Will the crypto crash derail the next web revolution? Advocates argue that the blockchain technology that underpins digital assets will withstand the recent fall in values

Jul 6, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Don’t forget to sign up for FIA Forum: Frankfurt 2022, to be held on July 12 at the Hilton Hotel in the City Centre from 9 a.m to 5 p.m. CEST.

Abaxx Technologies Inc. has seen tremendous interest in their podcast series Smarter Markets, with 850,000+ downloads and a 320% increase in traffic growth. The podcasts have been hosted by Grant Williams. Episode one on January 15 had Jeff Currie, global head of commodities research from Goldman Sachs, as the guest. The list of impressive guests has continued from there. They also have a sub-series titled “Systems at Risk” hosted by David Greely. Walt Lukken was a guest on May 14 of that series. There are other hosts as well. You can follow them on Twitter at @Smarter_Markets or on LinkedIn at @Smarter Markets.

The Financial Times has a podcast titled “How Spacs went splat” that looks inside the business and financial stories of the moment with reporting from the FT journalists.

FT Tech has a video titled “The ongoing battle to beat crypto thieves” that looks at how “2021 cryptocurrency theft had grown by 500 per cent over the previous year.”

To help celebrate the inclusion of ETFs in Stock Connect, HKEX published a white paper titled “The inclusion of ETFs in Stock Connect -Implications and opportunities.”

In rushing to tell the story of Highland Park yesterday, I forgot to include the fact my wife and her family lived there for a time. Her brother, Jeff Bergstrom, who is an editor of JLN and our CIO, went to grade school and middle school in Highland Park. Cheryl, my wife, spent three years at Highland Park High School, and her brother Bryan graduated from there. One of the things that happened on the fourth was that the Chicago Botanical Garden, where my mother-in-law was the director of development back in the day, was evacuated and closed because of the shooting in Highland Park, which abuts the garden. This story has a very wide impact across JLN, the Chicago area and beyond.

I heard from one reader of JLN who was at the parade and is safe, but still shaken from the experience.

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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Nodal Exchange And Incubex Collaborate To Launch First-of-their-kind Environmental Futures & Options
The IncubEx
Nodal Exchange and IncubEx announced today the planned launch of new environmental products including several first-of-their-kind futures contracts in renewable energy credits, renewable natural gas certificates (renewable thermal certificates) and voluntary carbon offsets. The new Nodal Exchange products further expand the world’s largest exchange listed suite of environmental products.
/jlne.ws/3zjl9xw

***** Incubex continues to do interesting things with its partners and who knows what will be next.~JJL

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Michael Lewis: ‘The thing that really works for Trump is: the system’s rigged’; One of the greatest chroniclers of America’s financial crisis takes aim at the former president — and at the US response to Covid
Henry Mance – FT
Real life is not stranger than fiction, but, when Michael Lewis tells it, it is more exciting. Lewis is arguably the best in the world at finding underdogs and oddballs, and spinning their triumphs into smart entertainment. The data-driven baseball manager Billy Beane in Moneyball, the wacky contrarian investors in The Big Short — Lewis made them superstars, and their stories made him richer even than his brief stint as a bond trader at Salomon Brothers did. Most of his 18 books are bestsellers. But do people really listen?
/jlne.ws/3bPNv8Q

****** If you tell a lie often enough, people will start to believe it. Where have I heard that before? ~JJL

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Are Gas and Nuclear Energy Green? European Lawmakers Say Yes.
The decision is likely to reverberate far beyond Europe’s borders and set a benchmark that could be replicated around the world.
Matina Stevis-Gridneff – NYT
In a landmark vote for Europe’s climate and energy policies, lawmakers said on Wednesday that some gas and nuclear energy projects should be considered “green” and receive access to cheap loans and even state subsidies.
A European Parliament meeting in Strasbourg, France, voted in favor of accepting a proposal by the European Commission, the E.U. executive, with 328 votes backing the proposal and 278 against.
/jlne.ws/3Pb7IVc

**** Glowing green? ~JB

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Tuesday’s Top Three
Our top story Tuesday was our lead story, Natural Gas Soars 700%, Becoming Driving Force in the New Cold War, from Bloomberg via Yahoo! Finance. Second was $12.8 Trillion In Gold Deposits Discovered In Uganda, from GSI Exchange. And third, for its fourth time in the top three, was A hedge fund manager who moved to Miami from Chicago breaks down the pros and cons of living in the Magic City for employees of Ken Griffin’s Citadel — from food to crime to the weather, from Business Insider.

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MarketsWiki Stats
26,901 pages; 239,308 edits
MarketsWiki Statistics

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Lead Stories

Will the crypto crash derail the next web revolution? Advocates argue that the blockchain technology that underpins digital assets will withstand the recent fall in values
Richard Waters and Hannah Murphy and Scott Chipolina – FT
Ethan Buchman, co-founder of blockchain network Cosmos, is doing his best to sound stoic. Since January, the collapse in cryptocurrency prices has wiped 80 per cent off the value of the atom tokens that underpin Cosmos, slicing $10bn from their total worth. “Some people get shaken out, some people get scared,” Buchman says of the price collapse in the tokens, which are used to secure the network. “But others see it as an opportunity to double down on what they believe in.”
/jlne.ws/3yllmxZ

Supreme Court EPA ruling puts regulators in handcuffs; Conservatives are rejoicing now but, if scandals result, the backlash could be severe
Brooke Masters – FT
At first glance, the principle behind last week’s US Supreme Court decision preventing the Environmental Protection Agency from regulating carbon emissions seems perfectly sensible. While federal agencies are empowered to regulate specific sectors, the court said, unelected bureaucrats cannot rush into new areas and pump out whatever costly rules they want. On “major questions”, Chief Justice John Roberts wrote in West Virginia vs. EPA, “the agency must point to ‘clear congressional authorisation’ for the power it claims.”
/jlne.ws/3NOqP6d

Why Payment for Order Flow Made Trades Free But Left SEC Skeptical
Katherine Doherty and Lydia Beyoud – Bloomberg
The way stocks are bought and sold in the US has changed dramatically over the past decade, and at the heart of the changes is something called payment for order flow, or PFOF. It’s what’s made much of stock trading commission-free, which in turn brought into the markets the millions of new retail investors who fueled 2021’s so-called meme stock revolution. But PFOF has also become a focus of attention for the US Securities and Exchange Commission and other critics, some of whom wonder if the “free” model is in fact the best deal.
/jlne.ws/3uOBBmv

Crypto lender Voyager Digital files for bankruptcy
Shivam Patel, Sinead Cruise and Tom Wilson – Reuters
U.S. crypto lender Voyager Digital said on Wednesday it had filed for bankruptcy, becoming another casualty of a dramatic fall in prices that has shaken the cryptocurrency sector.
/jlne.ws/3OGIPRf

FIA Tech launches Cash and Collateral data service; Initial firms represent 40% of customer funds held in US futures accounts
Securities Finance Times
FIA Tech, the leading technology provider to the exchange-traded derivative industry, announced today the launch of FIA Tech’s Cash and Collateral reference data service. At launch, the data set will be used by several global clearing firms that manage more than $120 billion of collateral held by customers for trading futures in the US alone. That is equivalent to 40% of all customer funds held in US futures accounts, according to CFTC filings and data published by the Futures Industry Association’s FCM Tracker.
/jlne.ws/3O1bH5L

Hong Kong Versus Singapore: Which City Is Best for Expats in 2022?
Tassia Sipahutar and Krystal Chia – Bloomberg
Some things never change. The battle between Hong Kong and Singapore to attract global business talent might just be one of them. Five years after Bloomberg first created its guide for expatriates considering which of the two cities to live and work in, here’s a fresh look at some of the key factors in this long-running rivalry.
/jlne.ws/3P8HdiS

U.S. exchanges win court appeal on SEC market data order
John Mccrank – Reuters
A U.S. appeals court on Tuesday struck down an order by the Securities and Exchange Commission that would have allowed some financial firms that are not stock exchanges to have a say in how essential stock market data is priced and disseminated. The ruling was a win for large exchange groups like Intercontinental Exchange’s (ICE.N) NYSE, and Nasdaq (NDAQ.O), which had challenged the SEC’s order. Real-time consolidated equity market data, such as the best bids and offers available in the market, are a regulatory must-have for brokers, in part so they can show they executed their customers’ orders at the best prices available.
/jlne.ws/3OQS0P5

Rishi Sunak resigns as chancellor in devastating blow to Boris Johnson; ‘It has become clear to me that our approaches are fundamentally too different’
Ashley Cowburn – Independent
Rishi Sunak has resigned as chancellor in a destablising blow to Boris Johnson’s premiership, just moments after Sajid Javid announced he had also quit the government. Mr Sunak said “the public rightly expect government to be conducted properly, competently and seriously”, adding: “I believe these standards are worth fighting for and that is why I am resigning.”
/jlne.ws/3IeZ8SZ

Boris Johnson on the brink after Rishi Sunak and Sajid Javid quit UK cabinet; Chancellor and health secretary lead resignations in wake of row over British PM’s honesty
George Parker, Sebastian Payne and Jim Pickard – FT
Boris Johnson was clinging to power on Tuesday night after chancellor Rishi Sunak and health secretary Sajid Javid dramatically resigned from the UK prime minister’s cabinet within minutes of each other. A number of junior government members also quit, with many Tory MPs believing that the ministerial mutiny could signal the beginning of the end for Johnson. But there was relief in Downing Street when a number of other senior figures — including deputy prime minister Dominic Raab, foreign secretary Liz Truss, defence secretary Ben Wallace and levelling-up secretary Michael Gove — indicated that they were staying.
/jlne.ws/3NMYGN1

Johnson Under Pressure as Five More Ministers Resign; Johnson Vows to ‘Keep Going’ After Cabinet Upended; Tories to discuss rule change that would allow leadership vote; New Chancellor Zahawi ‘determined’ to cut taxes; Resignations of government figures mount up.
Ellen Milligan – Bloomberg
Johnson’s government is imploding right now. His attempt to avoid other resignations by quickly installing senior Tories as chancellor and health secretary last night, and vowing to fight on today, has clearly not worked.
/bloom.bg/3ushTN9

CFTC Orders Swap Dealer to Pay $6 Million for Swap Reporting and Daily Mark Disclosure Violations
CFTC
The Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against BNP Paribas (BNPP), a global financial services corporation and swap dealer, for violations of the Commodity Exchange Act (CEA) and Commission regulations relating to swap reporting and daily mark disclosures. The order requires BNPP to pay a $6 million civil monetary penalty, cease and desist from violating the applicable provisions of the CEA and CFTC regulations, and comply with certain conditions and undertakings, including that BNPP make, within one year, a written report to the Division of Enforcement regarding the swap dealer’s compliance with the CEA and CFTC regulations.
/jlne.ws/3P5x46O

Statement of Commissioner Christy Goldsmith Romero Regarding $6 Million Enforcement Action Against BNP Paribas for Swap Data Reporting and Disclosure Failures and Failure to Supervise
CFTC
I strongly support this enforcement action against BNP Paribas for violating swap data reporting requirements for more than five years, violating swap disclosure requirements, and for failure to supervise. BNP failed to report accurately millions of swap transactions. Certain swap dealer compliance issues were not timely identified, with the result that these violations persisted for years. Despite BNP compliance personnel flagging a swap reporting issue, BNP did not adequately and timely address the issue apparently due to concerns that a comprehensive fix would take significant time and resources. I also note that BNP or affiliated entities have been the subject of CFTC or other federal enforcement actions.
/jlne.ws/3yU8Gjn

European Industries Jockey for Scarce Natural Gas; Russia’s move to cut deliveries to the continent has prompted energy-intensive industries to scramble for access to limited supplies
Matthew Dalton and Kim Mackrael – WSJ
Europe’s energy-intensive industries are jockeying for first dibs on the continent’s scarce natural gas, pressing European authorities for access to supplies as Russia cuts deliveries. Fertilizer producers are telling officials across Europe that their product is necessary for food security, that they need gas both as a raw material and a source of energy. Chemical makers say they can’t shut down a plant without incurring enormous costs. Aluminum producers say even a short power cut risks destroying their equipment.
/jlne.ws/3bUrA08

Norway’s government halts oil and gas strike; State intervention eases fears over security of supply for UK and Europe
David Sheppard and Harry Dempsey – FT
Norway’s government has intervened to end a strike by oil and gas workers that threatened to slash production at a time when Europe is scrambling for supplies to offset cuts to Russian output. Labour minister Marte Mjøs Persen summoned oil companies and workers late on Tuesday and announced the industrial action had been brought to an end.
/jlne.ws/3ImsMph

EU parliament votes to designate gas and nuclear as sustainable; ‘Taxonomy’ system aims to encourage investment towards climate-friendly projects
Alice Hancock – FT
European lawmakers have approved a law designating gas and nuclear as sustainable energy sources as part of a system aimed at encouraging direct investment towards climate-friendly projects.
/jlne.ws/3Avk46u

Crypto Mining Giant Dumped Most of Its Bitcoin Holdings in June; Core Scientific is selling tokens to buy machines, repay debt; Distress grows for mining companies facing a crypto winter
David Pan – Bloomberg
Core Scientific Inc., a top crypto miner, sold the bulk of its Bitcoin holdings in June as a steep drop in digital assets squeezes finances for even the leaders of the industry. Core Scientific sold 7,202 mined coins for $167 million last month, leading to a 79% drop in Bitcoin holdings on its balance sheet, according to the company’s monthly update. The Austin, Texas-based company now holds 1,959 coins.
/jlne.ws/3NLuZf8

‘God, Hwang and Archegos’: Insider Details of Collapsed Firm Revealed in Lawsuit; Former employee sues to recover $50 million in lost bonuses; Lawsuit claims family office operated as ‘personality cult’
Greg Farrell – Bloomberg
At Bill Hwang’s Archegos Capital Management, staffers publicly professed their allegiance to “God, Hwang and Archegos” and the founder often described himself as “the money guy who teaches the Bible to pastors.” The “personality cult” of the collapsed family office is at the heart of a lawsuit filed Tuesday by former Archegos managing director Brendan Sullivan, who is seeking to recover $50 million he says is owed from deferred bonuses he was forced to invest with the company. Hwang, he says, did whatever it took to make money, with the goal of becoming the “richest person in the world.”
/jlne.ws/3NPwSay

ECB’s crisis-fighting scheme risks being tied up in legal and political knots; Pledge to tackle divergence in bloc’s borrowing costs raises tough questions on when and how to intervene
Martin Arnold and Sam Fleming – FT
The 25 eurozone rate-setters meeting in Amsterdam last month thought they had plenty of time to finalise the European Central Bank’s plan for avoiding a bond market crisis when they started to raise rates. They were wrong.
/jlne.ws/3Arl8bm

The ongoing battle to beat crypto thieves
FT Tech
The price of cryptocurrencies has plunged but, whatever the value of their investments, for digital asset holders protecting their crypto from thieves is an ongoing problem. In March hackers carried out one of the biggest cryptocurrency heists and with cyber criminals wielding high-tech tools and techniques. In 2021 cryptocurrency theft had grown by 500 per cent over the previous year
/jlne.ws/3NL9yuD

K2 Launches Certification Against Investment Greenwashing; Investigations firm would conduct research to verify fund managers’ ESG claims
Matt Wirz – WSJ
Financial-crimes advisory firm K2 Integrity Holdings is launching an anti-greenwashing certification for investment firms as regulators crack down on false claims about investment products by money managers. The certification is meant to verify that the firms deliver on the environmental, social and governance targets they advertise to individuals, pensions and other investors. K2 will use disclosures from the companies they analyze and its own investigators’ research, according to a product presentation reviewed by The Wall Street Journal.
/jlne.ws/3nEcwGR

China ETFs Attract Billions as Investors Hope Selloff Is Over; Fear of regulatory pressure wanes as government support underpins a market rally
Eric Wallerstein – WSJ
In June, China stocks rallied to their best month in a year and a half, one of the few respites from the rout in global equities. The question now is whether relaxations of internet and Covid-19 regulations, alongside government stimulus, will continue to buoy them.
/jlne.ws/3yLr7qc

Ukraine Invasion

Russia’s Tactical Shift in Ukraine Raises Prospect of Protracted War
Alan Cullison – WSJ
Russia’s steady advances in eastern Ukraine, relying on superior firepower and larger numbers of troops, are grinding down Ukraine’s military and setting the stage for a protracted war of attrition in which Kyiv needs more Western weapons and help training new soldiers to turn the tide. After early missteps, Russia has found tactics that are working. In the invasion’s opening phase, Moscow’s armies tried to make daring thrusts deep into Ukrainian territory. They largely failed and lost elite units in the process. Now, Russian forces are advancing by increments under the cover of artillery.
/jlne.ws/3uvstmy

Gazprom Bondholders Face Dollar, Franc Coupon Payment Delays
Irene Garcia Perez – Bloomberg
The holders of two series of Gazprom PJSC notes face delays with coupon payments as Citigroup Inc., the securities’ paying agent, checks the transactions are compliant with sanctions, according to people familiar with the matter. While the Russian company has wired the money due last week, the paying agent is taking extra care on its due diligence process, the people said, asking not to be identified discussing private information. The Russian gas giant was due to pay interest of $15 million in June 29, and 7.7 million Swiss francs ($8 million) a day after, data compiled by Bloomberg show.
/jlne.ws/3P5vqCa

Russia’s Brain Drain Is Officially Underway; More than 20,000 tech workers have joined the exodus to Georgia, but the new arrivals are also raising rents and arousing suspicion.
Marc Champion and Helena Bedwell – Bloomberg
Dmitry Klimenko is putting the final touches to a new nightclub in Tbilisi’s central Vake Park, aimed at drawing some of the tens of thousands of disoriented fellow Russians, Belarusians and Ukrainians who fled to Georgia in recent months.
/jlne.ws/3ymAHOJ

Ukraine Doubts Deal to Unblock Grain Exports Will Happen Soon; Kuleba says Turkish, UN-brokered talks focus on logistics; Still, foreign minister paints grim picture of security issues
Volodymyr Verbyany – Bloomberg
Ukraine’s top diplomat cast doubt on a near-term breakthrough in talks to unblock crop exports from the war-ravaged nation’s Black Sea ports, as fears of a global hunger crisis intensify.
/jlne.ws/3OMcLvq

Russia’s war helps Qatar boost its influence over global energy flows; Search for alternatives in wake of Ukraine invasion gives Gulf state a big lift as it seeks to develop a major gasfield
Tom Wilson and Simeon Kerr – FT
Qatar has built an outsized role in global commodity markets since it first began exporting liquefied natural gas more than two decades ago. Now, following Russia’s invasion of Ukraine and a series of deals to develop a new gasfield, the Gulf state’s influence over international energy flows is set to grow even larger.
/jlne.ws/3AvnRjS

Exchanges, OTC and Clearing

Intercontinental Exchange Reports June and Second Quarter 2022 Statistics
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today reported June 2022 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/bit.ly/3P8M0Ba

Nasdaq Announces the Board of Directors of its U.S. Exchanges
Nasdaq
Nasdaq, Inc. (Nasdaq: NDAQ) today announced the election of all nominated directors to the boards of the U.S. exchanges operated by the company, which include The Nasdaq Stock Market LLC, Nasdaq PHLX LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq GEMX, LLC:
/bit.ly/3AvbBjC

HKEX launches new investor relations portal, IR Connect
HKEX
New online platform provides accessible, professional and cost-effective way for Hong Kong-listed issuers to connect with investors; Facilitates issuer-outreach and enhances visibility within global investment community
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Wednesday) pleased to announce the launch of IR Connect, a new digital investor relations platform, to help Hong Kong-listed issuers build connectivity and regular dialogue with their stakeholders.
/bit.ly/3NObGBZ

Farmer sentiment remains weak, crop producers contemplating acreage shifts in 2023
CME Group
The Purdue University/CME Group Ag Economy Barometer continued to slide in June, down 2 points to a reading of 97. Producers’ expectations for the future also weakened. The Index of Future Expectations fell 5 points to a reading of 96, marking the lowest level for the index since October 2016. Meanwhile, producers were slightly more optimistic regarding current conditions; the Index of Current Conditions improved 5 points to a reading of 99. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between June 13-17.
/bit.ly/3us5gRU

New Product: Initial Listing of 30-Year Uniform Mortgage-Backed Security (UMBS) To-Be-Announced (TBA) Futures Contracts (2.0%, 2.5%, 3.0%, 3.5%, 4.0%, 4.5%, and 5.0% Coupon Rates) – Effective Oct 3, 2022
CME Group
/bit.ly/3af0q3T

Initial Listing of the Physically-Delivered Lumber Futures and Options on
Lumber Futures Contracts
CME Group
Effective Sunday, August 7, 2022, for trade date Monday, August 8, 2022, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the physically delivered Lumber Futures and Options on Lumber Futures contracts (the “Contracts”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort as more specifically described below.
/bit.ly/3P63gqG

Delisting of Certain Previously-Listed Contract Months and Subsequent
Delisting of the Random Length Lumber Futures and Options on Random
Length Lumber Futures Contracts
Effective today, Tuesday, July 5, 2022, Chicago Mercantile Exchange Inc. (“CME”) delisted certain previously-listed contract months of the Random Length Lumber Futures and Options on Random Length Lumber Futures contracts (the “Contracts”) as noted in the table below. The Contracts are listed for trading on the CME Globex electronic trading platform (“CME Globex”) as well as for submission for clearing via CME ClearPort. There is no open interest in the delisted contract months.
/bit.ly/3Rbq3TN

Amendments to the GTC to the Connection Agreement and GTC to the Provider Connection Agreement: Connectivity limits and limit enforcement
Eurex
The Executive Board of Eurex Frankfurt AG (EFAG) decided on changes to the General Terms and Conditions to the Agreement on the technical connection and the utilization of the Exchange-EDP of Eurex Deutschland (hereafter: GTC Connection Agreement) and to the General Terms and Conditions to the Agreement on the technical connection of a Multi-Member-System Provider to the Exchange-EDP Eurex® (hereafter: GTC Provider Connection Agreement).
/bit.ly/3bVb1RV

ASX GROUP MONTHLY ACTIVITY REPORT – JUNE 2022
ASX
Attached is a copy of the ASX Group Monthly Activity Report for June 2022.
/bit.ly/3sGw54D

Deezer lists on Euronext and joins the Euronext Tech Leaders segment
Euronext
Deezer lists after having reached a definitive agreement for a business combination with the I2PO SPAC; Deezer joins the Euronext Tech Leaders segment, dedicated to European leading and high-growth Tech companies; Deezer is the 2nd listing on Euronext Tech Leaders since the launch of the initiative in June 2022; The listing of Deezer is the 5th business combination with a SPAC on Euronext markets in 2022, and the 1st business combination with a SPAC on Euronext Paris in 2022
/bit.ly/3RdYadK

ICRIER – NSE Conference on Getting Agricultural Markets Right
NSE
/bit.ly/3pckN5S

NYSE Pillar Options: Final Confidence Test, NYSE Pillar July 11th Go-Live Information
NYSE
Final Confidence Test
On Saturday, July 9th, NYSE Arca Options will conduct the Final Confidence Test ahead of its migration to NYSE Pillar. The script for the July 9th test can be found here. Participants wishing to test can register by contacting connectivity@nyse.com.
/bit.ly/3yniFMi

Fintech

Payment Giant Has SWIFT Alternative for 32 Million Indian Expats
Alex Gabriel Simon Thattil – Bloomberg
The company that built India’s digital payments backbone plans to make it cheaper and easier for the nation’s 32 million expatriates to bring their money home. Indians overseas remitted $87 billion last year, the biggest inflow for any country tracked by the World Bank. The remittances market, where it costs $13 on average to send $200 across borders, is ripe for disruption, according to Ritesh Shukla, chief executive officer of NPCI International Payments Ltd.
/jlne.ws/3NMidwQ

Sending money back home is about to get cheaper for Indian expats
Mimansa Verma – Quartz
The Indian rupee’s recent plunge has made remittances by Indian expatriates more valuable. The cost of sending money, too, is reportedly likely to fall soon. The National Payments Corporation of India (NPCI), the digital payments enabler and settlement system in India, is planning an alternative to the SWIFT payment system operator used widely for trade and cross-border payments internationally.
/jlne.ws/3yLrVLI

Machines Behaving Badly — why AI can never be moral; Toby Walsh argues that artificial intelligence must never be left to make life-and-death decisions unaided
John Thornhill – FT
On a list of the most impactful figures of the 20th century, several names jump out: Albert Einstein, Mahatma Gandhi and Franklin D Roosevelt on the positive side of the ledger and that trio of tyrants, Hitler, Stalin and Mao, who did unaccountable harm.
/jlne.ws/3bTY7mZ

Cybersecurity

Shanghai Data Breach Exposes Dangers of China’s Trove; Alleged breach exposes potential data and security lapses; Purported police data hack has transfixed China tech circles
Sarah Zheng – Bloomberg
Claims of the largest cyberattack in Chinese history have sparked an open debate about the extent to which Beijing hoovers up personal data and uses private firms to safeguard that trove, a discussion that could have ramifications for the broader technology industry in China. If verified, the purported theft of 23 terabytes of personal information on as many as a billion Chinese citizens from a Shanghai police database would rank as the country’ largest ever known data breach, if not one of the biggest leaks the world has seen. The allegations that emerged over the weekend have set tech circles buzzing and prompted rare public comment from high-profile industry figures such as Binance co-founder Zhao Changpeng.
/jlne.ws/3yhdca4

These are the biggest cybersecurity threats. Make sure you aren’t ignoring them
Danny Palmer – ZDNet
Cybersecurity is hard. Technology is continually changing, cyber criminals’ tools and techniques are always evolving and maintaining the security of a network with users who each want to do their own thing without being restricted by security is a constant challenge.
/jlne.ws/3IgBMMP

Want Strong Physical Security? Don’t Forget About Cybersecurity
Fredrik Nilsson – Forbes
With each passing year, it becomes harder to tell where the physical world ends and the digital world begins. Virtual reality goggles have become increasingly common. Augmented reality applications are growing. Digital assistants, customer service bots, behavior-tracking devices and even self-driving cars are no longer uncommon. Across countless industries, the physical and digital worlds are beginning to overlap in increasingly meaningful ways.
/jlne.ws/3OPfSm3

Shadow Compliance: The Cybersecurity Trend Nobody Is Talking About
Howard Taylor – Forbes
Are your closest customers probing your network for security weaknesses? To most CISOs, this question might sound crazy. Network scans are what the bad guys do, surely not your friends and business partners.
Yet it is happening right now with increasing frequency, evidence of what could be the most interesting cybersecurity trend nobody is discussing right now—shadow compliance.
/jlne.ws/3nFieZ5

Ignoring Cybersecurity Can Sour M&A Deals
Steve Durbin – Forbes
When a private equity firm had acquired a midsized manufacturer late last year, little did they know that someone else had set on the same target as well. Just two months after it was purchased, a cybercriminal organization launched a crippling ransomware attack that locked up the manufacturer’s systems. The acquirer eventually paid $1.2 million to have their systems released, a risk they did not account for during the M&A process.
/jlne.ws/3nIK5HS

Billionaire’s Jeweler Pays $7.5 Million Crypto Ransom to Hackers; Graff is suing Travelers over its refusal to cover the payout; Ransomware gang threatened to leak high-profile clients’ data
Olivia Fletcher – Bloomberg
Luxury British jeweler Graff Diamonds Corp. paid $7.5 million ransom in Bitcoin to a Russian hacking gang after it leaked data on the jeweler’s high-profile clients, according to a London lawsuit. Graff, that counts Middle East royalty among its client base, sued its insurer for losses over the extortion saying that the payment should be covered under their policy. The Travelers Companies Inc. is refusing to pay the jeweler’s loss caused by the Bitcoin ransom, Graff alleges.
/jlne.ws/3ajrNcY

Cryptocurrencies

Bitcoin’s First African Adopter Plans Its Own Digital Currency; CAR to roll out currency called Sango Coin in third quarter; World Bank, IMF expressed concern about CAR’s crypto program
Katarina Hoije – Bloomberg
The Central African Republic, which adopted Bitcoin as legal tender in April, is poised to roll out its own digital currency as part of a plan to develop its financial industry, according to the nation’s leader. “Sango Coin will be the currency for the next generation,” President Faustin-Archange Touadera said in a virtual briefing. The digital money may be rolled out in the third quarter. The CAR’s plan is, however, as scanty on detail as its announcement on becoming the second country to adopt Bitcoin after El Salvador.
/jlne.ws/3OLIcpr

Crypto Crash Halts Plans by Statehouses to Accept Bitcoin Tax Payments
Michael Bologna – Bloomberg
Two US states are steaming ahead with programs that will permit taxes to be paid in cryptocurrency, but the idea has been shelved almost everywhere else in the wake of the crash that has erased hundreds of billions of dollars worth of digital assets. Revenue departments in Colorado and Utah are implementing programs to enable businesses and individuals to pay their tax bills with virtual currencies such as Bitcoin, Ethereum, and Dogecoin, targeting implementation within a few months. The two Western states look to be outliers, however, and still face some logistical hurdles before their programs launch.
/jlne.ws/3AubvbO

BOE Says Crypto Needs Tougher Rules After $2 Trillion Drop
William Shaw and David Goodman – Bloomberg
The Bank of England said a $2 trillion plunge in the value of cryptoassets underscores vulnerabilities in the market and the need for tougher law enforcement and regulation. The market capitalization of digital assets has tumbled to about $900 billion from a peak of almost $3 trillion in late 2021, the BOE’s Financial Policy Committee said Tuesday. The “extreme volatility” in recent months revealed weakness in the market including liquidity mismatches that led to fire sales, and participants unwinding leveraged positions. Those features of the market have the potential to amplify further declines in prices, the central bank said.
/jlne.ws/3OBOgks

Crypto Venture Investors Choi, Wang Launch Fund for Web3; The new fund won’t take outside money or charge fees; Fund is tapping Defi ‘mentors’ to advise on promising projects
Muyao Shen – Bloomberg
A pair of executives from two of the more prominent crypto venture capital firms in Asia are launching a new fund they say is targeted specifically at helping promising web3 projects navigate their way through the current bear-market cycle. Jason Choi and Darryl Wang, both 27, told Bloomberg the new fund, dubbed Tangent, wouldn’t accept outside capital or charge any management fees. Tangent will work with three to five early-stage crypto projects each quarter using an undisclosed small pool of proprietary capital. A public deck for the fund shows that it provides resources from audit, legal structure, to media and technical support.
/jlne.ws/3P8leIU

Voyager Digital files for bankruptcy protection as crypto crisis deepens; Digital asset lender has more than 100,000 creditors and billions of dollars in liabilities, US court filings show
Joshua Oliver – FT
Voyager Digital has filed for US bankruptcy protection, the latest casualty of the sharp downturn in cryptocurrency prices that has triggered a crisis in the digital assets market. The Toronto-listed broker and lender filed for Chapter 11 bankruptcy late on Tuesday in federal court in New York after suffering losses of more than $650mn on a loan to Three Arrows Capital, the failed crypto investor.
/jlne.ws/3nG3h8P

Voyager Seeks Bankruptcy as Crypto Mogul’s Lifeline Fails
Suvashree Ghosh and Anna Irrera – Bloomberg
Crypto broker Voyager Digital Ltd. filed for Chapter 11 bankruptcy protection just weeks after getting a lifeline from billionaire Sam Bankman-Fried’s Alameda Research, citing market volatility and the collapse of a hedge fund it had lent money to.
/jlne.ws/3Avj028

Crypto asset manager Hilbert Capital names Cevian’s Murray as CEO
Reuters
Cryptocurrency asset manager Hilbert Capital has hired former Cevian Capital executive Richard Murray as CEO, it said on Tuesday. Murray was previously director of investor relations at activist investor Cevian. He has also worked at hedge funds Finisterre and Brevan Howard Asset Management, Hilbert said in a statement.
/jlne.ws/3yUGZqF

Crypto.com and Cronos (CRO) Are Next to Get Hit with Rumors
Bob Mason – FX Empire
It has been a tough time for crypto exchanges, as the effects of the lengthy crypto winter take their toll on small and large crypto-linked entities. For crypto investors and traders who park their money on exchanges, the threat is no longer just the loss of funds through a market sell-off. Investors now risk losing access to assets as exchanges announce withdrawal freezes. In recent weeks, we have seen how damaging the rumor mill can be to the liquidity profiles of crypto exchanges.
/jlne.ws/3uoFkqs

NFT Platforms Should Be Subject to Money-Laundering Regulation, EU Lawmakers Say
Jack Schickler – CoinDesk
NFT (non-fungible token) trading platforms should be made subject to European Union anti-money laundering (AML) laws, members of the European Parliament said in proposed amendments to the legislation published Monday. Lawmakers from the Green Party and Socialist representatives also appear to favor including self-managed crypto wallets and decentralized finance under a proposed regulation on money laundering. https://jlne.ws/3ym1Dhz

NFTs double down on the weirdness with ‘phygital’ trend; Some hope the combination of physical and digital goods can help boost interest
Scott Chipolina – FT
It would be an understatement to say crypto is going through a rough time. Since bitcoin reached its all-time high of almost $70,000 last year, it has lost 70 per cent of its value. The entire market has shrunk by trillions of dollars.
/jlne.ws/3yM7nmv

Gender Fluidity In The Metaverse; Navigating online identity in an anonymous landscape can be curious, thrilling or potentially exploitive. Where is the line?
Victoria Vergolina – Bloomberg
Experimenting with who you are online, especially if those identities are really different from who you present to the analogue world, is not a new concept. Neal Stephenson famously coined the phrase “metaverse” back in 1992. So it’s no surprise that folks are using newish technologies like crypto and the blockchain to play with their self-expression. Some are even using blockchain-enabled structures to monetize their experiments with identity, including their gender presentation.
/jlne.ws/3NRA2KR

Politics

Congress takes on ‘bro culture’ in fintech; A congressional task force this week heard from fintech founders and venture capitalists about persistent inequities in funding for female- and minority-founded startups.
Lynne Marek – Payments Dive
A lack of diversity in fintech investments and among venture capitalists and founders was the topic of a congressional hearing this week, but congressional members were at a loss for ways to rectify inequities. The House Committee on Financial Services’s task force on financial technology convened Thursday to discuss “Combating Tech Bro Culture: Understanding Obstacles to Investments in Diverse-Owned Fintechs.” Presenting to Rep. Stephen Lynch (D-MA), who leads the task force, and other Congress members were five people who have experienced the lack of diversity either in founding a company, seeking investments for startups or working to increase diversity in venture investing.
/jlne.ws/3PoM8wz

UK PM Boris Johnson loses two ministers in grave blow
Elizabeth Piper, Alistair Smout and Andrew Macaskill – Reuters
British Prime Minister Boris Johnson was fighting for his political survival on Tuesday after finance minister Rishi Sunak and another senior minister abruptly resigned over the latest scandal to blight his administration. Sunak and health minister Sajid Javid sent resignation letters to Johnson within minutes of each other in which both took aim at his ability to run an administration that adhered to standards. Signalling his intention to stay in power for as long as possible, Johnson quickly appointed former businessman and current education minister, Nadhim Zahawi, as his new finance minister.
/jlne.ws/3ykHMPV

The truth starts to catch up with Boris Johnson; PM reels as senior members of cabinet quit over Pincher scandal
George Parker and Sebastian Payne – FT
Boris Johnson allowed the cameras into the cabinet room on Tuesday; he may have wished they had stayed outside, as the lens swept around a cast of grim-faced ministers, digesting the self-inflicted fiasco threatening to overwhelm the prime minister. Johnson’s relationship with the truth was once again dominating the news, after it transpired the prime minister had been personally briefed about past allegations of sexual misconduct by the now disgraced former Conservative deputy chief whip Chris Pincher. Within hours, health secretary Sajid Javid quit the cabinet, followed shortly afterwards by chancellor Rishi Sunak, unable to serve any longer under a man whose values and judgment they no longer respected. Number 10 had spent the last few days denying Johnson was aware of “specific allegations” about Pincher. So had a number of ministers, sent into hostile broadcast media interviews, armed by Johnson with incomplete or inaccurate versions of the truth.
/jlne.ws/3nJ1sIw

Boris Johnson overselling benefits of post-Brexit trade deals, say MPs; Critical report points to shortcomings and large concessions in accord with Australia
Jim Pickard – FT
Boris Johnson’s much-lauded trade deal with Australia will cut the price of an imported bottle of a wine only by “a couple of pence”, according to a critical report by MPs, which urged the prime minister not to oversell the benefits of such agreements.
/jlne.ws/3OLNWzN

Regulation

Ex-M.M. Warburg Boss Is First Top Banker Charged in Cum-Ex Scandal; Christian Olearius charged over damages exceeding $102 Million; His lawyer called the allegations against the banker unfounded
Karin Matussek and Angela Cullen – Bloomberg
Former M.M. Warburg Chief Executive Christian Olearius became the first leading banker to be charged for allegedly taking part in the controversial Cum-Ex scandal that cost German taxpayers billions of euros. Prosecutors in Cologne charged Olearius in relation to several instances of aggravated tax evasion, with losses to the government in excess of 100 million euros ($102 million), according to a person familiar with the matter. The move against Olearius comes after M.M. Warburg & Co. lost a bid at Germany’s constitutional court to challenge a landmark judgment backing the seizure of 176 million euros ($186 million) from the bank for its involvement in Cum-Ex trades. Olearius stepped down amid the probe into the lender.
/jlne.ws/3OQLzM6

CFTC Orders J.P. Morgan to Pay $850,000 for Swap Reporting Failures
CFTC
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, and J.P. Morgan Securities, plc (collectively, J.P. Morgan), provisionally registered swap dealers, for failing to comply with their reporting obligations as swap dealers. The order requires J.P. Morgan to pay an $850,000 civil monetary penalty and to cease and desist from any further violations of the Commodity Exchange Act (CEA) or CFTC regulations, as charged. “Timely and accurate reporting of swaps transactions by registered swaps dealers is critical to the CFTC’s mission to protect market participants and ensure market transparency and integrity,” said CFTC Acting Director of Enforcement Gretchen Lowe.
/jlne.ws/3OXr4gi

Statement of Commissioner Christy Goldsmith Romero Regarding Enforcement Action Against JP Morgan Chase Bank, N.A., et al. for Swap Data Reporting Failures
CFTC
I strongly support this enforcement action against JP Morgan for violating CFTC swap data reporting requirements for years, and failing to report accurately more than 2.1 million swap transactions. I am quite concerned by the duration and substantial nature of violations by JP Morgan. I also note that JP Morgan has been the subject of several CFTC enforcement actions over the years, and the subject of many other federal agency enforcement actions.
/jlne.ws/3IfNXtf

Stewardship Code : 323 institutional investors have signed up to the Principles for Responsible Institutional Investors as of June 30, 2022
FSA Japan
The Council of Experts Concerning the Japanese Version of the Stewardship Code (Chairman: Professor Hiroyuki Kansaku, University of Tokyo Graduate Schools for Law and Politics) published the Principles for Institutional Investors (Japan’s Stewardship Code, hereinafter referred to as “the Code”) on February 26, 2014.
/jlne.ws/3rGARNw

MAS and IBF adjust training scheme funding parameters amidst stepped up skills development support for Finance Sector
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) and the Institute of Banking and Finance (IBF) today announced changes to provide more targeted support under the IBF training schemes. This follows earlier announcements to enhance funding for talent development programmes in growth and priority areas and to return subsidy rates under the IBF training schemes progressively to pre-pandemic levels .
/jlne.ws/3P50sKi

Investing and Trading

Why Now May Be the Wrong Time to Write Off the 60/40 Portfolio; Obits for the traditional investing approach may be premature, according to a newsletter for Vanguard investors.
Suzanne Woolley – Bloomberg
The classic 60/40 portfolio, where investments are split 60% in stocks and 40% in bonds, has taken a beating this year as both asset classes have plunged. But now may be “precisely the wrong time to steer a new path” and abandon the balanced approach, according to a newsletter for Vanguard investors. The Bloomberg index that tracks the 60/40 portfolio tumbled 17% in the first six months of the year, its deepest first-half dive since 1988, as rising inflation and interest rate hikes by the Federal Reserve sent bond prices into a tailspin at the same time as stocks plunged into a bear market.
/jlne.ws/3OLAig0

A Classic ‘Reverse Ferret’ Gets Up Markets’ Trousers; Frenzied contortions are everywhere you look in the scramble to adapt to a new narrative on rate-cutting, inflation and recession.
John Authers – Bloomberg
Reverse Ferret!
To capture what’s happening in global markets, think of a ferret in a newsroom. Back in the heyday of Fleet Street, Kelvin MacKenzie, one of Rupert Murdoch’s favorite tabloid editors, would yell, “Ferret up trousers!” when a big story broke and everyone had to drop what they were doing to work on it. If that story then turned out not to be true, even closer to deadline and requiring desperate work, he’d shout, “Reverse ferret!”
/jlne.ws/3OPLZST

Archegos Analyst Wants His Money Back; Also Russian assets, universal owners vs. labor and KYC/SOW.
Matt Levine – Bloomberg
Archegos
Here’s an amazing trade, if you can get it. Archegos Capital Management, the family office of Bill Hwang, had a hugely successful run followed by a disastrous collapse in March 2021. (We talked about it here, here and here.) Archegos’s assets grew from about $4 billion in 2020 to roughly $36 billion on March 22, 2021; by March 29 they were roughly zero. If you had money in Archegos — and you didn’t, it was a family office running mainly Hwang’s own money — then you had enormous paper profits as of March 22, and nothing as of March 29. But what if, on March 30, you could look around at the rubble and decide to withdraw what you had in the fund as of March 22? That would be pretty good, right?
/jlne.ws/3Aue3qt

Church of England taps debt markets with ‘Cranmer’ bonds; £10bn foundation hopes to raise funds even as corporate bond issuance has broadly declined
Ian Johnston – FT
A Church of England investment foundation is tapping bond investors for the first time, seeking to raise £500mn against a shaky credit market backdrop. The Church Commissioners for England, a charity with £10bn in assets, plans to raise about £250mn in bonds due to mature in 10 to 16 years, with a further £250mn tranche that will mature in 30 years or more, according to an investor presentation. Funds raised will be used by the CCE, which employs 33 in-house investment managers, to support its ongoing activities and investment.
/jlne.ws/3P1JMTO

Podcast: How Spacs went splat
FT
From hostile takeovers to C-suite intrigue, Behind the Money takes you inside the business and financial stories of the moment with reporting from Financial Times journalists around the world. See acast.com/privacy for privacy and opt-out information.
/jlne.ws/3P3ZZrR

If Luxury Stocks Are a Good Inflation Hedge, Why Is No One Buying? Enthusiastic shopping during the pandemic allowed designer brands to push through big price increases, but that seems unsustainable
Carol Ryan – WSJ
For the trinkets bought by the rich, inflation is running much hotter than for everyday groceries. Even with that enticing hedge, luxury stocks probably aren’t about to fly off the shelf. Luxury goods have an advantage over other consumer products: When top-end brands charge more, their designs can become more desirable to status-conscious shoppers. This gives the industry a reputation for offering investors inflation protection. Over roughly the last four decades, Forbes’ Cost of Living Extremely Well Index, which tracks the price of goods and services such as luxury handbags, expensive watches and real estate management fees, has risen 5% annually, compared with 3% gains in the U.S. consumer-price index.
/jlne.ws/3am3fA3

Environmental, Social and Corporate Governance

Schroders in Crosshairs as Investment Clients Balk at ESG Stance; Clients rebuke fund manager for opposing worker pay increases; Schroders ejected from investor group on income inequality
Alastair Marsh – Bloomberg
A shareholder vote over worker pay at one of the UK’s best-known supermarket chains is testing a major fund manager’s vaunted ESG credentials. Schroders Plc, which manages £753 billion ($901 billion) of assets and describes its investing approach as being “beyond profit,” plans to vote against a resolution calling on Britain’s second-largest grocer, J Sainsbury Plc, to pay all its employees a “living wage.” A top-five shareholder in the grocery chain, Schroders argues that the cost of doing so would hurt Sainsbury’s ability to compete.
/jlne.ws/3AvFBvz

UK Leaves Door Open for Coal Comeback in Bid to Keep Lights On; Energy Security Bill doesn’t mention earlier closure date; Measure contains measures to keep lights on and cut emissions
Jess Shankleman – Bloomberg
The UK is set to water down one of its key climate change policies as it battles soaring energy prices that have contributed to a cost-of-living crisis for millions of consumers. Last year the government pledged to close all of Britain’s unabated coal-fired power plants by October 2024 — and said it would enshrine that in law as soon as possible. But in an energy bill due to be published on Wednesday, there’s no mention of the date, according to fact sheets and a ministry statement detailing its contents.
/jlne.ws/3PamhIz

Tianqi Lithium raises $1.7bn in biggest Hong Kong IPO of 2022; Maker of battery components prices second share deal towards top of expected range
Cheng Leng and Hudson Lockett – FT
Tianqi Lithium, a Chinese supplier of key components in rechargeable batteries, has priced its Hong Kong share offer near the top of an expected range to raise about $1.7bn, in the city’s biggest listing this year. The secondary listing for the Chengdu-based company, which already trades on the Shenzhen bourse, marks the first listing to raise more than $1bn in Hong Kong this year after a regulatory crackdown on China’s tech sector throttled deal flow in the first half.
/jlne.ws/3bYQLyY

WTF happened to WTI?; It’s technical
Bryce Elder – FT
Commodities had a rough Tuesday, having been led downwards by oil. The front-end US benchmark West Texas Intermediate contract settled at $99.50 a barrel, down 8.2 per cent, having lost more than 10 per cent earlier. Brent was 9.5 per cent lower at $102.77 per barrel, its second biggest one-day absolute fall on record in dollar terms. Both markets are struggling to rally much this morning.
/jlne.ws/3alSKga

Institutions

Bridgewater’s Flagship Hedge Fund Gains 32% for First Half of Year
Katherine Burton – Bloomberg
Bridgewater Associates posted a 32% return for its flagship hedge fund through the first half of 2022 as it benefited from increased market volatility, according to a person familiar with the performance. The firm founded by Ray Dalio told investors that the Pure Alpha II fund climbed 4.8% in June, boosting the annualized return since its 1991 inception to 11.4%, the person said, asking not to be identified because the results aren’t public. Like many other macro funds, Bridgewater’s Pure Alpha strategy is rebounding after years of struggle, eking out a nominal annualized gain over a decade before posting a return of about 8% in 2021. It had lost 12.6% in 2020, and several institutional clients pulled their money.
/jlne.ws/3yIQ19N

Martin Gilbert’s AssetCo cancels controversial bonus scheme; Company drops long-term incentive plan after criticism from shareholders
Adrienne Klasa – FT
City grandee Martin Gilbert’s AssetCo will terminate its bonus and incentive scheme for executives, bowing to pressure from shareholders who had contested the pay structure. AssetCo said last year that it would review the long-term incentive plan beyond the first nine months at the end of September after facing criticism from investors. The listed company, which focuses on acquiring asset managers, said on Tuesday that it had decided to scrap the LTIP following the review, adding that it will discuss with shareholders and advisers about a replacement for the scheme. David McCann, analyst at Numis, said the move was “very much a positive development” given that the “old scheme was widely unpopular with external shareholders”. He added that “it may now appeal to a wider potential shareholder base”. As a result, the company will accelerate the release of shares that were due to be handed out over a five-year deferral period, subject to lock-ins that restrict employees from disposing the shares.
/jlne.ws/3NMvJAz

Tradeweb Reports Trading Volume of $26.1 Trillion in June With 18.0% YoY Increase in Average Daily Volume
Average daily volume (ADV) for the month was $1.24tn, an increase of 18.0 percent (%) year-over-year (YoY). For the second quarter of 2022, total trading volume was $72.6tn and ADV was a record $1.18tn, an increase of 20.4% YoY. Average daily trades for the month totaled 101,935.
In June, Tradeweb reported record ADV in swaps/ swaptions = 1-year. For the second quarter of 2022, Tradeweb reported record ADV in swaps/swaptions = 1-year, fully electronic U.S. High Grade credit, municipal bonds and Repurchase Agreements.
/jlne.ws/2TwpBEI

Mainland ETFs dominate as China-Hong Kong trading scheme goes live; More than 80 Shanghai and Shenzhen-listed ETFs can now be traded via the northbound Stock Connect route
Fred Chan – FT
Investors in mainland China and Hong Kong began trading exchange traded funds across each other’s markets this week, with strategies from the mainland far outnumbering their Hong Kong-listed counterparts.
/jlne.ws/3urtbAY

Wellness Exchange

The omicron subvariant now dominating the U.S. is ‘the worst version of the virus that we’ve seen’
Erin Prater – Fortune
New immune-evading Omicron subvariant BA.5 is now dominant in the U.S.—and previous heavy hitter “stealth Omicron” is now a shadow of its former self, according to federal health data released Tuesday.
BA.5 is estimated to have caused nearly 54% of COVID infections in the U.S. last week, according to data from the U.S. Centers for Disease Control and Prevention. Along with twin variant BA.4, it swept South Africa this spring thanks to its ability to evade immunity from both prior infection and vaccination.
/bit.ly/3bRVtyr

Beijing Rolls Out China’s First Ever Covid Vaccine Mandate; City to limit entry to raft public venues based on vaccination; Authorities want to boost vaccination rate among the elderly
Bloomberg News
Beijing residents wanting to enter a raft of public places will need to show proof of vaccination from Monday, the first time China has deployed a vaccine mandate, as the city rushes to quash a new outbreak caused by a more infectious subvariant. The city will require live performances, entertainment venues such as movie theaters, museums and gyms, as well as training and tutoring locations, to restrict entry to people who are vaccinated, Li Ang, deputy director at the Beijing Municipal Health Commission, told reporters at a briefing Wednesday.
/jlne.ws/3R9i1Lf

Hong Kong Health Officials Warn City’s Outbreak Is Worsening; Pedestrians in the Causeway Bay shopping area, Hong Kong; Pedestrians in the Causeway Bay shopping area, Hong Kong.Photographer: Lam Yik/Bloomberg
Linda Lew – Bloomberg
The number of Covid-19 patients in Hong Kong’s hospitals doubled in recent weeks, leading health care officials to say they are concerned the epidemic situation is worsening. There are approximately 830 patients currently hospitalized in the Asian financial center, up from roughly 400 in June, said Gladys Kwan, chief manager at the Hospital Authority. The number of serious and critical patients has risen to about 30, up from a dozen or so, she said.
/jlne.ws/3nL0V8V

Regions

China’s $1.2 Trillion Wealth Fund Loses Another Two Directors; Managers resign from risk, dynamic asset allocation roles; Add to more than 20 departures from CIC in recent years
Bloomberg News
China Investment Corp., the nation’s $1.2 trillion sovereign wealth fund, has lost two more directors, adding to a string of senior departures in recent years. Sun Bo, who was head of the dynamic asset allocation team, resigned last month, people with knowledge of the matter said. Qian Shichun, a risk management team leader for private investments, also quit recently to seek other career opportunities, the people said, asking not to be identified discussing personnel changes.
/jlne.ws/3AuQUUH

Singapore’s Sky-High Car Prices Are Warning for Global Cities; City-state’s taxes have pushed car prices to as much as a flat; Government restricts sales to prevent congestion, pollution
Nurin Sofia and Xiao Zibang – Bloomberg
Singapore media professional Ellie Lim gave up her plan to buy a new Volvo SUV to ferry her newborn baby when she realized it was going to cost her more than S$200,000 ($142,000). “I was quite shocked,” said Lim, 34. Coupled with high interest rates on car loans, fuel prices and maintenance fees, buying a new car is “a financially unsound decision,” she said. Why would you spend the cost of an apartment from the government’s Housing & Development Board for a rapidly depreciating asset? “These are all like HDB flats running on the road.”
/jlne.ws/3Asbq8H

Norway strikes threaten to cut off gas supplies to UK within days; Europe’s energy crisis intensifies as Equinor begins shutting down oil and gasfields
Harry Dempsey, David Sheppard, Shotaro Tani and Jim Pickard – FT
Norway has warned that gas exports to the UK that also supply mainland Europe could be shut off this weekend if a workers’ strike escalates, with up to 60 per cent of the Scandinavian country’s supplies under threat from industrial action. Equinor, Norway’s state-backed energy company, has already shut down three oil and gasfields since strikes began on Monday evening over pay claims seeking to compensate for rising inflation, in a move that helped propel European gas prices to their highest level in four months.
/jlne.ws/3yknTbN

Dutch House Approves to Make Work From Home a Legal Right
Diederik Baazil and Pablo Fernandez Cras – Bloomberg
The Dutch parliament approved legislation to establish work-from-home as a legal right, making the Netherlands one of the first countries to grant remote working flexibility by law. The legislation was approved by the lower house of the bicameral parliament of the Netherlands on Tuesday. It still needs a nod from the Dutch senate before its final adoption. The law forces employers to consider employee requests to work from home as long as their professions allow it.
/jlne.ws/3OPLMPm

Romanians Urged to Save Water as Drought Threatens Crops, Energy
Irina Vilcu and Andra Timu – Bloomberg
Romania is urging people to cut back on water use as a severe drought strains supplies that are needed for electricity generation and agriculture in one of the European Union’s largest grain producers. Drinking water should be conserved, and watering gardens and filling up of pools need to be limited with the drought affecting about 75% of the nation, Environment Minister Barna Tanczos told reporters in Bucharest Wednesday. The eastern part of the country has experienced extreme dryness this year, compromising the grain harvest in the region.
/jlne.ws/3NGL0Ty

Wet Canadian Weather May Give Relief to World Wheat Supply Squeeze; More wheat acres may help replenish global supplies: analyst; Canola acres seen falling as farmers shift acres to cereals
Jen Skerritt – Bloomberg
A soggy start to spring in parts of Canada may be good news for wheat supplies. Wheat acres will rise 8.7% to 25.4 million acres, the highest level in a decade, Statistics Canada said Tuesday in a report. Analysts in a Bloomberg survey expected 24.7 million. High prices and heavy rainfall in parts of the eastern Prairies may have spurred farmers to shift acres to cereal crops. “The acreage number along with average to trend yields will replenish global wheat supplies,” Jerry Klassen, an independent trader and market analyst in Winnipeg, Manitoba, said before the report’s release. “The Canadian wheat crop will offset a larger portion of the shortfall from Ukraine.”
/jlne.ws/3Ile95S

Miscellaneous

Airbnb London Prices Soar as UK Eyes Curbs in Tourist Haunts
Neil Callanan – Bloomberg
The cost of renting an entire London home on Airbnb Inc. has jumped as demand from tourists rises and the number of listings lags pre-pandemic levels. The bounce back from the pandemic means the median rate per night for an entire property is about 25% higher than it was in 2019, according to Inside Airbnb, which collects data from listings on Airbnb Inc.’s website.
/jlne.ws/3yMtIA0

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