEUR”it’s getting hotter at twice the pace of some other nations, and also happens to be the host of this year’s conference. If it continues to warm at its current rate, the country’s crops will wither and the capital, Cairo, will become unlivable. What’s happening in Egypt right now is a glimpse into the future for the rest of us if governments don’t get serious about the climate.

Cool Mud Beats Concrete for Building Homes in a Hotter Africa
West African architects like Clara Sawadogo are reviving old construction methods that keep homes comfortable as temperatures rise, without a heavy cost in carbon emissions.
Katarina Hoije – Bloomberg
It’s a sweltering 90F in Kaya, the midday sun beating down on the low-slung city in central Burkina Faso. But inside the Morija Medical Clinic on the outskirts, vaulted ceilings made of pressed adobe keep the temperature several degrees cooler.

The Race To Replace Africa’s Forest-Killing Fuel; A Nairobi startup says replacing charcoal with bioethanol could save forests as well as lives.
Tom Gibson – Bloomberg
Charcoal production is the leading cause of deforestation in Africa. The burning of the dirty fuel for cooking also has calamitous consequences for the health of those who breathe in its smoke. Now a Nairobi startup says replacing it with bioethanol could save forests as well as lives.

3 ways Elon Musk violated ESG principles in his first days at Twitter
Peter Vanham and David Meyer – Fortune
Is Elon Musk primarily a genius revolutionizing the world by making passenger cars greener? Or a harsh manager frightening employees and dividing society? After his whirlwind entry into Twitter last week, the debate between fans and detractors has flared up again. But one thing has already become clear: from an ESG perspective, this Musk is facing an uphill battle in improving his ESG score.

Billions Chasing Contested ESG Funds Leave Insiders’Mystified’; Morningstar says hundreds of funds may lose their top ESG designation under EU rules, but money keeps flowing in
Frances Schwartzkopff and Greg Ritchie – Bloomberg
As an ESG fund class facing mass downgrades attracts vast client flows, industry insiders confess they don’t understand why investors aren’t being more cautious. The fund class in question is called Article 9âEUR”Europe’s top environmental, social and governance disclosure designation. The problem is that analysts, industry associations and lawyers advising fund managers acknowledge that a significant number of Article 9 funds don’t currently meet the EU’s strict sustainability requirements.

ESG Investors Face a Choice: Do You Use a Positive or Negative Screen?; With a negative screen, investors may shun all companies in a sector. A positive screen can be more inclusive.
Suzanne McGee – The Wall Street Journal
For many investors, the question isn’t whether to invest in companies that embrace environmental sustainability, social responsibility and good governance. The question, rather, is how. And more specifically, a fundamental question is this: Do you use a positive or negative screen when building an ESG portfolio? With negative screens, an investor would shun all companies in a particular sector or doing a certain kind of business. They might, for instance, eliminate exposure to companies in the tobacco or fossil-fuel industry, or those with relatively outsize carbon footprints or a lousy record of labor relations.

The Great US Offshore Wind-Power Boom Has Begun to Falter; Offshore wind is seen as key to fighting climate change; Inflation, interest rates challenge offshore wind economics
Josh Saul and Will Wade – Bloomberg
Plans for massive offshore wind farms that President Joe Biden hopes will power as many as 10 million American homes by 2030 are starting to wobble. On Monday, New Jersey utility Public Service Enterprise Group Inc. said it’s deciding whether to pull out of Ocean Wind 1, a proposed project in the Atlantic Ocean that would generate 1.1 gigawatts — enough for 500,000 homes. Less than two weeks earlier, New England utility Avangrid Inc. said its similarly sized Commonwealth Wind project was no longer viable because of higher costs and supply chain woes.

Broadridge Launches New End-To-End Solution For SFDR Reporting – Solution Helps Funds Streamline ESG Reporting And Meet SFDR Requirements
Mondo Visione
To better support European asset managers in meeting their compliance obligations for the upcoming Sustainable Finance Disclosure Regulation (SFDR), global Fintech leader Broadridge Financial Solutions (NYSE:BR) today announced the launch of its new end-to-end managed service solution. Starting January 1, 2023, SFDR requires asset managers to consider and disclose in a consistent manner how ESG factors are adopted in their decision-making processes. For Articles 8 and 9 funds, this includes a Pre-contractual Disclosure (PCD), Periodic Disclosure (PD) and Website Disclosure (WD).

If we keep abusing nature it will collapse, taking us with it. We need a new mindset
Christiana Figueres – The Guardian
For the last 50 years, an ill-fated paradigm has shaped western thought and action: the “tragedy of the commons”. This is a situation in which everyone operates according to their own self-interest and ultimately depletes our shared resources. Ever since the term was first coined in 1968, we have been acting it out to its fullest with devastating consequences for our land, water and atmosphere. The climate and biodiversity crises have made it abundantly clear that we need to correct this fallacy and take care of the global commons. We all need clean air, fertile soil, thriving biodiversity and healthy oceans to survive and prosper. The temperature limits set by the Paris agreement will not be achieved without halting the conversion of intact ecosystems now, and regenerating what’s already been depleted.

Coal Traders Turn to Private Finance as High Demand Lifts Prices; EU buyers vie for supplies after bloc’s ban on Russian imports; Private funds tend to charge higher rates on loans than banks
Archie Hunter – Bloomberg
Coal traders are turning to private finance to keep shipments moving after a European ban on Russian imports sent prices up fivefold. Russia made up almost half of the European Union’s hard-coal imports in 2020, but purchases all but ceased in August as the bloc imposed sanctions over the war in Ukraine. That’s upended trade flows as European buyers scan the globe for alternative supplies to plug an energy shortfall, causing prices to spike.

Microsoft President Wants More Training for Workers to Fight Climate Change; Brad Smith says employees need to learn more about carbon accounting, green procurement and supply chain management for companies to fight global warming.
Dina Bass – Bloomberg
Microsoft Corp. President Brad Smith is calling for companies, schools and governments to dramatically increase training workers for new and redesigned roles tackling the climate crisis. The software giant, which has pledged to remove more carbon than it emits by 2030, says the lack of skills in areas like carbon accounting, green procurement and supply chain management is a threat to the kind of progress needed to arrest global warming.

China to Keep Coal Price Cap in 2023 as Fuel Supply Fears Linger; Authorities set 675 yuan a ton benchmark for annual contracts; Supply to power plants to continue to be prioritized
Bloomberg News
China will extend a limit on thermal coal prices in 2023 and penalize suppliers who renege on contracts as it continues to expand use of the fuel to avoid any new energy crunch. The National Development and Reform Commission, the country’s top economic planning body, has set a benchmark for annual contracts for next year at about 675 yuan ($92.85) a ton and has asked producers to finalize pacts by Nov. 25, according to a notice sent to companies and seen by Bloomberg News. Specific price caps for cargoes will fluctuate above and below the benchmark dependent on costs of production, transportation and other factors.


Wall Street Banks Seize Credit Calm to Sell Risky Corporate Debt; Banks kicked off $2.4 billion sale for Tenneco LBO late Monday; Ford is set to price the first junk bond in two weeks
Olivia Raimonde, Jill R Shah, and Josyana Joshua – Bloomberg
Big banks are trying to sell risky buyout debt again in the US, taking advantage of growing demand from investors that may prove short-lived. A group led by Bank of America Corp. and Citigroup Inc. late Monday started selling $2.4 billion of junk bonds and loans to help finance the leveraged buyout of auto-parts maker Tenneco Inc. by Apollo Global Management Inc. They’re selling at steep discounts, and it’s just a portion of the original $5.4 billion package that banks committed for the debt portion of the deal.

FTSE Russell Introduces Russell 3000 Fixed Income Index
FTSE Russell
FTSE Russell, a leading global index provider, today announces the launch of a new Russell 3000 Fixed Income Index and Russell 1000 Fixed Income and Russell 2000 Fixed Income sub-indices. Together with its sub-indices, the Russell 3000 Fixed Income Index delivers a curated market weight benchmark for investors, who seek precision allocation to track the US domestic corporate bond market.

Credit Suisse Cut to One Level Above Junk Status by S&P
Patrick Winters, Myriam Balezou and Steven Arons – Bloomberg
Credit Suisse Group AG’s long-term rating was downgraded by S&P Global Ratings to just one level above junk status, underscoring the bank’s challenges after it laid out a radical restructuring plan last week.

BGC Partners Reports Third Quarter 2022 Financial Results; BGC Declares Quarterly Dividend; Conference Call to Discuss Results Scheduled for 10:00 AM ET Today
BGC Partners
BGC Partners, Inc. (Nasdaq: BGCP) (“BGC”), a leading global brokerage and financial technology company, today reported its financial results for the quarter ended September 30, 2022. A complete and full-text financial results press release, including information about today’s financial results conference call and BGC’s most recent dividend declaration, is accessible at the “Investors & Media” section under either “Investor Relations” or “BGC Press Releases” at It is also available at, along with BGC’s quarterly results investor presentation and supplemental Excel financial tables.

Barclays Seeks to Shut Dozens of Firms That Haven’t Repaid Covid Loans; Bank has sought nearly 100 compulsory liquidations recently; Loans given to small firms with few checks during pandemic
Lucca De Paoli – Bloomberg
Barclays Plc has asked UK courts to shutter nearly 100 businesses in recent months as it seeks to recover money loaned under a government Covid-19 program that’s been blighted by fraud. The bank has sought winding-up petitions, which liquidate companies to pay debts, against at least 97 businesses since September, according to official records. The requests relate to loans of around £50,000 ($57,728) that Barclays gave to small businesses to help them get through the pandemic.

Och Dredges Up Levin’s’Personal Issue’ in Hedge Fund Fight; Billionaire investor Dan Och said that an issue in Jimmy Levin’s past caused him to rethink his succession plans. Sculptor said Och knew about the matter and Levin’s exoneration for years.
Katherine Burton – Bloomberg
It started five years ago as the kind of dispute over money and power that frequently flares up on Wall Street. But there’s nothing commonplace about the bitter fight between billionaire investor Dan Och and Jimmy Levin now. Och made it personal last week in a court filing, when he offered his version of events about why he abruptly reversed a decision at the end of 2017 to make Levin chief executive officer of his investment firm, now called Sculptor Capital Management. Och feared Levin “would place his own interests ahead of the stockholders,” the 14-page document said. But it also cited a “personal issue” from Levin’s past that gave Och “concerns about elevating Mr. Levin to the role of CEO.”

BNP Paribas Exane Hires Citigroup’s Renstrom for Block Trading
Swetha Gopinath – Bloomberg
BNP Paribas Exane has hired Citigroup Inc.’s Henrik Renstrom as head of block trading in cash equities, according to people familiar with the matter. Renstrom will join BNP Paribas Exane later this year and be based in London for the Europe-focused role, the people said, asking not to be identified discussing confidential information. He spent 15 years at Citigroup, most recently as a director covering strategic equity flow and block solutions with a focus on execution, the people said.

Wellness Exchange

Exercise Later in Day May Be Better for Blood Sugar Control; Doing exercise in the afternoon or evening was linked to reduced insulin resistance, by 18% and 25% respectively.
Jane Kirby – Press Association
Exercising in the afternoon or evening may be better for blood sugar control than spreading activity throughout the day, research suggests. A new study published in the journal Diabetologia found that exercising between noon and midnight could cut insulin resistance by up to a quarter.


Li Ka-shing’s Skyscraper Is 21% Empty as HK Vacancies Hit Record; Lingering Covid curbs and closed border with mainland have diminished city’s appeal as a regional hub and gateway to China.
Shawna Kwan – Bloomberg
Hong Kong’s most prestigious skyscrapers have more empty office space than ever before, underscoring the challenge facing John Lee’s government as he tries to revive the city’s standing as an international business hub. Empty premium office space- or the so-called Grade-A stock- has almost tripled in three years to an all-time high of a combined 11.9 million square feet (1.1 million square meters) as of October, according to CBRE Group Inc. At Cheung Kong Center, a skyscraper owned by billionaire-developer Li Ka-shing, vacancy surged to 21% in September, from just 5.4% in mid-2020, according to Midland IC&I Ltd.

A Day of Magical China Thinking; The market is still seeing what it wants to see in the world’s largest consumer of commodities.
Clara Ferreira Marques – Bloomberg
Copper and iron ore climbed on Wednesday, mirroring a surge in Chinese equities, on speculation that Beijing is planning an announcement on the path to easing draconian Covid-Zero rules. The talk had already prompted nickel’s most significant jump in seven months. Unfortunately, while this is what China should be doing, there is very little evidence that it’s actually happening. The source of all the optimism, as it turns out, was an unverified social media post suggesting a committee was being set up to assess ways of winding down iron-fisted pandemic policies. Not at all unreasonable in theory, but traders will have been hard-pressed to find tangible hints of a change of direction- apart from growing market frustration. Certainly, it hardly fits with the reality of workers at the world’s largest iPhone factory rushing to escape a lockdown that has resulted in grim living conditions, or images of visitors to Shanghai Disneyland, trapped inside the Happiest Place on Earth by a single Covid infection.

Germany Targets Windfall Profits to Finance Power Price Subsidy; The government plans to cap windfall collection at 90%; Consumer household power use will be billed at set levels
Kamil Kowalcze and Josefine Fokuhl – Bloomberg
The German government plans to collect windfall profits from electricity companies despite legal uncertainties about the proposal, according to a government paper seen by Bloomberg. The money, which will be collected retroactively from September 2022, will be used to finance electricity subsidies for companies and households as part of a policy that will go into effect as soon as this January. In an earlier leaked draft paper, the government had planned to begin skimming profits in March, which several experts said at the time would be unconstitutional.

Currency Redesign Deadline Sparks Rush to Buy Dollars in Nigeria; Naira plummets as residents try to exchange for dollars; Gap between official and black market rates soars above 85%
Emele Onu – Bloomberg
The naira slumped to a record low against the dollar on the widely used illegal market as Nigerians rushed to buy greenbacks a week after the central bank said it would redesign higher-value notes. Currency traders in the unauthorized parallel market offered as much as 830 naira per dollar on Tuesday in Lagos, said Umar Salisu, a bureau de change operator who tracks the data in the nation’s commercial capital. The record low widens the spread between the official exchange rate, which closed at 442.49 to the dollar, to the largest-ever gap of 88%.

The energy crisis gives the US a chance to woo big European companies; Reliable local supplies of natural gas hand America an advantage when it comes to attracting investment
Brooke Masters – Financial Times
European heavy industry has endured a grim few months. Sky high energy prices and fuel shortages sparked by Russia’s invasion of Ukraine have left close to 10 per cent of crude steel production and half of primary aluminium idle. The fertiliser industry has recently clawed its way back to half capacity and groups such as Norway’s Yara are warning that slashed production will lead to food shortages.

UK companies pay heavy price in creaking bond market; Water company snaps issuance lull but riskier businesses will struggle to refinance
Ian Johnston – Financial Times
UK companies are issuing bonds again after the shock sparked by the “mini” Budget, but deals are sparse and investors are demanding high returns- a worrying sign for the country’s more indebted borrowers. Northumbrian Water broke a six-week lull in UK corporate bond markets in late October. But even this steady, reliable utility company had to pay a yield of 6.585 per cent on its £400mn, 12-year bond- well above the 2.375 per cent interest rate the north-east company paid on 10-year debt in 2017. A later deal, for Northern Ireland Electricity Networks, came with a similar scale and yield.

Mississippi River Drought Is Pushing Soybean Shippers to Texas
Michael Hirtzer – Bloomberg
The shrinking Mississippi River has hobbled the most efficient channel for moving US soybeans onto world markets, prompting a pivot to alternatives from Puget Sound to Texas to the Great Lakes. Typically, more than half of all US soybean exports traverse the Mississippi River but after weeks of scant rainfall, water depths have dwindled, raising barge costs to an all-time high. As a result, ports in places like southeast Texas that normally handle less than 5% of the nations soybean exports are being thrust into action.

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