Wall Street Isn’t Ready for the Crackdown Coming Its Way

May 4, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Disneyesque automaton versions of ErisX Head of Product Ian Grieves and Head of Marketing Jessica Darmoni starred in a short Youtube promotional video announcing the closing of the deal for Cboe to acquire ErisX and promoting the different aspects of their markets.

Former Commerce and Transportation Secretary and Congressman Norman Y. Mineta has passed away (NYT) at the age of 90. His was a remarkable story, a Japanese American who was put in an internment camp during World War II, where he struck up a friendship with Alan Simpson, with whom he would serve in Congress. Both were Boy Scouts. Without much in the way of schools in the internment camp, the parents of the boys started a Boy Scout troop and found one outside the wire whom they could collaborate with, the one with future Sen. Alan Simpson in it. The story of their Scouting connection is captured in a Washington Post story from 2017.

The May issue of the World Federation of Exchanges Focus monthly publication is out and features these stories:

Unfinished Business by John McPartland, Director of Research, Hidden Road
Tokenised Assets May Dramatically Transform Securities Trading by Orly Grinfeld, Head of Clearing, Tel Aviv Stock Exchange
SET Steps into 48th Year of Operation: Moving Forward in the Capital Market by Pakorn Peetathawatchai, President, The Stock Exchange of Thailand
What Can We Expect From a Good Margin Model? by David Murphy, Visiting Professor, Department of Law, London School of Economics
Partnering to Scale Carbon Removal by Bjorn Sibbern, Executive Vice President and President of European Markets, Nasdaq
Extending Central Clearing to New Asset Classes by José Manuel Ortiz, Head of Clearing & Repo Operations, SIX
Nasdaq Talks About the Journey to Net Zero, Carbon Removal and How the Investment in Puro.earth Is Part of the Plan by: The WFE Focus Team
Number of Listed Companies by The WFE Research Team

Back when I took the train to work in Chicago, there used to be a couple that rode in my car – the husband worked for the CFTC and the wife for the NFA. I used to joke that they kept me under surveillance. Recently, CFTC Commissioner Christy Goldsmith Romero @CFTCcgr and Commissioner Kristin N. Johnson @CFTCjohnson started following me on Twitter. It just reminded me that the physical stakeout of yesteryear is now an electronic one, though neither was or is the case. But it is nice to know the commissioners are following JLN on Twitter.

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

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The YouTube channel Wendover Productions recently released a video called Why Gas Got So Expensive (It’s Not the War). The conclusion? High gas prices are here to stay. It’s 20 minutes long and well worth watching (I think). ~JB

With cybersecurity becoming ever more important we would hope that everyone had good passwords by now. That does not seem to be the case. NordPass did a study of the most commonly used passwords. “The misfortunate passwords of Fortune 500 companies” shows some shocking results. For example, “password” is still one of the most commonly used passwords as is “123456”. Here’s a protip: Use a passphrase. Something like, “ApplesAreMyFavoriteFruit”. Add your favorite number to the end if you need a number in the password. Easy to remember and near impossible to guess or brute force. The webcomic XKCD has an iconic entry that explains this. ~JB

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JohnLothianNews.com

Martin Franchi, CEO of NinjaTrader Group, sees its mission as “bringing futures trading to a more mainstream place.” With the rise of the retail trader, NinjaTrader – which historically has been a downloadable application – saw the customer experience becoming far more important, Franchi said.

Watch the video »

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FIA’s International Derivatives Expo is returning to The Brewery in London this coming 6-8 June. Standing still is not an option in today’s evolving cleared derivatives environment. Without adapting to new products, processes, technologies and regulations, your business won’t meet the needs of tomorrow’s industry. We’re bringing together industry leaders, vendors and policymakers to discuss what’s “now” in derivatives, and what lies ahead. Sign up here.

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As Putin Gets Desperate, U.S. Should Remember Pearl Harbor; Economic sanctions are working now against Russia as they squeezed Japan before World War II. But the historical lesson is that they don’t make adversaries less aggressive.
Hal Brands – Bloomberg
The Western powers are tightening the screws on Russian President Vladimir Putin: The next move appears to be a phased-in European ban on purchases of Russian oil. It’s the right policy, given that oil money is financing Putin’s war in Ukraine and keeping the Russian economy alive. But the risks may be substantial: Revisionist powers have sometimes become most violent when campaigns of economic strangulation against them are about to succeed.
/jlne.ws/3FfBcgT

***** You had to bring up Pearl Harbor?~JJL

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Zelensky Says Companies Are Supporting Russia’s ‘War Machine’ if They Stay There; ‘Leaving the Russian market is a must,’ Ukrainian leader says at WSJ’s CEO Council Summit
James Marson – WSJ
Global companies have a critical role to play in isolating Russia and helping Ukraine restore its economy, Ukrainian President Volodymyr Zelensky said Tuesday, addressing The Wall Street Journal’s CEO Council Summit in London. “The aggressor has to be isolated. Full, complete economic isolation. That will allow Ukraine to fight to defend our rights,” Mr. Zelensky said. “Leaving the Russian market is a must.”
/jlne.ws/3vFBwSG

****** There is no doubt he is correct. The question is what is the cost of their shame?~JJL

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100-year-old man breaks Guinness World Record for working at the same company for 84 years
Jhanvi Mehtalia – Breezy Scroll
100-year-old Walter Orthmann of Brazil broke the world record for the longest tenure at the same company. Guinness World Records reported that Orthmann was born on April 19, 1922, in the small Brazilian town of Brusque. He started working at 15 to help his family with financial issues. On Jan. 17, 1938, he was hired as a shipping assistant for the textile company- Industrias Renaux S.A., now known as ReneauxView. He was quickly promoted to a sales position, and then became a sales manager, a post he has held ever since.
/jlne.ws/37XdZDX

****** Here is an example of someone who was not delivered the company handbook with the retirement policy in it.~JJL

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Beware the Banter: How Trading Floor Jokes Can Backfire
Katharine Gemmell – Bloomberg
What might be passed off as a cheeky joke to a work colleague, could end up getting you or your employer sued. That’s according to new research from law firm GQ Littler, which found that the number of claims at U.K. employment tribunals relating to “banter” in the workplace increased 45% from 67 cases in 2020 to almost 100 last year. The findings shine a light on the fine line between one person’s perception of an offhand comment and what is actually discrimination or harassment, with “banter” increasingly being used as a defense in legal proceedings to these kinds of allegations, the firm said.
/jlne.ws/3FggfCh

****** Working at home, I find the banter to be rather restrained these days.~JJL

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College graduates are overestimating the salaries they’ll start out at by $50,000, report finds
Jessica Dickler – CNBC
Newly minted graduates are in for a shock. Although the job market and starting salaries for the Class of 2022 look significantly better than last year, they may fall far short of graduates’ expectations.
/jlne.ws/3saWkiS

***** Don’t believe the story. Pure propaganda made to make you cave for lower wages. You deserve $150K per year for that Starbucks barista job.~JJL

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Tuesday’s Top Three
Our top story Tuesday was a tie between the Wall Street Journal article with the intriguing title Facing a Wheat Crisis, Countries Race to Remake an Entire Market on the Fly and the Forbes article How To Become Rich As A Business Owner. Second was Google makes $100,000 worth of tech training free to every U.S. business, from Reuters. And third was Deutsche Börse to provide global derivatives market data from CME Group on A7 Analytics platform, from Deutsche Börse.

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MarketsWiki Stats
26,831 pages; 238,393 edits
MarketsWiki Statistics

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Lead Stories

Wall Street Isn’t Ready for the Crackdown Coming Its Way; Federal investigations into questionable trading practices are on the rise—and the fate of Bill Hwang and his firm, Archegos, may await others in the finance industry.
Tom Schoenberg, Matt Robinson, and Sridhar Natarajan – Bloomberg
Bill Hwang’s lawyers couldn’t believe it. The fallen billionaire investor was sitting in federal custody in Manhattan, less than 48 hours after his legal team had visited prosecutors to talk them out of criminal charges. The effort seemed to be going well until the feds scooped up Hwang at daybreak on April 27 to face 11 felony charges—and potentially, the rest of his life in prison. “In no event was an arrest necessary,” his attorneys said in a statement expressing frustration that morning, noting Hwang had been voluntarily answering the government’s questions for months.
/jlne.ws/3sdJkZY

Brussels proposes EU import ban on all Russian oil
Ursula von der Leyen vows to phase out supplies in an ‘orderly fashion’
Eleni Varvitsioti and Sam Fleming – FT
Brussels has proposed a phased-in ban on imports of all Russian oil as EU member states try to agree a sixth package of penalties against Moscow for its invasion in Ukraine. The ban will cover all Russian oil, seaborne and pipeline, crude and refined, European Commission president Ursula von der Leyen said on Wednesday. She vowed to phase out the supplies in an “orderly fashion”, hitting crude oil within six months and refined products by the end of the year.
/jlne.ws/3ydGKqE

**** Here is the WSJ version of this story.~JJL

Crypto bros on the beach feel a cold wind at their necks; Participants in a recent conference admit that leaner times are on the way for holders of digital assets
Joshua Oliver – FT
The irony of entering a cryptocurrency conference through a casino was clearly lost on the organisers of Crypto Bahamas. But if, last week, you turned left past the slot machines, under the blue glass chandeliers, at the Baha Mar resort in Nassau, down the bright yellow promenade to the convention centre, you found a collection of crypto magnates way past caring about the jibes of critics who see their industry as akin to gambling.
/jlne.ws/3kCjLxx

Wall Street sees greater risk of default by major banks
Mehnaz Yasmin – Reuters
The cost to insure bonds of Goldman Sachs , Morgan Stanley and Citigroup against default hit two-year highs on Monday on growing fears the U.S. Federal Reserve’s aggressive moves to tame inflation might tip the economy into recession. Credit risks have worsened since the Ukraine crisis as some big U.S. banks took a hit to their mainstay businesses, with capital market activity coming to a standstill and lending expected to remain lackluster. That has prompted bondholders to consider hedging strategies to protect against potential defaults.
/jlne.ws/3OSWtBg

Crypto Crowd’s Secret Gala Convenes Outside the Gates of Milken
Yueqi Yang – Bloomberg
It’s Medici LA 22, an event set up to connect crypto entrepreneurs and institutional investors amid the ballooning popularity of digital assets. The who’s who of crypto are attending, with Mike Novogratz, chief executive officer of Galaxy Digital, Anatoly Yakovenko, co-founder of Solana and Rostin Behnam, chairman of the Commodity Futures Trading Commission, among the 130 or so at the two-day meeting. The goal is to generate “actionable investment ideas” in the digital asset world, according to a copy of the conference’s program seen by Bloomberg News. And by all accounts, tickets for the event are hard to come by. A few hundred meters away, a separate confab is in full swing but some participants at the Milken Global Institute Conference — a mainstay event for the U.S. investing world — are wondering how they can get access to the parallel cryptocurrency gig.
/jlne.ws/3vGtAAA

India Mulls Wheat Export Curbs in Latest Food Supply Squeeze; Move to hurt India’s ambition to cash in on global price rally; Government cuts output estimate after hottest March on record
Pratik Parija and Shruti Srivastava – Bloomberg
India is considering wheat exports as severe heat waves have damaged crops, exacerbating tight global supplies after the war in Ukraine sent food inflation soaring. The South Asian nation experienced its hottest March on record, shriveling the wheat crop that the world was relying on to alleviate a global shortage. To safeguard domestic supplies, the government is considering limiting wheat exports, according to a person with knowledge of the matter.
/jlne.ws/3vH4py1

Crypto exchange Kraken to launch NFT marketplace
David Hollerith – Yahoo!Finance
Yahoo Finance’s David Hollerith discusses Kraken’s plans for an NFT platform.
/jlne.ws/3kCjt9B

Oil Traders Are Already Treating Russian Crude Like It’s Banned
Archie Hunter and Sherry Su – Bloomberg
Within the next few days, it seems increasingly likely that the European Union will announce some kind of gradual embargo that prevents member states from purchasing Russian oil in response to the invasion of Ukraine. In practice, though, there are already de facto curbs on swaths of purchases from Russia that are likely to restrict the nation’s trade — not just with Europe but further afield.
/jlne.ws/38JDN6p

Titans Talking Crises at Milken Conference Hit Afresh With Flash Crash News; Executives, dealmakers, investors get in some partying too; ‘You’re going to see more and more crazy things,’ CEO says
Jennifer Surane, Gillian Tan, and Michelle F Davis – Bloomberg
As the billionaires and mere multimillionaires flocked this week to Beverly Hills, California, there was no shortage of concerns to discuss: Russia’s invasion of Ukraine, surging inflation, recession risks, supply-chain woes, the lingering pandemic. Then, as the Milken Institute’s Global Conference was barely underway, European stocks experienced a rare flash crash when a trader on Citigroup Inc.’s London desk made an error inputting a transaction. Executives at the event cited the incident as a symptom of fragility in financial markets, with bank balance sheets stretched in the wake of post-2008 regulations.
/jlne.ws/3saDcBJ

Milken Unmasked: Frivolity and Fear as Elite Descend on LA
Hannah Levitt – Bloomberg
That should spell gentle optimism as the world’s most influential people cavort between panels, wellness sessions and the puppy playtime on offer at the Milken Institute Global Conference. But as they assemble to deliberate the world’s biggest issues, there’s a rare cocktail — and not the good kind — of mounting global challenges that will test the sunny West Coast mood. The famed gathering, in its 25th year, has outlined its focus as the power of connection, celebrating “the forces that bring us together while confronting the issues that keep us apart.” It’s a fitting theme for a world jolted by war in Ukraine just as the highest inflation in decades raises the specter of recession and the dregs of a global pandemic refuse to disappear.
/jlne.ws/3saFrVF

Europe Scrambles for Energy Before Cutting Itself Off From Russia; Imports of crude, diesel and natural gas have leaped, as Europe stocks up for a Russian-energy free future
Joe Wallace – WSJ
Europe is racing to stock up on oil and natural gas before it imposes tighter sanctions on Russian energy, showing the dash to reorganize global energy supplies in the wake of the war in Ukraine. Terminals to import liquefied natural gas took in a record amount of the superchilled fuel for the time of year in April, according to commodity-tracking firm Vortexa. Oil imports from non-Russian suppliers, meanwhile, hit their highest level since the start of the pandemic. Governments and companies are preparing for Russian imports to slow by seeking alternative sources in the U.S., Africa, the Middle East and Asia—as well as squeezing more supply out of Europe itself.
/jlne.ws/3Ftkz1n

An EU oil ban is a tightening noose on Russia’s economy; Moscow has limited scope to redirect crude sales to alternative markets
The editorial board – FT
In a few short weeks, assumptions have been dramatically overturned on how far Russia was prepared to go in its war against Ukraine — and how far western countries would go in response. The EU is edging towards a phased embargo on Russian oil exports, on top of similar US and UK moves. This is a momentous but risky move. The US has worried that moving too fast could drive up global oil prices; Germany has warned of the economic hit even while signalling it will back an embargo. Handled carefully, however, the costs can be contained. And the pain for Russia is ultimately far greater.
/jlne.ws/3kWJFw9

Why Chinese insurer Ping An is calling for a break-up of HSBC; Bank is caught between Washington and Beijing
Tabby Kinder and Stephen Morris – FT
Two decades ago, HSBC made a bold gamble to recapitalise an ailing Chinese insurance firm, paying $600mn for 10 per cent of Ping An. The risk paid off handsomely netting the bank $2.6bn in profit when the stake was sold in 2012. But a decade on, Ping An has become HSBC’s largest shareholder and is calling for what would be the biggest shake-up in the bank’s 157-year history — a split of its Asian and western operations.
/jlne.ws/3kAG8U1

SEC launches new cyber unit as it doubles down on crypto crime; US regulator has significantly increased the size of its cyber workforce, driving forward chairman Gary Gensler’s crusade to regulate trading in digital assets.
Laurie McAughtry – The Trade
The US’ Securities and Exchange Commission (SEC) has confirmed plans to bolster its unit responsible for protecting investors in crypto markets and from cyber-related threats. The new division, renamed Crypto Assets and Cyber Unit, will sit in the Division of Enforcement and grow from 30 dedicated positions to a 50-strong workforce.
/jlne.ws/3OWVtfp

Mifid II London roadshow: Is regulatory divergence harming end investors? Speaking on a panel hosted by The TRADE at the London Stock Exchange, panellists were divided on whether systematic internaliser reforms in the UK were benefitting or harming end investors.
Annabel Smith – The Trade
Industry participants are divided on whether diverging approaches to the systematic internaliser (SI) regime favoured by Europe and the UK post-Brexit will hinder end investors. Following the UK’s departure from the European Union, Europe has favoured stringent rules around the SI regime including limiting their ability to match at mid-point on small trades and from using the reference price waiver to execute small trades by introducing a minimum threshold.
/jlne.ws/37drQ8z

Ukraine Invasion

Germany Considers Shipping Rapid-Fire Howitzers to Ukraine
Arne Delfs and Michael Nienaber – Bloomberg
German Chancellor Olaf Scholz is considering sending seven rapid-fire artillery systems to Ukraine in another step to shore up the country’s efforts to fend off Russian forces. Defense Minister Christine Lambrecht has recommended delivery of the PzH 2000 — a self-propelled, armored howitzer — according to officials familiar with the matter. Scholz is weighing the request, but there are also several other proposals on the table and he hasn’t granted final approval yet, said the people, who asked not to be identified because the discussions are confidential.
/jlne.ws/3FeMbHg

What Happened on Day 69 of the War in Ukraine; Western leaders, including President Biden, Boris Johnson and Emmanuel Macron, sought to capitalize on Russia’s apparent lack of battlefield momentum to show Ukraine support and strengthen its resolve, and its arsenal.
Finbarr O’Reilly – NY Times
“This is my third war,” said Raisa Nazarchuk, 84, at a shelter for displaced people in Lviv on Tuesday. “Do you know when it will be over?” She had fled from her village, Bilohorivka, in the eastern province of Luhansk, with her daughter and her son-in-law. A child in World War II, she also survived the war with Russian-backed separatist forces that broke out in 2014.
/jlne.ws/3kCnpXU

Russia Seeks to Annex Occupied Ukraine as Invasion Goals Shift; Kremlin plans referenda to absorb Donbas into its territory; Votes on joining Russia could be delayed as offensive stalls
Bloomberg
Nearly 10 weeks into the war and with its troops making only marginal gains in Ukraine’s east, Russia is focused on cementing both military and political control over the territory it has taken so far. The Kremlin is installing occupation governments, ordering locals to use rubles for transactions and, according to three people involved in the efforts, planning hastily organized referendums in some areas to open the way for full annexation. The people spoke on condition of anonymity given the risk of retribution discussing sensitive information. The Kremlin did not respond immediately to a request for comment.
/jlne.ws/3KNo43n

As Warsaw Reaches Refugee Capacity, Mayor Pleads for Europe-Wide Help; Facing another potential surge of Ukrainian refugees, Mayor Rafal Trzaskowski says his city “cannot afford to improvise on such important matters.”
Natalia Kniazhevich – Bloomberg
Since Warsaw started taking in Ukrainian refugees, the Polish capital’s population has increased by more than 15%. It is now host to some 300,000 such refugees, but you won’t find any big refugee camps in the city. Instead, residents are hosting Ukrainians at their homes. The city is now reaching its capacity, according to Warsaw Mayor Rafal Trzaskowski. He is calling for the European Union and the United Nations to initiate an immediate and coordinated strategy across Europe, saying the city won’t be able to deal with a potential second wave of refugees. Trzaskowski, a member of Poland’s leading opposition party Civic Platform who ran for president in 2020, is also calling for more financial aid to go directly to local governments and organizations working on the ground, rather than just to the national government.
/jlne.ws/381JCfv

Citi in ‘active dialog’ to sell Russia consumer business, CEO says
Reuters
Citigroup Inc is in “active dialog” to carry out the sale of its Russia consumer business that it announced a year ago, Chief Executive Jane Fraser said on Monday. “We’re selling our consumer and our commercial banking franchise on the ground there, and we’re in active dialog around that,” Fraser said in a Bloomberg Television interview at the Milken Institute Global Conference. Investors have been worried that the sale was in limbo because of economic sanctions western nations have imposed to punish Russia for its invasion of Ukraine.
/jlne.ws/3kEgcqp

Ukrainian Civilians Describe Desperate Efforts to Flee Bombed-Out Mariupol; Evacuees trickle into Ukrainian-held territory as Moscow pursues its offensive; ‘every second we felt new bombs’
Matthew Luxmoore – WSJ
Scores of civilians trapped for weeks in the rubble of Mariupol and other towns occupied by Russian forces reached Ukrainian-controlled territory after traumatic journeys as Russia redoubled efforts to seize the sprawling steel plant that had served dozens of them as a refuge. Among the flow of people arriving Tuesday at a processing center in Zaporizhzhia, a Ukrainian-held city in the country’s southeast, was a convoy of around 150 civilians who had spent weeks sheltering in the Azovstal steel plant where Ukrainian soldiers continue to hold out.
/jlne.ws/3LMwVni

Germany’s Olaf Scholz struggles to get his message across on Ukraine; Attacked for foot-dragging, the chancellor has gone on the offensive to explain his strategy
Guy Chazan – FT
Olaf Scholz is not known for his oratorical flair. But at a May Day rally in Düsseldorf on Sunday, as chants of “warmonger” and “liar” rained down on him, Germany’s chancellor hit back with a rare clarity and passion. Addressing protesters angry at his decision to send tanks to Ukraine to counter Russia’s invasion, Scholz said he could “respect any kind of pacifism”. But “it must seem cynical to a Ukrainian when you tell him to defend himself against [Russian president Vladimir] Putin’s aggression without weapons”. That, he said, was “divorced from reality”.
/jlne.ws/3sdMcWK

Russia is losing on the electronic battlefield
David Ignatius – Washington Post
Among Russia’s most costly mistakes when it invaded Ukraine was the expectation that it would dominate the electronic warfare part of the battle. Instead, Russia has stumbled and lost its way in the little-known realm of intercepting and jamming communications, an increasingly essential element of military success.
/jlne.ws/3kCqQy7

Exchanges, OTC and Clearing

DTCC Identifies Key Systemic Threats That Require Close Monitoring Amid Rapidly-Evolving Risk Landscape
DTCC
DTCC’s new white paper highlights interconnectedness risks that pose increased contagion threat.
As the nature of risk continues to evolve and black swan events occur with greater frequency, The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today published a new white paper highlighting key risks that deserve close attention as firms navigate a global financial industry that is increasingly intertwined.
/jlne.ws/3ORK0Op

BME Exchange’s MEFF launches xRolling® Stocks – the new stock futures contracts
BME
xRolling Stocks starts with underlying assets corresponding to the 55 most liquid securities on the Spanish Stock Exchange; The new xRolling® contract has perpetual expiration, like the FX Futures contracts in MEFF
/bit.ly/3MNn8h0

Cboe Global Markets Completes Acquisition of ErisX, Entering Digital Asset Market
Cboe
Ownership of ErisX provides Cboe with entry to digital asset spot and derivatives markets, including clearing and settlement; Opportunity to build comprehensive digital asset market data offering, create indices and explore further derivative products; Network of industry partners, intermediaries and market participants of all types expected to contribute to ongoing development of client-driven solutions to increase adoption of digital assets and further mature the market
/bit.ly/3FcDI7w

CME Group Declares Quarterly Dividend
CME Group
CME Group Inc., the world’s leading derivatives marketplace, today declared a second-quarter dividend of $1.00 per share. The dividend is payable June 27, 2022, to shareholders of record as of June 10, 2022.
/bit.ly/3KGpMUb

Tradeweb Reports Trading Volume for April 2022; Total Volume of $21.6 Trillion and Average Daily Volume of $1.09 Trillion
Tradeweb Markets Inc.
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today reported trading volume for April 2022. Total trading volume for April 2022 was $21.6 trillion (tn). Average daily volume (ADV) for the month was $1.09tn, an increase of 22.1 percent (%) year-over-year (YoY).
/jlne.ws/3sc0uHg

May 2022 Eligible Corporate Bonds, ETFs, and Stocks
CME Group
CME Clearing accepts corporate bonds, ETFs and stocks for Base and IRS
performance bond requirements. The May 2022 acceptable CUSIPs are now available via
CME DataMine. Please refer to CME’s website for further details regarding acceptable
collateral criteria, haircuts, and limits.
/bit.ly/37dfUUj

April 2022 figures at Eurex
Eurex
Interest rate derivatives showing strongest growth among listed derivatives (up 21 percent); Repo Market volumes increasing by 75 percent y-o-y; Notional outstanding in long-dated OTC interest rate swaps up 30 percent
Total traded derivatives contracts at Eurex grew by 14 percent in April, from 119.7 million to 136.8 million compared to the same month last year. Interest rate derivatives showed the strongest year-on-year growth, up 21 percent from 40.7 million traded contracts to 49.2 million, while equity index derivatives grew by 14 percent, from 51.2 million traded contracts to 58.2 million. Total contracts traded in equity derivatives grew again by 6 percent.
/bit.ly/3MOy1PM

Equity Derivatives: Introduction of Single Stock Futures, Equity Options and Single Stock Dividend Futures
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 23 May 2022: Introduction of seven Single Stock Futures, one Equity Option and three Single Stock Dividend Futures pursuant to Annexes A, B and D to the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland (hereafter: Contract Specifications) in Attachment 2.
/bit.ly/38OzbvM

Routine Collateral Haircut Review and Adjustment
HKEX
Please be advised that pursuant to Chapter 7 of the OTC Clearing Hong Kong Limited Clearing
Procedures, OTC Clear has completed a routine Collateral haircut review and decided to adjust
the haircut ratios on cash and non-cash Collateral as below tables with effect from 10 May 2022.
/bit.ly/3y7RbMm

Mandatory Practice Session For Rolling Out The Submission Functions Of The Electronic Communication
HKEX
Following the successful Phase 1 rollout of Electronic Communication Platform 2.0 (ECP 2.0) on download function (Ref No: CT/028/22), a mandatory Practice Session for Phase 2 rollout of submission functions will be arranged on 14 May 2022 (Saturday) for Exchange Participants (EPs) to verify their readiness.
/bit.ly/3w6jB6z

Intercontinental Exchange Reports April 2022 Statistics
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today reported April 2022 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.
/bit.ly/3MN2xJJ

Commitment of Traders Report
LME
This Notice informs Members that the LME has been made aware of inaccuracies in the Commitment of Traders Reports (“COTRs”) published for Business Date 14 April 2022. The LME is therefore reissuing corrected COTRs for 14 April 2022.
/bit.ly/3624ceb

Soyuz Bank became a member of the Finuslugi personal finance platform
MOET
On May 4, 2022, Soyuz Bank joined the personal finance platform of the Financial Services of the Moscow Exchange.
/bit.ly/3vIVQmr

Nasdaq April 2022 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for April 2022 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.
/bit.ly/3kFup6y

Nifty 50 based ETFs and Index Funds AUM in India crosses Rs. 2 Trillion
NSE
The Assets under management (AUM) of all the Exchange Traded Funds (ETFs) and Index Funds tracking Nifty 50 index in India has crossed a new milestone of Rs. 2 lakh crores (Rs. 2 trillion). The Nifty 50 index linked passive funds account for 40% share of total passive funds (ETFs and Index Funds) AUM in India. The popularity of passive funds linked to the Nifty 50 has grown consistently over the last 20 years, after humble beginnings in December 2001, when the first ETF was launched on the Nifty 50. Currently, there are 17 ETFs and 19 index funds in India and 7 ETFs trade in the international markets tracking the Nifty 50 – the bellwether index of India.
/bit.ly/3pckN5S

Fintech

Elon Musk Plans to Take Twitter Public a Few Years After Buyout; Tesla chief has been speaking to investors including private-equity firms about participating in deal
Cara Lombardo and Eliot Brown – WSJ
Elon Musk, who has agreed to take Twitter Inc. private in a $44 billion deal, has told potential investors he could return the social-media company to public ownership after just a few years. Mr. Musk said he plans to stage an initial public offering of Twitter in as little as three years of buying it, according to people familiar with the matter. The deal is expected to close later this year, subject to conditions including the approval of Twitter shareholders and regulators, the company has said.
/jlne.ws/3KGcaIz

Pay for account on Twitter? Elon Musk says may charge slight fee for commercial, government users; The Tesla billionaire, however, clarified that for ‘casual users’, Twitter will be ‘always free’
First Post
Elon Musk Wednesday said that Twitter may charge a slight fee for commercial and government users, indicating at what Twitter will be like after he purchased the microblogging site last month. The Tesla CEO, however, clarified that for “casual users”, Twitter will be “always free”. In another post on Twitter, Musk said: “Ultimately, the downfall of the Freemasons was giving away their stonecutting services for nothing.”
The latest posts by Musk hints that Musk seems to be wanting to end free Twitter, meanwhile, he also wants to expand the reach of the microblogging site beyond the ‘niche’ audience. Talking to reporters at the annual Met Gala in New York, Musk said: “Right now it’s sort of niche. I want a much bigger percentage of the country to be on it, engaging in dialogue.” Musk also said that he would make Twitter transparent about how tweets are promoted and wants the software of the site to be publicly available for critics.
/jlne.ws/3MSHmWv

Social-Media Startups Take Aim at Facebook. And Elon Musk.; HalloApp is among new companies founded by former Facebook and WhatsApp employees trying to reshape online discourse
Deepa Seetharaman – WSJ
Elon Musk isn’t the only entrepreneur with big ideas about how to fix social media. A growing number of startups are emerging to challenge the status quo. Many of them are rooted in their founders’ experiences within the industry’s leading giant, Facebook’s parent company, now known as Meta Platforms Inc. Nearly a decade ago, then-WhatsApp executive Neeraj Arora helped negotiate the $22 billion sale of the messaging startup to Facebook, in one of the largest technology deals in history.
/jlne.ws/3w2hC3s

Cybersecurity

Biden Issued Executive Order to Improve Nations Cybersecurity
Brett Lawrence and Whitney J. Jackson – National Law Review
On March 18, 2022, President Biden issued a letter to California Gov. Gavin Newsom (the “March 18th letter”) requesting that he secure California’s computer systems and critical infrastructure in light of recent Russian cyberattacks against Ukraine. President Biden advised Newsom to gather his leadership team to discuss California’s cybersecurity and address several fundamental questions, including whether California’s Public Utility Commissions (or other California agencies) set minimum cybersecurity standards for California’s critical infrastructure.
/jlne.ws/3vWgFta

Many CEOs Are Using These Ridiculously Simple Passwords, Cybersecurity Report Shows
Tom Hale – IFLScience
A dizzying number of the world’s CEOs and business owners are using ridiculously weak and dangerously simple passwords, according to a new cybersecurity report.
New research by NordPass, a password manager, and independent researchers has revealed that passwords such as “123456,” “12345,” “password,” “123456789,” and “qwerty” are among the most hacked passwords used by CEOs.
/jlne.ws/3vYm82O

White House to boost support for quantum technology while boosting cybersecurity
Jarrett Renshaw – Reuters via Yahoo Finance
The White House on Wednesday will announce a slate of measures to support quantum technology in the United States while laying out steps to boost cybersecurity to defend against the next generation of supercomputers.
The U.S. and other nations are in a race to develop quantum technology, which could fuel advances in artificial intelligence, materials science and chemistry. Quantum computers, a main focus of the effort, can operate millions of times faster than today’s advanced supercomputers.
/jlne.ws/3KIzYvD

NIST seeks public comment on 5G cybersecurity guidance
Madeline Lauver – Security Magazine
The National Institute of Standards and Technology (NIST) has created an initial draft on guidance for 5G cybersecurity.
As organizations transition from 4G to 5G infrastructure, security leaders are tasked with protecting their communities from cyber actors taking advantage of loopholes opened by the evolving technology. The draft guidance aims to outline steps cybersecurity professionals can take to ensure organizational cybersecurity during and after the 5G transition.
/jlne.ws/3s7Gci4

5 Cybersecurity Threats That Aren’t Going Away
eWEEK
Last year saw the highest average cost of a data breach in 17 years, with the cost rising from $3.86 million to $4.24 million on an annual basis, according to the IBM Cost of a Data Breach Report. Clearly, organizations must have the correct people and processes in place to prepare for unrelenting cyber attackers.
As CIOs, CISOs, CTOs, and IT managers think about boosting cybersecurity strategies, they should consider what happened in the year prior and what might potentially get worse. Below are some of the cybersecurity threats that remain stubbornly consistent – and must be guarded against at all times.
/jlne.ws/3w5D5sg

Cryptocurrencies

Genesis to Join International Swaps and Derivatives Association; GGC International Limited to become Primary Member of ISDA
Marc Yaklofsky – Business Wire
Genesis, a digital asset industry pioneer and the premier institutional crypto derivatives provider, today announced that GGC International Limited has joined the International Swaps and Derivatives Association (ISDA) as a Primary Member. Genesis, through its GGC International Limited entity, was one of the first participants in the crypto derivatives market and enters into over-the-counter derivatives referencing a broad range of digital asset underliers. Its expert team of trading professionals facilitates transactions for both crypto-natives and traditional financial market participants who want to enter this unique market. As a member of ISDA, Genesis will continue to help shape the direction of the digital asset derivatives markets towards making them safe and efficient for all participants.
/jlne.ws/3w7G4R4

Coinbase Ends M&A Talks With Brazilian Crypto Firm 2TM; The deal would have furthered Coinbase’s presence abroad; Coinbase remains committed to Brazilian market: spokesperson
Hannah Miller and Rachel Gamarski – Bloomberg
Coinbase Global Inc. and 2TM Participacoes SA scrapped talks over a possible purchase by the exchange of the Brazilian cryptocurrency brokerage, people familiar with the matter said. The negotiations, which 2TM had hired JPMorgan Chase & Co. to advise in, could have resulted in a controlling acquisition or a minority stake sale. 2TM declined to comment on the deal.
/jlne.ws/3vFS6BR

Crypto Lender Nexo Issues $3 Million NFT-Backed Loan; Issue one of the biggest NFT-backed loans in crypto history; Two CryptoPunks Zombies were used as collateral for financing
Muyao Shen – Bloomberg
Crypto lender Nexo says it has issued one of the largest loans backed by NFTs in crypto’s history and that two rare CryptoPunks Zombies were used as collateral. Nexo said the 1,200 Ether loan, worth more than $3.3 million, was issued to an unnamed borrower who put up the Zombie NFTs as collateral. The 60-day loan carries an annualized interest rate of 21%.
/jlne.ws/38ScsPi

Politics

Biden nominates new top US general in Europe
Barbara Starr – CNN
Gen. Christopher Cavoli, the current head of US Army forces in Europe and Africa has been nominated by President Joe Biden to serve as the top US general in Europe as head of US European Command, Secretary of Defense Lloyd Austin announced Tuesday. If confirmed, Cavoli will take charge of some 100,000 US troops from all services stationed in Europe as Russia continues to carry out its war on Ukraine.
/jlne.ws/3OUdb37

IRS Chief Pushes Congress for Law Change on Land-Rights Tax Deals; Rettig says abusive syndicated conservation easement transactions persist despite stepped-up enforcement
Richard Rubin – WSJ
Internal Revenue Service Commissioner Charles Rettig sought congressional help Tuesday in stopping land-rights deals that the government views as abusive transactions. Mr. Rettig said so-called syndicated conservation easements have continued despite years of stepped-up IRS enforcement that now includes guaranteed audits, attempts to assert civil fraud penalties, litigation and criminal investigations.
/jlne.ws/3w9VV1w

BP’s bumper earnings stoke new calls for windfall tax; Oil major reports highest underlying quarterly profit in more than 10 years
Tom Wilson and Jim Pickard – FT
BP recorded its highest quarterly earnings in more than a decade on the back of soaring prices for hydrocarbons and “exceptional” trading revenues, prompting renewed calls for higher taxes on oil and gas companies to offset surging energy costs for consumers. The group’s underlying profit on a replacement cost basis, the measure most closely tracked by analysts, rose to $6.2bn in the first three months of the year, the highest since 2008 and more than double the $2.63bn recorded a year earlier.
/jlne.ws/3ye3irk

Vienna Must End Its Long Waltz with Putin; The European Union should demand that its smaller member states come off the fence in the conflict with Russia. That starts with Austria.
Andreas Kluth – Bloomberg
Critics from Ukraine to NATO have of late been chastising Germany for reacting too slowly and timidly against Russian aggression. Fair enough. Germany, as the largest economy in the European Union, bears disproportionate responsibility in helping to coordinate the Western response against the Kremlin’s atrocities and lies. But the attention given to Berlin obscures the not-so-helpful role played by several smaller European countries.
/jlne.ws/3KHjvI3

Hungary Voices Objection to EU Sanctions Plan on Russian Oil
Zoltan Simon – Bloomberg
The European Union’s plan to completely ban Russian crude oil falls short as it threatens Hungary’s energy security, a spokesman for Prime Minister Viktor Orban’s government said. Hungary and Slovakia, which are heavily reliant on Russian energy, will be given until the end of 2023 to comply with sanctions, a year later than other member states, according to people familiar with the matter. However, Zoltan Kovacs, a spokesman for the Hungarian government, said Hungary’s concerns remained unresolved.
/jlne.ws/3ya4QCr

Russia’s war tests Europe’s moral mettle as much as its economy; Governments need to cushion the impact on the cost of living but energy subsidies are not the answer
Martin Wolf – FT
How should the EU manage the economic costs of Vladimir Putin’s war? That is not the same as minimising those costs. This is a war, one on which the future of Europe, perhaps of democracy itself, will depend. In such times, the aim of economic policy is to support the war effort. Policy should seek to maximise costs to the aggressor relative to those to the EU, particularly to its most vulnerable citizens. How should this be done?
/jlne.ws/3FctR1u

Regulation

SEC staffs up to police crypto
Jennifer Schonberger – Yahoo Finance
The Securities and Exchange Commission (SEC) is beefing up its personnel to protect investors in crypto markets and from cyber attacks. The SEC will add 20 new staff members to a unit that’s been recently renamed the crypto assets and cyber unit, formerly the cyber unit, increasing the staff by two-thirds to 50 people. The action marks the latest sign that the SEC is serious about policing wrongdoing in crypto markets.
/jlne.ws/3kDOzOh

SEC investigating Chinese ride-hailing group Didi’s $4.4bn US IPO; High-profile founder of tech company makes social media posts invisible as scrutiny intensifies
Ryan McMorrow – FT
The US Securities and Exchange Commission is investigating Chinese ride-hailing giant Didi Chuxing’s botched New York initial public offering, adding to the company’s regulatory woes after Beijing launched a national security probe into the group last year.
/jlne.ws/3FctJiw

City regulation post-Brexit will need greater accountability; It would be perverse to replace the supposed democratic deficit of the EU with another homegrown one
Helen Thomas – FT
What’s odd about the wrangling over how the UK should regulate financial services after Brexit is that the one thing most people agree on seems in danger of falling through the cracks. The Queen’s Speech next week is expected to include a financial services bill that will set out the framework for how the industry should be regulated after Brexit.
/jlne.ws/3Fgj9Hb

Commissioner Pham to Participate in a Fireside Chat at Risk.net Cryptocurrency Trading Forum USA
CFTC
Commissioner Caroline D. Pham will be interviewed by Michelle Bond, CEO at the Association for Digital Asset Markets (ADAM), in a fireside chat titled “A Regulatory Perspective,” at the Risk.net Cryptocurrency Trading Forum USA
/jlne.ws/3LI0u9O

FCA makes senior hires
FCA
As the FCA continues its transformation, it has recruited three experienced individuals to its senior leadership team.
/jlne.ws/3Fdqt6t

Investing and Trading

How to Invest When Both the Stock Market and Bonds Are Falling; The best protection from this volatility is to have a long-term financial plan and stick with it, advisers say
Anne Tergesen and Veronica Dagher – WSJ
Chances are your portfolio is taking a beating right now as stock and bond prices fall together for the first time in decades. Yet the best strategy in moments of volatility like this one, financial advisers say, is also one of the least satisfying: Do nothing. Doing nothing right now is easier said than done, with anxiety rising along with inflation and interest rates, and the global economic uncertainties caused by the war in Ukraine and the third year of the pandemic only growing.
/jlne.ws/3Fg5Eaz

Rich Investors Are Still More Likely to Buy the Dip Than Sell It
Scott Carpenter – Bloomberg
Almost a third of high-net-worth individuals would add more to their existing investments if markets declined further, while only 20% would reduce their exposure, according to UBS Group AG. Beyond those ready to buy the dip, another 30% would shift to different sectors while 18% would make no changes if markets kept going down, according to survey of more than 2,500 investors with at least $1 million in assets by the wealth management unit of the Zurich-based bank.
/jlne.ws/3LKdmMB

Environmental, Social and Corporate Governance

Shale Giants Dump Oil Hedges as Losses Spiral Toward $42 Billion
Devika Krishna Kumar and Paul Takahashi – Bloomberg
Companies including Pioneer Natural Resources Co. and EOG Resources Inc. are poised to post historic profits when they report earnings this week. But those windfall earnings would be even higher if it weren’t for massive accounting losses from hedges that protect against falling prices while limiting upside potential. Producers in the aggregate are looking at about $42 billion in oil and gas hedging losses through 2023, according to BloombergNEF calculations of data from last year.
/jlne.ws/3LL4oia

Cash Keeps Flowing Into ESG While Markets Tank; Even after the worst April for equities in decades, ESG-labeled funds are drowning in cash. But maybe not for long.
Tim Quinson – Bloomberg
Even with the worst April slump in the S&P 500 since 1970, money keeps pouring into ESG-labeled funds at a seemingly unrelenting pace. More than $1.2 billion went into ESG-focused exchange-traded funds last week as the S&P 500 dropped 3.8%, bringing the index’s full-month decline to 8.8% on concerns about inflation, rising interest rates and Russia’s war on Ukraine. So far this year, ESG funds have attracted more than $22 billion, including almost $5 billion for U.S. offerings led by BlackRock Inc.-managed funds, according to data compiled by Bloomberg.
/jlne.ws/3LIMRa9

Top Sea Polluters Beg for Climate Rules That No Rival Can Avoid; Carriers seek global emissions rules to even field, UN says; Decarbonizing shipping may require $1.9 trillion by 2050
Augusta Saraiva and Olivia Rockeman – Bloomberg
The ocean shipping industry, among the world’s biggest polluters, is asking a key regulator to overhaul its emissions directives so that all carriers are working off the same rulebook as they make the expensive changes needed to cut output of harmful carbons.
/jlne.ws/3OWYsV1

India expands coal mining to beat power crunch as heatwave blazes; Surging demand after Covid plus supply chain bottlenecks has left power plants short of fuel
Benjamin Parkin and Chloe Cornish – FT
India is boosting coal production to record highs in an effort to overcome a fuel shortage that has strained power supply, leading to blackouts during a searing heatwave on the subcontinent. Officials and analysts expect India to bump up coal production after the supply crunch prompted fears about the country’s energy security. Care Edge, a ratings and research group, said it expected India to mine more than 800mn tonnes of coal in the financial year that started in April.
/jlne.ws/3vExJVR

Institutions

BNP Takes Credit Suisse’s Spot at the Stock Trading Table; The French bank has shown consistently better equities revenue over the past year.
Paul J. Davies – Bloomberg
BNP Paribas SA has long sought a spot at the top table of global stock-trading banks. Its push is finally starting to pay off. The French bank has overtaken Swiss rival Credit Suisse Group AG with consistently better equities revenue over the past year, and it’s hot on the heels of Britain’s Barclays Plc, which has also been ploughing resources into this business.
/jlne.ws/3MSMY3o

BlackRock Seeks Up to $4 Billion for New Private Credit Fund; Follows first Global Credit Opportunities fund in 2019; Fundraising already in the works with $2 billion raised
Eliza Ronalds-Hannon – Bloomberg
The world’s largest asset manager is looking to raise about $4 billion for the latest vintage of its Global Credit Opportunities fund, as the market for private credit instruments swells to more than $1 trillion. BlackRock has already raised about $2 billion — half of the targeted amount — for the new private credit fund, according to a person with knowledge of the matter, who asked not to be identified discussing private information.
/jlne.ws/3vF6DOo

AIG Boosts Profit as Catastrophe Losses Narrow, Premiums Are Increased; Prudential swings to a loss partly as a result of rising interest rates
Leslie Scism – WSJ
Global insurance conglomerate American International Group Inc. posted strong gains in first-quarter profit, benefiting from reduced catastrophe losses, growth in new business and premium-rate increases. Another of the biggest publicly traded insurers, Prudential Financial Inc., swung to a $31 million net loss for the quarter from a year-earlier $2.83 billion net profit, while its closely watched operating income fell 25%, to $1.22 billion. The life insurer booked net realized investment losses and related charges reflecting rising interest rates during the period, while the year-earlier quarter included substantial realized investment gains, among other year-over-year differences.
/jlne.ws/3LK46rM

UBS’s Reason for Firing Veteran Banker Found ‘Defamatory’
Sridhar Natarajan – Bloomberg
UBS Group AG’s reason for dismissing veteran investment banker Jim Boland was defamatory, an arbitration panel found. A Financial Industry Regulatory Authority panel of independent arbitrators said that the reason for Boland’s exit from UBS should be changed to “voluntary,” and the termination determination should be deleted in its entirety, according to a filing.
/jlne.ws/3vHJz1y

Tiger Global slumps more than 40% in first four months of 2022; Tumble in tech stocks deals fresh blow to Chase Coleman’s flagship hedge fund
Harriet Agnew, Robin Wigglesworth and Laurence Fletcher – FT
Tiger Global’s flagship hedge fund was dealt a fresh blow in April and is down more than 40 per cent this year, in the latest sign of how star investors who rode the big rally in tech stocks have been wrongfooted by a sharp pullback. The losses marked a dramatic fall from grace for Tiger Global’s founder Chase Coleman, who has emerged as one of the world’s most prominent growth investors after founding the firm in 2001.
/jlne.ws/3FekNsK

Tiger is suffering one of the biggest hedge fund drawdowns in history; Chase Coleman’s investment firm has been hammered in 2022. Can it survive?
Robin Wigglesworth – FT
Yikes. Tiger Global got smoked again last month. Kudos to Bloomberg for getting the scoop, but here is the FT’s story: Tiger Global’s flagship hedge fund was dealt a fresh blow in April and is now down more than 40 per cent this year, in the latest sign of how star investors who rode the big rally in tech stocks have been wrongfooted by a sharp pullback.
/jlne.ws/3sbltdr

BlackRock targets ‘industrial renaissance’ with new ETFs; The two iShares ETFs are the manager’s first retail products to offer exposure to blockchain and agriculture technologies
Brian Ponte – FT
BlackRock has launched two exchange traded funds that invest in areas that the firm thinks will accelerate the economy. The iShares Blockchain and Tech ETF, seeks to track the NYSE FactSet Global Blockchain Technologies index and is composed of companies that are involved in the “development, innovation and utilisation of blockchain and crypto technologies”, a filing says. The ETF does not invest directly in any cryptocurrencies or cryptocurrency derivatives.
/jlne.ws/3KC8pUI

Wellness Exchange

Hong Kong Plots Different Covid Path to Xi’s Zero Tolerance; City’s elite become more assertive over reopening the city; Officials still bound by China’s rigid Covid Zero policy
Kari Soo Lindberg and Richard Frost – Bloomberg
As Chinese cities such as Shanghai and Beijing stick ever more closely to Covid Zero principles, no matter the economic cost, Hong Kong is methodically moving toward opening up to the rest of the world. On Tuesday, the government brought forward a plan to ease social distancing rules, allowing people to go mask-free when exercising outdoors and doubling the maximum number of diners per table to eight. That came two days after Hong Kong ended a two-year ban on visits by all non-residents and eased some restrictions on inbound flights.
/jlne.ws/3vHuRaQ

The Vanishing Variants: Lessons from Gamma, Iota and Mu; Studying the coronavirus variants that have faded away could help us prepare for what comes next, scientists say.
Emily Anthes – NY Times
In early 2021, scientists in Colombia discovered a worrisome new coronavirus variant. This variant, eventually known as Mu, had several troubling mutations that experts believed could help it evade the immune system’s defenses. Over the following months, Mu spread swiftly in Colombia, fueling a new surge of Covid-19 cases. By the end of August, it had been detected in dozens of countries, and the World Health Organization had designated it a “variant of interest.”
/jlne.ws/3FcIzFy

Regions

Australia’s $142 Billion Wealth Fund to Curb Global Investment
Matthew Burgess and Erik Schatzker – Bloomberg
Australia’s A$201 billion ($142 billion) sovereign wealth fund plans to seek more local investments and trim exposure to listed companies as geopolitical tensions rise and markets get jittery over rate hikes. The Future Fund is seeking more illiquid assets and plans to use more active strategies to generate returns in expectation that rising borrowing costs will eventually tip economies into recession, said Chief Executive Raphael Arndt. Continued higher inflation will also pose a problem for investors, he said.
/jlne.ws/3kWpq1D

Don’t Fret for Hong Kong’s Dollar Peg Just Yet; The currency system is doing what it’s supposed to do, and there’s little sign of stress so far.
Matthew Brooker – Bloomberg
Hong Kong has undergone wrenching changes that were all but unimaginable little more than two years ago. The remaking of the city in the wake of pro-democracy protests in 2019 has touched upon areas such as freedom of speech and the legal system that are pillars of its standing as an international financial center. Yet if there is one aspect of this special administrative region of China that looks unlikely to change anytime soon, it is the currency peg to the dollar.
/jlne.ws/3KJvxAL

China’s independent refiners start buying Russian oil at steep discounts; Purchases come as Chinese state-owned commodity traders shy away to avoid sanctions
Harry Dempsey and Sun Yu – FT
China’s independent refiners have been discreetly buying Russian oil at steep discounts as western countries suspend their own purchases and explore potential embargoes because of the war in Ukraine. An official at a Shandong-based independent refinery said it had not publicly reported deals with Russian oil suppliers since the Ukraine war started in order to avoid attracting scrutiny and being hit by US sanctions.
/jlne.ws/3kGxByE

India Wants Russia to Discount Its Oil to Below $70 a Barrel
Debjit Chakraborty – Bloomberg
India is trying to get deeper discounts on Russian oil to compensate for the risk of dealing with the OPEC+ producer as other buyers turn away, according to people with knowledge of the matter.
/jlne.ws/3vFNHim

Hong Kong Wealth Fund Hit by $7 Billion Quarterly Loss
Kiuyan Wong and Olivia Tam – Bloomberg
Hong Kong’s wealth fund suffered a HK$55 billion ($7 billion) loss in the first quarter as stocks and bonds declined, opening a difficult year for the financial hub as it seeks to recover from years of economic turmoil. The Exchange Fund, managed by the Hong Kong Monetary Authority, lost HK$34 billion on its portfolio of domestic and foreign stocks in the first three months of 2022, HKMA’s deputy chief executive Howard Lee told lawmakers Tuesday. Bonds lost HK$34.7 billion, while foreign exchange earned HK$13.7 billion. The quarterly investment income loss was the biggest since a HK$112 billion shortfall in the first quarter of 2020.
/jlne.ws/3wn5Bpx

China’s Central Bank Pledges ‘Normalized’ Supervision for Tech Platforms
Bloomberg News
China’s central bank said it will implement “normalized” supervision on the financial activities of online platform companies, reiterating comments from top leaders last week. The People’s Bank of China held a meeting on April 29 to discuss implementing financial support for the economy and policies to boost the healthy development of technology platform companies, it said in a statement on Wednesday.
/jlne.ws/3FeentE

EU Targets Russia’s Global Oil Trade With Shipping Sanctions
Nikos Chrysoloras, John Follain, Alberto Nardelli and Alaric Nightingale – Bloomberg
The European Union is seeking to go beyond an import ban on Russian crude, targeting insurers in a move that could dramatically impair Moscow’s ability to ship its oil anywhere in the world. The bloc is proposing to ban European vessels and companies from providing services — including insurance — linked to the transportation of Russian oil and products globally as part of its new sanctions package, according to officials and a draft document seen by Bloomberg. It’s a detail that matters because 95% of the world’s tanker liability cover is arranged through a London-based organization that has to heed European law.
/jlne.ws/3MPFI8h

Yorkshire gold dealer helped launder £266mn in cash, trial told; Suspicions roused after ‘substantial amounts’ deposited into Fowler Oldfield’s bank account
Jane Croft – FT
A Yorkshire gold dealership at the centre of one of Britain’s biggest alleged money-laundering operations deposited “more than a million pounds in used notes” to NatWest bank on some days, a trial was told on Tuesday. The trial heard that from January 2014 to September 2016, more than £266mn in cash and unknown deposits were paid into the NatWest bank account of Bradford-based gold dealer Fowler Oldfield. Prosecutor Nicholas Clarke QC claimed to the court that it was “blindingly obvious” that the cash being couriered to Fowler & Oldfield by people using plastic carrier bags, sports bags and holdalls came from criminal activities.
/jlne.ws/3FegHkp

Miscellaneous

DraftKings, FanDuel Battle Tribes for Control of California Sports Betting; Measure seeking to allow online sports wagering will appear on the November ballot
Christine Mai-Duc and Katherine Sayre – WSJ
A measure seeking to legalize online sports betting backed by three of the nation’s largest online gambling companies has qualified for California’s November ballot, setting up a costly fight with the state’s tribes over control of a market researchers say could be worth billions. A coalition led by FanDuel Group, DraftKings Inc. and BetMGM said Tuesday it had submitted more than 1.6 million signatures in support of their online gambling measure, well above the roughly one million required to place it before voters this fall.
/jlne.ws/3KJKGSx

BuzzFeed Names Squarespace Finance Chief Marcela Martin as Its New President; Her responsibilities will include supporting the digital-media company’s acquisitions strategy
Alexandra Bruell – WSJ
BuzzFeed Inc. said Squarespace finance chief Marcela Martin would become its new president, joining a digital-media business that has lost half of its market value since it went public last year. Ms. Martin, who will start in her new role this summer, will report to Chief Executive Jonah Peretti and oversee a team that includes BuzzFeed’s legal, financial and human resources leaders, the company said Tuesday.
/jlne.ws/3kEF952

U.K. Finance Worker Pay Spikes 31% Since Start of Covid Pandemic; IFS study suggests trend will widen wealth inequality gap; Researcher finds few reasons for inflation-busting increases
Reed Landberg – Bloomberg
Britain’s financial services workers are enjoying wage raises at double the rate for the rest of the population, widening the gap between the rich and the poor at a time when the country is suffering biggest squeeze in living standards on record. The Institute for Fiscal Studies calculated that average monthly pay in finance was 31% higher in February than at the end of 2019, above the 14% rate prevailing across all sectors. The median increase was lower still, implying that growth was concentrated among the highest earners in banking and insurance.
/jlne.ws/3LIMgoV

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