Wall Street’s Shady Swaps Spark Pushback From Regulators; ICE buying MOVE indices

Aug 6, 2019

First Read

Hits & Takes
JLN Staff

The OCC cleared 31,288,394 options contracts yesterday – a record for 2019. (The grand total with futures was 31,968,074 contracts.)~SD

The yield on 10-yr Treasuries is 1.72% compared to 3.2% at the start of November 2018.~SD

Han Keun Kim was fined $60,000 and permanently banned from CME Group platforms for entering E-mini Nasdaq 100 futures orders with the intent to cancel or modify the order to avoid execution. Daesoon Park was fined a total of $140,000, ordered to disgorge $2,992 in trading profits, and permanently banned from CME Group platforms for spoofing in copper and gold futures on COMEX and spoofing in natural gas and crude oil futures on NYMEX.~SD

In more fallout for the high-end retail industry, Barneys will close its Chicago stores after filing for bankruptcy. ~SR

On Thursday, Troop 117B is holding an Eagle Court of Honor for Robby Lothian in Elmhurst.~JJL

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The Spread – Moving on Up
JohnLothianNews.com
On the heels of LSEG’s move to buy Refinitiv, ICE announced it would be purchasing BAML’s MOVE family of indices. This week’s episode of “The Spread” takes a look at this fixed income volatility development.
Watch the video and see the stories referenced here »

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Trading Technologies’ crypto platform shutting down as it failed to attract retail users
Yogita Khatri – The Block Crypto
Trading software provider Trading Technologies (TT) has decided to close its cryptocurrency trading platform, TT Crypto; The platform couldn’t attract a sufficient retail user base it once aimed for; The closing comes into effect this Friday at 5:00 pm EST
Trading software provider Trading Technologies (TT) has decided to pull the plug on its cryptocurrency trading platform, TT Crypto, as it couldn’t attract a sufficient amount of retail users.
/jlne.ws/2yG4CTA

*****This is a surprise to me.~JJL

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SEC Chairman Clayton Announces Event for Main Street Investors in Chicago
SEC
Securities and Exchange Commission Chairman Jay Clayton today announced an event for Main Street investors to be held in Chicago on Thursday, August 15.
/jlne.ws/2OHJJCF

*****Right next door, I think I have to attend.~JJL

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Monday’s Top Three
Yesterday’s top story was the NY Post’s NYSE floor traders are facing job extinction. The regulatory kerfuffle over LedgerX’s potential bitcoin futures offering still has readers intrigued, as Bloomberg’s Premature Launch of Bitcoin Futures Turns Ugly for LedgerX Exchange was our second most clicked link. In third was another NYSE-related story, NYSE Aims to Speed Up Trading With Core Tech Upgrade.

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Lead Stories

Wall Street’s Shady Swap Trades Spark Pushback From Regulators
Benjamin Bain, Silla Brush, and Claire Boston – Bloomberg
Authorities see rise in questionable trades that move prices; Reforms industry announced in March fail to appease watchdogs
Wall Street’s push to clean up a $10 trillion corner of the derivatives market is getting poor reviews from an important audience: global financial regulators.
/jlne.ws/2YMFSb4

ICE expands data business by buying MOVE indices; Purchase of volatility benchmarks allows exchange group to target growth of fixed income ETFs
Richard Henderson – FT
Intercontinental Exchange will acquire Bank of America’s MOVE indices in the latest example of an exchange group expanding its data business after rival operator the London Stock Exchange Group agreed to purchase Refinitiv.
/jlne.ws/2YJM2sl

***The Trade News has the story here.

Fed to Create Payments System to Speed Money Transfers; Move will provide a public option to another real-time network built by big banks
Lalita Clozel – WSJ
The Federal Reserve plans to develop a faster payments system for banks to exchange money, providing a public option to another real-time network built by big banks.
/jlne.ws/2OHHijv

The Road Ahead – IQ August 2019
International Swaps and Derivatives Association
As milestones go, a consultation on technical adjustments to fallback rates may not be the most obvious. In fact, it’s a big one. With the latest consultation now closed, work can move forward on finalising and implementing those new fallbacks into derivatives contracts, reducing the systemic threat of a permanent discontinuation of LIBOR and other interbank offered rates (IBORs).
/jlne.ws/2yDMZnz

Wall Street split over stock exchange’s 4-millisecond trading ‘speed bump’
Declan Harty – S&P Global
Wall Street is divided over the latest plan to put speedy traders on notice. Three years ago, IEX Group Inc. ignited a debate across the U.S. stock market when it proposed to launch a national securities exchange that featured a 350-microsecond delay known as a speed bump. The mechanism was designed to level the playing field between slow-moving market participants and faster traders who use sophisticated algorithms and technologies to move in and out of their positions at breakneck speeds.
/jlne.ws/2OFXhOQ

US Treasury officially labels China a currency manipulator; Decision comes after Beijing let renminbi fall through key level
Demetri Sevastopulo and Colby Smith – FT
The Trump administration has officially labelled China a “currency manipulator” after the Chinese central bank allowed the renminbi to fall below a key threshold, marking a dramatic escalation in the trade war between the two economic powers.
/jlne.ws/2yFnySB

China Retaliation Is ’11’ on Scale of 1 to 10, Wall Street Warns
Felice Maranz – Bloomberg
BMO asks how much further the yuan will be allowed to fall; Morgan Stanley’s Graseck sees investors’ eyes on bank margins
Analysts continued to warn about the dangers of an escalating trade war on Monday, as China moved to strike back at the U.S., hitting U.S. stocks and boosting Treasuries.
/jlne.ws/2yIjote

Asset managers farm out trading as costs and complexity climb
Thyagaraju Adinarayan, Helen Reid – Reuters
It’s 10 o’clock at night, and Benjamin Arnold’s day is just beginning. The former Goldman Sachs trader is gearing up to trade equities in Asia from his small office thousands of miles away in Park City, Utah.
/jlne.ws/2TemIpw

Being A Good Corporate Citizen Is Good For Your Bottom Line
Grant Freeland – Forbes
Leaders who care about their organization’s reputation and successónot to mention their ownóneed to understand the following family of acronyms: CSR, ESG, SDG, TSI. The topics they cover are serious and important. Many executives will be judged by how well they respond to the issues the acronyms represent.
/jlne.ws/2OJ1mlv

July Was The Hottest Month On Record, New Data Shows; “July has re-written climate history,” said the head of the World Meteorological Organization.
Nina Golgowski – Huffington Post
Global temperatures made July the hottest or equal to the hottest month in recorded history, new data shows ó just after June was ruled the hottest June ever recorded.
/jlne.ws/2OJfkUl

Why Is the US Not Yet a Leader in Crypto Regulation?
Max Yakubowski – Cointelegraph
Regulatory frameworks for Bitcoin (BTC) and other cryptocurrencies have developed differently around the globe, ranging from outright bans to so-called “crypto-friendly” legislation. Despite being an economic leader, many within the crypto industry argue that the United States in particular has not yet gained a leading position among governments actively working to regulate this new technology.
/jlne.ws/2OJeZkx

Yuan’s Slide Is Gold Standard Moment for China; The decision to let the currency weaken beyond 7 to the dollar echoes previous turning points of historic global significance.
George Magnus – Bloomberg
China allowing the yuan to slide below 7 to the dollar is a watershed moment for currency markets that’s symbolically equivalent to the U.S. and other countries abandoning the gold standard in the interwar period, or the collapse of the postwar Bretton Woods system of fixed exchange rates four decades ago. The implications for the global economy are equally significant.
/jlne.ws/2OIIzqj

Relying on liquidity risks leaving investors in hot water; Economic and political headwinds are poised to frustrate profitable strategies
Mohamed El-Erian – FT
Long spoiled by the comforting support of central banks, investors are getting a feel for what it would be like when economic concerns, rather than central banks’ monetary policies, take a bigger role in determining asset prices.
/jlne.ws/2ODXNNg

Securing a Wall Street job now is harder than ever: insiders
Kevin Dugan – NY Post
The US labor market may be booming ó but it’s been a bloodbath on Wall Street. A recent wave of layoffs from some of the biggest banks is making it harder than ever to get a job on Wall Street, recruiters and other insiders say.
/jlne.ws/2OFWrBG

Some Wall Street workers face pay slump in 2019: report
Reuters
Many Wall Street workers will see their pay stay flat or decline this year, as big banks and money managers continue to cut costs, according to a report on Tuesday by compensation consultancy Johnson Associates.
/jlne.ws/2OEh5Cf

Robots Are Solving Banks’ Very Expensive Research Problem; Banks can’t always afford to put analysts on the ground in developing nationsóabout the only places where investors can get yield right now.
Charlotte Ryan – Bloomberg
As lawmakers in Brasilia debated a controversial pension overhaul for months, a robot more than 5,000 miles away in London kept a close eye on all 513 of them. The algorithm, designed by technology startup Arkera Inc., tracked their comments in Brazilian newspapers and government web pages each day to predict the likelihood the bill would pass.
/jlne.ws/2OJd53n

Former Fed Chiefs Unite in Call on Trump to End Powell Threats
Sarah McGregor – Bloomberg
Four former Federal Reserve chiefs made a joint plea for the central bank to be able to operate without political pressures or the threat of removal of its leaders, responding to President Donald Trump’s persistent attacks on current Chairman Jerome Powell.
/jlne.ws/2OJ1QYR

Exchanges, OTC and Clearing

Intercontinental Exchange Reports July Statistics; Average Daily Volume up 16% y/y and Open Interest up 6% y/y
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported July trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/31fCTp2

Intercontinental Exchange Announces Agreement to Acquire the Merrill Lynch Option Volatility Estimate (MOVE) Index from Bank of America Merrill Lynch
ICE
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced it has entered into an agreement to acquire a family of fixed income volatility indices, including the prominent Merrill Lynch Option Volatility Estimate (“MOVE”) family of indices, from Bank of America Merrill Lynch.
/jlne.ws/31jd2wu

Cboe Global Markets Reports July 2019 Trading Volume
Cboe
Futures ADV up 7% over July 2018; Options ADV up 5% over July 2018
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported July monthly trading volume.
/jlne.ws/2OEi3OT

NYSE’s trading system gets set for speedy make over
The Block Crypto
The iconic New York Stock Exchange is at long last upgrading the systems of its flagship trading venue, according to a report by The Wall Street Journal. As per the report, the upgrade ó dubbed Pillar ó will be implemented over the next three weeks in different phases. The upgrade, which aims to improve processing speed for NYSE-listed stocks, could help it regain market share among the crowded market for alternative trading systems and exchanges.
/jlne.ws/2yHrv9o

Watch out for 12 August: Eurex Repo introduces new opportunities to the market
Eurex
As per 12 August Eurex Repo, the leading provider for international financing in the secured money market business, introduces new trading opportunities to customers:
/jlne.ws/2yJxxGB

STOXX introduces EURO STOXX 50 ESG Index
Deutsche Boerse Group
STOXX Ltd., the operator of Deutsche Boerse Group’s index business and global provider of innovative tradable index concepts, has launched an ESG version of the flagship EURO STOXX 50. The index has been licensed to UBS Asset Management as the underlying for an ETF listed in Frankfurt today.
/jlne.ws/2OHWBIS

ASX Group Monthly Report – July 2019
ASX
/jlne.ws/2OHlyEk

Proposed NSE IFSC – SGX Connect receives regulatory dispensations
SGX
Singapore Exchange (SGX) and the National Stock Exchange of India (NSE) have received a set of approved regulatory dispensations from their statutory regulators, obtaining their support on a joint proposal that SGX and NSE submitted earlier this year.
/jlne.ws/2OHbzP8

Cboe Europe Wants To Be One-Stop Shop For Closing Cross
MarketsMedia
David Howson, chief operating officer at Cboe Europe said the exchange is not looking to undermine the price forming process in the listing market closing auction but wants to give customers more choice after continuous trading has ended.
/jlne.ws/2OGGKdB

Fintech

Here is how the fintech startups use artificial intelligence to ruffle lending market
Kubra Fatima – CNBC
With an efficient credit model and smart use of technology, India’s financial technology (fintech) startups are cashing in on customers outside the purview of traditional financial institutions. These fintech firms are using Artificial Intelligence (AI) to automate lending process and reducing risk by mapping previous payments behaviour of borrower.
/jlne.ws/2T8FGxH

Rival Systems Releases Real-Time Margin For Enterprise Risk Clients
Rival Systems
Rival Systems Rival Systems Rival Systems (Rival), an award-winning provider of trading and risk management software, today announced the addition of real-time margin within its enterprise risk management solution. The new functionality will allow clients to proactively monitor margin for futures and options positions, as well as net liquidation value across all of their accounts.
/jlne.ws/31mjnXY

The Desktop Lives On
Jennifer Milton, Burton-Taylor – TABB Forum
Automation of the trading process has resulted in surging demand for direct data feeds, but the traditional desktop data terminal business is alive and well. The number of screens used globally increased by 3.1% in 2018 and the total number of desktops is expected to top 1.6 million users in 2019, with continued growth ahead.
/jlne.ws/2yDyhNd

Cryptocurrencies

Japanese Crypto Exchange Bitpoint Restarting Trade Services
William Foxley – Coindesk
Japanese crypto exchange Bitpoint is resuming some trading services following a $28 million hack in mid-July.
/jlne.ws/2OFWuNS

Experts Say Mexico’s Regulations Raise the Bar ‘Too High’ for Crypto Entrepreneurs
Diana Aguilar – Coindesk
A new Fintech Law issued by the Bank of Mexico (Banxico) clashes with the accelerated growth of fintech activity in the country. The resulting crackdown could force the closure of 201 listed startups, according to national media.
/jlne.ws/2OEgC2X

Co-Founder Sues Israeli Blockchain Firm for Breach of Contract
William Foxley – Coindesk
Co-founders of Israeli blockchain firm Orbs are being sued by former partner Elad Arad following the dissolution of his shares in a failed joint venture, Cointree Capital.
/jlne.ws/2OEfRXF

Bitcoin Crime Search Engine Paves Way For A New Kind Of Law Firm
Michael del Castillo – Forbes
Last month, acting director of the United States Financial Crime Enforcement Network Jamal El-Hindi filed a $110 million civil case against Russian national Alexander Vinnick and BTCe, a cryptocurrency exchange he ran that allegedly served 700,000 customers around the world without taking necessary steps to prevent money laundering. Just days before, New Jersey attorney general Gurbir Grewal filed paperwork in his state’s superior court alleging that ethereum startup Pocketinns violated the state’s uniform securities laws when it raised $410,000 to build decentralized marketplaces to compete with Uber, Airbnb and Amazon.
/jlne.ws/2yHoo1m

Facebook Hires US Senator’s Former Aide to Lobby for Libra Cryptocurrency
Wolfie Zhao – Coindesk
Facebook has hired a former aide to the chairman of the U.S. Senate Banking Committee to lobby for its new Libra cryptocurrency project. Politico reported on Monday the social media giant recruited Susan Zook of Mason Street Consulting, who previously assisted Senator Mike Crapo (R-Idaho), to a team of lobbyists aiming to influence lawmakers on the Libra initiative. Zook told the publication she would work on lobbying Senate Republicans.
/jlne.ws/2yEbS2B

A Battle Between Bitcoin Wallets Has Big Implications for Privacy
Christine Kim – Coindesk
Bitcoin privacy wallet Samourai announced last Thursday that its primary competitor, Wasabi Wallet, is the target of an ongoing network attack.
/jlne.ws/2yEbjpk

Facebook’s Libra crypto project faces new heat from global privacy regulators
The Block Crypto
Data protection and privacy authorities in the U.S., U.K., EU, Australia, and Canada have issued a joint statement sharing concerns about Facebook’s cryptocurrency project, Libra.
/jlne.ws/2yIuEpy

North Korea Stole $2 Billion in Crypto and Fiat to Fund Weapons Programs
Daniel Palmer – Coindesk
North Korea is funding its weapons of mass destruction with cryptocurrency and fiat currency stolen from banks and exchanges, according to a confidential U.N. report.
/jlne.ws/2yJ9RSw

Politics

Trump Can’t Have It Both Ways on China Anymore; Either the tariffs are costing China or they’re making the U.S. more competitive.
Karl W. Smith – Bloomberg
China’s devaluation of the yuan has proved U.S. President Donald Trump both right and wrong. He’s right that, by allowing its currency to weaken, China is now paying for at least part of his tariffs. And because it is, the tariffs are unlikely to provide the boost he promised to U.S. businesses.
/jlne.ws/2OEigSb

Goldman Sachs sees no trade deal before 2020 U.S. election, now expects three rate cuts
Reuters
Goldman Sachs said it no longer expects the United States and China to agree on a deal to end their prolonged trade dispute before the November 2020 presidential election as policymakers from the world’s largest economies are “taking a harder line”.
/jlne.ws/2OGRetq

The Very Political Fed; The central bank looks to dominate the real-time payments market.
The Editorial Board – WSJ
Federal Reserve officials want to protect their independence from politics, but then why do they keep trying to control more of the private economy like politicians? Consider the Board of Governor’s self-justifying decision Monday to big foot private banks with a competing public real-time payment system.
/jlne.ws/2OEgSyX

Jeffrey Epstein’s Endgame: One Last Shot to Stay in Wall Street’s Favor
Tom Metcalf, Harry Wilson and Stefania Spezzati – Bloomberg
Jes Staley visited Epstein’s private island in April 2015; Epstein maintained ties with JPMorgan, donated to charities
The Bequia, a grand teak-trimmed yawl, swung to its anchor off Little St. James, Jeffrey Epstein’s Caribbean retreat. Aboard that day in April 2015 was its owner, Jes Staley, one of the business and political figures Epstein had cultivated to place himself at the nexus of money and power. For a few hours that afternoon, Staley — soon to rise to the top of Barclays Plc, one of the grand old names of British banking — visited Epstein on the private island, accompanied by his wife Debora.
/jlne.ws/2OEfFaT

Steelmaker That Praised Trump Tariffs Now Suing U.S. for Relief
Joe Deaux – Bloomberg
Steel slab consumption in U.S. is 88% dependent on imports; JSW ‘going to have to bite the bullet’ on tariffs: Cosgrove
Less than a year after JSW Steel (USA) Inc. lauded U.S. metal tariffs for aiding the steel industry, the company is suing because it’s not exempted from the levies.
/jlne.ws/2yIOFvY

Trump May Have Made Himself the Recession’s Scapegoat; The Federal Reserve cut interest rates to account for a “simmering” trade war. Then the president turned up the heat and put a downturn in play himself.
Brian Chappatta – Bloomberg
The markets have spoken. If they are to be believed, the potential for a U.S. recession has never been greater in the post-crisis era than it is right now.
/jlne.ws/2yDoBT8

Republicans Fear ‘Extinction in the Suburbs’ Over Gun Control
Sahil Kapur – Bloomberg
Two new mass shootings renew debate over firearm restrictions; Suburban and college-educated voters favor new gun limits
After two gruesome mass shootings in a 24-hour span, some Republicans are raising alarms that their opposition to new firearm limits is making the party toxic to the suburban women and college graduates who will shape the 2020 election.
/jlne.ws/2yDo6se

Trump Presses to Lure Boris Johnson on Top Foreign Policy Issues
David Wainer – Bloomberg
As Boris Johnson hurtles toward a no-deal Brexit that could leave the U.K. diplomatically adrift and economically vulnerable, President Donald Trump is looking to seize an opportunity to lure the country away from Europe on some of his top foreign policy priorities: Iran and Huawei.
/jlne.ws/2OHXW2b

Regulation

Delivering Fast Payments For All, Federal Reserve Governor Lael Brainard At The Federal Reserve Bank Of Kansas City Town Hall, Kansas City, Missouri
Mondovisione
It is a pleasure to be here in Kansas City with Federal Reserve Bank President Esther George to talk about the future of America’s payment system.1
/jlne.ws/2OHQIvg

ESMA calls for data experts to join industry advisory group
ESMA
The European Securities and Markets Authority (ESMA) has today issued a call for candidates for its newly-established Data Advisory Group (DAG).
/jlne.ws/2OILGyG

FCA warns of investment firm clone
By Rachel Addison – FT Adviser
The financial regulator has warned fraudsters are using a clone firm to impersonate the financial services and investment group Smith & Williamson and targeting people in the UK.
/jlne.ws/2yHxbjI

Q&A: CFTC’s Behnam on tackling market risk in climate change; Commissioner wants to see new derivatives products to help mitigate climate threat
James Ryder – Risk.net
Beating the drum on greater awareness of the risks posed by climate change can be a tough sell in the US. Rostin Behnam, commissioner at the Commodities Futures Trading Commission knows this – but he also has a plan he hopes allcomers can get on board with: the development of thriving new climate derivatives markets to help mitigate the risk.
/jlne.ws/2yIEHeg

Ninth Circuit Sides with CFTC on Scope of Anti-Manipulation Authority
National Law Review
A three-judge panel for the U.S. Court of Appeals for the Ninth Circuit recently issued a decision that revives claims by the Commodity Futures Trading Commission (CFTC) that Monex Deposit Company and two affiliates (Monex) violated the Commodity Exchange Act (CEA) by engaging in an alleged scheme to defraud investors in precious medals. CFTC v. Monex, No. 18-55815 (9th Cir. 2019). While the opinion is expressly limited to leveraged retail commodity transactions, the CFTC is likely to interpret the opinion broadly to apply to all CFTC-regulated markets.
/jlne.ws/2OG2jec

Investing and Trading

Watering the financial desert; Millions of Americans don’t have access to basic financial services. Can corporations offer an economic lifeline?
Gareth Ross – Washington Post
Residents of Frayser, a community in the north of Memphis, Tennessee, have come on hard times. A community in north Memphis, Frayser was built around the railroad in the late 1800s. Throughout the 20th century, it grew quickly. Big factories moved in. Corporations, schools, and services came with them. But by the 1980s, those plants had closed down. People left the community. Corporations stopped investing. Today, the majority of jobs in the city are part-time or temporary. And, eighty-five percent of Frayser children qualify for free or reduced-price lunch.
/jlne.ws/2OHQOTE

Obama advisor Larry Summers warns the world is at ‘most dangerous financial moment’ since 2009 as global markets reel from trade war escalation
Jack Derwin – Business Insider
US Treasury Secretary Steve Mnuchin’s decision to name China as a currency manipulator has wiped billions of dollars of shareholder value from markets around the world.
/jlne.ws/2OJ0zB3

Good Will Is a Thing of the Past in the Trade War; China has taken the gloves off by allowing its currency to weaken beyond a key leve to the dollar.
John Authers – Bloomberg
That escalated quickly. As far as financial markets are concerned, the trade war has finally broken out. Barely a week ago, on July 26, after more than a year of vocal hostilities, the S&P 500 Index was at a record high. Although much discussed, the trade conflagration had little impact on markets, and little damage was priced in. Working on game theory, investors noted – correctly – that some of President Donald Trump’s greatest threats of 25% tariffs had never come to fruition and that both sides had an interest in reaching a deal.
/jlne.ws/2OJdseh

The Bond Market Goes Through the $14.5 Trillion Looking Glass; The value of bonds yielding less than zero has trebled since October. Expect renewed talk of helicopter money, MMT and sub-zero U.S. Treasuries.
Mark Gilbert – Bloomberg
With negative yields becoming commonplace across even the longer maturities in many of the world’s government bond markets, fixed-income managers are letting their imaginations run a little wilder about what might come next. So brace yourself for renewed talk of helicopter money, the implementation of Modern Monetary Theory, and the prospect of the benchmark U.S. Treasury offering less than zero.
/jlne.ws/2OHPSP8

Google pledges carbon-neutral shipping, recycled plastic for all devices
Paresh Dave – Reuters
Alphabet Inc’s (GOOGL.O) Google on Monday announced that it would neutralize carbon emissions from delivering consumer hardware by next year and include recycled plastic in each of its products by 2022.
/jlne.ws/2OHOYSK

Department stores suffer in worst July retail sales on record; Good weather fails to lift high street as shoppers hold back on big purchases
Valentina Romei – FT
Retail sales growth in July slowed to the lowest rate on record for the month despite favourable weather conditions, according to industry data, with department stores suffering the most.
/jlne.ws/2yFyUWT

Institutions

Goldman improves execution ‘by 50%’ with new algos; Bank uses neural networks and other AI tools to cut slippage in stock trading
Faye Kilburn – Risk.net
Goldman Sachs is creating a new breed of execution models that aim to better reflect intraday trends and correlations in global equities markets.
/jlne.ws/2OY5e2f

The Fall of Barneys Burns a Hedge-Fund Star; Richard Perry controlled the department store during broader retail decline
Juliet Chung – WSJ
Some billionaire hedge-fund managers buy sports teams. Richard Perry snapped up one of New York’s most influential luxury department-store chains.
/jlne.ws/2OY4D0v

JPMorgan’s WeWork IPO Pursuit Was Many Years and Loans in the Making
Sonali Basak – Bloomberg
Bank’s ties with WeWork include mortgages on CEO’s homes; Bragging rights, hefty share of fees accompany IPO victory
When WeWork Cos.’ Adam Neumann sits down with investment bankers, he’s known to casually mention one of his longtime financial advisers: JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon.
/jlne.ws/2OGaVS9

UBS’s Rich Clients to Feel Negative Rates Pain as Fees Extended
Patrick Winters – Bloomberg
Bank lowers fee threshold to 500,000 euros from 1 million; Low rates, stimulus putting pressure on banking margins
UBS Group AG plans to expand a policy of charging rich clients for holding excess cash in their accounts as negative interest rates in Europe are poised to stay.
/jlne.ws/2OEwDWt

HSBC Swiss Unit to Pay $329 Million in Belgian Tax Settlement
Gaspard Sebag – Bloomberg
Lender accused of helping wealthy Belgians dodge their taxes; Proposed accord still needs to be signed off by local judge
HSBC Holdings Plc’s Swiss private banking unit agreed to pay about 294 million euros ($329 million) to settle a Belgian criminal probe into allegations it helped wealthy clients dodge hundreds of millions of euros in taxes.
/jlne.ws/2yD08xh

Biggest Wealth Fund’s Bid to Dump Big Oil Is Now But a Whimper
Mikael Holter – Bloomberg
Fund’s entire selloff likely smaller than its stake in Shell; Original proposal reduced to ‘symbolic’ measure: economist
After revealing it wants to dump all oil stocks in a market-shattering bang in 2017, Norway’s $1.1 trillion wealth fund’s actual divestment could now be so small it hardly matters.
/jlne.ws/2yIWSjM

UK broker TP ICAP on track to meet £75m cost saving target; Upbeat outlook contrasted with challenging first half on markets
Philip Stafford – FT
TP ICAP, the UK interdealer broker, has confirmed it will meet its reduced cost savings targets for integrating the £1.3bn deal for ICAP, allowing it to step up plans for more investment from in 2020.
/jlne.ws/2yIDZxn

Regions

The Bank of Japan risks falling out of sync on global easing; The ‘policy pioneer’ must face up to increasingly tough challenges
The Editorial Board – FT
Below target inflation, a deteriorating outlook for economic growth and reduced monetary policy firepower are common problems among major central banks. But the Bank of Japan faces a unique challenge. A move towards looser monetary policy in Europe and the US risks making the most dovish central bank in the world look hawkish. The wait-and-see approach from the BoJ’s July monetary policy meeting may have been dictated by the limited set of options as, crucially, it leaves the bank with space for future easing. But it is not without risks, particularly as it exposes the currency to unwanted appreciation pressure.
/jlne.ws/2ORvZ86

Britain’s Richest Taxpayers Are Men in London, Southeast
Andrew Atkinson – Bloomberg
IFS report will fuel concerns over scale of inequality; Hedge funds, law firms, medical industry feature prominently
The richest people in the U.K. are overwhelmingly middle-aged men living in London and the southeast, according to new analysis published Tuesday.
/jlne.ws/2OFXrFW

Renminbi holds ground after US labels China currency manipulator; Beijing has pledged to ensure currency’s stability after letting it weaken
Hudson Lockett – FT
The renminbi held steady on Tuesday morning in line with Beijing’s pledge to ensure the currency’s stability and despite the US labelling China a currency manipulator on Monday.
/jlne.ws/2OJirMb

Anti-government protesters unleash chaos across Hong Kong in unprecedented citywide rampage
SCMP Reporters
Defiant protesters unleashed chaos and violence across Hong Kong on Monday in an unprecedented escalation of radical action against the government and police, even as the city’s embattled leader toughened her stance and warned that they had gone beyond protests to attack the nation’s sovereignty.
/jlne.ws/2OFWFc0

How China, Branded a Currency Manipulator, Steers the Yuan; Here is a look at China’s hybrid financial system and how it works
Mike Bird and Steven Russolillo – WSJ
China has let the yuan depreciate beyond the key level of 7 per dollar, prompting the U.S. Treasury to label it a currency manipulator. This escalation in the U.S.-China trade war has rattled global markets.
/jlne.ws/2OJ0EVn

Switzerland Strives to Be Global Leader in Opening Skies for Drones; Swiss air-traffic control organization and local businesses team up to dramatically expand unmanned aircraft flights
Andy Pasztor – WSJ
Switzerland is working on pioneering ways to handle booming drone traffic aimed at allowing unmanned aircraft to quickly operate in much more of the nation’s airspace than approaches being pursued in other countries.
/jlne.ws/2OHGc7n

China’s Treasuries Hoard Seen as Next Line in the Sand After Yuan’s Drop
Katherine Greifeld and Liz McCormick – Bloomberg
‘You can’t rule out the Treasuries option,’ says Stephen Roach; Nordea’s Galy watching U.S. debt auctions for pullback signs
The yuan’s decline to a decade-low has analysts and investors casting a wary eye toward China’s $1.1 trillion pile of U.S. Treasuries.
/jlne.ws/2OKP8IU

China Calls on Hong Kong People to Oppose Violent Protesters
Bloomberg News
Police use tear gas on protesters; mob violence breaks out; Chinese authorities hold rare briefing on Hong Kong Tuesday
China urged Hong Kong residents to stand up to protesters challenging the government, after a general strike that led to a day of traffic chaos, mob violence, tear gas and flight cancellations.
/jlne.ws/2ORigP0

How a shadow banking crisis sent India’s autos sector into a tailspin
Swati Bhat, Nupur Anand – Retuers
Sudhir Gharpure and his sales team sat chatting at a big Maruti Suzuki (MRTI.NS) dealership on the outskirts of Mumbai some two hours after its doors were opened on a recent Saturday morning – not a single customer was in sight.
/jlne.ws/2OGQc0w

Brexit

Corbyn Signals ‘Early’ Confidence Vote to Block No-Deal Brexit
Kitty Donaldson – Bloomberg
U.K.’s Johnson says calling election ‘last thing I want to do’; Confidence motion could trigger election under U.K. rules
Labour leader Jeremy Corbyn signaled he’ll call a vote of no-confidence in Boris Johnson’s government when Parliament returns in September to prevent the new prime minister taking Britain out of the European Union without a deal.
/jlne.ws/2OJfhrD

Britain needs an agenda beyond the Brexit trap; The Leave vote called for decisive change at home, less so in Brussels
The Editorial Board – FT
Boris Johnson’s first political priority is to deliver on the Leave vote. His second must be to address its causes. “Answering, at last, the plea of the forgotten people and the left-behind towns”, as he put it in his first speech outside 10 Downing Street. To tackle these concerns, Mr Johnson announced a £1.8bn cash boost for the National Health Service, reflecting totemic pledges to increase its funding during the campaign. It follows his promise of a new railway line in northern England and a £3.6bn fund for deprived towns.
/jlne.ws/2OFY4iJ

Opponents of No-Deal Brexit Harden Plans to Block Johnson’s Threat
Thomas Penny – Bloomberg
U.K. prime minister denies he’s preparing for general election; Corbyn signals ‘early’ no-confidence vote in House of Commons
Opponents of Boris Johnson’s threat to crash out of the European Union without a deal on Oct. 31 are hardening their plans to stop him as the new U.K. prime minister seeks to build support with a series of targeted spending pledges.
/jlne.ws/2OKHxtY

Downing Street demands EU ‘rethink’ its Brexit stance as both sides dig in over a new deal and Brussels claims Boris Johnson WANTS a No Deal departure
David Wilcock and David Churchill – Daily Mail
Downing Street demanded that Brussels ‘rethink’ its refusal to renegotiate the Brexit deal today as both sides dug in their heels ahead of the October 31 deadline for quitting the EU.
/jlne.ws/2OJi983

Boris Johnson’s Brexit bellowing may not make the EU blink; If his scare tactics fail, the UK prime minister will find it hard to walk back from his rhetoric
Robert Shrimsley – FT
If British politicians are so certain of their positions, you have to ask why is everyone shouting so much? In the days since Boris Johnson’s election as Conservative party leader, the debate over Brexit has sounded like the snarling before a boxing match.
/jlne.ws/2yEicaa

Miscellaneous

Ron Perelman Draws Hollywood, Wall Street for ‘Bittersweet’ Bash
Amanda L Gordon – Bloomberg
Billionaire’s Hamptons gala for Apollo Theater to be his last; Tom Hill, Woody Harrelson, Robert Kraft, Jamie Foxx attend
Jessica Seinfeld and Spike Lee were hanging out in Ron Perelman’s East Hampton living room Saturday night when Pharrell Williams, standing a few feet away, reflected on their host’s decision to make this evening the 10th and final benefit for Harlem’s Apollo Theater.
/jlne.ws/2OFXIZu

John Lothian Newsletter

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