Why ESG investing makes fund managers more money; ICE launches beta version of SONIA reference rates

Jul 9, 2020

First Read

Hits & Takes
By John Lothian & JLN Staff

Yesterday we announced the 2020 MarketsWiki Education World of Opportunity virtual event for July 22. Please feel free to forward information about the event to your interns or college students or friends who are interested in jobs in the financial markets. We have a terrific lineup of speakers, including Jenny Just from Peak 6, Bevon Joseph from the Greenwood Project, Alessandro Cocco from the Chicago Federal Reserve Bank, Andre Buckles from OCC and finally, new author Eileen Flaherty. Click HERE to register.

Nasdaq kicked off another season of the podcast series “Tomorrow’s Capital” with former Director of the National Economic Council Gary Cohn. The podcast hosts are CNBC Fast Money’s Guy Adami and Dan Nathan. You can listen on Spotify, Apple or Nasdaq.com

The synopsis for this episode is this: The pandemic and our nation’s response from government to business has changed the US economy as we know it. What are the consequences of these decisions on the long-term health of our economy? And what opportunities does this present for tomorrow’s innovators?

Nasdaq’s next episode (next Wednesday) will feature Kara Swisher, Executive Editor of Recode. Other guests coming soon are entrepreneur Mark Cuban and former Cisco CEO John Chambers.

The Ivy League has scrapped its fall sports activities, including the fall football season, due to the pandemic. It is interesting to see what “smart schools” not dependent on football TV income decide to do about the risk to their athletes.

On the other hand, Disney World is set to open with social distancing and capacity limits. So now we know what Mickey Mouse operations have decided to do.

Brooks Brothers, which declared bankruptcy, was established in 1818. The demise of the 202 year old company was described by the Wall Street Journal as “A Final Indignity for the Yuppie Generation.” However, my father wore a lot of Brooks Brothers. In his day of suits and ties at work, they were the standard.

Shepard Smith, formerly of FOX News, is joining CNBC as a nightly anchor. Good move by CNBC to bring in Smith, who I respect as a journalist.

Christopher L. Culp, a highly respected financial economist, academic, and expert witness, has passed away

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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I received a request to sign a petition to change the names of Berlin, Germany’s subway station, Onkel-Toms-Hütte (Uncle Tom’s Cabin), and nearby street, Onkel-Tom-Strasse (Uncle Tom Street). Intrigued, I googled Onkel-Toms-Hütte to see what else is out there. The first entry was for Onkel Tom’s Hütte, a charming wine and pizza restaurant, set against an Alpine background in Grindelwald, Switzerland. There is a similarly named Biergarten in Siegen, Germany, a hotel in the university town of Gottingen, as well as a lot more Uncle Tom’ses around the German speaking world. Who knew? ~Thom Thompson

FIA webinar: Will Mitting, founder and managing director of Acuiti, will join Will Acworth, senior vice president of FIA, in a 30-minute presentation on trends in clearing listed and OTC derivatives, on Thursday, July 16 at 10:30 a.m. – 11.30 p.m. ET. The discussion will cover proprietary data from global surveys of derivatives industry executives conducted by Acuiti as well as the latest data from the U.S. on customer funds flows. You can register here.~SR

Here are some bright and sunny statistics for your Thursday morning – the Cremation Institute, an organization of cremation experts, recently conducted a survey in which they found that 23 percent of its 1,150 respondents who were cryptocurrency owners do not have an estate plan for their digital assets. 89 percent said they were worried about what will happen to their digital assets when they die.~MR

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Former Fox News Anchor Shepard Smith Joins CNBC to Host Evening Newscast; ‘The News with Shepard Smith’ will debut this fall on the cable news business channel
Joe Flint – WSJ
CNBC has signed former Fox News journalist Shepard Smith to anchor a new one-hour evening news program, the network said Wednesday. “The News with Shepard Smith” will debut this fall in the 7-8 p.m. time slot on the cable news business channel. The Monday through Friday newscast marks a significant shift in the evening programming strategy for CNBC, which currently relies on light, unscripted fare.
/on.wsj.com/2Ofjlg1

*****You have to like anyone with the nickname “Shep.”~JJL

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Robinhood Has Lured Young Traders, Sometimes With Devastating Results; Its users buy and sell the riskiest financial products and do so more frequently than customers at other retail brokerage firms, but their inexperience can lead to staggering losses.
Nathaniel Popper – WSJ
Richard Dobatse, a Navy medic in San Diego, dabbled infrequently in stock trading. But his behavior changed in 2017 when he signed up for Robinhood, a trading app that made buying and selling stocks simple and seemingly free. Mr. Dobatse, now 32, said he had been charmed by Robinhood’s one-click trading, easy access to complex investment products, and features like falling confetti and emoji-filled phone notifications that made it feel like a game. After funding his account with $15,000 in credit card advances, he began spending more time on the app.
/nyti.ms/3gC4OXW

*****Some of the compliance departments I have dealt with interpreted their jobs as “NO (to the) Client,” instead of “Know the Client.”~JJL

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‘No Way I Can Lose’: Inside China’s Stock-Market Frenzy
Bloomberg News
Investors leveraging up at fastest in more than five years; Trading apps have struggled to keep up with booming demand
Like millions of amateur investors across China, Min Hang has become infatuated with the country’s surging stock market. “There’s no way I can lose,” said the 36-year-old, who works at a technology startup and opened her first trading account in Beijing on Tuesday. “Right now, I’m feeling invincible.”
/bloom.bg/38FbZMo

*****Wait until tomorrow when you will get taught what markets can and will do.~JJL

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China Says U.S. Policy Is Driven by ‘McCarthy-Style Paranoia’
Bloomberg News
Chinese foreign minister gives blueprint for easing relations; Willing to cooperate on virus vaccines, economic recovery
China’s top diplomat blasted U.S. policy toward Beijing while also proposing a blueprint for getting spiraling relations between the world’s biggest economies back on track. “Current U.S. policy toward China is based on strategic misjudgments that lack factual evidence, and is full of emotional catharsis and McCarthy-style paranoia,” Chinese Foreign Minister Wang Yi said during a pre-recorded address for a China-U.S. think tank and media forum, which also featured a speech by former Secretary of State Henry Kissinger. He added that “artificially creating various ‘China threats’ may eventually lead to self-fulfilling prophecies.”
/bloom.bg/3gI6PCg

*****I love a good self-fulfilling prophecy, don’t you?~JJL

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Wednesday’s Top Three
Our top story Wednesday was the Financial Times’ ION-Broadway deal stumbles on UK competition concerns. Second was Some surprising big names got PPP funds from Crain’s Chicago Business. The article quotes Geri Aglipay, a senior outreach manager in the Midwest for the nonprofit Small Business Majority interest group, as saying the program “seems to favor those (businesses) who are well-connected, well-heeled and well-banked.” Third was Dream co-owner Sen. Kelly Loeffler is against WNBA’s support of Black Lives Matter, from Yahoo Sports.

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Lead Stories

Why ESG investing makes fund managers more money; By actually knowing their supply chains, do-gooding companies have made better returns
Gillian Tett – FT
In recent years, some investors have felt so irritated by the pious tone of the environment, social and governance sector they have joked that the ESG acronym should stand for “eye-roll, sneer and groan”.
/on.ft.com/2ZWtJyK

ICE launches beta version of SONIA reference rates; ICE Benchmark Administration has started publishing beta term SONIA rates for testing, using data from BGC, TP ICAP, and Tradition’s Trad-X central limit order books.
Hayley McDowell – The Trade
US exchange group ICE has launched a beta version of its term SONIA reference rates for testing purposes before it is made available as a benchmark for interest rate derivatives.
/bit.ly/2O8vYtp

JPMorgan Says Liquidity Conditions Are Making Markets Vulnerable
Joanna Ossinger – Bloomberg
Funding conditions have improved but aren’t fully restored; Strategists warn Treasury market is vulnerable into year-end
Markets are still struggling to restore liquidity after the Covid-19 meltdown and that may leave them exposed to new shocks, according to JPMorgan Chase & Co. “Liquidity conditions have improved considerably, though not fully, and overall functioning has mostly been restored, but markets remain in an unstable equilibrium and vulnerable to shocks,” strategists including Joyce Chang, Nikolaos Panigirtzoglou and Marko Kolanovic wrote in a report.
/bloom.bg/2W1DYkk

Oil Went Below $0. Some Think It Will Rebound to $150 One Day; Debate rages about the long-term value of crude in the wake of its collapse and quick recovery
Joe Wallace – WSJ
Oil markets began the 2020s by nosediving below $0 a barrel for the first time. Investors and analysts are now trying to work out what the rest of the decade holds in store. Some think the bust will set in motion a boom, predicting that investment in oil-and-gas production will dry up and propel crude prices back above $100 a barrel.
/on.wsj.com/2ZQS1uf

Rise in margin lending stokes fears of China bubble; Sharp rally in stock market draws comparisons with 2015 downfall
Thomas Hale and Wang Xueqiao – FT
Margin loans to buy equities in China have risen to their highest level in five years, prompting fears that speculation on rising prices could lead to a rerun of a notorious stock market bubble that burst in 2015.
/on.ft.com/2ZPnsFi

Record Turkey Stock Trades Have Mostly Local Buyers to Thank
Tugce Ozsoy, Filipe Pacheco, and Taylan Bilgic – Bloomberg
Foreign ownership slips below 50% for first time in 16 years; Some new investors buying stocks touted by social media sites
Share-trading accounts have blossomed globally during Covid-19 lockdowns as more and more people try to make money from stocks. But in few places has the take-up been as dramatic as in Turkey, where dealing in benchmark Borsa Istanbul 100 Index shares hit record levels on Tuesday. Activity is up fivefold in a year, a faster increase than the gains across emerging markets, even outstripping booming numbers in Brazil encouraged by interest rates at an all-time low.
/bloom.bg/2VZ9kYY

‘The BSE Did Not Stop for a Single Second. It Worked Like Clockwork,’ BSE CEO Ashish Chauhan
Avatar Navanwita, Bora Sachdev – The Tech Panda
Digitized processes and automation helped the Bombay Stock Exchange (BSE) to continue functioning smoothly during the forced lockdown period in India. The pandemic has disrupted many smooth-functioning processes in many countries. At the same time, the existence of digitization has helped in keeping some processes running almost without any hiccups. The BSE, which has been automated and screen based since 1995, has fared well during the crisis. Deemed essential services, equity market trading continued in India during the lockdown.
/bit.ly/320Xtx2

Crypto exchange scores regulatory first with trading licence from FCA; Kraken hopes the licence will allow it to do more business with large institutional investors
Ryan Weeks – Financial News
One of the world’s largest startup cryptocurrency exchanges has won a trading licence from UK regulators, becoming the first firm in the sector to do so. Crypto Facilities has been granted a Multilateral Trading Facility licence by the Financial Conduct Authority, which allows it to offer a wider range of products and deal with regulated investors with strict investment mandates.
/bit.ly/2ChDuiX

Clearing Cliff’s Edge Looms
Shanny Basar – MarketsMedia
Access to central counterparty clearing houses by clients in the UK and European Union needs to be clarified by September when CCPs will need to give notice to clearing members if they need to change their arrangements.
/bit.ly/38RlvfH

Rosengren sees more US businesses needing Fed rescue; Central bank’s Boston chief says Main Street lending facility may need to be extended
James Politi and Laura Noonan – FT
Virus outbreaks in the coming months will drive a “ramp up” in demand for the Federal Reserve’s $600bn lending scheme to help American business weather the coronavirus pandemic, a senior central bank official has predicted.
/on.ft.com/2DhQQw2

The tiny German bank that bet big on Wirecard’s Markus Braun; Lender part-owned by buyout group Apollo gave loan to former boss of payments group weeks before collapse
Olaf Storbeck – FT
Just weeks before Wirecard collapsed, a tiny German bank made a big bet on Markus Braun. With investors still reeling from the findings of a special audit into Wirecard’s accounting, Oldenburgische Landesbank (OLB) replaced Deutsche Bank as a key lender to Mr Braun, the then chief executive of the payments company, its public face and biggest shareholder.
/on.ft.com/3iMWZAz

The Problematic Future of Gas Pipelines
Emily Chasan – Bloomberg
Sign up to receive the Green Daily newsletter in your inbox every weekday. It was a tough week for the North American fossil fuel industry. Over just a few days, the Atlantic Coast natural gas pipeline was canceled by developers, the Dakota Access oil pipeline was shut down by a federal judge and the Trump administration lost its Supreme Court bid to resuscitate the Keystone XL oil pipeline (though the justices did make it easier to build other pipelines).
/bloom.bg/2BW2yMH

Stockpile Secrets of Key Metal Market Will Soon Be Laid Bare
Mark Burton and Jack Farchy – Bloomberg
LME to start publishing data tracking private metal stockpiles; Size of global aluminum inventories is a source of debate
For decades, aluminum traders have largely relied on guesswork to predict how much of the metal is stashed away in ports around the world. Only a fraction of the material used in everything from airplanes to refrigerators is held in London Metal Exchange warehouses, and there’s no easy way to track how much sits outside that network. But that’s about to change.
/bloom.bg/3fezRsN

Natural Gas Is the Past. Natural Gas Is Also the Future; Pipelines and storage have become unpredictable, but fuel delivery still provides a clear path to returns.
Nathaniel Bullard – Bloomberg
Sign up to receive the Green Daily newsletter in your inbox every weekday. On Sunday, Virginia-based utility Dominion Energy Inc announced plans to sell almost all of its natural gas pipeline and storage assets to Warren Buffett’s Berkshire Hathaway Inc for $4 billion. At the same time, the Virginia-based utility said that it’s killing the Atlantic Coast gas pipeline despite a Supreme Court ruling that would grant it passage underneath the Appalachian Trail.
/bloom.bg/2W2gUll

JPMorgan Dropped Accounts That Became Bad News for Deutsche Bank
Christian Berthelsen – Bloomberg
U.S. bank backed away from Epstein, Danske and FBME by 2013; New York penalized Deutsche Bank for lax compliance over them
The trio of clients that got Deutsche Bank AG in regulatory trouble this week had a shared back story: They were all castoffs of JPMorgan Chase and Co. Deutsche Bank moved millions of dollars across the globe for convicted sex offender Jeffrey Epstein in the past decade, and billions on behalf of international lenders Danske Bank A/S and FBME Bank Ltd. Along the way, the German bank missed or disregarded compliance red flags for years, New York’s Department of Financial Services said Tuesday in levying $150 million in penalties.
/bloom.bg/2ZQB0jL

World’s Rich Question Fees With Wealth Hitting $74 Trillion
Tom Metcalf – Bloomberg
33% of millionaires surveyed are unhappy with fees: Capgemini; Global wealth growth was led by North America in 2019
Even before this year’s market crash, the wealth-management industry’s richest clients were frustrated about fees. A third of those with more than $1 million of investable assets were uncomfortable with them in 2019, according to Capgemini SE’s World Wealth Report 2020. Such discomfort will likely rise in today’s volatile markets. The survey of more than 2,500 individuals found that about one in five plans to switch their primary wealth management firm in the next year, with high fees the top reason.
/bloom.bg/2ZTlkwc

How EU Finance Chiefs Squandered Their Influence With Bickering
Viktoria Dendrinou – Bloomberg
Finance ministers have been largely sidelined during pandemic; New Eurogroup president will be tasked with reviving its role
Jeroen Dijsselbloem had been running the euro-area finance meetings for less than three months in 2013 when he stepped, bleary-eyed onto the stage at 4 a.m. to tell Cypriot savers they would have to help shoulder the cost of saving their country’s banking system.
/bloom.bg/3iLg9qJ

Going Back Is Not an Option for Some Venezuelan Students in U.S.; International students will lose their visas unless they attend programs with in-person classes, but many campuses remain closed to limit Covid contagion.
Patricia Laya and Nicolle Yapur – Bloomberg
New U.S. immigration rules have sent students from Venezuela into a panic about returning to a homeland in crisis. Christian Garcia, who won a grant to finish high school in Germany and now studies international political economy at the College of Idaho, says he is considering seeking political asylum or an internship in order to stay in the U.S. if he can’t keep his student visa.
/bloom.bg/3iLhuOo

He had $35,000 in retirement savings in March — 350 trades later and he’s apparently sitting on $1 million
Shawn Langlois – MarketWatch
Prepare for some serious trading FOMO, courtesy of Reddit’s “WallStreetBets” community. If his detailed story is to be believed, the user, who identifies as “Mori226” on the popular social-media platform, has had a spectacular run during the coronavirus pandemic, and he walked his fellow traders on Reddit through every step of his journey.
/on.mktw.net/3feBzuc

Wirecard Under Criminal Scrutiny by U.S. Authorities as Part of Probe Into Alleged Bank-Fraud Conspiracy; Federal prosecutors, FBI examining Wirecard’s work as payment processor, merchant bank in alleged $100 million fraud involving cannabis company
Rebecca Davis O’Brien, Juliet Chung and Patricia Kowsmann – WSJ
The Justice Department is examining whether scandal-plagued German payment company Wirecard AG WDI -1.08% played a critical role in an alleged $100 million bank-fraud conspiracy connected to an online marijuana marketplace, according to people familiar with the investigation.
/on.wsj.com/2AHlE8z

Coronavirus

Covid-19’s Environmental Benefits Evaporate as World Reopens; Carbon emissions sank as lockdowns took hold world-wide, but now they are rebounding fast
Sarah McFarlane – WSJ
For climate scientists, the pandemic has made one thing clearer: the difficulty of reducing carbon emissions. Emissions sank when factories were shut down, planes grounded and cars parked, as people stayed home to slow the spread of the coronavirus, but they are now rebounding fast as economies reopen.
/on.wsj.com/3gDRB0U

Wait Times Grow for Covid-19 Test Results as Infections Rise Sharply; Some patients wait more than a week for results, complicating contact-tracing and containment efforts
Sarah Krouse, Sharon Terlep and Matt Grossman – WSJ
The surge in U.S. coronavirus cases and growing demand for Covid-19 tests are straining the ability of pharmacies and labs to deliver timely results to consumers, causing delays that hamper efforts to contain the spread of the virus.
/on.wsj.com/3gI4GGx

Cruise lines warn of ‘severe blow’ from social-distancing measures; Norwegian and Royal Caribbean say reduction in number of passengers poses threat to business model
Alice Hancock – FT
Two of the world’s largest cruise operators have warned of a “severe blow” to the industry if social-distancing measures that reduce the number of passengers on ships are required.
/on.ft.com/2ZUpKCS

US coronavirus cases jump by one-day record of 62,000; Death toll also shows signs of rising for first time since new outbreak in south and west
Peter Wells and Matthew Rocco and Courtney Weaver – FT
The US had its biggest one-day increase in coronavirus cases since the start of the pandemic, recording 62,000 infections on Wednesday in a sign that a series of new restrictions has failed to snuff out the outbreak.
/on.ft.com/3gDOcPG

What to Do If You’re Not Ready to Return to the Office; Emphasize how staying home will benefit the business—not you.
Arianne Cohen – Bloomberg
There are many reasons not to want to return to the office. If you live in a city, maybe it’s a fear of taking mass transit. Or maybe you can’t line up child care if school is not back in session. Regardless, what’s the best way to convey this to your boss? “A mistake that people make is coming to managers with personal reasons for wanting to work remotely,” says Laurel Farrer, founder of the Remote Work Association. And while companies are likely to take those into consideration more so now than before the pandemic, accommodating individual desires is “not how businesses make decisions,” she says. “You need to come to the boss with evidence of how this decision will benefit the business and team.” Here’s how to have the conversation.
/bloom.bg/2ZQMG6b

Trump trashes CDC school-reopening guidelines — then CDC updates them
Betsy Klein and Kevin Liptak, CNN
After President Donald Trump tweeted Wednesday that he disagreed with US Centers for Disease Control and Prevention guidelines for safely reopening schools because they are “very tough” and “expensive,” the agency said it would issue new recommendations next week.
/cnn.it/3iLfOnX

World’s Wealthy Are Spending the Pandemic Weighing Succession
Benjamin Stupples, Marion Halftermeyer, and Patrick Winters – Bloomberg
Billionaires will transfer $2 trillion within next two decades; Surprising how many wealthy lack up-to-date wills, banker says
John Caudwell is thinking a lot about life and death these days. The 67-year-old billionaire said he intends to leave most of his wealth to charity, making him aware of the need to plan carefully for how his fortune will be used beyond his own lifetime.
/bloom.bg/31Wvwqp

Health official: Trump rally ‘likely’ source of virus surge
Sean Murphy – AP
President Donald Trump’s campaign rally in Tulsa in late June that drew thousands of participants and large protests “likely contributed” to a dramatic surge in new coronavirus cases, Tulsa City-County Health Department Director Dr. Bruce Dart said Wednesday.
/bit.ly/38EzW6F

Offices Try to Combat Coronavirus With More Fresh Air; Pathogen’s spread in enclosed spaces is changing the way commercial buildings operate
Bob Tita – WSJ
One way to reduce the spread of coronavirus is to maintain ventilation with plenty of fresh air. But what does that amount to in buildings? The pandemic is challenging long-held conventions for offices to be cool, dry, shaded from direct sunlight and mostly sealed off from outside air. Researchers say those conditions can help spread and sustain the virus, prompting manufacturers of heating, ventilation and air-conditioning equipment to alter their products and strategies.
/on.wsj.com/3ehyrwe

Authorities in Hong Kong warn of potential ‘exponential growth’ in coronavirus cases just weeks after loosening restrictions
oshua Berlinger – CNN
Hong Kong (CNN)Authorities in Hong Kong, a city lauded for its quick and effective response to the coronavirus pandemic, are now warning of potential “exponential growth” in new cases of Covid-19 after a surge in local transmissions.
/cnn.it/3fiXy36

Millions under new Australia lockdown as global virus cases soar
Ryan Smith, AFP
Millions in Australia’s second-biggest city went into lockdown Thursday to battle another coronavirus outbreak, as spikes across the world added to the devastation already wrought by the pandemic.
/yhoo.it/2Cn3GJe

Exchanges, OTC and Clearing

A New ETF Issuer On The Swiss Stock Exchange: SIX Welcomes Rize ETF; As of today, two more thematic ETFs with growth potential can be traded on the Swiss Stock Exchange: medical cannabis and cyber security.
Mondovisione
The newly tradeable ETFs from Rize ETF are focusing on thematic market trends with growth stories: medical cannabis and cyber security. Rize ETF developed both ETFs in cooperation with the index provider Foxberry and the respective thematic experts New Frontier Data and Tematica Research. These products offer investors additional opportunities to diversify their portfolios and dip into the ever-thriving segment of equity-themed ETFs available at SIX. Liquidity for the 2 ETFs is provided by Société Générale.
/bit.ly/2CfPhOO

HKFE Announces Revised Margins For Futures Contracts
Mondovisione
Please be advised that pursuant to Exchange Rule 617(d) and HKCC Rule 402, the Exchange and the Clearing House have determined that with effect from the commencement of trading on Monday, 13 July 2020, (including the mandatory intra-day variation adjustment and margin call, if applicable), the margin levels of the following Futures Contract shall be as follows:
/bit.ly/2AHVUZM

ICE Benchmark Administration Launches Beta Version of ICE Term SONIA Reference Rates; BGC, TP ICAP and Tradition provide eligible SONIA OIS data; Beta rates are for information and testing purposes
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announces that ICE Benchmark Administration Limited (IBA) has launched an initial beta version of its ICE Term SONIA Reference Rates (“ICE TSRR”). The ICE TSRR beta rates are designed to measure average expected (i.e. forward-looking) SONIA rates over one month, three month and six month tenor periods on a daily basis.
/bit.ly/2ZSUxjq

TMX Group Equity Financing Statistics – June 2020
TMX
TMX Group today announced its financing activity on Toronto Stock Exchange and TSX Venture Exchange for June 2020. TSX welcomed 24 new issuers in June 2020, compared with 12 in the previous month and six in June 2019. The new listings were 22 exchange traded funds, one closed-end fund and one oil & gas company. Total financings raised in June 2020 increased slightly compared to the previous month and were down 15% compared to June 2019. The total number of financings in June 2020 was 57, compared with 54 the previous month and 50 in June 2019.
/bit.ly/3ek9QqQ

OTC Clear Launches Clearing Services for HONIA-based Interest Rate Products
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Thursday) that its central counterparty (CCP) subsidiary, OTC Clearing Hong Kong Limited (OTC Clear), has become the first clearing house to offer clearing services of Hong Kong Dollar Interest Rate Swap (IRS) contracts benchmarked to the Hong Kong Dollar Overnight Index Average (HONIA) reference rate.
/bit.ly/2AGlX3s

LME trading floor to stay closed despite Britain’s lockdown easing
Reuters
The easing of social distancing in England will not allow the London Metal Exchange (LME) to reopen its open-outcry trading floor, which has been closed for more than three months, the exchange said on Wednesday.
/reut.rs/3f965Wh

HKEX to Launch Master SPSA Service on 10 July
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today that it will launch the Master Special Segregated Account (Master SPSA) service on 10 July 2020, as part of its latest service enhancement to support Stock Connect, HKEX’s landmark mutual market access programme with the Shanghai and Shenzhen stock exchanges.
/bit.ly/38FTQhl

European Investment Bank joins LCH SA as first supranational clearing member
LCH
European Investment Bank live accessing EURGCPlus at LCH RepoClear; First supranational institution to become a clearing member of LCH SA
LCH, a leading global clearing house, today announced that the European Investment Bank (EIB) is the first supranational institution to become a clearing member at LCH SA’s RepoClear service. By joining the service, EIB is able to directly access EURGCPlus, LCH’s tri-party basket repo clearing service.
/bit.ly/3ffY41L

Eurex Exchange Eurex Exchange Readiness Newsflash | Go-live of the mandatory PIN procedure for Trading on Behalf (ToB) and other inquiries on 3 August 2020
Eurex
Dear Eurex Participant,
With this Newsflash we would like to remind you that the mandatory PIN authentication procedure for ToB and further inquiries will go live on 3 August 2020.
/bit.ly/38HNzC8

EEX Publishes Position Paper On Increasing The EU’s 2030 Climate Ambition
Mondovisiione
You’ll find below EEX’s position paper on increasing the EU’s 2030 climate ambition which EEX contributed to the European Commission’s consultation on the topic. Our key messages are:
/bit.ly/3ef6jKi

Marex Solutions Trades World’s First Tier 2 Structured Note – Investors Turn To Structured Notes As They Seek Yield
Mondovisione
Marex Financial Products, the structured notes arm of commodities specialist Marex Spectron, has issued the first ever Tier 2 Capital Structured Note.
/bit.ly/3fpJDIo

Fintech

ION takeover of Broadway raises fixed income trading competition concerns; The UK’s competition authority has given ION five days to address concerns that its takeover of Broadway will harm competition in fixed income trading.
Hayley McDowell – The Trade
ION Group has come up against concerns that its takeover of Broadway Technology in February will harm competition in fixed income trading.
/bit.ly/2ClkEHC

Supply-Chain Fintech Taulia to Raise New Funds From JPMorgan, Ping An; Fundraising round will also include Saudi Aramco’s venture arm
Julie Steinberg – WSJ
A clutch of global investors is throwing its weight behind a financial-technology upstart that facilitates payments between companies and their suppliers, betting that it is well positioned amid the disruption resulting from the coronavirus pandemic.
/on.wsj.com/31YVvNO

Wirecard Probe Brings Scrutiny to How Fintech Companies Are Audited
Mark MAurer – WSJ
Auditors are still figuring out how to assess the financial statements of fintech companies, a challenge highlighted in the recent accounting scandal surrounding German electronic-payments company Wirecard AG .
Fintech companies digitally deliver financial services such as payments or loans, and derive much of their income from fees. Auditors may not fully grasp the emerging industry’s business models or how the companies account for complex transactions, experts say. The auditor also has to verify a large number of small digital customers around the world, said Luo Zuo, an associate professor of accounting at Cornell University.
/on.wsj.com/3feOuMz

Xignite Launches Suite of Enterprise Microservices to Help Financial Institutions Move Market Data Management to the Cloud; Enterprise Microservices client NICE Actimize gains agility and scalability bringing its real-time market data infrastructure to the cloud
Xignite, Inc.
Xignite, Inc., a provider of market data distribution and management solutions for financial services and technology companies, today announced the launch of Xignite Enterprise Microservices, a powerful suite of cloud-native market data management services built to transform how firms store, distribute, manage and control market and financial data in the cloud. NICE Actimize, the leading global provider of financial crime, risk and compliance solutions is the first user of the new Real-time Microservice solution.
/bit.ly/2O4n5kr

Researchers connect Evilnum hacking group to cyberattacks against Fintech firms
Charlie Osborne – ZDNet
Evilnum has been detected in the wild since 2018 with links made between the advanced persistent threat (APT) group and attacks against financial technology firms. Beyond the group’s taste for Fintech targets, however, little has been explored in terms of the group’s tools, techniques, or potential ties to other cyberattackers.
/zd.net/3fe74Vd

Pandemic Lending Pushes Community Banks Toward Fintech Fixes
Lydia Beyoud – Bloomberg
A federal stimulus program to combat the recent economic downturn is pushing more community banks to embrace financial technology partnerships.
Some banks already issue Small Business Administration-backed loans, but the $669 billion Paycheck Protection Program, launched in early April, turned many other community banks into SBA lenders almost overnight.
/bit.ly/3ecL4J3

Turbo-charging Innovation
Jon Butler via LinkedIn
I was asked recently about the biggest challenge I faced during my 20+ years managing sales & trading technology in Capital Markets. My answer was managing the difference between the front office business demand for technological innovation, such as new systems and upgrades and the ability of the front office technology department to supply it, quickly and affordably.
/bit.ly/2ObsVAQ

Cryptocurrencies

Crypto Stablecoins Face Increasing Regulatory Scrutiny
Olga Kharif – Bloomberg
Regulator FATF calls for digital exchanges to police the coins; Coins seen posing money laundering, terrorism financing risks
Tether and other so-called cryptocurrency stablecoins have long flown under the radar of international regulators. That’s about to change. The Financial Action Task Force, with members from about 200 countries who recommend ways to stop money laundering and the financing of terrorism, said in a report Tuesday that stablecoins need to comply with standards to guard against both practices.
/bloom.bg/2VVzpYA

China’s Digital Yuan Gets First Big Test Via Tech Giant Didi
Zheping Huang – Bloomberg
SoftBank-backed startup has been working on adoption of DCEP; Specifics of rollout aren’t clear yet, people familiar said
Ride-hailing giant Didi Chuxing is testing China’s digital cash as a payment method on its platform, in what could be one of the first real-world applications of the electronic version of the yuan.
/bloom.bg/2ZMJZ5n

TikTok Takes on Crypto With Dogecoin Soaring 40% in 24 Hours
Amena Saad and Vildana Hajric – Bloomberg
Dogecoin surges thanks to the latest TikTok challenge; ‘Stay Safe. Be Smart,’ Dogecoin Twitter tells investors
As TikTok users spend more time at home, their priorities appear to have shifted from whipping up the perfect Dalgona coffee to manipulating the crypto market. Enter, the Dogecoin Challenge. Dogecoin is a cryptocurrency jokingly established in December 2013 that features the bygone Doge meme as its logo. Among the latest in an endless series of TikTok trends, users are encouraged to invest in the currency, acting under the assumption that there is serious money to be made if the coin’s price hits $1. It currently sits at $0.0039.
/bloom.bg/2ZPqwBf

CFTC Is Waiting on SEC to Allow Futures Trading of More Digital Assets, Says CFTC Chairman; Chairman Tarbert of the CFTC wants to see more clarity on which tokens are securities within the U.S. as well as broader international cooperation on regulation.
Kollen Post – Cointelegraph
In a July 7 interview with predecessor Jim Newsome, current Chairman of the Commodity Futures Trading Commission (CFTC) Heath Tarbert ran down a list of pending concerns standing between cryptocurrencies and the long-awaited promised land of regulatory clarity.
/bit.ly/2OjnQXj

Coinbase hires prominent former judge as its top lawyer
Jeff John Roberts – Fortune
The cryptocurrency giant Coinbase announced on Wednesday that it has brought on Paul Grewal as its chief legal officer. The move is significant because Grewal is a prominent figure in Silicon Valley and carries a lot of weight in a legal circles.
/bit.ly/2OcSp0o

Here are the numbers behind TikTok’s crazy Dogecoin moment
Frank Chaparro – The Block
Much wow. That’s how some cryptocurrency traders are likely thinking of recent action in Dogecoin markets after a wild week for the meme crypto. The price of the coin, originally founded as a joke, has soared as TikTok users attempt to pump it to $1 from its sub-penny price. As the dust starts to settle, we take a look at some of the numbers behind what Bloomberg has called the “Dogecoin Challenge.”
/bit.ly/2W3QZK7

London Stock Exchange Parent Assigns Financial ‘Bar Codes’ to 169 Cryptos
Sandali Handagama – Coindesk
It’s not quite a seal of approval, but one of Europe’s largest financial markets is giving cryptocurrencies the equivalent of the bar codes found on soup cans and jam jars. Late last month, the London Stock Exchange Group (LSEG) added 169 digital assets to its SEDOL Masterfile service, a global database that assigns unique identifiers to financial instruments. The assignees included digital currencies (such as bitcoin), “digital platforms” that allow issuance of multiple assets (such as Ethereum) and security tokens. The seven-digit alphanumeric codes help LSEG’s customers keep track of traded assets from execution to settlement.
/bit.ly/3iIDV6B

Venezuelan military officials seize 315 bitcoin miners
Yogita Khatri – The Block
The Bolivarian National Guard of Venezuela, also known as the Armed Forces of Cooperation and part of the country’s Ministry of Defense, has seized 315 bitcoin mining machines. An official account of commander Adolfo Rodríguez Cepeda announced the seizure on Monday on Twitter, saying that the bitcoin mining machines were retained “for not having the permit issued by the National Superintendence of Cryptoactives and Related Activities (Sunacrip).”
/bit.ly/3gzyJjI

Ethereum’s DeFi tokens are rapidly outpacing Bitcoin
Greg Thomson – Decrypt
Tokens associated with decentralized finance (DeFi) protocols exploded in value in the past three months, outperforming the wider cryptocurrency market by a wide margin. Over $2 billion worth of Ethereum and Bitcoin has found its way into DeFi protocols already. The second billion of that sum flooded in during just three weeks in June. What’s more, DeFi platforms are now collectively handing out $25 million per month to their users.
/bit.ly/2O8lhHj

Introducing the CoinDesk 20: The Assets That Matter Most in Crypto
Lawrence Lewitinn – Coindesk
Which cryptocurrencies matter most to the market? That question gets tougher to answer every day as new digital assets join the thousands already traded. Those looking to figure out which ones are the most important have often used simple metrics such as market capitalization to sort through the Lego pile of coins and tokens. Such simplistic filtering tells only part of the story and is fraught with the potential for manipulation. (Read Anna Baydakova’a recent article for a salient illustration.)
/bit.ly/2CmKriB

Ethereum miners set a record for revenue from transaction fees in June
The Block
Ethereum miners generated an all-time high of nearly 17% of their total revenue from the transaction fees in June — up from just 10% in May — based on a 30-day rolling average. Cryptocurrency miners typically generate their revenues through block subsidy rewards and transaction fees. The increase in the transaction fees piece of the pie was likely fueled in part by several Ethereum-based Ponzi and marketing schemes that have become some of the network’s biggest spenders lately. The mania around “yield farming” in the Ethereum community is also a likely contributor.
/bit.ly/327aoNY

Politics

TikTok, Once an Oasis of Inoffensive Fun, Ventures Warily Into Politics; App starts allowing U.S. protest videos and quits Hong Kong, while facing flak in Washington over its Chinese control
Georgia Wells, Shan Li and Liza Lin – WSJ
TikTok has been one of the world’s biggest distractions during the pandemic, thanks to its endless stream of bite-size videos featuring dance-offs, pranks and other goofs. Lately there has been a dash of something new at TikTok: politics.
/on.wsj.com/31ZFIyj

Trump Says He’s Considering a Ban on TikTok in the U.S.
Shelly Banjo, Jordan Fabian, and Nick Wadhams – Bloomberg
President seeks to retaliate against China over virus spread; Justice, FTC are pursuing an inquiry, privacy advocate says
President Donald Trump said his administration is considering banning the short video app TikTok in the U.S. as one possible way to retaliate against China over its handling of the coronavirus. Trump’s comments on Tuesday came one day after Secretary of State Michael Pompeo said officials were looking at barring the app, whose parent company is China’s ByteDance Ltd. Asked to elaborate Wednesday, Pompeo declined to repeat the threat of a ban but said instead that the examination of TikTok was part of a broader effort to protect American citizens’ private data.
/bloom.bg/3iO5pYv

*****I wonder if this is related to TikTok being used against him for his Tulsa rally?~JJL

The humbling of the Anglo-American world; Abandonment of common sense during the pandemic has damaged the US and UK national brands
Edward Luce – FT
It takes effort to recapture how Ronald Reagan and Margaret Thatcher in the 1980s hastened the demise of the Soviet Union. Images of that triumphal moment are as fresh as yesterday. The atmospherics smell of another era. Yet it is worth the effort.
/on.ft.com/31WhAg5

Old Friends Expect Trump’s U.S. to Become Even More Erratic; The U.S. leader has tested the ability of political veterans to adapt. China may have its own strategy, but Europeans are caught in the middle.
Ian Wishart, Kait Bolongaro, and Arne Delfs – Bloomberg
After Donald Trump became president, some of the U.S.’s oldest allies believed they could anticipate his next move. The billionaire’s approach was unorthodox for sure, but there was a certain logic. Many realize now that their thinking was not only misguided, but that they don’t have much power to influence him. There is also a growing dread that the embattled leader will stop at little in a brutal fight to get re-elected come November. Polls show him badly trailing his Democratic rival Joe Biden.
/bloom.bg/2ZR43Um

Does Zuckerberg Understand How the Right to Free Speech Works? A new audit warns that Facebook may be “driving people toward self-reinforcing echo chambers of extremism.”
Greg Bensinger – NY Times
It’s time for Mark Zuckerberg to really start listening. Civil rights and good government groups and users have been shouting from the rooftops for years for real change at the world’s most powerful social media company. Facebook, they say, has helped enable misinformation about the coronavirus, elections, political repression — as well as incite actual violence. Critics have long warned about President Trump’s spread of misinformation on the platform, where hate groups like white supremacists have also found a cozy home.
/nyti.ms/2W3zfyx

TikTok Gone From Hong Kong App Stores as China Law Bites
Zheping Huang and Vlad Savov – Bloomberg
The viral video sensation is no longer available to download; New law from China seen as threat to civil liberties
ByteDance Ltd.’s TikTok is no longer available to download for either iPhones or Android devices in Hong Kong, exiting the market just days after the passage of a new national security law by Beijing.
/bloom.bg/320jAny

Jacksonville attorneys sue to block Republican National Convention
Justine Coleman – The Hill
A group of attorneys in Jacksonville, Fla. filed a lawsuit on Wednesday to block the Republican National Convention from taking place in the city next month. The lawsuit, filed in Duval County, points to several arguments why the city should not host the event as Florida’s case numbers continue to spike, saying the convention would be “a nuisance injurious to the health (and) welfare” of the community.
/bit.ly/2ZRmaJQ

U.S. Killing Of Iran’s Gen. Soleimani ‘Was Unlawful,’ U.N. Expert Says
Bill Chappell- NPR
The U.S. killing of Iranian Maj. Gen. Qassem Soleimani in January “was unlawful and arbitrary under international law,” a U.N. human rights investigator says, calling the drone strike in Baghdad a violation of Iraq’s sovereignty.
/n.pr/38EObZ7

It Really Is Trump’s Fault; The coronavirus pandemic squashed all the advanced economies, but none so dismally as the U.S.
Matthew A. Winkler – Bloomberg
President Donald Trump inherited the world’s best economy in 2017 and helped make it one of the worst. The coronavirus pandemic would have made Americans miserable under any president, but it was Trump’s defiance of science, muddled messaging and incessant vitriol that has plunged the country into a swamp of joblessness, receding labor participation and slumping business confidence unseen in other developed nations. Trump’s four years in office already measure up as the biggest economic disaster for any U.S. president in modern times, according to data compiled by Bloomberg.
/bloom.bg/3gNepLX

Regulation

Reminder: Compliance Date for NFA’s Swaps Proficiency Requirements is January 31, 2021
NFA
As a reminder, the compliance date for NFA’s Swaps Proficiency Requirements is January 31, 2021. NFA Members with associated persons (AP) required to satisfy NFA’s Swaps Proficiency Requirements must ensure these individuals do so by January 31, 2021. Individuals who do not satisfy the Swaps Proficiency Requirements by the compliance date will be unable to engage in swaps activities until they have done so. NFA encourages individuals to complete the Swaps Proficiency Requirements in advance of the January 31, 2021 compliance date. This will ensure they remain approved as a swap AP at an FCM, IB, CPO or CTA Member (intermediary) or may continue acting as an AP at an SD after that date.
/bit.ly/38D8juG

CFTC Charges Florida Man for Attempting to Fraudulently Profit From COVID-19; First CFTC Enforcement Action Targeting Misconduct Directly Tied to COVID-19
CFTC
The Commodity Futures Trading Commission today announced it has filed a complaint in the U.S. District Court for the Western District of Texas against James Frederick Walsh of Boca Raton, Florida, charging him with fraudulent solicitation and failure to register with the CFTC. Walsh’s fraudulent solicitations include falsely claiming to generate increased profits as a result of the COVID-19 pandemic. This is the first enforcement action brought by the CFTC alleging misconduct tied directly to the pandemic. The CFTC has also brought additional cases against entities and individuals whose frauds were ongoing during the pandemic. [See CFTC Press Release Nos. 8180-20, 8179-20, 8164-20].
/bit.ly/38DvVPO

CFTC Announces Finalization of 2020-2024 Strategic Plan
CFTC
The Commodity Futures Trading Commission today announced the finalization of the agency’s 2020-2024 Strategic Plan. The plan was unanimously approved by the Commission in May and was subject to a 30-day comment period that ended in June. “This is a bipartisan, consensus plan that can stand the test of time,” said CFTC Chairman Heath P. Tarbert. “I am proud of the hard work that went into developing the plan and the unanimous support it ultimately received. It will guide the last of the CFTC’s unfinished business to completion and better position the agency to tackle the unwritten future.”
/bit.ly/2O8Ig4X

CFTC Charges California and Colorado Residents in Ongoing Multimillion-Dollar Ponzi Scheme
CFTC
The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the Eastern District of California charging a number of individuals and entities with operating a $14.5 million binary options and retail foreign currency (forex) Ponzi scheme. Charged in the complaint are California-based defendants John D. Black and his affiliated entities Financial Tree (d/b/a Financial Tree Trust), Financial Solution Group (d/b/a Financial Solution Group Trust), and New Money Advisors, LLC, and his associates Christopher Mancuso and Joseph Tufo. The complaint also charges Colorado-based defendants John P. Glenn and his law firm, The Law Firm of John Glenn, P.C. In addition, the complaint names seven relief defendants who received funds from the scheme to which they have no lawful entitlement.
/bit.ly/2ZejIOc

SEC Issues Agenda for July 16 Special Meeting of the Asset Management Advisory Committee
SEC
The Securities and Exchange Commission today released the agenda for the virtual July 16 special meeting of the Asset Management Advisory Committee (AMAC). AMAC was formed to provide the Commission with a range of perspectives on asset management and related advice and recommendations.
/bit.ly/2Cl9YJ0

ESMA consults on Guidelines on calculation of positions under SFTR
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has launched a consultation on draft Guidelines on the calculation of positions by Trade Repositories (TRs) under the Securities Financing Transactions Regulation (SFTR).
/bit.ly/38KnVfN

ASIC consults on second product intervention order to stop continuing consumer harm
ASiC
ASIC has released Consultation Paper 330 (CP 330) on the proposed use of its product intervention power to address significant detriment it has identified in the continuing credit industry.
/bit.ly/3fkfWJ6

Investing and Trading

Applying the scientific method to investing; The new field of experimental finance goes beyond backtesting
Rob Mannix – Rick.net
Plenty of investment managers describe their approach to investing as scientific. In reality, that only goes so far. Scientists use experiments to prove their theories. In finance, quants build strategies, test them out-of-sample, and then peddle them to investors.
/bit.ly/2O8nse7

Miserable Economic Outlook Could Yield Record Gold Prices; Tumbling U.S. bond yields have helped drive gold prices higher—and a yield rebound doesn’t seem imminent
Mike Bird – WSJ
Gold prices ticked past $1,800 an ounce this week, and are now not far from the all-time highs reached in 2011, in the bleak aftermath of the financial crisis. New records could be ahead.
/on.wsj.com/38HOwu3

Record-High Gold Prices Are in Sight
Ranjeetha Pakiam – Bloomberg
Only a matter of time before bullion tests all-time high: ING; Fed’s Mester sees economic risks rising as virus cases surge
Gold prices could be set to take out their long-standing record as mounting concerns about the global economy fuel gains above $1,800 an ounce. Spot bullion extended its advance into a sixth day as the resurgence of the coronavirus in some parts of the world adds to concerns about a protracted global downturn. Demand for havens has surged, with inflows into gold-backed exchange-traded funds this year already topping the record full-year total set more than a decade ago, and some market watchers are forecasting prices could hit all-time highs as the health crisis drags on.
/bloom.bg/2ZUPcYP

Gold ETF Inflows Hit Record as Bullion Rally Continues; Gold prices are up nearly 20% for the year amid buying by skittish investors during coronavirus
Amrith Ramkumar – WSJ
Nearly $40 billion flowed into gold-backed exchange-traded funds in the first half of the year, topping the previous annual record and highlighting robust investor demand for precious metals during the coronavirus pandemic.
/on.wsj.com/2W1f1oZ

United Airlines Warns It May Furlough 36,000 Staff; The airline’s involuntary cuts are likely to be set in August and go into effect from Oct. 1
Doug Cameron and Alison Sider – WSJ
United Airlines Holdings Inc. said it is exploring the possibility of shedding almost half its U.S. workforce, the first major domestic carrier to detail how deep the industry might have to retrench amid the pandemic-driven slump in passenger demand.
/on.wsj.com/322UpAC

Psychological traps investors should be wary of; Do you need an ’emotional circuit breaker’ to prevent untimely investment decisions?
Madison Darbyshire – FT
It has been a rollercoaster year for investors. If you resisted the urge to sell in March as global markets plunged, then you probably benefited from the subsequent bounce — but you may now be fearing that worse is to come. The hangers-on are likely to have seen their dividend income dry up, whereas those who retreated to the safety of cash have been watching share prices detach from the reality as an influx of day traders enter the market.
/on.ft.com/3gExDDg

Fed withdraws from repo market after 10 months; US central bank’s aggressive intervention brought short-term borrowing costs under control
Colby Smith – FT
The US Federal Reserve’s unprecedented 10-month intervention in short-term borrowing markets has been wound down, after the central bank successfully tamed volatile funding costs that had threatened to cause disruption across the financial system.
/on.ft.com/3219lPW

Negative interest rates can be a doom loop for pension investors; Fixed income is turning into fixed expense for those who seek haven assets for capital conservation
Amin Rajan – FT
“On the whole, negative interest rates, no?.?.?. not an area I would want to go to,” said Bank of England governor Andrew Bailey to members of the UK parliament in March. Two months later Britain sold a government bond with a negative yield for the first time, as Covid-19 created the dystopian reality of deserted airports and traffic-free highways.
/on.ft.com/3iJabGT

Bond investors wait for more headlines on EU recovery fund
Yoruk Bahceli – Reuters
Euro zone bond yields held their ground on Thursday with investors’ main focus expected to be any new developments on the European Union’s recovery fund, which aims to help the region’s economy recover from the coronavirus crisis.
/yhoo.it/3fft1mC

Environmental, Social and Corporate Governance

Goldman Sachs Joins Initiative to Help Shape Industry’s Role in Financing Climate Transition
Goldman Sachs
Wells Fargo, Goldman Sachs, Bank of America, and JPMorgan Chase are partnering with the Rocky Mountain Institute, a leading global clean energy nonprofit, to launch the Center for Climate-Aligned Finance to help shape the financial industry’s role in facilitating the transition to a low-carbon, sustainable economy, and society.
/bit.ly/2CmR4BS

Fed’s Top Ranks Dominated by White Men Despite Diversity Push
Catarina Saraiva, Steve Matthews and Dave Merrill – Bloomberg
Federal Reserve Chair Jerome Powell has said that there’s no room for racism at the central bank and that diversity and inclusion are a “very high priority.” A close look at the Fed’s own makeup shows that this powerful institution, the foremost authority on the economy in the U.S., still has a lot of work to do on that front.
/bloom.bg/2DmFsz3

Al Gore: the pandemic is a ‘turning point’ in the fight against climate change; ‘Overall, I think the world is beginning to move in the right direction,’ the former US vice-president told the FT
Billy Nauman and Patrick Temple-West – FT
What will happen to the sustainability movement after Covid-19? How will it dovetail with politics and finance? Al Gore, former vice-president to Bill Clinton — and almost president in his own right in 2000 — is better placed than many to issue a verdict. Back in 2006, his film An Inconvenient Truth made him one of the first public figures to sound alarm bells about climate change. He also co-founded Generation Investment Management, one of the early large sustainable investing funds that now manages approximately $20bn. But now that Gore’s once-lonely crusade on the climate has gone mainstream — and money is flooding into sustainability — does he expect the momentum to continue?
/on.ft.com/2ZfGLbL

Institutions

BNY Mellon and Deutsche Bank reduce confirmation times for emerging market FX trades; By leveraging previously established bots for a new digital solution, BNY Mellon and Deutsche Bank are aiming to improve custody processes for emerging market currency trades.
Joe Parsons – The Trade
BNY Mellon and Deutsche Bank have developed a new joint custody FX solution aimed at significantly reducing confirmation times for restricted emerging markets currency trades.
/bit.ly/2ZcXn3V

Crunch time for long/short funds after Lansdowne calls it quits; European pioneer of popular strategy says easy money has made things too difficult
Laurence Fletcher – FT
Lansdowne Partners’ decision this week to shut its flagship hedge fund has dealt a big blow to a key strategy — equity long/short — that is already struggling to find losers in stimulus-soaked markets.
/on.ft.com/2ZQUqFg

Big Banks Aren’t Embracing Fed’s Main Street Loan Program; Many big lenders are not openly willing to make loans to new customers through the Federal Reserve’s program for midsize businesses
Jeanna Smialek – NY Times
The Federal Reserve Bank of Boston on Wednesday released a list of lenders that have signed up for the central bank’s midsize-business lending program and are willing to make loans to new customers through the initiative.
/nyti.ms/3fcsBgU

Regions

Bankers fleeing UK lockdown told to return or take leave to stay abroad
The Malaysian Reserve
Bankers who waited out Britain’s lockdown beyond the UK’s borders are being told by their employers that it is time to return. Unless they leave vacation homes in France or their parents’ place in Poland soon, they risk complicating their residency status and more importantly for a government running up historic peacetime deficits, depriving the Treasury of tax payments. Firms could also become liable for paying into national insurance systems in multiple countries.
/bit.ly/2O6cxBu

Nigeria devalues naira to close gap with unofficial rates; Economy had barely recovered from 2014-15 oil price collapse when coronavirus hit
Neil Munshi – FT
The Central Bank of Nigeria has weakened the naira, responding to mounting pressure from external lenders, US dollar shortages and a slump in oil prices that has blown a hole in the country’s budget.
/on.ft.com/3iS0TbN

A Dearth of Cattle Sends Beef Production Plummeting in Australia
Ainslie Chandler – Bloomberg
Australia’s beef output plunged to the smallest since 2017 as farmers rushed to rebuild herds after rains eased years of severe drought. Beef production in May tumbled a seasonally adjusted 8.4% from last year to 178,900 tons, according to Australian Bureau of Statistics data. The number of cattle slaughtered dropped by 12.5% on the year to 603,500 head. Both figures are the lowest since November 2017.
/bloom.bg/3gFffu0

Family Behind Paris Baguette Loses Billions by Taking on World
Yoojung Lee – Bloomberg
SPC Group seeks to grow to 20,000 outlets in the next decade; Paris Baguette bakeries will launch in Canada next year
Its stores are dotted around Manhattan, Singapore and Shanghai with blue neon signs that virtually scream France: The words Paris Baguette, separated by an Eiffel Tower logo. Yet the family behind the chain is South Korean — and it’s bet a large chunk of its fortune that the rest of the world will warm to its baked goods, often featuring a subtle twist for Asian palates, such as buns stuffed with red-bean filling and pastries that fuse hot dogs.
/bloom.bg/321dhzR

Lone Polish Analyst Becomes Top Forecaster for EM Currencies
Lilian Karunungan – Bloomberg
Grejner bet central bank stimulus would see risk assets rally; Dollar is set to revive in second half as global threats loom
A lone foreign-exchange strategist who works in a small city in western Poland better known for its annual wine festival than its financial-services industry has become the most accurate forecaster for emerging-market currencies.
/bloom.bg/2W1ggVv

Google launches balloon-powered internet service in Kenya
Bethlehem Feleke, CNN
Nairobi, Kenya (CNN)A fleet of balloons has begun providing internet service to remote areas of Kenya, Google’s Project Loon and Telkom Kenya announced. It’s the first balloon-powered internet to launch in Africa, and the first non-emergency commercial deployment in the world, the two companies said.
/cnn.it/3e8wBha

China’s market euphoria trumps political risk in Hong Kong
Samuel Shen, Noah Sin – Reuters
Investors in China’s soaring stock market are increasingly turning to Hong Kong for bargains, egging on an investment boom on the back of large tech listings and shaking off fears of political risks in the bruised financial hub.
/reut.rs/3gCo8UY

Brexit

Brexit: UK wants deal with EU over NI food supply
Conor Macauley – BBC
The UK government is seeking to agree “special provisions” with Europe over the food supply to Northern Ireland from Great Britain. The environment secretary is seeking to cut a deal limiting trade friction after the Brexit transition. George Eustice told a Lords scrutiny committee this was an issue for GB supermarkets supplying their NI stores. Under the Withdrawal Agreement signed by the UK and EU, NI will follow EU rules on goods, including foods. However, Great Britain will not.
/bbc.in/3iO5Die

The Guardian view on Brexit and trade: an expensive geography lesson
The Guardian
It is possible that Boris Johnson meant it when he said last year that Brexit would not involve checks on goods moving between Great Britain and Northern Ireland, but only if he did not understand the deal he had signed. His position made sense as dishonesty or ignorance. It was never true. As Brexit talks continue in London this week, it turns out the government has submitted to the EU its application to put border control posts at Irish Sea ports. That is a necessary act of compliance with the Northern Ireland protocol in the withdrawal agreement.
/bit.ly/2VWujLV

Brexit: UK nominates Liam Fox to lead World Trade Organization
BBC
The UK government has nominated former cabinet minister Liam Fox as its candidate to lead the World Trade Organization. The body is searching for a new director-general to replace Brazilian Roberto Azevedo at the end of August. Boris Johnson said Mr Fox was a “passionate advocate of multilateralism” with “detailed knowledge” of global trading. Labour said the WTO would “immediately discount” Mr Fox for the role.
/bbc.in/2DkJPup

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