First Read

Hits & Takes
JLN Staff

The JLN team is home after a successful day two of MarketsWiki Education World of Opportunity in New York at Nasdaq yesterday. We had 12 speakers who knocked it out of the park. Thank you to Nasdaq for hosting day two and for all our sponsors and speakers. Thank you too to the hard working JLN staff. The videos will start rolling out in the coming days and weeks.~JJL

During the merit badge workshop on Tuesday at Nasdaq, Robby Lothian had to give an impromptu two minute speech as part of the badge. With no idea what to talk about, and not wanting to follow in the footsteps of other speakers who talked about why the Yankees will win the World Series or why the New York Mets won’t, he made his decision. He decided to speak on why Chicago deep dish pizza was superior to New York pizza. That’s my boy!!~JJL

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Ocean Tomo, the Intellectual Capital Merchant Banc, recently issued a report entitled, “Blockchain and Cryptocurrencies Industry Report.”
Ocean Tomo
Among other things, this Report analyzes the patent landscape in the Blockchain and Crypto markets. Additionally, it examines various IP Blockchain efforts by looking at firms or projects that are using Blockchain as a part of their business model to make IP markets and licensing more efficient. By way of example, one such firm, Intellectual Property Coin Group, seeks to facilitate IP transactions that are tied directly to global, in-force government issued patents. https://goo.gl/43vbiP

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Interest rate benchmark reform: transition to a world without LIBOR
UK FCA
Speech by Andrew Bailey, Chief Executive of the FCA, at Bloomberg, London – on transitioning from LIBOR to alternative interest rate benchmarks.
/jlne.ws/2L2jCD9

***** Here is the speech by Andrew Bailey on Libor.~JJL

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Wednesday’s Top Three
Talk about an event that still resonates: February 5, 2018, when the Dow Jones Industrial Average plummeted 1,175 points, is such a day. We noted that our story about that market event and the damage inflicted on customers and clearing brokers was the most read story of the year in JLN. Yesterday, FCMs Big And Small Suffer Major Losses On Latest Black Monday was the second most read item, and remained in the top three for the third consecutive day. The story is historically significant and still acutely relevant. Our top piece of the day is also quite important, Bloomberg’s Mobius Says Trade War Is Just a Warm-Up Act for Financial Crisis. The third most read item was the NYSE’s letter to the SEC about rival exchange IEX, Transaction Fee Pilot for NMS Stocks, Securities Exchange Act Release No.82873, which is a critical attack on IEX by the NYSE’s Brent Fields. It includes unusually brassy language such as “IEX has sunk to a new low” and “IEX has failed to have any meaningful impact as an exchange.” With that, these are our top three.

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MarketsWiki Stats
129,447,998 pages viewed; 23,189 pages; 214,006 edits
MarketsWiki Statistics

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Lead Stories

Nasdaq to Provide Clearing Technology to SIX for Clearing Overhaul; Nasdaq post-trade technology to support clearing of pan-European equities and Nordic derivatives for SIX
Nasdaq
Nasdaq announced a new contract to deliver its clearing and real-time risk management technology via the Nasdaq Financial Framework to SIX x-clear, one of Europe’s leading providers of clearing services. The technology will power SIX’s clearing of pan-European equities and Nordic derivatives.
/jlne.ws/2LaUM4l

Abandon Libor Now or Else, U.K. Agency Warns Finance Firms
Franz Wild and John Glover – Bloomberg
The U.K. Financial Conduct Authority warned traders to speed up their move away from products based on the Libor rate, or risk falling foul of the regulator when the 50-year-old borrowing benchmark disappears.
/jlne.ws/2L7W7Zo

Flash Boys on the Farm? Arms Race Gets Unleashed Over Crop Data
Alan Bjerga, Nick Baker, Megan Durisin, and Brian Louis – Bloomberg
USDA ends decades-long policy of giving journalists data first; Website distribution may benefit traders with fastest access
It’s the sort of edge any trader would covet — and one the authorities were actually hoping to prevent. Yet the U.S. Department of Agriculture may well be clearing the way for some Wall Street speed demons to trade on market-moving data before others. Abandoning decades of precedent, the agency has decided to only post its reports directly on the web, rather than also release them via accredited media. While that may seem like a democratic move, it actually could set the stage for a winner-takes-all arms race to grab the info first.
/goo.gl/goqGGW

UK watchdog warns financial firms over Big Data
Huw Jones, Carolyn Cohn – Reuters
Britain’s banks and insurers must take the lead in spelling out how they will use data collected from customers or they could face new rules, Financial Conduct Authority Chair Charles Randell said on Wednesday.
/jlne.ws/2L5L0Ac

Hackers target new cryptocurrency investors; As exchanges increase security cyber crooks seek out new soft targets
Jemima Kelly – FT
As cryptocurrency exchanges beef up security measures following a relentless run of heists, cyber criminals are turning their attention to stealing digital tokens directly from users.
/jlne.ws/2L3gpU1

Former trader convicted in Euribor rigging trial; A second defendant was acquitted while the jury failed to reach verdicts for 3 others
Barney Thompson – FT
A former star trader at Barclays has been found guilty of conspiracy to defraud in relation to the Euribor lending rate, while one other defendant was acquitted and the jury failed to reach verdicts for three others.
/jlne.ws/2Lb9A2V

FCA warns banks must accelerate plans to abandon Libor; Andrew Bailey said financial institutions should move to new ‘risk-free’ reference rates
Philip Stafford – FT
The head of the UK markets regulator has issued its sternest warning yet that banks must speed up their plans to abandon Libor in favour of the new “risk-free” reference rates.
/jlne.ws/2L1HdE2

Titans of Junk: Behind the Debt Binge That Now Threatens Markets
Shannon D. Harrington, Sally Bakewell, Christopher Cannon and Mathieu Benhamou – Bloomberg
Masayoshi Son and Elon Musk leveraged their dreams to the hilt. Patrick Drahi stockpiled debt to build a global cable empire. Michael Dell loaded his computer company with risky loans to buy out activists threatening his control. And a group of Chinese developers borrowed big to expand in the nation’s booming property market.
/goo.gl/mS6WZr

Pretty Soon, You’ll Get to Invest Just Like Ray Dalio; His approach has a lot of variations but isn’t foolproof.
Nir Kaissar – Bloomberg
Ray Dalio may be slowing down, but the investment strategy he popularized is just getting started.
/jlne.ws/2L3StzS

The Reason Merger Arbitrage Funds Aren’t Doing Well; Evidence suggests that returns are more dependent on financial stress than volume of deals.
Aaron Brown – Bloomberg
Mergers and acquisitions are booming, with 2018 projected to be the first year that global deal volume breaks $5 trillion. But merger arbitrage funds, which attempt profit on perceived market inefficiencies before or after an M&A deal is announced, are not doing well. The last three months for which data are available represent the first time MAFs have lost money three months in a row, and represent the second-, third- and sixth-worst months since data begins in 1999.
/jlne.ws/2LaywYk

OPINION: HFTs Not to Blame for ‘Flash Crashes’?
Rob Daly – Traders Magazine
Is the conventional wisdom regarding high-frequency trading’s contribution to ‘flash crashes’ wrong? Is it unfair to lay the blame of the worst market-structure characteristic at the feet of high-frequency traders? According to the authors of a recent research note published by the UK’s Financial Conduct Authority, HFT firms are not the one whom most likely fuel mini-flash crashes, but agency brokers that provide direct market access for their clients.
/jlne.ws/2L3olVj

Exchanges, OTC and Clearing

LSE To Launch RFQ For Equities
MarketsMedia
London Stock Exchange is introducing a pan-European request for quote for cash equities in the autumn, highlighting the expansion of the order type from exchange-traded funds and less liquid asset classes since new regulations went live in the European Union.
/jlne.ws/2L3tCw2

CME Technical Issue Keeps Some Customers From Connecting
Nick Baker and Sheela Tobben – Bloomberg
July 11, 2018, 3:06 PM
CME Group Inc., the world’s biggest exchange operator, experienced a technical malfunction Wednesday that prevented some traders from accessing the market.
“We’re experiencing a technical issue that is impacting connectivity for some customers,” the company said in a statement. “Our markets remain open while we work directly with customers to resolve the issue.”
/goo.gl/oucg2u

Nex shareholders’ punchy payday protest
Philip Stafford – FT
More than 40 per cent of shareholders in Nex Group have voted against the UK financial technology company’s policy allowing management’s share bonuses to vest if a planned sale to Chicago’s CME Group goes ahead.
/jlne.ws/2L0NNL9

CCPs build their liquidity buffers
Alessandro Aimone -Risk.net
Ten of the largest central counterparties (CCPs) strengthened their liquidity by $43.7 billion, a rise of 10%, in the first quarter over the last period of 2017. About a quarter of that improvement came from deposits at commercial banks.
/jlne.ws/2LaccOa

Trading on MCX halts twice due to technical glitch; MCX said that the technical glitch was not caused due to any cyber security breach.
Press Trust of India
Leading commodity bourse MCX on Wednesday said the trading was halted at its platform twice during the day because of a technical glitch.
/jlne.ws/2Lb0C5L

Eritrean potash deposit company readies London listing
Neil Hume, Natural Resources Editor – FT
A company developing a large potash deposit in Eritrea has announced plans to list in the UK, testing the appetite of investors for ‘greenfield’ mining projects in Africa.
/jlne.ws/2La74JU

For the first time over 1,300 ETFs on Xetra
Deutsche Börse Cash Market
With the two new iShares ETFs launched on Xetra and the Frankfurt Stock Exchange this Thursday, the number of products in the ETF segment of the Deutsche Börse exceeded 1,300 for the first time. Since the beginning of the year alone, there have been 115 new listings.
/jlne.ws/2L4sxEm

DBS and SGX launch customised investment education programme for budding investors
SGX
In response to demand for investor education across different investor profiles and financial proficiencies, DBS Bank and Singapore Exchange (SGX) today announced a three-year collaboration to provide retail investors with the knowledge, skills and tools to aid financial decision-making and kick-start their investment journey.
/jlne.ws/2L5Slje

SGX welcomes Futu Securities International (Hong Kong) Limited as Securities Trading Member
SGX
Singapore Exchange (SGX) today welcomed Hong Kong-based brokerage firm, Futu Securities International (Hong Kong) Limited, to its securities market as a trading member.
/jlne.ws/2L2jbJ1

Fintech

Thomson Reuters Uses AI To Increase Personalization For Financial Professionals On Its Financial Desktop Platform, Eikon
Mondovisione
Thomson Reuters today announced the launch of Eikon Digest, a proprietary personalized service containing the most significant news, research, data and information from Thomson Reuters Eikon, its financial desktop platform. EIKON Digest builds on the strength of Reuters News which is renowned for breaking news, delivering comprehensive independent analysis and commentary on the latest world and financial market news and supplements and leverages a unique combination of artificial intelligence and Reuters editorial curation, designed to distill the most critical information from a vast array of trusted sources, saving clients time and helping ensure they are always aware of what matters to them the most.
/jlne.ws/2KZZzp9

Which Locations Are Drawing FinTech Companies?
Tedd Carrison and Kristin Sexton – Area Development
As financial technology, or “FinTech,” grows from an obscure corner of the digital market to a source of mainstream trends and broad-reaching innovations, the cities that cultivate FinTech companies are no longer limited to large, traditional financial centers. Recent growth in the industries comprising FinTech has been distributed among markets, primarily in the South and West, that show the right combination of attributes to attract today’s employers.
bit.ly/2L3X1WY

Rise or fall? The evolution of the European fintech industry
Leah Hodgson – PitchBook
Although technology in financial services has been present in the industry for decades— from ATMs to chip and pin—it’s only in the last few years that the concept of fintech has become a fixture and gained significant traction in Europe. But although it has seen considerable VC investment, will the sector be able to sustain the same pace of growth?
bit.ly/2L7xn3E

How fintech is turning China’s cities into cashless societies
Richard Cook – Asia Times
In 2025, will Tencent be the biggest company in the world? Or will it be Alibaba? Tencent’s story, just like modern China’s, is one of superlatives and big numbers. Founded in the southern Chinese city of Shenzhen in 1998, Tencent launched its first product, the QQ instant messaging service, a year later.
bit.ly/2L3vKnv

Cryptocurrencies

Crypto Crime Is a Focus of Trump’s New Task Force on Consumer Fraud
Benjamin Bain and David McLaughlin – Bloomberg
Justice Department-led group will target digital currencies; Fraud against elderly and veterans will also be priorities
In forming a new task force to protect consumers from fraud, the Trump administration made clear that one of the greatest threats to the public is just emerging: red-hot markets for crypto coins.
/jlne.ws/2L6ePAz

Accenture to lead The Institutes’ blockchain platform development
Matthew Lerner – BusinessInsurance.com
The Institutes RiskBlock Alliance, the insurance organization’s blockchain consortium, said that Accenture P.L.C. will lead development of RiskBlock’s production-grade platform to develop and implement blockchain uses for the industry, The Institutes said in a statement Monday.
/jlne.ws/2KZZRML

Big Advertisers Embrace Blockchain to Root Out Digital Spending Waste; Blockchain’s secure, transparent nature has drawn interest from big consumer advertisers, who tend to be wary of digital ad agencies and tech venders
Lara O’Reilly – WSJ
Blockchain technology has made inroads in industries from logistics to health care. Now, it’s gaining traction with marketers, who see it as a potential answer to the pitfalls of online advertising.
/jlne.ws/2L4Js9G

$1.5 Billion Were Confiscated From a Unlawful Crypto Gambling Platform – Coindoo
Adriana Midrigan – Coindoo.com
Twenty-one public security institutions based in Guangdong have arrested 540 individuals accused of creating a football gambling during the FIFA World Cup. They have violated Chinese legislation that prohibits the organization of online gambling. In such cases, both the participants and the organizers are subject to criminal liability.
bit.ly/2L3zANv

Politics

U.S.-China Trade Talks Grind to a Halt
Saleha Mohsin, Jenny Leonard, Jennifer Jacobs and Andrew Mayeda – Bloomberg
High-level negotiations that started in May have petered out; Administration has signaled it could restart talks – source
High-level trade talks between the U.S. and China have ground to a halt as the Trump administration threatens to escalate a trade war that shows little sign of abating, according to five people familiar with the matter.
/goo.gl/WxNZcE

Senate overwhelmingly rebukes Trump with tariff vote
Ted Barrett – CNN
For the second day in a row, the Senate pushed back on President Donald Trump, showing stiff resistance to his key policy decisions on tariffs and NATO even as the President is at a summit in Europe wrestling with allies over those same issues.
/goo.gl/G33Pf8

Germany Is Nobody’s ‘Captive,’ Mr. Trump; The NATO ally isn’t any more dependent on Russian gas than it was during the Cold War.
Leonid Bershidsky – Bloomberg
President Donald Trump sees a clear link between U.S. security guarantees under the North Atlantic Treaty and American trade with the alliance’s member states, in particular when it comes to liquefied natural gas sales to Germany. But he isn’t likely to change the reality of Germany’s energy needs and plans.
/jlne.ws/2L7u0d0

A Soybean Surge Makes Trump’s Trade War Look Deceptively Good
Jim Tankersley – NY Times
President Trump’s trade war is expected to temporarily bolster United States economic growth, in part because Beijing tried to beat the clock on Mr. Trump’s tariffs by stocking up on American soybeans, crude oil and other exports.
/jlne.ws/2L83ct1

Tower of secrets: the Russian money behind a Donald Trump skyscraper; The Trump Toronto reveals the links between a shadowy world of post-Soviet money and a future president
Tom Burgis – FT
One October day in 2007, a celebrity real estate developer in a greatcoat and powder-blue tie alighted from a stretch limousine in Toronto’s financial district. Before a bank of photographers, he took hold of a golden shovel. To his left, also holding a novelty spade, was his partner in a C$500m (£287m) skyscraper, construction of which was to begin that day: a Russian-Canadian billionaire whose fortune had its origins in the collision of communism, capitalism and the KGB at the fall of the Soviet empire.
/jlne.ws/2L4DSnK

Robert Reich: Donald Trump Is A Liar. Don’t Let Him Get Away With it | Opinio
Robert Reich – Newsweek
As the political season heats up, Trump is ramping up his lies through his three amplifiers: Fox News, rallies, and Twitter. According to The Fact Checker’s database, the average daily rate of Trump’s false or misleading claims is climbing.
/jlne.ws/2LaXhDL

Regulation

Sebi not averse to the merger of exchanges, says Chairman Ajay Tyagi; The comments come amid reports of merger talks between NSE and largest commodity bourse Multi Commodity Exchange (MCX)
Pavan Burugula – Business Standard
Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi on Wednesday said the regulator was not against the merger of exchanges.
/jlne.ws/2L7xOef

Ex-Tesla Worker Escalates Legal Battle by Blowing Whistle to SEC
Dana Hull and Josh Eidelson – Bloomberg
A former Tesla Inc. employee portrayed by Elon Musk as a saboteur has filed a whistle-blower tip to the U.S. Securities and Exchange Commission alleging the company made misstatements and omissions to investors.
Martin Tripp, a process engineering technician who left Tesla on June 19 and was sued by the company shortly thereafter, accused the carmaker of inflating weekly Model 3 production figures by as much as 44 percent. In a tip filed to the SEC on Friday, he also said the company installed unsafe batteries in vehicles that may be at higher risk of catching fire later.
/goo.gl/QmoCM8

U.S. Justice Department announces task force to deter fraud, avoid ‘piling on’
Diane Bartz, Katanga Johnson – Reuters
U.S. Justice Department officials on Wednesday announced the establishment of an anti-fraud task force intended to deter fraud and coordinate investigations to avoid “piling on,” where multiple agencies probe the same alleged misconduct.
The task force brings together the Justice Department and U.S. attorneys offices, the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB) and Securities and Exchange Commission (SEC), said Deputy Attorney General Rod Rosenstein, who made the announcement along with the heads of the three agencies.
/goo.gl/q7XcaK

ESMA Consults On The Clearing Obligation Under EMIR
ESMA
The European Securities and Markets Authority (ESMA) has today published a Consultation Paper (CP) on the Clearing Obligation under EMIR. The CP deals with an amending draft RTS regarding the treatment of intragroup transactions with a third country group entity. ESMA’s consultation seeks stakeholders’ views on a proposed extension of the temporary intragroup exemption and is open for feedback until 30 August 2018.
/jlne.ws/2L7SuCK

ESMA sets out plan for systematic internaliser regime calculations and publications
ESMA
The European Securities and Markets Authority (ESMA) has today published details of its action plan (within its updated Q&As on MiFID II and MiFIR transparency topics) for systematic internaliser (SI) regime calculations ahead of their publication on 1 August 2018. ESMA’s action plan focuses on equity, equity-like instruments and bonds while postponing the publication for derivatives and other instruments to 1 February 2019.
/jlne.ws/2L4t1ua

ESMA updates Q&As on MiFID II and MiFIR investor protection and intermediaries
ESMA
The European Securities and Markets Authority (ESMA) has updated its Questions and Answers (Q&A) document on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).
/jlne.ws/2L6qfo1

ESMA reminds UK-based regulated entities about timely submission of authorisation applications
ESMA
The European Securities and Markets Authority (ESMA) is issuing this Public Statement in order to raise the awareness of all market participants on the importance to prepare for the possibility of no agreement in the context of the United Kingdom withdrawing from the European Union. As there is no assurance that a transition period will be agreed upon, entities need to consider the scenario where a hard Brexit would take place on 30 March 2019.
/jlne.ws/2L6ysZe

Whistleblower Attorney Explains How Proposed Changes To SEC Whistleblower Program Will Undermine Deterrence
Mondovisione
On June 29, 2018, the U.S. Securities and Exchange Commission (“SEC”) announced proposed amendments to the rules governing its successful whistleblower program. This announcement received immediate criticism from whistleblower advocates as well as two of the five SEC Commissioners who oppose the amendments.
/jlne.ws/2L0Jmjt

BoE says worried by lack of auditor choice for banks
Huw Jones – Reuters
The Bank of England said on Wednesday there is too little choice of auditor for big banks who must switch book-keepers under European Union rules.
/jlne.ws/2L2dQRZ

SEC Issues Agenda for July 16 Meeting of the Fixed Income Market Structure Advisory Committee
SEC
The Securities and Exchange Commission today released the agenda for the July 16 meeting of the Fixed Income Market Structure Advisory Committee. The Commission established the advisory committee to provide a formal mechanism through which the Commission can receive advice and recommendations on fixed income market structure issues.
/jlne.ws/2L6deuz

U.S. Treasury Issues Final Regulations on Inversion Transactions; In an inversion, a U.S. company takes a foreign address, typically through a merger with a smaller firm
Richard Rubin – WSJ
The Treasury Department on Wednesday released the final version of regulations designed to limit U.S. companies’ ability to engage in so-called inversion transactions that put their tax addresses abroad.
/jlne.ws/2LaZIGp

SEC Files Additional Charges in Fitbit Stock Manipulation Scheme
SEC
The Securities and Exchange Commission today filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit securities through false regulatory filings.
/jlne.ws/2L6rP9i

Remarks on the Establishment of the Task Force on Market Integrity and Consumer Fraud
Chairman Jay Clayton – SEC
Thank you for inviting me to say a few words about the importance of this Task Force.[1] I commend the President and the Attorney General for their leadership in this area. Serving and protecting Main Street investors is my main priority at the SEC. We recognize that close partnerships with our fellow regulators and law enforcement agencies are vital to helping us detect and respond to fraud. Through a few examples, I’d like to highlight some of the work the SEC is doing to combat retail securities fraud and illustrate how important inter-agency cooperation is.
/jlne.ws/2LaX57v

Production Test for TRACE Trade Reporting FIX Tag Changes
FINRA
On Monday, August 20, 2018, FINRA will require a change to all FIX trade reporting related to the processing of execution time during Daylight Savings Time (DST) changes. FIX Tag 60 (TransactTime) will be used to indicate the Execution Time for all products and Tag 22007 (ExecutionTime) will be retired from processing use.
/jlne.ws/2L6qv6t

Investing and Trading

NFEC Seeks Input on Definition of Financial Literacy
PR Newswire
The National Financial Educators Council seeks to improve upon the current financial literacy definition and would value third-party input. The NFEC currently defines financial literacy as “Possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual’s personal, family, and global community goals.”
/jlne.ws/2L8FpWG

Investors Have Become Too Complacent About Inflation; Markets have been worried about what’s happening to growth. In the background, inflation is warming up
Richard Barley – WSJ
Remember inflation? What with trade conflicts, political turmoil and puzzles around global growth, there’s a lot for investors to juggle. But this year’s ructions in global markets started with a steep climb in bond yields in part due to rising inflation. U.S. consumer price data for June, due Thursday, are forecast to show inflation at 2.9%, its highest for more than six years. With so much else to worry about, inflation may have moved too far off investors’ radar.
/jlne.ws/2L1Chiu

Soyabean prices drop to lowest since 2008
Peter Wells – FT
Soyabean prices are getting crushed, dropping to their lowest since the financial crisis as the trade war between the US and China ratchets up.
/jlne.ws/2L0U09X

U.S. Yield Curve to Invert in Mid-2019, Morgan Stanley Says
Chris Anstey – Bloomberg
Fed in March to map out end to balance-sheet contraction: MS; Net Treasury supply seen smaller thanks to Fed balance sheet
The Federal Reserve next March will probably map out an end to the contraction in its balance sheet, helping support longer-dated bond yields, which will drop below those on shorter-dated notes by the middle of 2019, according to Morgan Stanley.
/jlne.ws/2Lab39k

Opinion: The risk Jeff Bezos takes with Amazon.com offers stock investors a valuable lesson
Mark W. Johnson – MarketWatch
Some years ago, famed investor Warren Buffett told an interviewer that his approach to investing “is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it’s the lack of change that appeals to me. I don’t think it’s going to be hurt by the internet. That’s the kind of business I like.”
/jlne.ws/2L1CySt

IEA warns spare oil capacity to be ‘stretched to limit’; Crude prices rally after steepest one-day fall in two years
David Sheppard – FT
The International Energy Agency warned on Thursday that spare oil production capacity risks being “stretched to the limit” as supply disruptions and US sanctions against Iran tighten the market.
/jlne.ws/2L3rTXz

Institutions

Morgan Stanley manager steps down amid complaints against brokers
Reuters Staff
Morgan Stanley (MS.N) said on Wednesday that Robert Perry, manager for the firm’s Beverly Hills, California, wealth management office, has left the firm.
/jlne.ws/2L3sKaN

BlackRock plans its largest ever alternative investment fundraiser
Trevor Hunnicutt – Reuters
BlackRock Inc (BLK.N) is planning to raise $3.5 billion for investments in energy infrastructure in what is poised to be its largest alternative investment fund yet, an executive at the world’s largest asset manager told Reuters.
/jlne.ws/2L7Sbb4

Hedge fund Tiger Global takes $1 billion stake in Softbank: source
Reuters Staff
U.S. hedge fund Tiger Global has built a stake worth more than $1 billion in Japan’s Softbank Group which it considers to be under-valued, a source with direct knowledge of the matter said on Wednesday.
/goo.gl/G1i6W9

Glencore forms committee to handle DoJ probe; Chairman and two non-execs to oversee response to US government investigation
Neil Hume , Natural Resources Editor – FT
Glencore has asked its chairman and two non-executive directors to handle the company’s response to a US government investigation into possible bribery and corruption.
/jlne.ws/2L0TFnH

Goldman Sachs, Prysmian, others lose challenge against 302 million euro EU cartel fine
Foo Yun Chee – Reuters
Investment bank Goldman Sachs (GS.N), the world’s top cablemaker Prysmian (PRY.MI), Nexans (NEXS.PA) and eight other cable companies on Thursday lost their challenge against a 302 million euros ($352.6 million) EU cartel fine.
/jlne.ws/2L6qJKI

The Wealth-Management Arms Race Is Heating Up
Olivia Carville – Bloomberg
Citigroup Inc. is adding muscle to its private-wealth arm, hiring advisers from rival Bank of America Corp. as competition for assets intensifies.
/jlne.ws/2L6oWW9

Wall Street Competes With Unregulated Banks for the Riskiest Loans
Sally Bakewell – Bloomberg
Regulators loosen guidance so banks return to buyout lending;Non-traditional lenders that filled void vie for junk debt
Wall Street’s junk war is heating up. On one side are major banks, which are diving back into high-risk corporate lending now that U.S. regulators have loosened up.
/jlne.ws/2L1FAGq

Regions

Saudi securities regulator awards first two fintech licenses
Reuters Staff
Saudi Arabia’s securities regulator approved its first two financial technology licenses on Tuesday, part of a drive to develop a fintech sector in the Arab world’s biggest economy under reforms designed to reduce reliance on oil exports.
/goo.gl/cZ6K8p

Venezuelan economy shrank 12 pct in first quarter – congress
Reuters
Venezuela’s economy contracted 12 percent in the first three months of this year compared with the same quarter of 2017, the opposition-led congress said on Wednesday, in another dramatic indication of the OPEC nation’s unraveling.
/goo.gl/qFa6W8

Brexit

Brussels downplays BoE warnings on Brexit risk to derivatives; Assurances from EU commissioner run directly counter to fears spelled out by Carney
Jim Brunsden – FT
The European Commission has downplayed warnings from the Bank of England that the validity of vast numbers of financial services contracts could be put at risk if regulators do not put special measures in place before Brexit, saying the market should be able to deal with most of the problems itself.
/jlne.ws/2La7WhE

Theresa May ditches hopes of keeping City in tight tie-up with EU; White paper discards ‘mutual recognition’ in favour of looser ties after Brexit
George Parker and Patrick Jenkins in London – FT
UK prime minister Theresa May has abandoned plans for a tight new relationship with the EU in financial services after Brexit, laying out a new proposal for a looser partnership in her long-awaited white paper on Thursday.
/jlne.ws/2L4B0Hu

May Unveils U.K. Soft Brexit Blueprint, But Banks Are Cut Loose
Tim Ross and Ian Wishart – Bloomberg
Government white paper: U.K.-EU ‘free-trade area for goods’; May says plan delivers ‘principled and practical Brexit’
Theresa May released the most contentious document of her two-year premiership on Thursday, vowing to push through her plan to keep the U.K. closely tied to the European Union single market after Brexit.
/jlne.ws/2Lb3jUV

Miscellaneous

Mansueto buying 49 percent stake in Chicago Fire
Danny Ecker – Crain’s Chicago Business
After expanding his empire to real estate with the purchase of the Wrigley Building, billionaire Morningstar founder Joe Mansueto is adding a new investment to his portfolio: professional soccer.
/jlne.ws/2L6lRp3

The post Nasdaq to Provide Clearing Technology to SIX for Clearing Overhaul appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Happy Friday the 13th!

Yesterday I learned I will be having hip replacement surgery. Using the logic of the sooner the better, I have decided to have the surgery on August 2, which happens to be the last day of the MarketsWiki Education World of Opportunity series in Chicago.

Needless to say, I will not be at the last day of the series. Someone from JLN will be filling in for me as master of ceremonies on that day.

I should be back in action the next week, though working from home, as I only have to be in the hospital for 3 days or so. I expect a full recovery within eight weeks of the surgery, which will leave me just under 50% cyborg. For those of you scoring at home, I will now have two new knees, a new shoulder, two improvements to my back and now a hip. Luckily my memory upgrade was only moving data to the cloud.~JJL

Yesterday I received a blackmail threat by email from someone who seemingly hacked one of my passwords somehow. They asked for $2900 in bitcoin in 24 hours. I called the police.~JJL

Futures for Kids celebrated the 4th of July with their annual golf day, competing for The Bob Ray Trophy at Royal Blackheath in London. They raised £23k (or $30k) for FFK. Here are the results.~JJL

The JLN story from February about FCM losses in the wake of the February 5th market drop was in the top three from Monday onward, a record for a story we first published in late February. There’s a commentary from David Silverman of Alpha Trading on it today as well.~JK

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CFTC Announces Its Largest Ever Whistleblower Award of Approximately $30 Million
CFTC
The Commodity Futures Trading Commission (CFTC) today announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action. The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program.
/jlne.ws/2L3wMjh

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Inhuman Resources: Mike Picarella wanted to protect a co-worker from humiliating sexual harassment. He didn’t expect his own life to be destroyed in the process.
David Dayen – Huffington Post
ON MAY 5, 2011, Mike Picarella’s first day at HSBC, his boss wanted to know if he was sexting. “No, no,” he reassured her—his wife was just curious how things were going, so he was texting her back. His boss then inquired whether his wife had ever heard of the three-minute rule. “What’s that?” Mike asked. Well, his boss said, leaning in, if she ever wanted her husband to do something, she would give him a blowjob that lasted exactly three minutes, and voila, her wish was his command. Surveying Mike’s blank stare, she belted out one of her giant, guttural laughs and plopped herself down at her desk, a mere two feet from his.
/jlne.ws/2L82Rq4

***** You really don’t want to read this story.~JJL

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That Giant Sucking Sound is Post-Brexit London Losing Out; The U.K. capital’s rivals are slowly carving chunks out of its business.
Mark Gilbert – Bloomberg
Lingchi is the Chinese word for a form of torture in which flesh was systematically sliced from the body of the condemned, resulting in death by a thousand cuts. It was banned there in 1905; but, with Brexit looming, the practice is set for a revival in the City of London.
/jlne.ws/2L9xNq0

***** Bleeding to death is not a good strategy.~JJL

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[[David Silverman]]’s Commentary on February 5: We are a “master and slave to the system”
JLN
I read the JLN essay about the events of February 5. I had heard many of the rumors that quickly emerged in the aftermath of the carnage and, as always the case in these types of situations, wasn’t sure what to believe. So, first, congratulations on the incisive and important reporting. It’s scary to consider how vulnerable the FCM community—and by extension, the entire industry—is to these periodic shocks; especially since the previously rare black swan sighting has become an increasingly regular occurrence.
I suppose it’s possible to look at February 5 in a positive light. After all, every FCM that suffered losses was able to quickly recapitalize. But, what about the next time? And the next and the next?
bit.ly/2Jl3OXj

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Thursday’s Top Three
Our top read story of the day yesterday was in the top three all week and is our top read story of the year by a long shot FCMs Big And Small Suffer Major Losses On Latest Black Monday. It is uncommon for a dated story to make our top three, much less have a run like this. If you haven’t read it, it details the level of customer and clearing FCM losses taken on February 5, when the market plunged 1,175 points in the Dow and 113 points in the S&P 500. Second was the Bloomberg story CME Technical Issue Keeps Some Customers From Connecting. In third was Bloomberg’s Flash Boys on the Farm? Arms Race Is Unleashed Over Crop Data

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MarketsWiki Stats
129,482,804 pages viewed; 23,191 pages; 214,033 edits
MarketsWiki Statistics

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Lead Stories

US Treasury market structure could pose systemic risk — report; Industry group says rise of prop trading firms and electronic trading requires new rules
Joe Rennison in New York – FT
The current structure of the US Treasury market could pose a risk to financial stability, an industry advisory group to the Federal Reserve Bank of New York has concluded.
/jlne.ws/2L4lGul

EU to change share-trading rules in fear of hit from Brexit
Philip Stafford in London – FT
European markets regulators have launched a review of a key part of their new share trading rules amid concerns they may lose business to London after the UK leaves the European Union next year.
/jlne.ws/2JkFwwK

Wall Street-Backed Blockchain Company Weighs IPO, Sale
Olga Kharif and Ruth David – Bloomberg
Developer R3 hasn’t made final decision about future ownership; Investors including CEO, BofA will decide company’s course. R3, a blockchain-software company that works with more than 200 heavyweights such as Intel Corp., Microsoft Corp., US Bancorp and Wells Fargo & Co., is considering going public, according to people familiar with the matter.
/jlne.ws/2L9gbdX

Feds award JPMorgan Chase whistleblower a record $30M
Kevin Dugan – Bloomberg
Call him the $78 million man. A Florida financial investigator is getting a cool $30 million from a federal commodities regulator for blowing the whistle on a conflict of interest at JPMorgan Chase. Edward Siedle’s reward is the largest ever awarded by the Commodity Futures Trading Commission — and, in fact, is triple its previous largest award, the CFTC said Thursday.
/jlne.ws/2JjfmKN

OCC Appoints General Counsel of NYSE Group to Board of Directors
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that Elizabeth King, General Counsel of NYSE Group, has joined the Board of Directors as an Exchange Director. She fills a vacancy created by the departure of former NYSE Group President Thomas Farley in May.
/jlne.ws/2L7i7Us

Hedge Funds Should Be Thriving Right Now. They Aren’t.
James B. Stewart – NY Times
Highly paid hedge fund managers have complained for years that it’s unfair to compare their performance with the broad stock market during prolonged bullish periods. Hedge funds are designed to mitigate risk, the argument goes, and so investors in them might sacrifice some gains as markets rise while waiting for hedge funds to prove themselves in more challenging times. Those times would seem to have arrived.
/jlne.ws/2LiBhne

Bond Traders Are Flummoxed by ‘Slumpflation’; The copper-gold ratio signals slower growth, but inflation is the highest in years. What’s the bond market to do?
Brian Chappatta – Bloomberg
The world’s biggest bond market just doesn’t know what to do with the prospect of an all-out trade war instigated by the U.S.
/jlne.ws/2Lbs2Im

UBS Brought the Bond Market to Philanthropy and It Paid Off
Emily Chasan – Bloomberg
Debut development-impact bond helps education project succeed; Burgeoning niche seen as potentially ‘powerful financing tool’
The world’s first development-impact bond to fund girls’ education in India performed better than expected, suggesting the tools of the fixed-income market can be harnessed to supercharge philanthropy in emerging markets.
/jlne.ws/2LajPV1

The quality of financial information explains why stocks and bonds co-move
Stefano Cascino – London School of Economic and Political Science
The sensitivity of corporate bond returns to changes in the value of equity is a fundamental input for portfolio asset allocation. Since imperfect correlation of asset returns is a key assumption in portfolio theory, stock-bond return co-movement is important to determine the diversification benefits of bonds, and to hedge common exposures across the two asset markets. Because bonds exhibit on average lower expected returns, a higher stock-bond return co-movement implies a greater allocation to equities.
/jlne.ws/2L7bCRy

Exchanges, OTC and Clearing

Michael Spencer’s Big Trade Looks Better by the Year; TP ICAP’s woes show how right he was to retreat from voice broking.
Chris Hughes – Bloomberg
When Michael Spencer sells, pay attention. The British broking entrepreneur sold almost all his shares in TP ICAP Plc soon after he received them following the merger of his ICAP voice broking business with rival Tullett Prebon.
/jlne.ws/2L4KPFh

EurexOTC Clear Release 9.0: Announcement and service enhancements to be introduced
Eurex
With this circular, Eurex Clearing announces the introduction of service enhancements with EurexOTC Clear Release 9.0 on 3 December 2018. The timeline for the new release and the introduction of services is as follows:
/jlne.ws/2LeTguA

EXCHANGE UPDATES AND STREAMLINES ITS GUIDANCE MATERIALS
Regulatory
HKEX
Changes comprise: Two additions; Five updates; Twenty withdrawals; Aim is to provide greater clarity to market
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) updated and streamlined some of its Guidance Materials – Guidance Letters, Listing Decisions and Frequently Asked Questions (FAQ) – to provide greater clarity to the market.
/jlne.ws/2JjO3jx

Exchange Publishes Guide on Listing New Structured Products
HKEX
Guide is designed to help issuers in their submission of new product applications to the Exchange; Objectives includes more efficient introduction of new products to give investors more product choices
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) a guide on listing new structured products on the Exchange.
/jlne.ws/2LeTLos

EPEX SPOT and ECC successfully introduce 15-minute continuous trading in Belgium and The Netherlands
Eurex
The European Power Exchange (EPEX SPOT) and the clearing house European Commodity Clearing (ECC) successfully introduced 15-minute continuous Intraday trading on the Belgian and Dutch local power spot markets. First trading day was 10 July 2018.
/jlne.ws/2Jkbadr

Eight Mexican companies join London Stock Exchange Group’s ELITE
London Stock Exchange Group
ELITE, London Stock Exchange Group’s international business support and capital raising programme, today welcomes eight new Mexican companies. ELITE has partnered with legal and professional services firm Doporto Consortium to support the onboarding of Mexican companies to ELITE. ELITE and Doporto Consortium will work closely to support the growth of dynamic companies across the country, helping them to innovate, create jobs and drive economic growth.
/jlne.ws/2Jk8yfC

Fintech

OptionMetrics Announces New Leadership Structure to Reflect Company Growth
Business Wire
OptionMetrics, an options database and analytics provider for institutional and retail investors and academic researchers, has restructured its management leadership as it continues to expand into new markets. David J. Hait, Ph.D., founder of OptionMetrics, formerly President of the company, is now Chief Executive Officer. Eran Steinberg, formerly Vice President of Sales and Marketing at OptionMetrics, now serves as Chief Operating Officer and Chief of Staff. Garrett DeSimone, Ph.D., also recently joined the team as Head of Quantitative Research.
/jlne.ws/2L57qle

Data impel economists to leave their armchairs at last; Practitioners have traditionally thought more about theory than measuring real life
Tim Harford – FT
If Hollywood is to be believed, every mad scientist who ever lived has a laboratory full of bubbling flasks, flashing consoles and glowing orbs. Science writer Philip Ball — who has visited countless research labs — tells me that reality is not so very different: the gear may be more subdued, but the gear is always there.
/jlne.ws/2L6wuby

Funding for U.S. Fintech Startups Rose 40 Percent Last Quarter
Julie Verhage – Bloomberg
A big initial public offering and strong signs of growth in the financial technology industry are giving startups in the sector a funding boost.
/jlne.ws/2Lb9I24

Thomson Reuters adds rules-based order routing to REDI EMS; Rules-based order routing will give traders ability to prioritise orders on the EMS across asset classes.
Hayley McDowell – The Trade
Rules-based order routing has been added to the REDI execution management system (EMS) at Thomson Reuters to allow traders to prioritise orders across asset classes.
/jlne.ws/2LhtBBH

Cryptocurrencies

The Fight Over Mt. Gox’s Bitcoin Stash; Hundreds of thousands of Bitcoins went missing from the busted exchange. Who gets the leftover digital currency?
Tom Redmond, Min Jeong Lee – Bloomberg
An April 7, 2017, photo shows a sign informing customers that Bitcoin can be used for payment at a store in Tokyo. PHOTOGRAPHER: TORU YAMANAKA/GETTY IMAGES
Mark Karpelès learned in June that he’s probably not going to become a Bitcoin billionaire. He calls that good news. If it had happened, he says, he would have been “one of the most hated people on Earth.” And Karpelès already has plenty of people who are angry with him.
/jlne.ws/2L1cQxJ

Ex-CFPB Deputy to Guide Crypto Firms Through Regulatory Thicket
Robert Schmidt – Bloomberg
Raj Date’s FS Vector aiming ‘to educate on all sides of this’; Former banker helped Elizabeth Warren launch consumer bureau
A former Consumer Financial Protection Bureau deputy director turned venture capitalist is opening a consulting shop to help cryptocurrency and digital banking companies navigate Washington.
/jlne.ws/2L6KAtu

Crypto Investors Try Forming First Regulated Bank, in Malta
Cindy Wang and Todd White – Bloomberg
Binance, one of the world’s biggest cryptocurrency exchanges by traded value, is seeking to lay the groundwork for a new bank whose owners will be digital-coin investors.
/jlne.ws/2LaWMcw

Billionaire Steven Cohen Invests in Crypto Hedge Fund
Katrina Lewis – Bloomberg
Billionaire Steven Cohen has invested in a hedge fund focusing on cryptocurrencies and blockchain-based companies, according to a person familiar with the matter.
/jlne.ws/2L99zw9

Bitcoin Looks More Like Gold Than a Currency; The cryptocurrency is volatile, costly to store, hard to use and deflationary.
Noah Smith – Bloomberg
In the seven months since Bitcoin’s price peaked, it has fallen by about two-thirds. But it’s still almost three times more valuable than it was a year ago:
/jlne.ws/2L8QjPw

***** Both gold and bitcoin are currency default swaps.~JJL

Bitcoin or Buffett? One gambler is willing to wager millions on the first
Shawn Langlois – MarketWatch
Warren Buffett’s Berkshire Hathaway is trading at $287,100 a share. Bitcoin is barely clearing $6,000. One intrepid crypto fan believes the gap between the two won’t last. In fact, he’s willing to bet millions of dollars on it.
/jlne.ws/2L68qFH

French Crypto Wallet Ledger Is Solving Bitcoin’s Biggest Flaw For Financial Giants
Oliver Smith – Forbes
“One million dollars straight in crypto, in cold storage,” said hedge fund chief Bobby Axelrod on HBO’s Billions in May, handing a mysterious-looking USB stick to his loyal lieutenant.
/jlne.ws/2LdpQjW

New York to Crypto Miners: Looking for Cheap Power? Let’s Talk
Chris Martin – Bloomberg
State approves utility rates that allow for miner contracts; Miners have descended upon upstate New York for cheap power
New York just cracked open a door for electricity-sucking cryptocurrency miners to take advantage of some of its cheapest power supplies.
/jlne.ws/2L4cyWB

eToro CEO: ‘We can trade $200m in crypto in one day’
Co-founder and CEO Yoni Assia on the firm’s rapid growth, its move into institutional
By Samuel Agini – Financial News
Yoni Assia struggled to remember when he first invested in cryptocurrencies. “Two thousand and… I don’t know if it’s ten or eleven,” said the co-founder and chief executive of online broker eToro. “We bought bitcoin for $5.”
/jlne.ws/2JkPDlf

Politics

A trade war risks all Donald Trump’s economic successes; The very voters who put the US president in the White House will be hurt by tariffs
Anthony Scaramucci – FT
During his first 16 months in office, President Donald Trump made all the right moves in leading the US economy and stock market to record heights: tax cuts, regulatory relief and pro-business rhetoric. Wages are inching upwards and people are returning to work. Yet, the potential for a full-blown trade war risks undoing much of that great work and punishing the very voters who elected him. The administration needs to change tactics now or risk jeopardising the midterms.
/jlne.ws/2L6hDOi

Ryan Says Trump’s Trade Policies Put U.S. Economy at Risk
Anna Edgerton – Bloomberg
House Speaker Paul Ryan drew a stark difference between his vision for trade and that of President Donald Trump, rejecting tariffs and warning that pulling out of trade agreements is a threat to the U.S. economy.
/jlne.ws/2L3wNE3

Commerce Secretary Ross to Sell All Stocks After Ethics Office Warning
Bill Allison – Bloomberg
Commerce secretary cited for late divestiture of assets; Ethics chief says failure ‘undermined public confidence’
U.S. Commerce Secretary Wilbur Ross said Thursday that he would divest all his remaining equity holdings after the government’s top ethics watchdog said his failure to sell off assets that could pose a conflict of interest “created the potential for a serious criminal violation.”
/jlne.ws/2L9htpa

Trump says Brexit blueprint likely to ‘kill’ any UK-US trade deal; President criticises Theresa May’s handling of EU negotiations as ‘unfortunate’
Demetri Sevastopulo, Henry Mance and Jim Pickard in London – FT
US President Donald Trump has begun his first official visit to Britain with an undiplomatic barrage against Theresa May, saying the prime minister’s Brexit blueprint “will probably kill” any trade deal between the two allies.
/jlne.ws/2L3lsUv

Trump says Brexit blueprint likely to ‘kill’ any UK-US trade deal
President criticises Theresa May’s handling of EU negotiations as ‘unfortunate’
Demetri Sevastopulo, Henry Mance and Jim Pickard in London – FT
US President Donald Trump has begun his first official visit to Britain with an undiplomatic barrage against Theresa May, saying the prime minister’s Brexit blueprint “will probably kill” any trade deal between the two allies.
/jlne.ws/2L3lsUv

Trade disputes take toll on emerging market equity funds; Outflows for 10th straight week take losses since start of May to more than $17bn
Joe Rennison in New York – FT
Funds invested in emerging market equities this week suffered their longest continuous bout of withdrawals in more than two years, as intensifying trade disputes weighed on investor appetite.
/jlne.ws/2L6xmgl

4,500 Tech Workers, 1 Mission: Get Democrats Elected
Kevin Roose and Sheera Frenkel – NY Times
It was four months and eight days until the 2018 midterm elections, and Anna Eskamani had not spent a penny to promote her political campaign online. Ms. Eskamani, 27, is running to represent Florida’s 47th District in the State Legislature. Like many state-level candidates, she writes her own fund-raising emails and manages her own social media accounts. And with her busy schedule on the campaign trail, advertising online is an afterthought. “My budget is zero for it right now,” Ms. Eskamani said. “It just hasn’t been necessary.”
/jlne.ws/2LftJBB

Regulation

CFTC Orders Commodity Trading Firm to Pay $3.4 Million Penalty for Attempted Manipulation of Agricultural Markets
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Lansing Trade Group, LLC (Lansing), a commodity merchandising firm with headquarters in Overland Park, Kansas, for the attempted manipulation of the price of certain wheat futures and options contracts that were traded on the Chicago Board of Trade (CBOT) and for aiding and abetting the attempted manipulation of the cash price for yellow corn from Columbus, Ohio (Columbus Corn).
/jlne.ws/2L6PKpm

US antitrust chief signals comfort with tech deals; Trump appointee says ‘great efficiencies’ can come from large groups buying smaller rivals
Kadhim Shubber in Washington – Ft
The US justice department’s antitrust chief has indicated he is comfortable with large technology groups snapping up smaller rivals, arguing that “great efficiencies” can come from such deals in Silicon Valley.
/jlne.ws/2L9dAAJ

CIO Pam Dyson Talks Tech Innovation; Pam Dyson at the AWS public sector summit
SEC
How does a federal agency with 4,500 employees oversee $82 trillion in annual securities trading, 21 national securities exchanges, and nearly 26,000 registered market participants? According to Securities and Exchange Commission Chief Information Officer Pamela C. Dyson, the SEC does it by multiplying the impact of every employee and leveraging technology.
/jlne.ws/2L7pr2g

Fed Chair Jay Powell: We’re “independent of political considerations”
Kai Ryssdal – MarketPlace.org
In the five months since Jerome “Jay” Powell took over as chairman of the Federal Reserve, the country is facing a growing number of tests: stagnant wage growth, tariff disputes around the world and a White House that likes to publicly offer the Fed economic advice.
/jlne.ws/2La4Eey

Ex-Barclays Trader Convicted of Fraud May Be Out of U.K.’s Reach
Franz Wild – Bloomberg
Philippe Moryoussef fled to France before Euribor trial began; Messy Brexit could help Moryoussef fight extradition
Former Barclays Plc trader Philippe Moryoussef was in his native France when a London jury found him guilty of a conspiracy to rig an interest-rate benchmark that influences trillions of dollars of pensions and mortgages. He had left London days before the trial began in April.
/jlne.ws/2L8UV88

SEC Probes Why Facebook Didn’t Warn Sooner on Privacy Lapse; Facebook faces questions on what it knew and when about Cambridge Analytica’s use of social-media data
Dave Michaels and Georgia Wells – WSJ
Securities regulators are investigating whether Facebook Inc. FB 2.16% adequately warned investors that developers and other third parties may have obtained users’ data without their permission or in violation of Facebook policies, people familiar with the matter said.
/jlne.ws/2Lcb5dz

ESMA mulls applying tick size regime on third countries as Brexit looms; Third country instruments may have to comply with tick size regime as ESMA looks to protect venues inside the European Union.
Hayley McDowell – The Trade
Countries outside of the European Union could be forced to comply with the tick size regime under MiFID II as the EU markets watchdog seeks to protect venues in Europe as the shadow of Brexit grows larger.
/jlne.ws/2LbpYgm

Buy-side warned about free-trial periods for research under MiFID II; ESMA lays out rules for free-trial periods and investment firms are excepted to keep a record that they have been met.
Hayley McDowell – The Trade
The European Securities and Markets Authority (ESMA) has clarified the use of free-trial periods for research services under MiFID II’s unbundling requirements.
/jlne.ws/2LdLQYF

ESMA delays systematic internaliser regime for derivatives; SI calculations for derivatives will now be published on 1 February 2019 as ESMA blames incomplete and insufficient data.
Hayley McDowell – The Trade
The EU markets watchdog has decided to delay the implementation of the systematic internaliser (SI) regime for derivatives to 2019.
/jlne.ws/2LcCe01

ESMA warns UK firms planning to relocate over ‘no deal’ Brexit; European regulator warns market participants over authorisation deadline for Brexit relocation.
John Brazier – The Trade
The European Securities and Markets Authority (ESMA) has made a public statement to remind UK firms to adequately prepare for a ‘no deal’ or ‘hard Brexit’ scenario on 30 March next year.
/jlne.ws/2Le00ZC

Prospectuses: ESMA consults on risk factors and exemptions for takeovers, mergers and divisions
ESMA
The European Securities Markets Authority (ESMA) has launched today two public consultations under the new Prospectus Regulation (PR).
/jlne.ws/2LgtLcu

ESMA consults on tick size regime
ESMA
The European Securities and Markets Authority (ESMA) has published a Consultation Paper (CP) proposing amendments to the tick size regime (Commission Delegated Regulation (EU) 2017/588 (RTS 11)). The MiFID II tick size regime aims at creating a level playing field between the different trading venues in the EU by regulating the minimum price increment that can be used by those trading venues. The CP aims to address issues, in a timely manner, that have arisen with respect to financial instruments where only a marginal proportion of trading is executed on EU trading venues and the main pool of liquidity is located outside the EU (third country instruments).
/jlne.ws/2Lhx4jH

FINRA Handles Record Volume of Market Activity through First Six Months of 2018
Cloud Strategy Enables Seamless Processing and Robust Market Surveillance
FINRA
FINRA processed an unprecedented amount of market activity through the first six months of 2018, averaging a record 57.9 billion electronic records per day during the period — a 62-percent increase over the average daily volume in 2017. FINRA’s pioneering cloud strategy has allowed it to handle the record-setting volume smoothly while performing vigorous regulatory oversight of securities trading.
/jlne.ws/2JkdMIh

Podcast: CFTC Talks EP051: Jim Bianco, Bianco Research
CFTC
This week on CFTC Talks, we speak with founder of Bianco Research, Jim Bianco. We cover a wide range of topics from why confidence surveys are wrong to the challenges…
/jlne.ws/2LiHajW

Investing and Trading

S&P 500 Is Very Close to Putting March and April Behind It
Richard Richtmyer – Bloomberg
A blast of buying in the last few minutes of Thursday’s trading session pushed the S&P 500 Index to within a hair’s breadth of 2,800.
/jlne.ws/2L7imim

Fed chair Powell predicts ‘significant’ boost for US economy
Sam Fleming in Washington – Ft
Jay Powell has given an upbeat assessment of the economy, predicting that tax cuts and spending increases could deliver a “significant” boost to the economy for at least the next three years.
/jlne.ws/2LdTs0B

Investment in education can counter the economic impact of an older population; But the ability of skill boosts to counter the effects of ageing seems to be smaller in countries with more educated workforces, write Rainer Kotschy and Uwe Sunde
London School of Economic and Political Science
Population ageing is one of the most important economic and social challenges in the twenty-first century. With increasing life expectancy and falling fertility, the populations of most countries are growing older. Large cohorts are being replaced by relatively smaller but better educated young cohorts, resulting in substantial shifts in the workforce and its age and education composition.
/jlne.ws/2LdNfBP

Cargill’s bets on animal protein pay off as profits hit record; Commodities group has invested heavily in feed rations for livestock, poultry and fish
Gregory Meyer in New York – FT
Feeding animals and selling meat have become the biggest sources of profit for Cargill, helping the US agricultural titan offset pressures in its historic crop trading business.
/jlne.ws/2L3satH

Activist Investors Turn Up Heat in Drive for Returns; Lazard data show activists spent $40 billion targeting 136 companies in first half
Cara Lombardo – WSJ
CEOs beware: Surging stock prices have done little to placate activist investors. Activists are launching campaigns at a record pace as the rise in passive investing pressures fund managers to find new ways to beat the market and letting the rabble-rousing investors into boardrooms becomes less taboo.
/jlne.ws/2LdK2Pi

Institutions

Citadel Hedge Funds Jump 8.8%, Extending Hot Streak
Katia Porzecanski – Bloomberg
Ken Griffin tops main rival, Izzy Englander, in first half; Millennium Management’s flagship returns almost 6% in period
Ken Griffin’s flagship multi-strategy funds extended their solid performance this year through the first half, returning 8.8 percent.
/jlne.ws/2L6ne7g

Apple Announces $300 Million China Clean Energy Fund
Mark Gurman – Bloomberg
Apple Inc., expanding its environmental efforts, announced a $300 million fund to promote clean energy in China. The iPhone maker said it’s creating the fund to boost the use of renewable energy in its supply chain, which is primarily spread across regions in China. The company and 10 of its key suppliers and manufacturing partners, including Corning Inc., Pegatron Corp., Wistron Corp. and Luxshare Precision Industry Co., will contribute to the fund over the next four years, the Cupertino, California-based company said Thursday in a statement.
/jlne.ws/2L9qE9f

JPMorgan reports 18% rise in net profits in second quarter; America’s biggest lender sees ‘good economic growth’ and strength in capital markets
Robert Armstrong in London – FT
JPMorgan Chase kicked off the Wall Street earnings season with strong second-quarter results that will provide reassurance to investors who have sold off shares in the big US banks over the past six months.
/jlne.ws/2L5o1oT

Wells Fargo profits drop as fallout from fake account scandal continues; US bank still struggling to restore reputation two years after fake accounts controversy
Alistair Gray in New York – FT
Wells Fargo’s revenues and profits declined in the second quarter, the latest sign it is struggling to restore its reputation as a reliable financial performer almost two years after a scandal over fake accounts erupted at the US bank.
/jlne.ws/2LeUAO4

Hong Kong’s Securities And Futures Commission Welcomes Appointment Of Non-Executive Directors
Mondovisione
The Securities and Futures Commission (SFC) welcomes the appointment by the Financial Secretary of Mr James C Lin and the re-appointment of Dr William Wong Ming-fung, SC as Non-Executive Directors for a term of two years with effect from 1 August 2018 (Note 1).
/jlne.ws/2Jl66Wp

Hong Kong’s Securities And Futures Commission Welcomes Re-Appointment Of Executive Directors
MondoVisione
The Securities and Futures Commission (SFC) welcomes the re-appointment by the Financial Secretary of Mr Brian Ho and Mr Keith Lui as Executive Directors for a three-year term and a one-year term, respectively, with effect from 28 August 2018 (Note 1).
/jlne.ws/2JkLZI2

Regions

Hedge Funds Turn to These Tiny Stocks That Have Been Quietly Surging
Kana Nishizawa and Bei Hu – Bloomberg
Wiwynn, Yageo, Coupa are among top picks for some investors; Rays, APTA, Sylebra made early bets on overlooked stocks
Chinese tech giants aren’t the hot hedge fund favorites they once were.
/jlne.ws/2L3zOUV

A Financial War Can’t Stop Iran. Here’s What Can; Without forceful political and military initiatives that reverse recent Iranian gains, Tehran will have no reason to resume negotiations.
Hussein Ibish – Bloomberg
Having pulled out of the nuclear deal with Iran, the Trump administration is looking for additional ways of restraining its adversary’s regional ambitions. In a visit this week to the United Arab Emirates and then at the NATO meeting in Brussels, Secretary of State Mike Pompeo reportedly focused on working with allies to turn up the heat on Tehran.
/jlne.ws/2L6AR6s

Cheating Isn’t Going to Help China Win; Skirting WTO rules will only slow the country’s technological drive.
James Bacchus – Bloomberg
The chances of defusing a U.S.-China trade war seem bleak, so long as American complaints remain focused on China’s drive to dominate the industries of the future. The U.S. has justified concerns about the methods China has chosen to pursue its “Made in China 2025” industrial plans. China refuses to accept any curbs on an effort seen as crucial to its future economic vitality.
/jlne.ws/2L62vk1

China Sovereign Fund Prepares Request to Invest at Home
Bloomberg News
$941 billion SWF would need government approval for change; Senior CIC executive cited ‘good opportunities’ in China
China’s $941 billion sovereign wealth fund wants permission to invest in domestic stocks and bonds for the first time, people with knowledge of the matter said, as it tries to end restrictions on its mandate following government moves to open up financial markets.
/jlne.ws/2L68VQ6

Billionaire Ambani Topples Jack Ma as Asia’s Richest Person
Bhuma Shrivastava , Saket Sundria , and Pei Yi Mak – Bloomberg
Reliance’s Mukesh Ambani is worth $44.3 billion on stock surge; Ma has seen his wealth decline by $1.4 billion this year
Mukesh Ambani overtook Alibaba Group founder Jack Ma to become Asia’s richest person as he positions Reliance Industries Ltd. to disrupt the e-commerce space in India.
/jlne.ws/2L8T2IB

Ireland to become first country to divest from fossil fuels; Government bill will require Strategic Investment Fund to sell EUR300m of holdings
Leslie Hook, Environment and Clean Energy Correspondent – FT
Ireland is set to become the first country in the world to divest from fossil fuels, after a bill was passed that requires its sovereign wealth fund to sell off its holdings in fossil fuel companies “as soon as is practicable”.
/jlne.ws/2L6XLe0

US cuts forecast for soyabean exports to China; First estimate on the impact of Trump’s trade war points to gains for Brazilian growers
Gregory Meyer in New York – FT
The first US government forecast incorporating the agricultural fallout from its trade war with China has come to a firm conclusion on soyabeans: China will import less, American farmers will lose business and Brazil will be a beneficiary.
/jlne.ws/2JkG0TA

Brexit

Theresa May Leaves London’s Bankers In the Dark; The Brexit White Paper fails to describe a services deal acceptable to both London and Europe.
Ferdinando Giugliano – Bloomberg
Theresa May’s government has presented its eagerly-awaited proposal on the future relationship between Britain and the EU after Brexit. One area that merits careful scrutiny concerns the City of London and financial services, given their weight on the country’s economy and central position in global markets.
/jlne.ws/2LaMPfa

Brexit white paper’s 98 pages and even more questions; EU capitals welcome document — but will have major issues with it
Alex Barker in Brussels and Chris Giles in London – Ft
Britain finally has a negotiating position for a post-Brexit partnership with the EU.
/jlne.ws/2L60d4p

A new approach for UK financial services after Brexit; We start from a unique point because our financial regulations are in effect identical, writes Philip Hammond
Philip Hammond – FT
Last Friday, prime minister Theresa May set out to the cabinet her Brexit plan for Britain: a principled, practical approach that can deliver a good deal for the UK.
/jlne.ws/2LaSkKS

The post US Treasury market structure could pose systemic risk appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Since I will not be at the final day of MarketsWiki Education World of Opportunity on August 2, the JLN team will take turns introducing the speakers that day. Sarah Rudolph, Spencer Doar, Jeff Bergstrom and summer intern Robby Lothian will take turns. I will be in a hospital bed recovering from hip replacement surgery.~JJL

For the first time in over 10 years, I will not be attending Boy Scout summer camp. My hip to be replaced the next week is too much to handle while living in a tent for a week.~JJL

To all my European friends. I love you.~JJL

CME’s S&P 500 Total Return Index Futures had a record day on Thursday with 22k traded.~SD

According to DataTrek Research, “truckload shipping costs rose 9.4% year-over-year in June 2018.” That number is closest to 2008 levels. ~SD

Performance engineer Bob Van Valzah released the third part of his blog series on shortwave trading – see our lead stories section. You can find his related presentation – Why your transatlantic trades are getting picked off – from the 2018 STAC summit in New York here. ~SD

++++

Trump Was Asked Who the Biggest U.S. Foe Is. He Mentioned the EU First.
Margaret Talev – Bloomberg
Continues president’s notable shift away from long-term allies; Europe’s Tusk says its ‘fake news’ that Europe, U.S. at odds
President Donald Trump named the European Union as a “foe” of the U.S. in an interview, days after a contentious meeting with NATO allies, but a top European official said the suggestion was “fake news.”
/jlne.ws/2uByLRD

***** It is easy for someone without friends not to understand who is a friend and who is a foe.~JJL

++++

Never Trumpers Will Want to Read This History Lesson; In the 1850s, disaffected Democrats made the wrenching choice to leave their party to save American democracy. Here’s what happened.
Joshua Zeitz – Politico
“I was educated a Democrat from my boyhood,” a Republican delegate confided to his colleagues at Iowa’s constitutional convention in 1857. “Faithfully, I did adhere to that party until I could no longer act with it. Many things did I condemn ere I left that party, for my love of party was strong. And when I did, at last, feel compelled to separate from my old Democratic friends, it was like tearing myself away from old home associations.”
/jlne.ws/2uDX6pY

***** Fascinating read of history repeating itself.~JJL

++++

++++

America’s Values Must Guide White House Diplomacy; That’s why the Trump-Putin summit is so risky.
Michael R. Bloomberg – Bloomberg
Never in my lifetime can I remember a week when a president of the United States did more to insult our closest allies and flatter our biggest adversaries. Alienating friends who share our values while ignoring a hostile power’s intrusions into U.S. sovereignty is diplomacy at its most incompetent and counterproductive ó and Americans in both parties must demand that it stop.
/jlne.ws/2zJhg7H

****** You don’t have to have a title to be a leader, and Mike Bloomberg is a good example of this.~JJL

++++

How to Listen to What the Market Is Trying to Tell You
Bloomberg
For years, it was pretty quiet in markets. Stocks kept making new highs and volatility drifted to fresh lows. That’s changed in recent months and there’s now plenty to keep investors busy, including fears of a trade war and signs that the economy be nearing the end of its cycle. On this week’s episode of the podcast, we speak with Peter Borish, a veteran investor and trader (and former Odd Lots guest), who is currently chief strategist at the Quad Group. He talks about how he approaches trading in the current environment and the indicators that he tracks in order to understand what the market is trying to tell us.
/jlne.ws/2uBrx0c

******Sometimes the market whispers, and sometimes it yells. Listen up!~JJL

++++

Bridging the Weeks by Gary DeWaal: June 25 – July 13 and July 16, 2018 (Attempted Manipulation; Curious About Digital Assets; Whistleblowing; SARs; Obstruction)
Gary DeWaal, Katten Muchin Rosenman
A commodity merchandising firm was fined US $6.55 million by the Commodity Futures Trading Commission and the Chicago Board of Trade combined for attempting to manipulate the prices of wheat futures contracts. However, its transaction activity may have constituted ordinary commercial conduct. But that was not sufficient to avoid the regulators’ wrath. Separately, the Financial Industry Regulatory Authority asked member firms voluntarily to disclose details regarding their, their associated persons’, and their affiliates’ activities related to digital assets. But the nature of activities FINRA is curious about is very broad, and includes such persons’ futures activities. As a result, the following matters are covered in this week’s edition of Bridging the Week:
/jlne.ws/2zHNtMZ

++++

Friday’s Top Three
Our top story on Friday was the long and cringe-worthy story by Huffington Post about HSBC’s Mike Picarella and his colleagues in Inhuman Resources. Second went to a piece that remained in the top three for a full week, the February story from John Lothian News, FCMs Big And Small Suffer Major Losses On Latest Black Monday and the related David Silverman Commentary on February 5: We are a “master and slave to the system”. Third went to the CFTC’s announcement CFTC Announces Its Largest Ever Whistleblower Award of Approximately $30 Million

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MarketsWiki Stats
129,641,187 pages viewed; 23,192 pages; 214,138 edits
MarketsWiki Statistics

Lead Stories

Goldman Said Poised to Take Next Step Towards Post-Blankfein Era
Sam Mamudi and Marcus Wright – Bloomberg
David Solomon set to be named as CEO this week, Times says; Move brings the end of Blankfein’s 12-year tenure nearer
Goldman Sachs Group Inc. is poised to take another step in the slow exit of Lloyd Blankfein, its longstanding chief executive officer.
/jlne.ws/2zHyPFc

****SD: David Solomon moonlights as DJ D-Sol.

Buy-side voluntary clearing set to take off; Regulation and collateral costs have made the cleared derivatives market much more attractive for the buy-side. Joe Parsons asks what else will it take for them to voluntarily take part?
Joe Parsons – The Trade
The seismic shift in the derivatives market post-financial crisis has seen not only a change in the way the products are traded and cleared, but also in the nature of relationships throughout the process.
/jlne.ws/2zKyz8y

EU Rules Want Light. Traders Like Dark, Periodically
Viren Vaghela, Silla Brush – Bloomberg
Europe’s push for more transparency in stock trading, which ushered in new limits on so-called dark pools, has led to a surge in what are known as periodic auctions. They’re advertised as a more transparent way of trading stocks, but they share some of the characteristics of dark pools, like the anonymity prized by investors buying or selling big blocks of stock who worry that too much sunshine costs them too much.
/jlne.ws/2uEH1jR

Dog Days of Summer Are Here as Traders Give Up Acting on Tweets
Ksenia Galouchko – Bloomberg
As a heatwave takes hold across Europe, the region’s stock traders are heading for the beach. Market turnover in the region’s equities dropped to the lowest in six months last week as investors gave up trying to predict President Donald Trump’s next tariff threat. European stock volatility also declined, falling to the lowest since June 15, when Trump approved slapping duties on $50 billion of Chinese goods.
/jlne.ws/2zErVAC

U.S. Tries to Rein In High-Speed Trading in Farm Patch; Starting on Aug. 1, the Agriculture Department will change how it releases crop and livestock reports
Alexander Osipovich – WSJ
The U.S. government is taking steps to protect agricultural markets from high-frequency traders – a move some say will make little difference down on the farm.
/jlne.ws/2zEZvqo

VC Firm Social Capital Set Out to Fix Capitalism. Now It’s In Turmoil; Staff have departed and investors have expressed dismay, but CEO Chamath Palihapitiya says the firm hasn’t wavered from its goals.
Lizette Chapman and Sarah McBride – Bloomberg
Seven years ago, Social Capital made its debut as one of the hottest venture funds in Silicon Valley, the brainchild of a former Facebook Inc. executive with some grandiose ideas about backing startups that might help humanity. Now, after a flood of prominent departures from the firm and a failed expansion strategy, a number of investors have lost confidence in the remnants of the leadership team and its ability to make good on its initial promises.
/jlne.ws/2zIIc7J

Shortwave Trading, Part III – Fourth Chicago Site, East Coast, Patent, Regulation, and Farmer Kevin Mystery
Bob Van Valzah – Sniper In Mahwah
I’ve heard that years ago, there was a stable business selling microwave data radios to local governments for networking their offices. Then the traders discovered microwave and everything changed for the radio vendors. Their new customers weren’t so much concerned about the costóthey just wanted the lowest-possible latency in the radios and repeaters.
/goo.gl/bV8Vvz

****SD: If you haven’t been following, catch up with Part I and II.

Never Mind the VIX, Anxiety Is Everywhere in U.S. Stock Market
Lu Wang – Bloomberg
Investors seeking safety in options market, defensive shares; Low correlation means pockets of losses don’t spread
The Nasdaq 100 is at a record, stocks have just strung together two straight weeks of gains and one of the best earnings seasons in a decade is at hand. Bears vanquished? Not entirely.
/jlne.ws/2uD8eUe

Wall Street’s Summer Calm May Depend on Selective Vision
Conrad De Aenlle – NY Times
Wall Street has been in a remarkably relaxed mood lately, especially when you consider that only a few months ago, Federal Reserve rate increases and Trump administration trade policies helped to set off a steep decline in stock prices.
But investors seem to be focusing on a more benign development: an increase in profits resulting mainly from the reduction in corporate income tax rates late last year.
/nyti.ms/2LcAmEF

Offices of the future: inside fund managers’ glitzy new HQs; London companies swap tired facilities for rooftop gardens, pools and music rooms
Owen Walker – FT
London’s property market may be going through a rough patch but at several City fund managers, staff are busy emptying their desk drawers ready to move within the capital.
/jlne.ws/2uCdiYR

How the Supreme Court Unleashed Business; Lewis Powell’s appointment in 1971 marked a sea change for corporate America. It’s his seat that Brett Kavanaugh now hopes to fill.
Justin Fox – Bloomberg
The November 1971 Senate Judiciary Committee confirmation hearings for Lewis F. Powell Jr. were a placid affair. Republican President Richard Nixon had nominated Powell for the Supreme Court at the same time as William H. Rehnquist, who as a lawyer in private practice in Phoenix in the 1950s and 1960s had been a vocal opponent of civil rights legislation. Powell ó a longtime partner at the law firm now known as Hunton Andrews Kurth in Richmond, Virginia, a member of multiple corporate boards of directors, including that of tobacco giant Philip Morris (now Altria Group Inc.), and a former president of the American Bar Association ó was by comparison an uncontroversial choice. The legislative director for the AFL-CIO summed up the perceived contrast in his testimony to the committee, calling Rehnquist a “right-wing zealot” and Powell “thoughtful, scholarly and moderate.”
/jlne.ws/2uBr4es

Exchanges, OTC and Clearing

HKEX’s Response To The Three Types Of Hang Seng Composite Index Constituents Not Included For Stock Connect’s Southbound Trading
Mondovisione
The Stock Exchange of Hong Kong (SEHK), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), has noted the announcement and news release by the Shanghai Stock Exchange and the Shenzhen Stock Exchange on 14 July on inclusion arrangements for eligible securities under Stock Connect’s Southbound Trading. HKEX has the following three-point response.
/jlne.ws/2uD6Tga

China excludes Xiaomi shares from Stock Connect programme; Stock hit as bourses bar trading-link purchases of Hong Kong-listed dual-class shares
Emma Dunkley and Don Weinland in Hong Kong – FT
Shares in smartphone maker Xiaomi fell by almost a tenth on Monday after mainland Chinese investors were barred from buying into Hong Kong-listed companies that issue dual-class shares.
/jlne.ws/2zKKRxK

Every tenth German would bury his gold in the garden; Study shows where Germans store the popular precious metal
Deutsche Bˆrse Group
The Germans are actually playing it safe: more than half would store their gold in a safe deposit box. But almost one in ten even buries it in the garden. This is the result of a representative survey by Kantar-Emnid on behalf of Deutsche Bˆrse Commodities.
/jlne.ws/2zKMKuk

Chief Executive Charles Li discusses latest Stock Connect development
HKEX
HKEX Chief Executive Charles Li responded to media questions after a listing ceremony in Hong Kong this morning regarding the announcement by the Shanghai and Shenzhen stock exchanges last Saturday that excludes companies that use weighted voting rights from Stock Connect’s Southbound trading.
/jlne.ws/2uGvoZY

SGX RegCo reprimands Dapai International Holdings Co. Ltd., Executive Chairman Chen Xizhong, former CEO Chen Yong and former CFO Lawrence Lam Pong Sui
SGX
Public reprimand: Breach of Listing Rules
/jlne.ws/2zLiHTm

CME Group Achieves International Average Daily Volume of 4.2 Million Contracts in Q2 2018, Up 13 Percent from Q2 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved quarterly international (defined as outside of the US) average daily volume (ADV) of 4.2 million contracts during the second quarter of 2018, up 13 percent over the same period last year.
/jlne.ws/2uCjLD6

Pimco criticises LCH over SOFR plan; Senior official calls on CCP to follow CME and use SOFR for margin interest and discounting immediately
Robert Mackenzie Smith – Risk.net
A senior Pimco official has criticised LCH’s decision to stick with Fed funds as the discount and margin interest rate for secured overnight financing rate (SOFR) swaps in the short term, claiming it will create a “bastard contract” that will generate more problems for legacy products.
/jlne.ws/2uDM57Z

Fintech

Duco Expands into Singapore, Wroclaw and Edinburgh; The London-based data engineering company is opening three new offices.
Jamie Hyman – Waters Technology
The London-based data engineering company’s new locations will be open by September. The expansion follows a $28 million funding round in January this year.
/jlne.ws/2uC9zKQ

Eventus Systems Launches New Website Highlighting RegTech Solutions for Capital Markets
Markets Insider
Eventus Systems, Inc., a provider of innovative regtech software solutions for the capital markets, has just launched a new, enhanced website, www.eventussystems.com.
/read.bi/2NUnHIn

How Amy Hood Won Back Wall Street and Helped Reboot Microsoft; She re-imagined the CFO job and played a key role in persuading employees, customers and investors to believe in the company again.
Dina Bass – Bloomberg
Clad in jeans and a gray sweatshirt, Amy Hood stands before a room of 140 Microsoft recruits. The feeling in the air is a bit like the first day of school, and new hires are taking selfies outside in front of a big Microsoft logo.
/jlne.ws/2uxDyUe

To Tokyo and Beyond: TT Infrastructure Enhancements to Supercharge Your Trading
Tim Murphy, VP of Service Management – TT Talk
When we set out to build the trading infrastructure for the TT platform several years ago, our goal was to engineer a network of colocated data centers that would provide our customers with an easier way to access the global marketsóno matter where our customers are basedóand achieve superior execution performance. While many would say we’ve already achieved this goal, it’s really a moving target. Technology doesn’t stand still, so there’s always something new that we can leverage to further enhance our offering.
/jlne.ws/2uE9x53

Cryptocurrencies

Bitcoin Was Russian Hackers’ Currency of Choice, U.S. Says
Lily Katz – Bloomberg
Digital coin allegedly used for payments during election; 12 intelligence officers indicted by U.S. special counsel
For years, Bitcoin believers have tried to distance the digital coin from the perception that it’s only used for criminal activity. New insights into Russian meddling in the U.S. election aren’t helping.
/jlne.ws/2uD8r9Y

Hong Kong launches blockchain-based trade finance
Don Weinland – Financial Times
Hong Kong’s de facto central bank will go live next month with a blockchain-backed trade finance platform set to link up with 21 banks, including HSBC and Standard Chartered.
The launch of the system, designed by China’s Ping An Group, will be one of the first and largest examples of a government-led project aimed at upgrading the $9tn global trade finance industry.
/on.ft.com/2LgA9Uf

Robinhood’s Plan to Win the Crypto Exchange War? Kill Trading Fees
Marc Hochstein and Christine Kim – Coindesk
As a new entrant into the cryptocurrency field, Vlad Tenev, co-CEO of online investment brokerage Robinhood, is following a time-honored business strategy: Undercut the competition. Except he’s taking it to an extreme.
/jlne.ws/2zIdZ8N

Blockchain Wunderkinds: Solving Peripheral Problems, Missing the Big Picture
Streetwise Professor
Ethereum wunderkind Vitalik Buterin delivered a rant against centralized crypto exchanges:
/jlne.ws/2uBkLr1

Coinbase to explore the addition of 5 new crypto-coins to its platform, as bitcoin slips
Mark DeCambre – MarketWatch
Coinbase, the most popular digital-currency platform in the U.S., late Friday said it is exploring adding five new cryptocurrencies to its suite of offerings, which currently includes bitcoin and Ethereum’s Ether.
/jlne.ws/2zEno14

Global regulators start monitoring crypto assets
Huw Jones – Reuters
Global regulators have published a framework for “vigilantly” monitoring risks from crypto assets like bitcoin and ether, even though they don’t pose a major risk to financial stability for now.
/jlne.ws/2zI2xtX

Bitcoin Rises as Biggest Asset Manager Studies Crypto Technology
Todd White – Bloomberg
Leading digital token heads for largest increase in two weeks; BlackRock says it is studying technology behind crypto assets
Bitcoin headed for its largest increase in two weeks on Monday, as BlackRock Inc. became the latest big name to signal an interest in the technology underpinning digital currencies.
/jlne.ws/2uA3I91

Fujitsu’s new blockchain offering: really cheap or really expensive?
Jemima Kelly – FT
Fujitsu, the Tokyo-based IT conglomerate, has been long blockchain for some time. As early as 2015, the company was trialling the technology for cross-border settlements; in 2016 it said it had developed tools for securely sharing documents via the power of the distributed ledger; and in 2017, it built ConnectionChain, a blockchain system for connecting… blockchains.
/jlne.ws/2zJHiYz

Financial Stability Board outlines crypto-assets monitoring framework; FSB report says crypto markets do not currently pose a material risk to global financial stability.
John Brazier – The Trade
The Financial Stability Board (FSB) has published a report outlining its monitoring framework for the financial stability implications of global crypto-asset markets.
/jlne.ws/2uAcRyn

Politics

U.S. and Allies Consider Possible Oil-Reserve Release
Benoit Faucon and Timothy Puko – WSJ
As oil prices climb, President Donald Trump has implored Saudi Arabia and OPEC to pump more oil.
If that doesn’t help curb prices, U.S. and Western officials are discussing another option, according to people familiar with the matter: an emergency release of stockpiled oil around the world.
/on.wsj.com/2JkYB1R

Mueller Charges 12 Russians on Hacking Before Trump-Putin Summit
Tom Schoenberg and Greg Farrell – Bloomberg
Allegations involve Clinton campaign, Democratic emails; Mueller offers deep look at Russian intelligence operation
The U.S. special counsel brought election meddling directly to Vladimir Putin’s doorstep just days before the Russian leader plans to meet with President Donald Trump, charging 12 Russian military intelligence officers with computer attacks meant to undermine the Democratic Party.
/jlne.ws/2uBuNZu

Boris Johnson, Donald Trump and the Rise of Radical Incompetence; Like America’s president, Brexiteers resent the very idea of governing as complex and based in facts.
William Davies – NY Times
“I am increasingly admiring of Donald Trump. I have become more and more convinced that there is method in his madness.” These comments, subsequently leaked, were made last month by Boris Johnson, who was then Britain’s foreign secretary. Never one to discount praise, Mr. Trump reportedly expressed an interest in meeting his “friend” Mr. Johnson during his visit to London this week, noting that Mr. Johnson has been “very, very nice to me, very supportive.”
/jlne.ws/2zIvq95

Trump’s trade war rattles Republicans in an election year; GOP worries about the impact of US trade wars in hard-fought congressional districts
Courtney Weaver – FT
Iowa’s Chuck Grassley has blasted it as potentially “catastrophic”. Tennessee’s Lamar Alexander has attacked it as “a big mistake”. Texas’s John Cornyn has warned that the escalating battle could “escalate out of control”.
/jlne.ws/2uD1C8p

Welcome to Scotland? No Love Lost in Trump’s Ancestral Home
Rodney Jefferson and Justin Sink – Bloomberg
Scottish leaders snub president, who’s staying at his resort; Protesters gather with signs like ‘We Shall Over Comb’
It’s not the kind of greeting Scotland’s tourist brochures advertise, let alone for world leaders.
/jlne.ws/2zHANW6

Trump Lies So Much That Journalists Now Measure Things Like ‘Dishonesty Density’
David Boddiger – Splinter
Only with someone like Donald Trump as president would journalists have to come up with scientific indicators to measure and describe the extent of the president’s dishonesty and untrustworthiness.
/jlne.ws/2zIRwZe

What Game Theory Says About Trump’s Trade Strategy; Under one scenario, the tensions with China could lead to changes in the global economy that favor the U.S.
Mohamed A. El-Erian – Bloomberg erg
Financial markets were of two minds last week about the impact of mounting trade tensions between China and the U.S. On the one hand, the escalating tit-for-tat tariffs still affect only a relatively small part of the two countries’ economies. The consensus baseline remains that the measures should not have a significant and lasting downward impact on the economy and stocks and, ultimately, may help bring about trade that is still free but fairer.
/jlne.ws/2uEz1zl

The Trump Doctrine – coherent, radical and wrong; The US president’s worldview puts economics ahead of ideals and values
Gideon Rachman – FT
Since the end of the second world war, there has been a remarkable consensus within the US establishment about foreign policy. Republicans and Democrats alike have supported a global network of American-led alliances and security guarantees.
/jlne.ws/2zI2LRB

Regulation

BoE’s query of non-Big Four auditor for Goldman attacked
Caroline Binham – Financial Times
Parliamentarians from three different select committees have fired a broadside at the Bank of England over a seeming reluctance to allow banks to use auditors outside the Big Four.
The chairmen of the joint committees scrutinising the collapse of Carillion, the outsourcing group, wrote to the BoE’s Prudential Regulation Authority laying out that the PRA’s apparent position is at odds with wider moves ó including through EU legislation ó to try to break the monopoly of the Big Four accounting firms.
/on.ft.com/2Lcab0L

Convicted Trader Cries Foul at Nickname That Got Lost in Translation
Gaspard Sebag – Bloomberg
Former Barclays swaps trader spoke in interview before verdict; Said he wasn’t willing to gamble with his life in London court
Until a month before his London fraud trial began, Philippe Moryoussef felt confident he would prevail in court.
/jlne.ws/2zS7WPh

FCA floats ban on exit fees for online investment platforms; Financial watchdog raises concern on difficulty in switching services
Kate Beioley – FT
The UK financial watchdog could ban online investment platforms like Hargreaves Lansdown from charging exit fees after raising concerns they make it too difficult for customers to switch away from their services.
/jlne.ws/2zJHjvJ

Rise of green investing triggers rethink on disclosure; Demand grows for more nuanced scrutiny of ESG opportunities amid standardisation push
Kate Allen – FT
As the market for environmental and social investing becomes more prominent, investors are rethinking how they assess the non-financial effects of the companies they back ó a process set to swell the pool of green assets available.
/jlne.ws/2zKKZNK

Steve Young’s private equity firm accused of covering up fraud
Josh Kosman – NY Post
NFL great Steve Young is feeling the heat – and this time, it’s not from a 300-pound defensive lineman. The private equity firm the Hall of Fame quarterback co-founded in 2007 – eight years after he retired – stands accused of covering up a massive fraud at one of its companies.
/jlne.ws/2uD6ytQ

ESMA defines standards for the implementation of the Securitisation Regulation
ESMA
The European Securities and Markets Authority (ESMA) has issued today a first set of technical standards under the Securitisation Regulation (SR) containing both draft regulatory and implementing standards (RTS/ITS).
/jlne.ws/2uxGkc6

FINRA Warns Firms of Regulator Impersonators
FINRA
Recently, FINRA has received reports of member firms receiving telephone calls from persons claiming to work for FINRA in an attempt to deceive firms into revealing confidential information. FINRA is notifying firms that these individuals may be impersonators. Firms that receive telephone calls or emails purportedly from someone at FINRA requesting any type of informationóconfidential or otherwiseóshould use caution and verify the identity of the caller or sender before providing any information or responding to an email.
/jlne.ws/2zPdIBc

FCA proposes actions to improve competition in the investment platform market
UK FCA
Competition is working well for most consumers using investment platforms, according to interim findings of the Financial Conduct Authority’s market study into investment platforms, published today.
/jlne.ws/2uDIvuz

Investing and Trading

U.S. oil boom delivers surprise for traders – and it’s costly
Julia Payne, Devika Krishna Kumar, Dmitry Zhdannikov – Reuters
The world’s biggest oil traders are counting hefty losses after a surprise doubling in the price discount of U.S. light crude to benchmark Brent WTCLc1-LCOc1 in just a month, as surging U.S production upends the market.
/jlne.ws/2zKgvva

As Marijuana Goes Mainstream, Investors Rush In
Ken Belson – NY Times
The cannabis industry is growing and, naturally, investors are taking notice.
With 30 states and the District of Columbia having legalized the use of the drug for medicinal or recreational use, the stock prices of the companies that grow, process and sell marijuana have been rising.
/nyti.ms/2Jm3GXI

Colombia’s coffee is in danger. These scientists are fighting to save it; Cenicafe, dubbed the NASA of coffee, is leading the fight against fungi and pests threatening the crops of the 500,000 family-run farms in Colombia.
Andrew Wight- NBC
Deep in the Andes mountains, the Cenicafe research institute is ground zero for an evolutionary and economic arms race to keep coffee flowing from Colombia into the cups of consumers across the world.
/jlne.ws/2uCZJZg

BlackRock CEO Fink Says Tariff War Could Spur Broad Market Rout
Annie Massa and Erik Schatzker – Bloomberg
Market having ‘hard time digesting’ globalization, trade; Investors pulled $22.4 billion from the firm’s equity products
BlackRock Inc. Chief Executive Officer Larry Fink said that intensifying global trade tensions may spur a broad market downturn and a slowdown in the U.S. economy.
/jlne.ws/2uE37CZ

How activist investing is changing
FT
Last year more than $62bn was deployed by activist investors on their campaigns, double the amount spent in 2016. And activism is changing. In the US, the number of proxy fights has fallen to a five year low. So why are campaigns becoming less confrontational?
/jlne.ws/2zET8Da

Long-term investors are not the enemy for European company chiefs; With buyout funds on the prowl there is a benefit in engagement
Tawhid Ali and Andrew Birse – FT
For too long equity investors have been reluctant to engage with European management teams. European chief executives have not made it easy, but with buyout funds on the prowl, it’s time for a constructive dialogue to begin.
/jlne.ws/2uyx5bu

University of Oxford launches first algo trading course; Algorithmic trading programme will look at trading systems, the rules driving algo trading success and building trading models.
Hayley McDowell – The Trade
The first algorithmic trading programme has been established by the University of Oxford’s business school aimed at teaching traders about systematic trading strategies.
/jlne.ws/2uyz3so

Institutions

Profit Gains at JPMorgan, Citigroup Reflect a World in Growth Mode
Emily Glazer and Christina Rexrode – WSJ
Loan growth helped JPMorgan Chase and Citigroup Inc. post double-digit profit increases in the second quarter, reflecting solid economic fundamentals in the U.S. and abroad.
/on.wsj.com/2JlOB8o

Wells Fargo’s loan book shrinks, profit misses estimates
Imani Moise – Reuters
Wells Fargo & Co (WFC.N) said on Friday its loan book shrank and it raked in less fee revenue than a year ago, factors that contributed to lower-than-expected quarterly profit and sent its shares lower.
/reut.rs/2Jj91Pq

How a Tiny Bank From the Ozarks Got Big and Outpaced Wall Street’s Real Estate Machine; An Arkansas bank has become one of America’s top construction lenders. Does it know something the giants don’t?
Peter Robinson – Bloomberg
George Gleason isn’t one of those chief executives who make the job look easy. Rather, he’ll tell you (and tell you) it’s hard. Not up-at-dawn hard. Up-at-midnight hard. That’s when he got out of bed to write the remarks for his bank’s first-quarter earnings statement, finally hitting “send” one March morning at 5:30 from a hotel room in Washington, after a full week of client meetings on the road. Gleason, who runs Bank of the Ozarks, an institution in Little Rock with $22 billion in assets, even makes being interviewed look hard. In response to an emailed list of questions, he composed five pages of answers in red, then referred to the printout frequently when we met at the bank’s headquarters in April. “I should have numbered these pages,” he said.
/jlne.ws/2uB7Oxp

Own goal: how AC Milan’s Chinese owners lost control to a US hedge fund; Complex debt arrangement in acquisition of club became key to ownership
Rachel Sanderson,, James Fontanella-Khan, Robert Smith and Murad Ahmed – FT
Li Yonghong looked victorious as he held up an AC Milan shirt outside the San Siro, the Italian club’s home ground and one of the great cathedrals of European football.
/jlne.ws/2zJkKah

How Goldman Sachs Lost the World Cup; The investment bank’s sophisticated model to predict game results didn’t even come close.
Leonid Bershidsky – Bloomberg
Goldman Sachs’ statistical model for the World Cup sounded impressive: The investment bank mined data about the teams and individual players, used artificial intelligence to predict the factors that might affect game scores and simulated 1 million possible evolutions of the tournament. The model was updated as the games unfolded, and it was wrong again and again. It certainly didn’t predict the final opposing France and Croatia on Sunday.
/jlne.ws/2zPvDHA

How a $139 Billion Fund Is Trading the Trade War
Ruth Carson – Bloomberg
AMP Capital started buying long-end U.S. debt six weeks ago; “The best is probably behind us,” Ilan Dekell says of growth
In a bid to beat the trade war, a $139 billion Australian investment manager is using 30-year Treasuries as its weapon of choice.
/jlne.ws/2zP1CIi

Banks Are Facing a Squeeze From Trump’s Trade War
Alfred Liu and Emily Cadman – Bloomberg
Trade finance revenue already at lowest level in eight years; ‘Very challenging’ for banks in Asia trying to grow business
For banks that finance trade in Asia, the tariff war between the U.S. and China couldn’t come at a worse time.
/jlne.ws/2uEVA6Y

Big Banks Reshape Lobbying Game; New Bank Policy Institute will represent JPMorgan, Bank of America and 46 others
Lalita Clozel – WSJ
Big banks are revamping their lobbying approach as Trump-appointed regulators set out to ease rules put in place after the financial crisis.
/jlne.ws/2zIQ8pA

Deutsche Bank Surprises With Profit Beat Welcomed by Investors
Steven Arons – Bloomberg
Bank says both net income and revenue better than expected; Shares jump most in more than two years after early results
Deutsche Bank AG surprised investors with second-quarter earnings that were higher than analysts had expected, driving one of Europe’s worst-performing bank stocks up the most in more than two years.
/jlne.ws/2uzKQqB

Deutsche Bank profits surpass market expectations; German lender releases bumper second-quarter results 9 days ahead of schedule
Laura Noonan – FT
Deutsche Bank made twice as much money as analysts expected in the second quarter of the year, offering a reprieve for the lender and a boost to new chief executive Christian Sewing after an unrelenting run of bad news.
/jlne.ws/2uzM9G1

Regions

Trump Is Misjudging China’s Resolve on Trade; You can’t defeat an opponent you don’t understand.
Michael Schuman – Bloomberg
Donald Trump’s strategy in his trade war with China boils down to inflicting sufficient economic pain to eventually force Beijing’s leaders into concessions the president wants ó whatever those may be. That’s the obvious purpose of the tariffs he plans to impose on another $200 billion of Chinese-made goods.
/jlne.ws/2zEV6n2

How Venezuela Became China’s Money Pit; Beijing is reportedly throwing good money after bad to the Latin American producer, but it has its reasons
Spencer Jakab – WSJ
The world oil market is notoriously quick to react to headlines, but a seemingly significant one last week from the owner of the world’s largest reserves didn’t cause so much as a blip.
/jlne.ws/2uDTlkx

Finnish Newspaper Targets Trump And Putin With Giant Billboards Lauding Free Press
Willa Frej – Huffington Post
President Donald Trump and Russian President Vladimir Putin were welcomed to Helsinki, Finland, with a potent message about the importance of press freedom ahead of their bilateral summit.
/jlne.ws/2uBXSE4

Germany: We can no longer fully rely on U.S. White House
Reuters
Germany’s foreign minister said on Monday Europe could not rely on Donald Trump and needed to close ranks after the U.S. president called the European Union a “foe” with regard to trade.
/jlne.ws/2uDXy7z

China Can Hit U.S. Tech Where It Hurts in Tariff Response
Gerrit De Vynck, Ian King and Mark Gurman – Bloomberg
Apple, Nvidia, Broadcom get more than 20% of sales from China; China has used boycotts, regulation against others in the past
President Donald Trump’s latest move to ratchet up tariffs on Chinese goods raises the specter that China could strike back by tripping up U.S. companies doing business in the Asian nation — and tech is especially vulnerable.
/jlne.ws/2zI1rOJ

China Stocks at Record Lows Make Case for $941 Billion Fund
Bloomberg News
CIC said to seek approval to invest in domestic market; Senior wealth fund executive cited ‘good opportunities’
China’s sovereign wealth fund has expressed a desire to invest in the domestic market as stock valuations have hit multiyear lows, underscoring how coming home may bring it new opportunities to boost returns.
/jlne.ws/2zEwwCZ

Frontier funds can rival ESG. Let’s pay them more attention; Doubt over MSCI index puts spotlight on sector with high returns since 2010
Steve Johnson – FT
Making money ó both for itself and, on occasion, even for customers ó is no longer enough for the asset management industry.
/jlne.ws/2uBgG6b

Brexit

British Leader’s Brexit Plan Imperiled by Conservative Hardliners; Some Conservative Party lawmakers seek a harder break with the European Union than Prime Minister Theresa May proposes
Will Horner – WSJ
The future of British Prime Minister Theresa May’s Brexit plan hangs on a kernel of hard-liners within her own Conservative Party devoted to ending the influence of the European Union in the U.K.
/jlne.ws/2zL8jek

Theresa May rules out second Brexit referendum; UK prime minister says there will not be a new vote under ‘any circumstances’
Jim Pickard – FT
Downing Street has ruled out a second referendum on Brexit under “any circumstances,” in a blow to those pushing for Britain to remain in the European Union.
/jlne.ws/2zF6ZcY

Miscellaneous

A Crisis Management Guru Bungles a Crisis
David Segal – NY Times
When Sir Alan Parker was appointed chairman of Save the Children U.K. in 2008, he must have seemed like the perfect choice. As the founder and head of Brunswick Group, one of the most successful corporate public relations firms in the world, he had connections with chief executives, celebrities and media moguls as well as politicians on both sides of the political divide. Charming and boyishly effusive, he earned millions leading a business that now has 1,000 employees in 14 countries, all of them shaping narratives for companies in the public eye.
/jlne.ws/2uD7OgC

Arsenal Gets Entangled in Suspected Fraud at Chinese Carmaker
Bloomberg News
Carmaker asks police to investigate person posing as employee; Person struck unauthorized advertising deals: carmaker BYD
London soccer club Arsenal got entangled in a suspected fraud involving a Chinese carmaker, which says it was duped by a person posing as an employee who signed unauthorized contracts with advertising partners.
/jlne.ws/2uyv7rC

The post Goldman’s Next Step For Post-Blankfein Era; Buy-side voluntary clearing appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The word of the day in the United States is: Treason.~JJL

On Saturday, WGN Television held a Trading Tech 300 session with Demetrius Ivory teaching the weather merit badge to a group of Boy Scouts and one girl STEM Scout. At the class we learned what a CME is in the world of weather. A CME, or coronal mass ejection, is a significant release of plasma and magnetic field from the solar corona. They often follow solar flares and are normally present during a solar prominence eruption. ~JJL

Later this week Advantage Futures and Esulep will be hosting Trading Tech 300 workshops. On Thursday, Advantage Futures and Terry Duffy will be teaching the chess and public speaking merit badges. On Friday, Rob Khoury and Esulep will be teaching the entrepreneurship merit badge.~JJL

If you want to know how your firm can get involved with Trading Tech 300, just contact me.~JJL

Fittingly, Jeff Bezos was crowned the wealthiest man in modern history on Amazon Prime Day. (However, Amazon’s site did have a glitch at the start of the 36-hour shopping event.) ~SD

A study of 27 CEOs in the Harvard Business Review showed that a chief exec averaged 37 meetings a week that took up 72 percent of their work time. ~SD

Our friends at Eventus launched a new website yesterday. It was no big deal, but a huge eventus.~JJL

Journalist and CME Group board member Terry Savage also has a new website.~JJL

Chicagoan Richard Elden, an innovative hedge fund investor who started as a journalist, is dead at 84.~JJL

Stuart Kaswell is stepping down as MFA General Counsel.JJL

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Building a Compliant Crypto Consortium
JohnLothianNews.com
Everyone who has a stake in cryptocurrency right now has one thing on the mind: regulation. The SEC and CFTC are scrambling to find a way to define and regulate cryptocurrencies. Whether you’re cheering them on, booing, or tapping your foot impatiently, the next zeitgeist for the global crypto markets will depend on how regulators resolve the current challenges surrounding digital asset trading.

Enter OpenFinance Network (OFN): a digital asset trading platform for the next stage in the crypto market’s evolution. CEO Juan Hernandez sat down with John Lothian News to discuss how OFN is striving to fill the gaps in the crypto market infrastructure to help the people, the tech, and the ideas behind digital tokens and blockchain technology reach their full potential.
Watch the video here »

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Monday’s Top Three
Two of the three top stories of the day on Monday were all about politics, history and the presidency. Politico’s Never Trumpers Will Want to Read This History Lesson took the top spot by far with its history of the Democrats turned Republicans. The third most read piece was Michael Bloomberg’s essay America’s Values Must Guide White House Diplomacy. Second was The Trade’s piece Buy-side voluntary clearing set to take off

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MarketsWiki Stats
129,702,545 pages viewed; 23,194 pages; 214,161 edits
MarketsWiki Statistics

Lead Stories

Trump’s Defense of Putin Proves Too Much for Some Republicans
Sahil Kapur and Billy House – Bloomberg
Allies back away from president’s remarks on U.S. Intelligence; Former congressman says GOP at ‘inflection point’ on president
President Donald Trump’s equivocation on U.S. intelligence agencies during a news conference with Russian leader Vladimir Putin triggered the most intense backlash from Republicans of anything he’s done since winning election in 2016.
/jlne.ws/2uEeM4L

U.K.’s May in Brexit Turmoil With Parliament Majority Slashed
Tim Ross, Robert Hutton and Kitty Donaldson – Bloomberg
Government escapes defeat on customs bill by just three votes; Vote Leave campaign fined and referred to police for spending
U.K. Prime Minister Theresa May’s ability to deliver Brexit was thrown into doubt as infighting in her Conservative Party left her with a perilously small majority, staggering from one vote to the next.
/jlne.ws/2uH30a1

R.J. O’Brien Limited Joins LCH’s EquityClear as Clearing Member; Move Enhances Firm’s Equity CFD Offering for Professional Market Participants
R.J. O’Brien & Associates
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced that its London-based affiliate, R.J. O’Brien Limited (RJO Limited), is now approved as a general clearing member of EquityClear, the UK-based equities clearing service of LCH Limited, a leading global clearing house.
/jlne.ws/2uCI6sw

Pro-Brexit Campaign Broke Law and Overspent in 2016 Referendum
Alex Morales – Bloomberg
Vote Leave, BeLeave fined for breaches in electoral rules; Groups broke rule banning cooperation: Electoral Commission
Vote Leave, the official pro-Brexit campaign in the U.K. referendum on European Union membership, was fined for breaking electoral laws — a verdict that is likely to further fuel calls for a second ballot.
/jlne.ws/2LmVIix

Goldman Sachs Names David Solomon to Succeed Lloyd Blankfein as Chairman, CEO; Wall Street firm has tried to expand beyond trading business
Liz Hoffman – WSJ
Goldman Sachs Group Inc. said veteran investment-banker David Solomon would succeed Lloyd Blankfein as chief executive Oct. 1, setting up a high-profile transition for a firm that is expanding well beyond its Wall Street roots.
/jlne.ws/2uGcWR4

Banks under watch over exposure to cryptocurrencies
Hannah Murphy – Financial Times
Global banking regulators are assessing the size of banks’ exposure to “crypto-assets” such as bitcoin and looking at introducing capital safeguards, in a move that could deter banks from embracing the nascent market. A report on Monday revealed that the Basel Committee on Banking Supervision is “conducting an initial stock take on the materiality of banks’ direct and indirect exposures to crypto-assets”.
/goo.gl/VWnHPH

Goldman’s cool crisis commander finally bows out; Lloyd Blankfein steered bank through turmoil, but legacy is not assured
Robert Armstrong, Laura Noonan and Arash Massoudi – FT
Most chief executives, upon their departures, are measured by how their companies grew under their stewardship and the returns reaped by their investors. On both of these metrics, Lloyd Blankfein is unexceptional.
/jlne.ws/2uH80eC

EU’s Tusk Warns Trump Trade Wars Can Lead to ‘Hot Conflicts’
Bloomberg News
EU-China summit takes place in Beijing amid U.S. protectionism; Summit yields first joint EU-China summit statement since 2015
European Union President Donald Tusk called on Donald Trump to reform the world order rather than bring it down, warning that trade wars can lead to “hot conflicts.”
Tusk issued his appeal in opening remarks to an annual EU-China summit on Monday, as he made an explicit link between the European delegation visiting Beijing and the U.S. president’s meeting later the same day in Helsinki with Russian President Vladimir Putin. The comments came a day after Trump called the EU his biggest “foe” due its stance on trade.
/jlne.ws/2uCOZdm

Houston Is a Big Energy Hub, So Why Not Price Oil Futures There?; Intercontinental Exchange plans new contract with Houston delivery as U.S. exports rise
Stephanie Yang – WSJ
Houston is set to get its own oil futures, a sign of the city’s growing importance as the U.S. sends more crude abroad.
/jlne.ws/2uGlJ5D

A small band of human traders at electronic trading giant Citadel Securities are crushing it, and they could help the firm tap into a $800 billion market
Frank Chaparro – Business Insider
One of the largest electronic traders in the world has seen its market share increase in one of the last vestiges of human trading on Wall Street.
/jlne.ws/2LdR8qa

Exchanges, OTC and Clearing

LME moves closer to lithium contract launch with request for pricing providers
Henry Sanderson – FT
The London Metal Exchange has moved a step closer to launching the world’s first lithium futures contract, issuing a request for pricing providers, according to a document seen by the Financial Times.
/jlne.ws/2LngVJf

LME to increase user choice and participation through introduction of implied pricing
LME
The London Metal Exchange (LME) today announces the introduction of implied pricing for base metals on its electronic trading platform, LMEselect, as part of its Strategic Pathway commitment to deliver greater user choice and market participation.
/jlne.ws/2LiCXQw

Intercontinental Exchange Announces Third Quarter Launch of Futures Contract Based on Permian WTI Crude Oil Deliverable in Houston
Press Release
Intercontinental Exchange, Inc. announced plans to launch a physically delivered Permian West Texas Intermediate (WTI) crude oil futures contract, deliverable in Houston, Texas. The Houston delivery point has become the pricing center for U.S. crude oil production and exports, and the new flat price futures contract is designed to serve hedging and trading opportunities in this growing market. The contract is expected to launch on ICE Futures U.S. in the third quarter, subject to regulatory review.
bit.ly/2NWrPr3

LCH adds R.J O’Brien as equity clearing member; R.J O’Brien has been approved as a general clearing member on LCH’s EquityClear service.
Hayley McDowell – The Trade
Futures broker and clearing firm R.J O’Brien has joined the London Stock Exchange Group’s clearinghouse LCH as a clearing member for equities.
/jlne.ws/2LipqIR

LSEG’s former strategy chief sees institutional crypto demand growing; David Lester speaks to The TRADE Crypto about his latest venture with former senior hedge fund executives from Omni Partners.
Hayley McDowell – The Trade
The London Stock Exchange Group’s former strategy chief and industry veteran, David Lester, has said demand for exposure to cryptocurrencies from institutional investors is growing significantly.
/jlne.ws/2LbHCUH

GC Pooling Deferred: Q&A
Eurex
The European Central Bank (ECB) recently conducted a market consultationto assess three candidate euro overnight rates as alternatives to the current benchmark EONIA, the long-established risk-free rate (RFR) for pan-European lending. A recommended RFR may be selected as early as September.
/jlne.ws/2LhOwHJ

Contingency Plan
JPX
Tokyo Stock Exchange(TSE) and Osaka Exchange(OSE) have established their contingency plans to clarify measures in the event of malfunction of systems such as those for trading or market information, as well as infrastructures provided by outside sources.
/jlne.ws/2LfxXMN

Fintech

Credit Suisse hires Citi’s Salas to run fintech banking – memo
Reuters
Credit Suisse has hired Citigroup’s Mathieu Salas to head its coverage of financial technology clients, according to an internal memo, the contents of which were confirmed by a spokeswoman for the European bank.
/reut.rs/2KXPOs4

Reed Smith Bolsters Finance and Fintech Capabilities – Adding Gerard Martin and Jeffrey Silberman in Chicago and New York
Reed Smith LLP
To fuel the continued growth of its Financial Industry Group, global law firm Reed Smith today announced that Gerard Martin and Jeffrey Silberman have joined the firm, both as Counsel. Gerard and Jeffrey represent two significant additions to areas of emphasis for the firm, finance and FinTech, respectively.
bit.ly/2JtnuYY

French central bank presses UK fintech companies on Brexit strategy; Request for details of contingency plans seen as latest Paris move to win business
Martin Arnold – FT
The French central bank has turned up the pressure on hundreds of British payment providers and digital finance companies that have customers in France by asking them for details of their Brexit contingency plans.
/jlne.ws/2LoD4Hn

Revolut reports suspected money laundering on its system; UK fintech company tells law enforcement authorities and financial watchdog
Martin Arnold – FT
Revolut discovered a spate of suspected money laundering on its digital payments system a few months ago, prompting the UK’s fastest growing financial technology company to tell law enforcement authorities and the financial watchdog.
/jlne.ws/2uNWFtx

Schroders looks to up engagement with FinTech startups; Schroders is the first asset manager to join The Disruption House for support in assessing new technology providers.
Hayley McDowell – The Trade
Global investment manager Schroders has signed up to a specialist data analytics network that aims to bridge the gap between traditional and startup financial institutions.
/jlne.ws/2LjJ47l

Thomson Reuters links up to London FinTech’s buy-side platform; The FINBOURNE LUSID platform looks to provide the buy-side with cost efficiency and better data management processes.
Hayley McDowell – The Trade
Thomson Reuters has teamed up with a London-based cloud technology firm to implement its investment management platform for client and transaction data.
/jlne.ws/2LhNT0P

Cryptocurrencies

New York State Department Of Financial Services Grants Virtual Currency License To Bitpay, Inc.
Mondovisione
Financial Services Superintendent Maria T. Vullo today announced that the New York State Department of Financial Services (DFS) has approved the application of BitPay, Inc. for a virtual currency license. BitPay is authorized to offer clearing and settlement services to merchants willing to accept payment in bitcoin or issue payments in bitcoin, and is the first wholesale payments processor to be approved for a license.
/goo.gl/EBeKHx

Coinbase Says It Has Green Light to List Coins Deemed Securities
Lily Katz – Bloomberg
SEC, Finra sign off on deals that give firm federal licenses; Company is exploring addition of five new digital tokens
Coinbase Inc., one of the most popular cryptocurrency platforms, said it got the green light from U.S. watchdogs to move forward with a trio of acquisitions that will allow it to become one of the first federally regulated venues for trading digital coins deemed to be securities.
/jlne.ws/2LpHdL4

BlackRock’s Fink Says Clients Aren’t Looking to Buy Cryptocurrency
Bloomberg Surveillance
Larry Fink, chairman and chief executive officer at BlackRock, discusses the firm’s examination of blockchain and clients’ appetite for cryptocurrency. He speaks with Bloomberg’s Erik Schatzker on “Bloomberg Surveillance.” (Source: Bloomberg)
/jlne.ws/2LndnGV

World’s First Bank-Backed Crypto Exchange Finally Opens to the Public
Wolfie Zhao – Coindesk
The world’s first bank-backed cryptocurrency exchange is now open to the public after months of delays. Japanese financial giant SBI Holdings formally launched its in-house crypto trading platform, dubbed VCTRADE, last month. Yet, as reported by CoinDesk at the time, the trading service was only available for a group of selected users who pre-registered with the platform last October.
/jlne.ws/2uJv5O2

Cryptomining Companies Consider Broadening Scope; As the price cryptocurrencies drop, some miners are searching for alternative uses for massive data centers they’ve built.
Joshua Brustein – Bloomberg
Harry Pokrandt spent the last year scouring the earth for real estate with two main characteristics. He needed cold weather, to keep his computer servers cool, and cheap electricity, to keep them running 24 hours a day. Pokrandt’s company, Hive Blockchain Technologies, filled up a Cold War-era helicopter hangar in Sweden with servers, then constructed a building of its own in Norway and filled that one up, too.
/jlne.ws/2Ls2yDw

Canada’s Only Actively Managed Crypto Fund Is 90% in Cash
Kristine Owram – Bloomberg
Manager is closely watching Bitcoin’s 30-day moving average; Sees the currency hitting new highs in next couple of years
Cash is king for Canada’s only actively managed crypto fund. The Rivemont Crypto Fund, run by Rivemont Investments, had about 91 percent of its C$3 million ($2.3 million) of assets in cash as of July 13, with the remaining 9 percent in Bitcoin, according to its latest weekly update on Facebook.
/jlne.ws/2uH4ktd

Politics

Trump pushed his personal agenda, not the national interest, at Putin summit
John Harwood – CNBC
President Trump’s stunning news conference with Vladimir Putin becomes understandable once you recognize that he was advancing his personal interests, not those of the United States.
/jlne.ws/2uBxJoE

Opinion: Donald Trump is the new Benedict Arnold
Rex Nutting – MarketWatch
Russia’s ongoing attack on our democracy amounts to an act of war. But instead of confronting Russian President Vladimir Putin, Donald Trump praised him. Instead of standing up to Putin, Trump stood by him
/jlne.ws/2uFqNad

Trump: A profile in cowardice
Michael D’Antonio – CNN
Is Trump putting Putin first, America second?
Confronted with a true alpha male in Russian President Vladimir Putin, President Donald Trump — who likes to talk tough — turned into a fawning beta in Helsinki, Finland, abandoning American interests in favor of appeasing the man who allegedly attacked the integrity of the 2016 presidential election.
/jlne.ws/2LouGra

Fed’s Powell Presents Lawmakers With a Charm Offensive
Nick Timiraos and David Harrison – WSJ
Five months into his term as Federal Reserve chairman, Jerome Powell is investing considerable time and energy on Capitol Hill.
Mr. Powell, who heads to Congress on Tuesday to begin two days of testimony on the economy, has met individually with 18 lawmakers – 10 Republicans and eight Democrats – during his first four months as chairman, according to his public calendars. He also had eight calls with lawmakers, equally split between Republicans and Democrats.
/on.wsj.com/2L0eC2S

Trump is no longer leader of the free world
John Avlon – CNN
Since the Second World War — spanning 14 US presidents, Republican and Democratic — the occupant of the Oval Office has been referred to as “the leader of the free world.” Until now.
/jlne.ws/2uH7o8O

The death of truth: how we gave up on facts and ended up with Trump; From post-modernism to filter bubbles, ‘truth decay’ has been spreading for decades. How can we stop alternative facts from bringing down democracy
Michiko Kakutani – The Guardian
Two of the most monstrous regimes in human history came to power in the 20th century, and both were predicated on the violation and despoiling of truth, on the knowledge that cynicism and weariness and fear can make people susceptible to the lies and false promises of leaders bent on unconditional power. As Hannah Arendt wrote in her 1951 book The Origins of Totalitarianism, “The ideal subject of totalitarian rule is not the convinced Nazi or the convinced communist, but people for whom the distinction between fact and fiction (ie the reality of experience) and the distinction between true and false (ie the standards of thought) no longer exist.”
/jlne.ws/2LsD5tB

House lawmakers agree on bipartisan package on capital markets rule-easing
Katanga Johnson – Reuters
Top lawmakers in the U.S. House of Representatives on Monday said they had agreed on a bipartisan legislative package to ease rules in a bid to help Main Street companies and boost jobs.
/reut.rs/2L1YlKH

Russian Accused of Infiltrating NRA on Mission From Kremlin
Tom Schoenberg and Polly Mosendz – Bloomberg
U.S. says Butina sought political back channel to Moscow; Assisted Torshin, with alleged mob ties and a link to Putin
U.S. authorities accused a Russian national of trying to establish a back channel to American politicians during the last election cycle, announcing the charges just hours after President Donald Trump accepted Russian President Vladimir Putin’s assurance his country hadn’t interfered.
/jlne.ws/2LouSqo

U.S. launches five WTO challenges to retaliatory tariffs
Reuters
The United States launched five separate World Trade Organization dispute actions on Monday challenging retaliatory tariffs imposed by China, the European Union, Canada, Mexico and Turkey following U.S. duties on steel and aluminum.
/goo.gl/NV1LS7

U.S. Treasury Restricts Donor Disclosure Requirement for Some Nonprofit Groups; Social welfare groups, trade associations won’t have to list donors, department says
Richard Rubin – WSJ
The Treasury Department will allow some nonprofit groups to provide less information about donors on their tax forms in a win for conservative organizations engaged in politics.
/jlne.ws/2LsIIbd

Regulation

CFTC Issues Customer Advisory On Digital Tokens
CFTC
The Commodity Futures Trading Commission (CFTC) today issued a Customer Advisory warning customers to use caution and do extensive research before purchasing virtual coins or tokens, including those that are self-described as “utility coins,” or “consumption coins.” This is the fourth advisory about virtual currencies the CFTC has issued to give customers a greater understanding of virtual currencies.
/goo.gl/wcQwJ1

CFTC Announces First Whistleblower Award to a Foreign Whistleblower
CFTC
The Commodity Futures Trading Commission (CFTC) today announced an award of over $70,000 to a whistleblower who significantly contributed to an ongoing CFTC investigation and led the CFTC to a successful settlement. The award is the first made by the CFTC’s Whistleblower Program to a whistleblower living in a foreign country and the sixth award to a whistleblower who provided valuable information about violations of the Commodity Exchange Act (CEA).
/goo.gl/bzYykF

SFTR 101: bringing transparency to securities finance transactions
Val Wotton, Managing Director, Product Development and Strategy, Derivatives and Collateral Management at DTCC via FOW
This year marks a decade since the collapse of Lehman Brothers, after which followed the global financial crisis. In those 10 years, regulators and policymakers have responded to the issues exposed by the crisis through the implementation of regulations to ensure greater transparency in the global financial system and the mitigation of systemic risk.
/jlne.ws/2uEyYnm

Oil Firm’s Ex-CEO Banned by SEC Over Undisclosed Personal Loans
Matt Robinson – Bloomberg
Executive used vendor money to finance lifestyle, agency says; SEC says he also borrowed from investor seeking board seat
The former head of a Houston-based oil producer agreed to be fined and banned from holding executive positions to settle a regulator’s claims that he financed a lavish lifestyle with unreported loans from company vendors and a hedge fund manager who was seeking a board seat.
/jlne.ws/2LpP1wj

SEC bribery lawsuit against Och-Ziff executives is dismissed
Jonathan Stempel – Reuters
A federal judge has dismissed the U.S. Securities and Exchange Commission’s lawsuit accusing two former Och-Ziff Capital Management Group LLC (OZM.N) executives of masterminding a scheme to funnel tens of millions of dollars of bribes to African officials.
/jlne.ws/2uH3rkn

FCA probe into investment platforms fails to make a splash; Regulator urges online providers to scrap exit fees and make it easier to switch
Kate Beioley – FT
Online investment platforms could be forced to scrap exit fees that penalise customers who switch provider and speed up transfers following the UK financial regulator’s first findings into competition issues in the UK’s £500bn retail investment market.
/jlne.ws/2LqHzRF

ESMA finalises standards for the implementation of the Prospectus Regulation
ESMA
The European Securities and Markets Authority (ESMA) has today issued regulatory technical standards (RTS) specifying the implementation of certain provisions in the Prospectus Regulation (PR).
/jlne.ws/2LjJP06

ESMA updates Q&As on Benchmarks Regulation
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the Benchmarks Regulation (BMR).
/jlne.ws/2LjfPlc

ESMA responds to EC consultation on Fitness Check
ESMA
The European Securities and Markets Authority (ESMA) has published its response to the European Commission (EC) Consultation Document seeking feedback to evaluate the Fitness of the European Union (EU) framework for public reporting by companies (Fitness Check). ESMA’s response focuses on those matters falling under the remit of securities regulators, and emphasises the requirements applicable to issuers admitted to trading on regulated markets.
/jlne.ws/2LjKtuy

Monthly Disciplinary Actions July 2018
FINRA
Monthly Disciplinary Actions July 2018
/jlne.ws/2Leog0X

The Financial Conduct Authority publishes Approach to Consumers paper, alongside Discussion Paper on Duty of Care
UK FCA
The Financial Conduct Authority (FCA) has today outlined the measures it will take to protect consumers and sets out when and how the organisation takes action. The Approach to Consumers document published today sits alongside a new discussion paper on a Duty of Care and taken together are intended to ensure there are no gaps in protection for consumers in the financial sector.
/jlne.ws/2LmNElv

Investing and Trading

IMF Can’t Say the Commodities Markets Are Complacent
Robert Burgess – Bloomberg
The International Monetary Fund on Monday kept its forecast for global economic growth this year and next unchanged at 3.9 percent but said financial markets seem complacent to the mounting risks of escalating tensions over trade. The IMF economists have apparently neglected to look at the commodities market.
/bloom.bg/2NSgxEh

Swiss Franc, Scandinavian Currencies Most Exposed to Trade War
Ellen Milligan – Bloomberg
Dollar and yen are the least vulnerable, says Danske Bank; Analysis is based on exposure to China and commodities: Danske
The Swiss franc and Scandinavian currencies are among the most vulnerable to the escalating trade war between the U.S. and China.
/jlne.ws/2LpOhHA

Ain’t Gonna Be No Bitcoin ETF
Themis Trading Blog
After repeated attempts to convince the SEC to approve a bitcoin ETF, the Cboe is back once again with another Bitcoin ETF application. Earlier this year, the SEC asked the bitcoin fund sponsors to withdraw all applications because of fears of fragmentation and extreme volatility. But the Cboe just won’t quit.
bit.ly/2NRYga9

Kashkari Isn’t Buying ‘This Time Is Different’ for Yield Curve
Jeanna Smialek – Bloomberg
Sees ‘little reason’ to hike much further and risk inversion; Powell could give update on his thinking in testimony Tuesday
Neel Kashkari does not want to invert the yield curve. Given anchored inflation expectations and few signs of overheating, “there is little reason to raise rates much further, invert the yield curve, put the brakes on the economy and risk that it does, in fact, trigger a recession,” the Federal Reserve Bank of Minneapolis president wrote in a post Monday on the website Medium.
/jlne.ws/2uGgFhD

Traders Exit Gold ETFs as Dollar Leaves Metal `by the Wayside’
Susanne Barton – Bloomberg
Exchange-traded funds backed by bullion drop for eighth week; Gold futures post lowest close this year, miners fall
Gold buyers are moving to greener pastures. Investors dumped exchange-traded funds backed by the metal for the eighth straight week, the longest stretch of outflows since January 2014. The exodus comes as appetite for the metal wanes amid a strengthening dollar and solid demand for equities.
/jlne.ws/2LpO6Mn

Warnings of Market Complacency Are Growing Louder
Liz McCormick and Lu Wang – Bloomberg
BlackRock’s Fink sees tariffs possibly fueling stocks losses; Yet shares have gained 3 straight months, bond swings subdued
A growing chorus of observers is saying that financial markets are too sanguine about the threat that a U.S.-instigated trade war poses to global output and asset values.
/jlne.ws/2uADnHM

Institutions

JPMorgan Ups Its ETF Game With Cheap Funds Luring Investors
Olivia Schaber and Carolina Wilson – Bloomberg
Two funds took in more than $840 million combined last week; The ETFs are far less costly than similar BlackRock products
JPMorgan Chase & Co. is finally gaining ground in the competitive ETF landscape with its BetaBuilder brand.
/jlne.ws/2LpJXrZ

BofAML’s Fake Trade Reports: Governance Breakdown?
Chris Kentouris – FinOps
How could Bank of America Merrill Lynch get away with giving institutional customers phony trade execution, transaction cost analysis and expense reports for five years?
Ten brokerage operations and IT managers contacted by FinOps Report can only speculate after reading the scant details in separate settlement reports issued by the Office of the Attorney General of the State of New York (OAG) and the Securities and Exchange Commission which jointly fined BofAML US$84 million. The consensus of those brokerage operations and IT managers: either the technology department or internal audit department were asleep at the wheel.
/goo.gl/bAwRdv

Goldman profits jump as fixed income rebounds; Earnings rise 44 per cent in second quarter
Laura Noonan – FT
Goldman Sachs enjoyed a 44 per cent rise in net profits for the second quarter, helping the bank to its best half yearly returns since 2009, as its fixed income business continued to rebound strongly from a tough 2017 and its other key divisions did well.
/jlne.ws/2LteXaA

BlackRock’s Investor-Cash Inflows Slide; Second-quarter results beat expectations, as revenue rose 11%
Asjylyn Loder – WSJ
Investors radically slowed the torrent of cash flowing into investment giant BlackRock Inc. this spring, a sign that a changing global economy and trade rifts may be unsettling a decadelong embrace of passive stock investing.
/jlne.ws/2Lp4A7r

Regions

Latin American Scorecard: Q2 2018
Silvia Kitchener – S&P Dow Jones Indices Indexology Blog
Q2 2018 showed that volatility is king in Latin America. The first quarter saw strong returns for the region, with Mexico lagging. In the second quarter, we saw a practical wipeout of all gains for the year and a return to negative territory for Latin America.
/goo.gl/EbQq9b

Complete China equity exposure made easier
Christopher Vass – FTSE Russell
The China equity markets have changed dramatically since FTSE Russell became the first international index provider to launch mainland indexes back in 2001. This shifting landscape has made it difficult for international investors to consistently target comprehensive China exposures. To help investors address these challenges, we’ve developed the Total China Concept, designed to provide a mechanism to gain access to Chinese listed equities globally.
bit.ly/2NRY0YJ

Cuba’s new constitution will recognize private property
Katherine Ellen Foley – Quartz
Cuba has published a summary of a new constitution likely to be approved by the national assembly later this week, which will recognize a right to own private property.
bit.ly/2Lq6Z1E

European Governments Explore Financial Channels for Iran; The French, British and German governments aim to keep the Iranian nuclear deal alive by providing financial conduits
Laurence Norman – WSJ
The French, British and German governments have told Iran they are exploring activating accounts for the Iranian central bank with their national central banks in a bid to open a financial channel to keep alive the Iranian nuclear deal, according to several European officials.
/jlne.ws/2LoZ193

London and Dublin in talks over access to Ireland-domiciled funds; Fund groups want reassurance that regulators are preparing for UK to be third country
Owen Walker – FT
Markets regulators in London and Dublin have started discussions over an agreement to ensure British investors can access funds domiciled in Ireland after Brexit.
/jlne.ws/2uDwTrN

China Hedge Fund Doubles Down as Market Selloff Deepens Losses
Bei Hu – Bloomberg
Springs China Opportunities Fund drops as much as 17% in 2018; Fund is buying oversold, undervalued smaller growth stocks
One China hedge fund is adding to stocks in the nation even as a rout deepened losses in its portfolio and prompted some peers to duck for cover.
/jlne.ws/2uDxMk7

Brexit

Bank of England governor Mark Carney warns of “big” impact from Brexit no deal
Jasper Jolly – City AM
Bank of England governor Mark Carney today warned of a “big economic consequences” if the UK leaves the EU without a deal.
/jlne.ws/2LmrxIA

May’s Brexit position will crumble so Article 50 should be delayed; Extending the March 2019 deadline is the best alternative to no deal with the EU
Nick Clegg – FT
So, has she pulled it off? In response to Theresa May’s “Chequers deal” and Thursday’s White Paper establishing a UK negotiating position for the Brexit deal, business groups were positive, EU leaders publicly polite and pro-European Conservative “rebel” MPs supportive. Even Michel Barnier, the EU’s chief negotiator, struck an emollient tone. Despite the resignations of Boris Johnson and David Davis, broadsides from Donald Trump and grumblings from backbench hardliners, the prime minister and her inner circle might be forgiven for thinking they are finally making progress towards a “smooth and orderly” Brexit.
/jlne.ws/2Ls0ifw

Miscellaneous

Wall Streeters in the Hamptons Turn Out for Chad Leat at Parrish Gala
Amanda L Gordon – Bloomberg
Apollo, Goldman execs toast ex-Citi ‘leveraged-finance maven’; Historic artist home, Amagansett stables also host events
Chad Leat’s Wall Street friends followed him to the Parrish Art Museum Saturday night to see him honored by CNN’s Don Lemon.
/jlne.ws/2uGsTqu

The post Trump’s Defense of Putin Too Much for Some Republicans; U.K.’s May in Brexit Turmoil appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The JLN Team was saddened to learn of the passing of FIA employee Bernadette Connolly, who passed away after a long illness. Bernie was loved and very respected, as FIA so appropriately shares in their tribute further down the newsletter.~JJL

Thinking about purchasing a foreign car in the United States? You should consider putting the pedal to the metal on that urge as the WSJ reported that U.S. dealers expect an imported vehicle to cost $5,800 more after a 25 percent tariff increase. ~SD

For the first time since 2008, 3mo T-bills hit a yield of 2 percent.~SD

The SEC is holding an open meeting today and will consider whether to adopt amendments to Rule 3a1-1 and Regulation ATS and new Form ATS-N under the Securities Exchange Act of 1934 related to certain alternative trading systems.~JJL

The @johnlothian Twitter account earned 670.7K impressions over the last 28 day period.~JJL

ICE has completed its acquisition of the Chicago Stock Exchange.~JJL

If we cannot fight global warming we can learn to cope. Vienna’s metro hands out 14,000 deodorants to passengers amid stifling summer heatwave.~JB

EEX reached a new daily #record in European Processing #Potatoes on Monday, 16th July 2018: 1,239 contracts were traded which is equal to a volume of 30,975 tonnes of commodity equivalent. This is the highest daily volume on EEX since the launch of the #agricultural contracts in May 2015. The previous daily record amounted to 796 contracts (equals 19,900 tons), traded on 26th June 2015.~Via LinkedIn

++++

FIA Family Pays Tribute To Bernadette Connolly, A Well-Respected, Loyal Colleague And Friend
FIA
With great sadness, FIA today announced the passing of Bernadette “Bernie” Connolly, a longtime and highly respected staff member in the London office. Although living with a terminal illness for a number of years, Bernie continued to be the steady cornerstone of FIA’s events in Europe.
/goo.gl/ZS4DzP

**There are unsung heroes in many organizations who do all the things that get the job done and make others look good, with grace. Bernie Connolly was certainly one of my heroes.~JK

++++

JLN Profile: George Gero’s long winding road through the futures industry
JohnLothianNews.com
George Gero started out as a floor broker on the New York Stock Exchange in 1959. He has been a witness to the growth and changes in the markets over the years, becoming a member of NYMEX, COMEX, and a number of other exchanges. In this John Lothian News Profile, Gero talks about some of the changes he has witnessed, and participated in, throughout his long history in the markets, from the birth of the West Texas Intermediate (WTI) crude oil contract on NYMEX, through decimalization and of course the technology revolution, which changed the entire culture of the futures industry.

Known for sharing his expertise on precious metals in numerous TV interviews, Gero says he wasn’t always bullish on gold, and explains why gold is a “misunderstood asset.” He has learned a number of lessons in his long career in the markets, including how traders use buy stops and sell stops, and that event driven selloffs in the futures markets are sure to find a retracement soon after.

Watch the video here »

++++

A Chicago trading firm is teaming up with a group of crypto exchanges to stamp out manipulation
Frank Chaparro – Business Insider
Trading Technologies announced Tuesday a partnership with a group of cryptocurrency exchanges to stamp out manipulation on their platforms.
/jlne.ws/2Lhe1sL

**** A positive step, but there are a lot of exchanges not covered.~JJL

++++

Tuesday’s Top Three
Our top story of the day on Tuesday was Citadel Securities is growing its DMM business, from Business Insider. Second and third went to the Trump-Putin meeting and so-called press conference. The New York Times’ Thomas Friedman’s Trump and Putin vs. America opinion piece was second. Bloomberg’s Trump Praises Meeting With Putin Despite a Republican Backlash was third.

++++

MarketsWiki Stats
129,759,170 pages viewed; 23,196 pages; 214,181 edits
MarketsWiki Statistics

Lead Stories

Battle between mainland China and HKEX heats up; Shanghai and Shenzhen’s move on dual-class listings could threaten Hong Kong’s status
Emma Dunkley – FT
Shortly before Charles Li boarded a plane to Beijing, the head of Hong Kong’s stock exchange admitted that there had been some “disagreements” over the future of Stock Connect, the trading link between Hong Kong and mainland China’s equity markets.
/jlne.ws/2Lnabyg

ETFs Unlikely to Cause Widespread Market Disruptions, Research Shows; Rapid expansion of index investing has fueled investor concerns about the pressure passive funds exert on stocks and bonds
Asjylyn Loder – WSJ
The deluge of money flooding into passive investments can swing stock prices, but fears of widespread market disruptions are overblown, according to a new report from S&P Global Inc.
/jlne.ws/2uIpDux

Bernanke, Geithner, Paulson Voice Some Concern About Next Crisis
Rich Miller – Bloomberg
Emergency powers to tackle turmoil seen as weaker than before; Former policy makers also decry rising budget deficits
Federal Reserve policy makers appear confident that they have the weapons they’ll need to fight the next financial crisis. Some of their predecessors on the front lines are not so sure.
/jlne.ws/2LfwBld

Export Boom May Give Houston New Status as Oil-Futures Hub
Stephanie Yang – WSJ
Houston is set to get its own oil futures, a sign of the city’s growing importance as the U.S. sends more crude abroad. Intercontinental Exchange Inc. is planning a new crude futures contract with physical delivery in Houston, the company said Tuesday. The contract will provide traders with direct access to Houston prices. The exchange is aiming to launch this quarter, subject to regulatory review.
/on.wsj.com/2L13S4e

****Reuters – ICE to launch Houston oil contract, building on export growth

DTCC rolls out Brexit plan with new Dublin office; DTCC is the latest post-trade market infrastructure planning to move its European operations from London to Ireland.
Joe Parsons – The Trade
The Depository Trust and Clearing Corporation (DTCC) is planning to open a new office in Ireland to ensure it continues to fully serve European clients after the UK’s exit from the EU.
/jlne.ws/2Jx6n8T

Goldman Sachs Is Secretive and Hidebound. Its New Chief Wants to Change That
Liz Hoffman – WSJ
Lloyd Blankfein secured the survival of Goldman Sachs Group Inc. by leading it through the financial crisis. The challenge for its next leader: how to thrive in a radically altered postcrisis world.
/jlne.ws/2LkOpev

Blankfein’s Vindication and His Uncertain Legacy; As Goldman Sachs CEO Lloyd Blankfein departs, his new strategy for the firm is untested
Aaron Back – WSJ
Goldman Sachs Chief Executive Lloyd Blankfein is leaving on a high note with the firm’s earnings showing strong performance nearly across the board. But the course he has set for the future, featuring more traditional bank activity like lending to consumers, remains unproven.
/jlne.ws/2LnaHMI

With Blankfein exit, Dimon sole survivor of 2008 financial crisis
Kevin Dugan – NY Post
And then there was one. Following the Sept. 30 exit of Goldman Sachs’ Lloyd Blankfein, Wall Street will be down to one major bank CEO who was in that position since before the financial crisis: JPMorgan Chase’s Jamie Dimon.
/jlne.ws/2uHRCe4

HKEX and Mainland exchanges agree on adjusting inclusion arrangements for eligible securities under Stock Connect’s Southbound trading
HKEX
The Stock Exchange of Hong Kong, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), reached a consensus yesterday (Tuesday) with the Shanghai and Shenzhen stock exchanges on adjusting the inclusion arrangements for eligible securities for Stock Connect’s Southbound trading. This followed a productive meeting of the three exchanges.
/jlne.ws/2LjdruM

Coinfloor and Coinfloor EX Partner with Trading Technologies to Implement TT Score Machine Learning Technology for Market Surveillance and Provide Direct Market Access to CoinfloorEX Through the TT and TT Crypto Trading Platforms
Trading Technologies
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, and Coinfloor, a group of leading cryptocurrency exchanges designed for institutional investors, announce that Coinfloor and their subsidiary companies, Coinfloor Exchange UK, Coinfloor Exchange Gibraltar and CoinfloorEX, a British Virgin island-based cryptocurrency futures and spot exchange, will implement Trading Technologies’ TT Score machine learning technology to surveil all market activity on their cryptocurrency exchanges.
/goo.gl/sEnAS3

Quant Funds Are Getting a Bad Rap; Many commentators mix and match to make the results seem worse than reality suggests.
Aaron Brown – Bloomberg
Poor results in the first half of 2018 have led to a backlash against so-called factor investing, which is a strategy that chooses securities based on certain attributes such as profitability or price volatility. But many commentators talk as if the results are worse than reality suggests. These are strategies with decades of strong evidence in favor of them, both in terms of academic studies and realized performance, in diverse market conditions. This year represents a normal downturn.
/jlne.ws/2Lg5rux

Exchanges, OTC and Clearing

Intercontinental Exchange Finalizes Acquisition of Chicago Stock Exchange
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that it has completed its acquisition of the Chicago Stock Exchange (CHX). Terms of the transaction were not disclosed. The financial impact of the acquisition is not material to ICE and will not impact capital return plans.
/jlne.ws/2uJU0kx

How does China, the largest commodities buyer, become a price maker? Owning an offshore exchange is a start
Elaine Chan and Zhang Shidong – South China Morning Post
As the trade war with the US heightens concerns over the security of supplies – from soybeans to technologies – to the world’s biggest factory, China is building its first offshore commodities exchange, which it hopes will buy it a voice in influencing global prices beyond the ongoing dispute.
/goo.gl/YNJFJu

Hong Kong Exchange Moves Closer to Deal With Mainland For Supervoting Shares; Xiaomi shares helped by the news and hit fresh highs
Joanne Chiu – WSJ
Hong Kong Exchanges and Clearing Ltd. touted progress in letting mainland Chinese investors trade locally listed companies with supervoting shares, giving Xiaomi Corp 1810 3.11% a boost.
/jlne.ws/2uGc132

NEX Markets adds BME Clearing to BrokerTec platform; BME Clearing will be available on the NEX Markets BrokerTec FX and fixed income trading platform.
Hayley McDowell – The Trade
NEX Group’s FX and fixed income electronic trading business has added a new clearing option to its BrokerTec platform with BME Clearing.
/jlne.ws/2uIrJdT

Credit Suisse, Goldman Sachs and JP Morgan clear first SOFR swaps with LCH
Hayley McDowell – The Trade
The London Stock Exchange Group’s central counterparty (CCP) LCH has cleared its first interest rate swaps referencing the newly introduced US alternative to the Libor benchmark.
/jlne.ws/2uIUs2g

****Risk.net – First SOFR swaps trade as banks test new benchmark

INTL FCStone Ltd Becomes Member Of LMEprecious
Mondovisione
INTL FCStone Inc. (NASDAQ: INTL) today announced that its London-based subsidiary, INTL FCStone Ltd, is one of the first general clearing members to join the London Metal Exchange’s (LME) newly created LMEprecious service, following its launch last year. The LME, along with the World Gold Council and a group of industry participants, created LMEprecious to introduce exchange-traded, loco London precious metals products.
/goo.gl/otGewv

Warsaw Stock Exchange (GPW): Jakub Modrzejewski Elected New Chairman Of The Exchange Supervisory Board
Mondovisione
Janusz Krawczyk was elected Deputy Chairman of the Exchange Supervisory Board
/jlne.ws/2LjioDU

Nigerian Stock Exchange Sets To Host 6th Nigerian Capital Market Information Security Forum
Mondovisione
The Nigerian Stock Exchange (“NSE” or “The Exchange) is pleased to announce that the 6th edition of its bi-annual Nigerian Capital Market Information Security Forum (NCMISF), themed, “Social Engineering, The Neglected Human Factor”, will hold on Wednesday, July 25, 2018, at the NSE Event Center, 2/4 Customs Street, Lagos.
/jlne.ws/2Lgy8qZ

Single Stock Futures, equity options: Change of the contract size for SSFs on EXOR NV; Withdrawal of admission of eleven Single Stock Futures and two equity options; Further editorial changes
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 23 July 2018:
/jlne.ws/2Jxznxd

LCH clears first SOFR swaps
LCH
LCH becomes first clearing house to offer clearing of U.S. Dollar interest rate swaps benchmarked to the new reference rate; This underlines LCH’s support of global rates reform driven by market participants and regulators;\ Credit Suisse, Goldman Sachs and J.P.Morgan among the first participants to clear SOFR swaps
LCH, a leading global clearing house, today announced that it has cleared the first U.S. Dollar interest rate swaps referencing the Secured Overnight Financing Rate (SOFR). Credit Suisse, Goldman Sachs and J.P. Morgan were among the first participants to clear swaps using the new rate.
/jlne.ws/2uMeqsS

Tokyo Stock Exchange and Kyoto University Agreed on Joint Research for Developing New Stock Price Index
JPX
Tokyo Stock Exchange, Inc. and the Education Unit of the Investment Study at the Graduate School of Management of Kyoto University have agreed to commence joint research for developing a new stock price index as below
/jlne.ws/2uJDyRc

Fintech

EU fines Google record EUR4.3bn over Android; Brussels penalises US group for abusing dominance in mobile operating systems
Alex Barker – FT
Brussels has hit Google with a EUR4.3bn fine, imposing a record penalty on the US group for abusing its dominant position in the Android operating system for mobile phones.
/jlne.ws/2LiDW3q

Thomson Reuters Partners with Finbourne for Cloud Investment Platform; Startup signs major data deal for cloud-based portfolio management.
James Rundle – Waters Technology
Thomson Reuters’ clients will use the platform to manage their portfolio and transaction data, which will incorporate Lusid’s event-based ledger system. The technology allows for a bi-temporal view of data, in which data can be viewed as it existed at any point in its history.
/jlne.ws/2LpKq0B

JPMorgan Chase invests in artificial intelligence startup Volley
Anna Irrera – Reuters
JPMorgan Chase & Co (JPM.N) has made a strategic investment in Volley.com, a San Francisco-based startup that uses artificial intelligence to help large enterprises automatically generate training content for employees, the companies said on Tuesday.
/jlne.ws/2LjjXBM

Schroders digital chief to lead Investment Association FinTech initiative; Graham Kellen, chief digital officer at Schroders has been appointed chair of the Investment Association’s FinTech accelerator advisory panel.
Hayley McDowell – The Trade
The chief digital officer at Schroders has been chosen to lead the Investment Association’s FinTech accelerator programme for the asset management industry.
/jlne.ws/2JuLknn

Algomi gains new investor in Euroclear; The data business at Euroclear joins Algomi’s other investors, S&P Global, Euronext and AllianceBernstein.
Hayley McDowell – The Trade
Euroclear’s data and information services business has made a strategic investment in fixed income trading and technology specialist Algomi.
/jlne.ws/2JxUYFy

Japan Revamps Financial Regulatory Agency to Address Issues in FinTech, Cryptocurrencies
Ana Alexandre – Cointelegraph
Japan has overhauled its financial regulator, the Financial Services Agency (FSA), in order to better deal with fintech-related fields, including cryptocurrencies, news outlet Nikkei Asian Review reported July 17. Changes were made to various bureaus in order to make the organization more suited to address new problems and challenges in the financial sector.
bit.ly/2LmEJjI

Cryptocurrencies

Lost your bitcoin password? Call in the crypto-hunters; About $25bn worth of bitcoin is floating out there in the ether, lost or ‘probably lost’
Hannah Murphy – Financial Times
Three-and-a-half years ago, Roger Ver, a bitcoin evangelist so vocal in his support for the cryptocurrency that he was nicknamed the Bitcoin Jesus, showed me how to set up my own online bitcoin wallet. He rounded off his demonstration by giving me £5 worth of the currency. One day, he said, my holdings would be worth more than £1,000.
/goo.gl/XTwxGH

Coinbase Says It Was Wrong About SEC Approval of Acquisitions
Lily Katz – Bloomberg
Coinbase Inc., which on Monday said it got the green light from the U.S. Securities and Exchange Commission to move forward with a trio of acquisitions, now says it never got such an endorsement.
/jlne.ws/2LmBfhd

IBM Is Helping Launch a Price-Stable Crypto With FDIC-Insured Funds
Marc Hochstein and Ian Allison – Coindesk
The latest attempt to create a cryptocurrency pegged to the U.S. dollar, or “stablecoin,” combines 21st-century technology with an invention from the Great Depression.
/jlne.ws/2LjBiu9

The economics of blockchains
Markus K Brunnermeier, Joseph Abadi – VOX
Cryptocurrencies and the underlying distributed ledger technology have exploded into public consciousness over the last few years, with devotees insisting that the technology will revolutionise financial transactions and ownership data. This column identifies a ‘blockchain trilemma’ whereby no ledger can fully satisfy the three desirable properties of decentralisation, correctness, and cost-efficiency. It further explains how distributed ledgers enhance competition but introduce costs above and beyond the well-known electricity costs.
/jlne.ws/2LeE2c9

After Scandal and Death, Two Alpine Banks Target Crypto Gold
Hugo Miller and Patrick Winters – Bloomberg
Falcon, Frick target bitcoin brokers and own private clients; ‘Crypto Valley is almost unbanked,’ says Falcon’s desk head
Walk into Falcon Private Bank on the Pelikanstrasse in central Zurich and you’re immediately struck by the giant photo of a woman crouched in the sprinter’s starting position, painted head-to-toe in gold.
/jlne.ws/2LgSbFQ

W. Va. Blockchain Experiment Could Be the Future of U.S. Voting
Jen A. Miller – ThirtyK
With the U.S. election process shown to be vulnerable to hacking during the 2016 presidential race, West Virginia could be leading the way to prevent a repeat in the 2018 midterms.
In May, the Mountain State became the first to allow voting by blockchain when it allowed overseas servicemen, servicewomen and their spouses from two of the state’s counties to cast ballots in the state’s primary using the Voatz app. Officials are now saying the program likely will be expanded to the entire state for the November general election.
bit.ly/2Ljq8p7

Cryptos Push Korea’s Financial Regulator to Consider Restructuring
Marin Marinov – Cryptovest
South Korea’s Financial Services Commission (FSC) has revealed a plan for restructuring in a bid to foresee market changes and safeguard investors from the challenges that new financial technologies like cryptocurrencies pose. The organizational reshuffle includes a new body that will issue recommendations related to virtual coins as well as a mega-department that will supervise all financial sectors.
bit.ly/2LltXu5

Oracle Blockchain Cloud Service Now Available for All Potential Clients
Anatol Antonovici – Cryptovest
US tech corporation Oracle announced on Monday that its Oracle Blockchain Cloud Service has become available for all clients. The move follows months of system testing by early adopters. Businesses and organizations can now use the solution to develop blockchain networks that ensure secure and seamless transactions and would allow streamlining processes in the supply chain. Oracle’s blockchain system is already used by several companies, such as Indian Oil, MTO, Arab Jordan Investment Bank, TradeFin, CargoSmart, Neurosoft, Certified Origins, Intelipost, and Nigeria Customs.
bit.ly/2LlPKBK

Politics

How we lost America to greed and envy; The US president is hostile to the core values the country used to stand for
Martin Wolf – FT
Who lost China? This cry went up in the US after Mao Zedong’s victory in China’s civil war in 1949. It was a strange question. When did the US own China? Strange or not, this cry helped Republicans win power in 1952. It promoted the rise of Joseph McCarthy, whose politics had similarities to those of Donald Trump ó above all, in the charge that traitors infest the US government. In the senator’s case, the target was the state department; for Mr Trump, it is the FBI. The question today is: who lost America? And is it lost for good?
/jlne.ws/2LiGrCQ

Trump Sheds All Notions of How a President Should Conduct Himself Abroad
Mark Landler – NY Times
President Trump, who gleefully defies the norms of presidential behavior, went somewhere in Helsinki, Finland, on Monday where none of his predecessors have ever gone: He accepted the explanation of a hostile foreign leader over the findings of his own intelligence agencies.
/jlne.ws/2LjfcYU

Now We All Know What Putin Has on Trump
Julia Ioffe – GQ
After a summit that left most Americans stunnedóbut maybe not surprisedóthe truth is? now? obvious: Trump is doing Putin’s bidding. And the reasons why are clear. GQ’s Julia Ioffe on Putin’s monumental win and the lasting result of Trump’s Helsinki debacle?.? The kompromat is out of the bag.
/jlne.ws/2LpXDqc

The Trump First Doctrine; Putin respects strength but Trump showed weakness.
The Editorial Board – WSJ
Donald Trump left for Europe a week ago with his reputation enhanced by a strong Supreme Court nomination. He returned Monday with that reputation diminished after a tumultuous week of indulging what amounts to the Trump First Doctrine.
/jlne.ws/2LjRAmE

Winklevoss twins donate $130K to Cuomo after getting state approval
Nolan Hicks – NY Post
The Facebook-famous Winklevoss twins donated $100,000 to Gov. Cuomo’s campaign ó and less than a month later, state authorities approved their cryptocurrency exchange, campaign-finance filings show.
/jlne.ws/2LjgVxo

U.S. Treasury moves to protect identities of ‘dark money’ political donors
Reuters Staff
he U.S. Treasury said on Monday that it will no longer require certain tax-exempt organizations including politically active nonprofit groups, such as the National Rifle Association and Planned Parenthood, to identify their financial donors to U.S. tax authorities.
/jlne.ws/2LpVb2Y

Twitter boots Guccifer 2.0 and DCLeaks after Mueller indictment
Fox News
Twitter on Saturday kicked off two accounts, Guccifer 2.0 and DCLeaks, that were connected to the 2016 hack of the Democratic National Committee and the leak of stolen documents. Axios reported the suspension of the accounts, which comes after the U.S. Department of Justice on Friday said that 12 Russian military officers have been indicted on accusations of interfering in the 2016 U.S. presidential election. Both accounts were active during the election cycleóGuccifer 2.0 was also suspended once in 2016óand spread a range of documents that showed some of the backroom happenings at the DNC.
/jlne.ws/2LiC0YI

Trump Retreats and Says He Accepts U.S. Finding Russia Meddled
Jennifer Jacobs and Justin Sink – Bloomberg
Still casts doubt, saying it ‘could be other people also’; Responds to GOP Blowback Against Helsinki Summit Comments
President Donald Trump said Tuesday he accepts the conclusion by U.S. intelligence agencies that Russia interfered in the U.S. presidential election, marking a rare retreat from comments just a day earlier amid a backlash from Republicans.
/jlne.ws/2LmAepk

Mayor Lloyd Blankfein? Jon Corzine Says He’d Be ‘Very Good’
Max Abelson – Bloomberg
Few executives wield more power over global capitalism than the head of Goldman Sachs Group Inc. Fewer know what it’s like to leave that perch. Jon Corzine is one of them.
/jlne.ws/2Llp1p3

Prayer, Guns Paved Path to GOP Influence for Accused Russian
David Kocieniewski, Greg Farrell and Polly Mosendz – Bloomberg
Aide to Putin ally cultivated NRA, religious groups, U.S. says; Erickson said to be prominent conservative vouching for Butina
As a Russian seeking to ingratiate herself in the U.S. political world, Mariia Butina zeroed in on two pillars of the conservative establishment: gun rights activists and religious groups.
/jlne.ws/2LfuFJt

Regulation

ESMA Is Seeking Secondary Market Experts To Join Its Consultative Working Group
Press Release
The European Securities and Markets Authority (ESMA) today launches a process to renew the composition of the Consultative Working Group (CWG) of the ESMA Secondary Markets Standing Committee (SMSC). ESMA is calling for expressions of interest from stakeholders to become a member of the CWG by 28 August 2018.
/goo.gl/wgDj6a

Daniel Gorfine to Testify before the House Committee on Agriculture
U.S. CFTC
Daniel Gorfine, Director of LabCFTC and Chief Innovation Officer, will testify before the House Committee on Agriculture on Cryptocurrencies: Oversight of New Assets in the Digital Age
/goo.gl/MMg51R

Kraft Says Traders Shouldn’t Get CFTC Reports In Wheat Row
Diana Novak Jones – Law360
A proposed class of traders suing Kraft over its alleged manipulation of the wheat futures market shouldn’t get expert reports from a parallel U.S. Commodity Futures Trading Commission suit, the food giant told an Illinois federal judge Monday, arguing the material would give them an unfair advantage.
/jlne.ws/2NqxYe9

US swaps users want CFTC rules lifted in Libor switch; Dodd-Frank should not catch contracts amended as part of move to new rates, letter argues
Robert Mackenzie Smith – Risk.net
Swaps users in the US have called for guidance on the regulatory treatment of trades that are amended as part of the market’s transition away from US dollar Libor. Without some form of exemption, trades that pre-date clearing, margining and other post-crisis rules could suddenly be dragged into scope if changes are made to the contracts.
/jlne.ws/2Liipb4

SEC Charges BGC Financial for Failure to Preserve Documents and Maintain Accurate Books and Records
SEC
The Securities and Exchange Commission today announced that New York-based broker-dealer BGC Financial has agreed to pay a $1.25 million penalty to settle charges that it failed to preserve audio files sought by the SEC and inaccurately recorded travel, entertainment, and other expenses.
/jlne.ws/2LpnA90

BGC fined $1.25 million for deleting audio records; BGC will pay fine after failing to provide audio records and data requested by US financial watchdog.
Hayley McDowell – The Trade
New-York-based broker dealer BGC Financial has agreed to pay a $1.25 million fine to settle allegations that it deleted records sought after by US authorities.
/jlne.ws/2Jx7llx

Ex-Deutsche Bank Executive Denies Index Rigging in Paschi Case
Sonia Sirletti, Vernon Silver and Sergio Di Pasquale – Bloomberg
Says trader’s “well done!” email not linked to Paschi deal; Deal was so large “entire bank” consulted for transaction
Former Deutsche Bank AG executive Michele Foresti, in key court testimony, denied he manipulated the firm’s indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses.
/jlne.ws/2Jxw8px

Asset Manager With Fake Rothschild Website Gets BaFin Warning
Jan-Patrick Barnert – Bloomberg
Helmuth Newin website almost identical to that of private bank; Rothschild plans to take legal action to protect its brand
An asset manager sporting a website that closely resembles that of Edmond de Rothschild Group has no license to conduct business in Germany, the country’s financial regulator BaFin said, warning investors away from the “unauthorized institution.”
/jlne.ws/2uJQUNo

ESMA clarifies endorsement regime for non-EU credit ratings
ESMA
The European Securities and Markets Authority (ESMA) has published today supplementary guidance on the application of the endorsement regime for non-EU credit ratings under the Credit Rating Agencies Regulation (CRAR). In order to ensure that third-country credit ratings, which are endorsed for use by EU investors, meet requirements which are at least as stringent as those set out in CRAR, ESMA adds a new section to its Guidelines on Endorsement first published in November 2017.
/jlne.ws/2Jwfzuc

2018 South Region Member Forum
FINRA
The South Region Member Forum is a one-day event designed to provide financial professionals associated with FINRA member firms in the South Region the opportunity to engage in key discussions with FINRA staff, and connect with industry leaders and peers. The seminar also includes thoughtful discussions around the future landscape of the financial services industry. Meet one-on-one with FINRA Regulatory Coordinators, and Surveillance and District Directors to discuss firm-specific questions.
/jlne.ws/2Jz8hps

2018 North Region Member Forum
FINRA
The North Region Member Forum is a one-day event designed to provide financial professionals associated with FINRA member firms in the North Region the opportunity to engage in key discussions with FINRA staff, and connect with industry leaders and peers. The forum also includes thoughtful discussions around the future landscape of the financial services industry. Meet one-on-one with FINRA Regulatory Coordinators, and Surveillance and District Directors to discuss firm-specific questions.
/jlne.ws/2JyWmI3

FCA response to the CMA’s provisional decision report on its investment consultants market investigation
UK FCA
We welcome the Competition and Markets Authority’s (CMA’s) in-depth work on competition in the market for investment consultancy and fiduciary management services. As part of our asset management market study, we referred this sector to the CMA for a detailed investigation because we had serious competition concerns.
/jlne.ws/2Jy3Jj2

Investing and Trading

The business value of appearing on The New York Times
London School of Economics and Political Science
Firms that are more visible in the press are better governed and more profitable. But investors underestimate the value of visibility and could profit from investing into high-visibility firms.
/jlne.ws/2LmBRU3

New York FX Traders Are More Bullish the Dollar Than Londoners
Emma Ockerman – Bloomberg
Depending on where you’re trading in the world, the sun might shine a little differently on certain currency pairs.
/bloom.bg/2JxmYt8

All Eyes Are Glued to a Leveraged Gold ETF That’s Trading Its Size in Volume
Carolina Wilson – Bloomberg
Direxion’s $1.2 billion NUGT absorbs $1.8 billion in trades; Gold hits lowest since July 2017, triggering action in fund
/bloom.bg/2LqLVYV

Buffett’s Berkshire Hathaway loosens policy on stock buybacks
Jonathan Stempel, Trevor Hunnicutt – Reuters
Berkshire Hathaway Inc (BRKa.N) on Tuesday eliminated a restriction on its ability to buy back its own stock, a change that could help billionaire Chairman Warren Buffett deploy more of the conglomerate’s cash.
/jlne.ws/2Lpmkmi

Jerome Powell Hints at a Little Trouble With the Curve; An inversion might change the Federal Reserve’s plans for rate hikes.
By Brian Chappatta – Bloomberg
Federal Reserve Chairman Jerome Powell didn’t give bond traders a lot to chew on during his testimony before the Senate Banking Committee on Tuesday.
/jlne.ws/2LlomE5

Treasury Yield Curve Is Heading for Inversion, Fund Managers Say
Luke Kawa – Bloomberg
The Treasury curve is on a one-way trip to inversion. That’s the assessment of fund managers surveyed this month by Bank of America Merrill Lynch, which reported that investors’ expectations for curve steepening sank to the lowest level in more than seven years.
/jlne.ws/2LiC6iZ

How to Prepare for a Stock Market Surprise; The markets have been fairly calm lately. But when financial stress returns, will you be prepared? We offer a classic solution, as well as market insight and analysis, in our quarterly report on investing.
Jeff Sommer – NY Times
When you consider how sharply stocks declined early in 2018 and how many problems still appear to be lurking around the world, the peaceful state of financial markets over the last few months has been nothing short of remarkable.
/jlne.ws/2Ln9DZe

Institutions

Goldman Sachs pressed on strategy as new CEO confirmed
Matt Scuffham, Aparajita Saxena – Reuters
Goldman Sachs Group Inc was pressed for details on new businesses after an uneven second-quarter performance, a likely preview of challenges incoming Chief Executive David Solomon will face as he leads the Wall Street bank’s overhaul.
/reut.rs/2LpZBTU

Goldman Is Carving Out Less Revenue for Banker Bonuses
Sridhar Natarajan – Bloomberg
A big change is afoot inside Goldman Sachs — aside from the disc jockey slated to become CEO.
/jlne.ws/2LjhTJS

New Goldman CEO shows Wall Street is still a man’s world; The male-dominated firm’s new leader is the third straight without hair
Aaron Elstein – Crain’s New York
Back in 1997, Goldman Sachs had about 10,000 employees, the overwhelming majority of them white men. The firm’s chief executive at the time, Jon Corzine, told The Wall Street Journal that one measure he would judge his tenure by would be progress in hiring and promoting minorities and women. He said he wasn’t “satisfied with where we are by any stretch of the imagination.”
/jlne.ws/2LjG6Q4

Next Goldman CEO to take on old problems, new businesses
Matt Scuffham and Jessica DiNapoli – Reuters
Goldman Sachs Group Inc (GS.N) named David Solomon as its next chief executive officer on Tuesday, ushering in a new era for the Wall Street bank as it expands into different businesses and revamps familiar ones.
/jlne.ws/2LiEQgk

Read Lloyd Blankfein’s Farewell Memo to His Goldman Sachs Team
Jamie Condliffe – NY Times
Goldman Sachs on Tuesday announced that its chief executive, Lloyd C. Blankfein, will step down on Oct. 1. Here’s the farewell memo that Mr. Blankfein sent to Goldman’s employees:
/jlne.ws/2LlLKRK

Scaramucci’s Path to $20 Billion Runs Through a Hot China Market
Bloomberg News
Funds of hedge funds are opening at a record pace in China; Crackdown on shadow banking sends investors to alternatives
An investment offering that most of the world has shunned is suddenly all the rage in China, and money managers from UBS Group AG to SkyBridge Capital are moving to grab a slice of the bounty.
/jlne.ws/2LnaER2

Lloyd Blankfein Poised for $85 Million Payout When He Leaves Goldman
Alicia Ritcey – Bloomberg
Lloyd Blankfein could get as much as $84.7 million in compensation when he departs Goldman Sachs Group Inc. in October after 36 years at the investment bank.
/jlne.ws/2LpXSBC

Morgan Stanley profits surge on trading, investment banking gains
Laura Noonan in New York – FT
Morgan Stanley has rounded off the US banks earnings season on a high, reporting a 39 per cent surge in quarterly net income as its investment bank enjoyed a trading and deal-making boom while its wealth management division improved profitability.
/jlne.ws/2JAemSr

Regions

Japan, EU Sign Trade Deal: ‘We Stand Together Against Protectionism’; The agreement, which eliminates most bilateral tariffs, comes as the U.S. has put up trade barriers
Alastair Gale and Emre Peker – WSJ
The leaders of Japan and the European Union signed a deal to create one of the world’s largest liberalized trade zones, a contrast to escalating trade disputes between the U.S. and several of its trading partners.
/jlne.ws/2Lmrdg7

Danske’s Latest Selloff Brings 2018 Market Loss to $10 Billion
Christian Wienberg – Bloomberg
This year may go down as one of the worst in Danske Bank A/S’s post WWII history.
/jlne.ws/2JxLwlH

Noah Confident of Profit in Consolidating China Wealth Market
Bloomberg News
U.S.-listed shares fell 26% after company’s poor 1Q results; President Lam expects 85% of rivals to be weeded out
China’s first private asset manager for the ultra rich is confident it’ll meet its 2018 profit forecast, despite disappointing first-quarter results that triggered a slide in the company’s U.S.-listed shares.
/jlne.ws/2Jy6uAN

India Poised to Infuse $2 Billion Into State-Run Banks
Siddhartha Singh – Bloomberg
Punjab National Bank is said to get largest single allocation; Injection intended to bolster capital, meet bond payments
India will inject at least 135 billion rupees ($2 billion) into state-controlled banks this month, as it seeks to shore up capital buffers and help the lenders meet coupon payments on their bonds, people familiar with the matter said.
/jlne.ws/2uKj3DL

Russian warship ‘carrying £100 billion in gold’ discovered off South Korea
Julian Ryall – Telegraph
A South Korean salvage team has discovered the wreck of a Russian warship that was sunk in a naval battle 113 years ago and is believed to still contain a trove of gold bullion and coins worth 150 trillion won, or £100 billion.
/jlne.ws/2uIVxHm

Brexit

No-deal Brexit would have big economic consequences – Carney
Richard Partington – The Guardian
Mark Carney has warned that Britain would face “big economic consequences” and could need emergency interest rate cuts if the country crashes out the European Union without a deal.
/goo.gl/41xQA5

‘Fanatical’ pro-Brexit lawmakers pushing UK toward new election: former PM Major
Reuters
Prime Minister Theresa May could be forced to call another election in months if the “fanatical” pro-Brexit wing of her party do not compromise over how Britain leaves the EU, former prime minister John Major warned on Tuesday.
/reut.rs/2JwsQTD

Miscellaneous

Exclusive: Snapchat is launching a news partnerships initiative
Axios
Snapchat is launching a news partnership initiative with the goal of helping journalists and news organizations better mine the billions of public videos and photos shared daily on Snapchat for news and information.
/jlne.ws/2LkPAL0

The post China/HKEX battle heats up; ETFs Unlikely to Cause Widespread Mkt Disruption appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

ICE‘s Data and Listings segment generated revenues of $2.5 billion in 2017 and accounted for 54 percent of its consolidated revenue of $4.6 billion in 2017, according to its annual 10-K filing.~JK

The Security Traders Association of New York, Investment Traders Association of Philadelphia and Security Traders Association of Chicago are all holding golf outings in the next month or so. Join the links – for more info.~SD

EEX set a daily trading record for potato futures. The 1,239 contract record is the physical equivalent of more than 30 tonnes of taters.~SD

Cheers to the A Leg To Stand On (ALTSO) crew who were in town yesterday to put on a pre-Rocktoberfest cocktail hour at Oranj. To those who don’t know, ALTSO puts on the coolest charitable music event (the performers all have ties to the industry) I’m aware of and it’s for a great cause. For more info and to get tickets for this year’s Rocktoberfest, go here.~SD

TABB Group’s Institutional Equity Trading Study interviewed more than 100 buy-side heads of desks and senior traders. Aligned with their study, they are presenting a preview of their research in a free three-part #webinar series. Sign up Here.~JJL

This is LabCFTC”s Dan Gorfine’s written testimony before the U.S. House Committee on Agriculture addressing “Cryptocurrencies – Oversight of New Assets in the Digital Age.”~JJL

The UK’s FCA has published a paper on their approach to Brexit titled “Our preparations and our vision for the future.”~JJL

This year’s keynote speaker for the LME Week Metals Seminar is Jeremy Weir, CEO of Trafigura.~JJL

There are tons of regulation stories in today’s newsletter. There was a new spoofing indictment, regulators thoughts on bitcoin, all sorts of commentary on alternative trading venues, a capital requirement update, Brexit developments and more. ~SD

++++

JLN Profile: Ralf Roth – Market Structure Matters
JohnLothianNews.com
Ralf Roth got his start in 1994 at Deutsche Bank as a junior fixed income analyst. Starting at the bottom and working his way up, Roth occupied various roles in equities and prime broking before eventually becoming the global head of equity product development. He then left to be the global head of Elektron for Thomson Reuters, followed by a stint at IHS Markit as chief technology officer for equities. He is currently CEO of Quantitative Brokers.
Watch the video and read the rest here »

++++

Timely Capital Relief Comments From Fed Chair Powell or: The Options Market Stability Act Was On TV!
Spencer Doar – JLN

During Federal Reserve Chairman Jerome Powell’s testimony on Capitol Hill, Rep. Randy Hultgren asked Chairman Powell about targeted capital relief for bank-affiliated clearers of options liquidity providers.

Recall that Rep. Hultgren authored legislation – the Options Market Stability Act – that just passed the House. That legislation seeks to provide relief for clearers by directing banking regulators “to consider a number of items including the availability of liquidity, the economic value of delta weighting and netting of positions, safety and soundness of financial institutions and overall financial stability. The legislation also requires the Federal Reserve to submit a report to Congress assessing the impact of their final rule.” (Emphasis added.)

Read the rest here.

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Blackstone’s Tony James, Ex-Googler Gangadhar and Deutsche Bˆrse Group’s Leithner join Digital Asset Board
Digital Asset
Digital Asset, the leading provider of Distributed Ledger Technology (DLT), today announced the appointments of Tony James, Executive Vice Chairman of Blackstone, AG Gangadhar, former engineering executive at Amazon, Google and Uber, and Stephan Leithner, Executive Board Member of Deutsche Bˆrse Group, to its board of directors.
/jlne.ws/2uv5gC0

***** When I visited Digital Asset’s offices in New York they made the point they had dropped “Holdings” from the name. They are just Digital Asset.~JJL

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Wednesday’s Top Three
Our top three items of the day were led by Trading technologies partners with Coinfloor from Business Insider. Second went to the sad news from FIA, FIA family pays tribute to Bernadette Connolly, a well-respected, loyal colleague and friend. Third went to GQ’s (yes, the style magazine) What Putin Has on Trump. We dig deep for news, with style.

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MarketsWiki Stats
129,792,729 pages viewed; 23,204 pages; 214,293 edits
MarketsWiki Statistics

Lead Stories

SEC votes to improve oversight of dark pools
Robin Wigglesworth and Nicole Bullock – FT
The US Securities and Exchange Commission has voted to improve the transparency and regulatory oversight of stock market trading venues often called “dark pools”, after rising concerns that their opacity allows for predatory practices.
/jlne.ws/2uOLhgL

Powell Says Cryptocurrencies Aren’t Big Enough to Pose a Threat
Olga Kharif – Bloomberg
Federal Reserve Chairman Jerome Powell made it clear that the explosive growth in digital money isn’t very high on his list of concerns.
/jlne.ws/2uNIKU2

Citadel’s Kenneth Griffin says “there’s no need” for cryptocurrencies
Heather Landy – Quartz
The vilification of cryptocurrencies by big names in finance is becoming an annual tradition at CNBC’s Delivering Alpha conference. Last year, JPMorgan CEO Jamie Dimon spoke at the investor gathering and called bitcoin a “fraud.” (He recanted a few weeks later.) This year, Citadel founder and CEO Kenneth Griffin took up the mantle as crypto critic-in-chief.
/goo.gl/NZaAkQ

****CNBC has the story, too.

Bond Traders Are Way Ahead of the Fed’s Powell; Debt market undercurrents lead market commentary.
Robert Burgess – Bloomberg
The bond market these days is about as fun as watching paint dry. The benchmark 10-year Treasury note yield has moved less than 7.7 basis points in July, putting it on course for its smallest monthly range since 1973, according to Bloomberg News. Even so, some very important developments are happening beneath the surface that shouldn’t be ignored.
/jlne.ws/2uOjhtN

Cinnober and BitGo Unite on Cryptocurrency Exchange Offerings
John D’Antona Jr. – Traders Magazine Online News
Cinnober, a global independent provider of exchange technology, and BitGo, the market leader in institutional-grade cryptocurrency security, announced a collaboration to provide solutions to cryptocurrency exchanges. BitGo’s wallet solution will expand Cinnober’s trading and post-trade platform to provide an end-to-end secure, institutional-grade digital asset exchange solution.
/jlne.ws/2uNKTyX

Wall Street traders set for best year since aftermath of crisis
Matt Scuffham, Rishika Dugyala – Reuters
Wall Street trading desks may have reached a post-crisis turning point, with revenue on track for the best year since 2011, second-quarter earnings reports from big U.S. banks showed.
/reut.rs/2L4k1FX

Bloomberg Integrates Live Twitter Feeds With Financial Platform
Bloomberg
Bloomberg announced today that it is the first financial information platform to integrate real-time Twitter feeds directly into the investment workflows of market
professionals. The announcement follows this week’s decision by the U.S. Securities and Exchange Commission to allow companies to use social media for corporate disclosures.
/jlne.ws/2uNhSDT

Morgan Stanley: stormin’ Gorman; Bank chief executive’s ‘make money’ strategy is neither bold nor innovative
FT
James Gorman did not need his years of training at McKinsey to knock down a question on strategy when presenting second-quarter earnings on Wednesday. The former consultant ó and now chairman and chief executive of Morgan Stanley ó had just claimed to have achieved more change over the past eight years than in the previous 80 by building the wealth business, cutting trading and conserving capital. One analyst then wanted to know what he would do for an encore, at a time when rivals such Goldman Sachs appear to be ripping up the rule book. Mr Gorman fired back: “How about, make some money?'”
/jlne.ws/2uJPToz

****SD: I sincerely hope staff calls him stormin’ Gorman.

US Department Of Justice: Two Connecticut Men Charged For Deceptive Trading Practices Executed On U.S. Commodities Markets
Mondovisione
Two former employees of a global financial institution were charged in an indictment filed today for their alleged participation in fraudulent and deceptive trading in previous metals futures contracts, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William Sweeney of the FBI’s New York Field Office.
/goo.gl/tLxSe9

****SD: Iceberg right ahead! Read the spoofing indictment here. It doesn’t look good when you leave chat messaging evidence like, “guys the algos are really geared up in here. if you spoof this it really moves” [sic] or “that was me pushing it. dont do it yourself. I will help you. don’t spoof it.” Edward Bases was named in January as well.

Morgan Stanley CEO declares broker recruiting wars over
Elizabeth Dilts – Reuters
A subtle peace has emerged in Wall Street’s long-running broker recruiting wars, Morgan Stanley Chief Executive Officer James Gorman said on Wednesday.
/jlne.ws/2JArEi3

Federal Reserve should ease rules for largest non-global U.S. banks – official
Michelle Price – Reuters
The U.S. Federal Reserve should consider formally easing the regulatory framework for U.S. banks that have more than $250 billion in assets but are not global players, a top Fed official said on Wednesday.
/reut.rs/2O1Dzcb

Pumping Iron: How can metals prices help predict global growth?
Tom Wise – BOE’s Bank Underground Blog
Estimates of GDP growth are published with a considerable lag – even in some major economies we still only have partial data on what GDP growth was in Q1 2018. So ‘nowcasting’ GDP using more timely indicators of economic activity is an important way of assessing the strength of the world economy in real time. Good indicators are timely, correlated with measures of world activity and should outperform simple benchmarks. Unlike other global indicators such as business surveys or trade data, metals prices are available minute by minute. They also tend to move closely with world GDP. This post assesses how well they perform at nowcasting world GDP.
/goo.gl/ADL97L

Did Goldman Sachs Just Edge Away From Its Bonus Culture?
Peter Eavis – NY Times
Goldman Sachs is getting a new leader and venturing into different businesses, but there is a number in the bank’s second-quarter earnings that may also send a signal about its future.
/jlne.ws/2JAWcjv

Former Hotspot FX financial chief joins TradingScreen; TradingScreen appoints new CFO, while its current strategy chief will assume expanded role as chief operating officer.
Hayley McDowell – The Trade
TradingScreen has made two new appointments in its senior management team and hired the former chief financial officer (CFO) of Hotpsot FX for the same role. Rishi Gupta has more than 20 years’ experience working in finance, accounting and operations. He most recently worked as the CFO at a private equity firm and prior to that was CFO for Hotspot FX, the institutional FX trading platform now known as Cboe FX.
/jlne.ws/2uNfEV3

Former RBC forex trader in rare win for a City whistleblower; London employment tribunal rules in favour of EM currencies head
Katie Martin – FT
Royal Bank of Canada unfairly dismissed a former currencies trader who had called on the bank to tighten up what he called “box-ticking” compliance procedures, a London employment tribunal has ruled in a rare victory for a City whistleblower.
/jlne.ws/2Lq2rLW

FCA planning for no-deal Brexit
Caroline Binham – FT
The UK and the European Union’s financial regulations may “evolve” after Brexit but that should not impede access to one another’s markets, a senior UK regulator has said.
/jlne.ws/2LlWkbK

Exchanges, OTC and Clearing

LiquidX Accelerates Global Expansion; Opens Offices in London and Singapore; Establishes Latin American Desk; 2nd Quarter Transaction Volume Hits $1.8 Billion; 64% Increase Year-over-Year
LiquidX, Inc.
LiquidX, the global marketplace for illiquid assets, announced today it has opened new offices in London and Singapore and established a New York based desk exclusively focused on Latin American transactions. LiquidX is taking these steps as the number of its members expands in Europe, Asia, South America and elsewhere around the globe.
/jlne.ws/2JAlgY3

CACEIS adds new dimensions to its international fund distribution offer
CACEIS
CACEIS is enhancing the solutions which underpin its fund distribution offer in North America, Latin America and Asia, by optimising order processing managed by the National Securities Clearing Corporation (NSCC) and Taiwan Depository and Clearing Corporation (TDCC) platforms and expanding its connectivity offering to local investors and distributors.
/jlne.ws/2uJqyel

London Metal Exchange moves further towards launch of lithium contract
Pratima Desai – Reuters
The London Metal Exchange has asked companies that assess prices of battery-grade lithium to submit proposals to supply a reference for the cash-settled contracts it plans to launch next year, the exchange said.
/jlne.ws/2JASl5T

ASTS Bridge for new FX market platform
MOEX
A new ASTS Bridge beta version 4.3.4 is now available at MOEX FTP (ftp://ftp.moex.com/pub/ClientsAPI/ASTS/). It will be available for production use together with the release of a new FX market trading and clearing system (scheduled for 30 July 2018). There is only one change in this version: when connecting simultaneously to the trading and to the clearing systems using the same user ID then these two connections will be considered as one when checking for the maximum allowed number of connection sessions. So it will be possible to establish up to 8 connections to the clearing system along with 8 connections to the trading system through a single ASTS Bridge instance.
/jlne.ws/2uHjKxM

MSCI appoints Russell Read as managing director
Reuters Staff
Index provider MSCI Inc (MSCI.N) said it named Russell Read as managing director and global head of client solutions, effective September.
/jlne.ws/2uJyGLS

Wall Street welcomes first marijuana IPO at $17 a share; Canadian medical-use cannabis producer Tilray set to start trading on Nasdaq
Nicole Bullock – FT
Wall Street will play host to the latest effort by the marijuana industry to move into the financial mainstream on Thursday when trading in Tilray, the Canadian medical cannabis producer, starts on Nasdaq.
/jlne.ws/2uNCiwd

Market maker SIs execute almost EUR30 billion in first quarter; Research found that around EUR1 billion is traded a day on systematic internalisers operated by electronic liquidity providers.
Hayley McDowell – The Trade
Systematic internalisers (SIs) operated by market making firms under MiFID II traded close to EUR30 billion in the first quarter this year, despite reluctance from the buy-side to interact with them.
/jlne.ws/2LlgORS

US dark pools set for transparency overhaul; SEC approves amendment which will require dark operators to disclose information for greater transparency and regulatory oversight.
Hayley McDowell – The Trade
The US financial watchdog has voted to adopt new rules for equities dark pool operators which will significantly increase transparency and oversight of how they operate.
/jlne.ws/2LjjeAh

SGX proposes to enhance default management capabilities of derivatives and securities clearing houses
SGX
Singapore Exchange (“SGX”) is seeking public feedback on proposed amendments to the clearing rules of Singapore Exchange Derivatives Clearing Limited (“SGX-DC”) and the Central Depository (Pte) Limited (“CDP”) (the “SGX-DC Clearing Rules” and the “CDP Clearing Rules” respectively) to enhance both clearing houses’ default management capabilities.
/jlne.ws/2JDnHcb

MCX claims technical glitch that resulted in multiple outages resolved; SEBI asked the exchange to find out what went wrong after trading halted four times in two months
Rajesh Bhayani – Business Standard
Multi Commodity Exchange (MCX) claims it has resolved the technical fault which halted its trading four times in the last two months. The exchange said, ” MCX has implemented a solution to prevent this issue in the system.”
/jlne.ws/2JGHWWI

Fintech

More than half of hedge funds now using AI technology; Hedge funds are using AI and machine learning for investment decisions, but only a quarter are using it for trade execution.
Hayley McDowell – The Trade
Over half of hedge funds are currently using artificial intelligence (AI) or machine learning technology to inform investment decisions and generate trading ideas, according to a survey.
/jlne.ws/2LoupaQ

JPMorgan Chase invests in artificial intelligence startup Volley
Anna Irrera – Reuters
JPMorgan Chase & Co (JPM.N) has made a strategic investment in Volley.com, a San Francisco-based startup that uses artificial intelligence to help large enterprises automatically generate training content for employees, the companies said on Tuesday.
/jlne.ws/2LjjXBM

Albar Capital Deploys FlexNOW; Easy-to-Install Multi-Asset Execution Management System —
FlexTrade
FlexTrade (@FlexTrade) today announced that Albar Capital Ltd., a new hedge fund led by Javier Velazquez (formerly of Millennium Capital Partners LLP), is now trading equities and futures using FlexNOW, FlexTrade’s new execution management system.
/jlne.ws/2uK0ik7

CFPB Wants to Help Launch New Fintech Products
Yuka Hayashi – WSJ
Mick Mulvaney, the acting chief of the Consumer Financial Protection Bureau, spent the past eight months rolling back policies implemented by his Democratic predecessor. Now he wants to add his own mark by giving the agency a fresh mission promoting innovation in consumer finance.
/on.wsj.com/2Nt2Tqh

Why Banks And FinTech Need Each Other… And For How Long
Michal Gromek – Forbes
According to Sebastian Siemiatkowski, CEO of Klarna, which is one of the leading Swedish FinTech unicorns, banks need to be customer centric, not just talk about it. But in practice, we see little change in the banks’ approach. That’s why we often hear about developing alliances between banks and FinTech platforms. Will friends become enemies?
bit.ly/2uNTiCv

Fintech funding back on the rise
Crain’s New York Business
A big initial public offering and strong signs of growth in the financial technology industry are giving startups in the sector a funding boost.
bit.ly/2uO4ZJo

Cryptocurrencies

Former CFTC chairman says underlying crypto cash market is ‘a mess’; Gary Gensler urges US financial authorities to decide which regulator should regulate crypto markets.
Hayley McDowell – The Trade Crypto
The former chairman of the top US derivatives watchdog has urged Congress to establish who should regulate the cryptocurrency cash market which underlines securities and derivatives.
/jlne.ws/2uMq7jm

Mastercard Wins Patent for Speeding Up Crypto Payments
Christine Kim – Coindesk
Mastercard won a U.S. patent on Tuesday for a method of speeding up cryptocurrency payments.
The document, published July 17 by the U.S. Patent and Trademark Office (USPTO), explains that though cryptocurrencies have “seen increased usage over traditional fiat currencies by consumers who value anonymity and security,” the wide disparity in payment processing times between the two classes of assets puts cryptocurrencies at a “disadvantage.”
“There is a need to improve on the storage and processing of transactions that utilize blockchain currencies,” the patent claims.
/goo.gl/79RJEm

Barry Silbert says bitcoin put in its 2018 low, but 99% of cryptos are worthless
Ryan Vlastelica – MarketWatch
Barry Silbert, the chief executive officer of the Digital Currency Group, on Wednesday said that while he was extremely optimistic about the long-term prospects of bitcoin, as well as the broader cryptocurrency industry, a huge amount of new entrants seemed headed for zero.
/jlne.ws/2uJRomH

The ICO whose team members are literally cartoon characters
Jemima Kelly – FT
Remember Kevin Belanger, the ICO graphic designer with a clear focus on identities and illustration, who bore an uncanny resemblance to Ryan Gosling?
/jlne.ws/2JB3Nyo

Customer Advisory: Use Caution When Buying Digital Coins or
Tokens
CFTC
The Commodity Futures Trading Commission (CFTC) is alerting customers to exercise caution and conduct extensive research before purchasing digital coins or tokens, including those self-described as “utility coins” or “consumption coins.” Understand what rights are attached to the coin or token being sold, and what underlying factors could affect its value. Be especially wary of promises or guarantees of future value.
/jlne.ws/2JASCpz

GMEX Named As One Of The Leading Financial Services Technology Companies In UK Blockchain Economy – Hirander Misra, Chairman And CEO Named Key Business Influencer
Mondovisione
GMEX Group (GMEX), a provider of innovative exchange, post-trade and digital technology solutions, is pleased to have been identified as one of the leaders in the implementation of blockchain technology in the Financial Services industry in a first-of-its-kind, report on the state of the Blockchain Industry in the United Kingdom. The report was launched at a Reception in London at the Houses of Parliament on Monday 16 July.
/jlne.ws/2uJYcAL

Politics

Trump’s Tax Cut Hasn’t Done Anything for Workers; Wages were supposed to rise. Instead, they’ve fallen.
Noah Smith – WSJ
A few months ago, I cautioned that Americans should be patient before deciding what effect President Donald Trump’s tax cuts have had on the economy. It takes a while for companies to make investment decisions, more time for those decisions to be implemented and even more time for the resulting changes in labor demand to bid up workers’ wages. It therefore takes months or even years before the full impact of the tax bill will be known.
/jlne.ws/2Jy1OuZ

New York governor opens door to criminal case against Trump Foundation
Reuters Staff
New York Governor Andrew Cuomo on Wednesday opened the door to a possible criminal case against the Donald J. Trump Foundation, but the state attorney general’s office said it had not determined that a criminal referral was warranted.
/jlne.ws/2JBua7I

Democrats Could Become a Free-Trade Counterweight to Trump; Historically opposed to free trade, Democrats increasingly identify with values like openness to trade
Greg Ip – WSJ
In Tennessee’s critical Senate race, it’s the Democrat running as a free trader. Phil Bredesen, a former governor, poses in a whiskey distillery in a recent ad and slams President Donald Trump’s tariffs: “They hurt our auto industry, our farmers, and Tennessee exports like Jack Daniel’s.”
/jlne.ws/2uIwwvO

Is Trump a Traitor? Who’s Asking?; The answer to the second question usually dictates the response to the first.
Jonathan Bernstein, Noah Feldman, Eli Lake, Ramesh Ponnuru, Cass R. Sunstein and Francis Wilkinson – Bloomberg
Jonathan Bernstein: It’s not a word I use. But I don’t necessarily think it’s out of bounds.
/jlne.ws/2uMjv4w

Court Blocks Billionaire’s Measure to Split California Into Three States
Romy Varghese and Kartikay Mehrotra – Bloomberg
Billionaire Tim Draper’s proposition to break California into three states won’t be on the ballot in November.
/jlne.ws/2JC4ise

Citadel’s Griffin warns on dangers of prolonged trade war
Svea Herbst-Bayliss – Reuters
Billionaire investor Kenneth Griffin on Wednesday praised President Donald Trump’s policies but warned that prolonged trade wars could harm consumers and companies alike.
/jlne.ws/2uJojHX

From the Start, Trump Has Muddied a Clear Message: Putin Interfered
David E. Sanger and Matthew Rosenberg – NY Times
Two weeks before his inauguration, Donald J. Trump was shown highly classified intelligence indicating that President Vladimir V. Putin of Russia had personally ordered complex cyberattacks to sway the 2016 American election.
/jlne.ws/2JBYVJo

Regulation

UK financial ombudsman says will be ready for small firms
Huw Jones – Reuters
Britain’s financial industry complaints body said it was ready to broaden its remit to include more small companies despite a review that raised questions about its performance.
/jlne.ws/2JBX4V6

The 1971 UK banking deregulation had a positive effect on firms; Firms undertook more investment in intangible assets and substituted expensive trade credit with bank debt, write Fabio Braggion and Steven Ongena
London School of Economic and Political Science
Starting in the 1970s, various countries deregulated their banking systems and abandoned the strict rules that governed financial institutions since the Great Depression. Deregulation was intended to increase competition in the credit market, improve consumers’ welfare but it has been indicated by many observers to be at the roots of the 2008 financial crisis. Despite the large interest in this issue, we have limited knowledge of the effects of deregulation and increased bank competition on the real economy. Does banking deregulation have a positive effect on firms’ access to credit and investment? Or does it only increase the fragility of the financial system?
/jlne.ws/2JBlUVg

SEC Charges Investment Adviser And CEO With Misleading Retail Investors
SEC
The Securities and Exchange Commission today charged a Connecticut-based investment advisory firm and its chief executive officer with putting $19 million of investor money, including elderly investors’ retirement savings and pension plans, in risky investments and secretly pocketing hefty commissions from those investments.
/goo.gl/wTMCE2

Convicted ex-traders to be sentenced in Euribor scandal
Reuters Staff
Two French former senior traders, Christian Bittar and Philippe Moryoussef, face sentencing in a London court on Thursday after being convicted of plotting to rig global interest rates.
/jlne.ws/2uOiCIP

Opening Statement At The SEC Open Meeting, Chairman Jay Clayton
SEC
Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act. Today, the Commission will consider two recommendations from the Division of Corporation Finance and one recommendation from the Division of Trading and Markets. The fourth item that appeared on the Sunshine Act notice has been removed. The staff continues to refine and work with the Commission on the recommendation, and I expect that recommendation to be voted on shortly.
/jlne.ws/2uJoQtr

SEC Adopts Final Rules and Solicits Public Comment on Ways to Modernize Offerings Pursuant to Compensatory Arrangements
SEC
The Securities and Exchange Commission today issued final rules to amend Securities Act Rule 701, which provides an exemption from registration for securities issued by non-reporting companies pursuant to compensatory arrangements. As mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act, the amendment increases from $5 million to $10 million the threshold in excess of which the issuer is required to deliver additional disclosures to investors.
/jlne.ws/2uNh4Pn

Statement of Commissioner Robert J. Jackson, Jr. Final Rules Regarding Regulation ATS (Alternative Trading Systems)
SEC
Thank you, Chairman Clayton, and I want to begin by expressing my deep gratitude and congratulations to Director Redfearn and his colleagues in the Division in Trading and Markets, especially John Roeser and Tyler Raimo, for all they’ve done to get this important rule over the line. Today we take an important step toward shining light on dark pools, and for the reasons Commissioner Stein has emphasized, that transparency is crucial for the future of equity marketsóand long overdue.[1]
/jlne.ws/2JAViDD

Statement at Open Meeting on NMS Stock Alternative Trading Systems
Commissioner Hester Peirce – SEC
Thank you, Mr. Chairman. I know it has been a long road to get to this meeting. I thank the staff, particularly Tyler [Raimo], for your persistence, even to the point of skipping a vacation.
/jlne.ws/2uMgEIQ

Statement on Amendment to Securities Act Rule 701(e) and Concept Release on Potential Revisions to Securities Act Rule 701 and Securities Act Form S-8
Commissioner Kara Stein – SEC
I would like to join Chairman Clayton in thanking the staff for their hard work on these releases. In particular, I would like to thank Anne Krauskopf and Adam Turk.
/jlne.ws/2JCh1uZ

Statement on Adoption of Rules to Increase the Operational Transparency of Alternative Trading Systems (ATS)
Commissioner Kara Stein – SEC
I want to join the Chairman in thanking the staff for the hard work that went into this release. Thank you to Tyler Raimo , Matthew Cursio, Marsha Dixon, Jennifer Dodd, David Garcia, and Megan Mitchell from the Division of Trading and Markets as well as Amy Edwards, John Ritter, and Hermine Wong from the Division of Economic and Risk Analysis. And, thank you to everyone else on the team for your dedication and hard work.
/jlne.ws/2JBIcpX

Statement at Open Meeting on Rule 701 Amendment and Concept Release
Commissioner Hester M. Peirce – SEC
Thank you to the staff for your work in putting together both this new rule and the accompanying concept release. The change we are considering today is a discrete one, but could enhance the ability of companies to hire and retain workers. I am pleased that we are going beyond the congressional mandateówhich is a good oneóto consider more broadly how we might make Rule 701 work better.
/jlne.ws/2uNBuaV

Spain and Slovenia risk fines for non-compliance with MiFID II; Both countries face the Court of Justice for failing to implement MiFID II regulation.
Hayley McDowell – The Trade
Spain and Slovenia could face financial penalties after being referred to the Court of Justice by the European Commission for failing to implement MiFID II, despite being six months into the new regime.
/jlne.ws/2LsRZne

ESMA consults on revising CRAs’ periodic reporting
ESMA
The European Securities and Markets Authority (ESMA) has today issued a consultation paper for revised Guidelines on the information that is to be periodically reported to ESMA by credit rating agencies (CRAs) for supervisory purposes.
/jlne.ws/2JABWyz

Written Testimony of Daniel S. Gorfine before the U.S. House Committee on Agriculture
CFTC
Cryptocurrencies – Oversight of New Assets in the Digital Age
/jlne.ws/2uOp5n5

SEC charges RIA and CEO with putting $19 million of client money into risky investments
Sarah Min – InvestmentWeek
The SEC on Wednesday charged an investment advisory firm based in Litchfield, Conn., and its CEO with putting $19 million of investor money, including elderly clients’ retirement savings, in unsuitable, illiquid investments and secretly pocketing hefty commissions.
/jlne.ws/2uMZN8S

Investing and Trading

Index IDEA: Taking a global view on corporate earnings
FTSE Russell
As passionate as global soccer (or futbol) fans are about the World Cup, corporate earnings season can ignite similar passions in the minds of investors.
/goo.gl/mmFhBu

Exxon, Once a ‘Perfect Machine,’ Is Running Dry; CEO Darren Woods’s plan to make a comeback by spending more on fossil-fuel projects has so far proved unpopular
Bradley Olson – WSJ
Darren Woods spent a year preparing an ambitious plan to return Exxon Mobil Corp. XOM -0.11% to glory.
/jlne.ws/2uHnCPk

Buffett Gets Richer Even After Donating $3.4 Billion to Charity
Tom Metcalf – Bloomberg
Warren Buffett just can’t stop making money, even in a week where he gave $3.4 billion to charity. The Berkshire Hathaway Inc. chairman added $4 billion to his fortune Wednesday after the conglomerate removed a cap on stock buybacks.
/jlne.ws/2uNHQa6

Deficit Projected to Top $1 Trillion Starting Next Year; Most recent administration estimates show challenge of reducing red ink
Nick Timiraos – WSJ
The Trump administration expects annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year.
/jlne.ws/2JBTUkc

Volatility Goes AWOL From Global Markets Besieged by Risk
Sid Verma and Luke Kawa – Bloomberg
Implied swings at levels not seen since before February rout; U.S. resilience helps keep lid on volatility premiums
Whisper it quietly, but there’s a distinct air of complacency creeping into financial markets just now.
/jlne.ws/2Lhj3Wr

Institutions

Morgan Stanley caps strong earnings season for big U.S. banks
Reuters
Morgan Stanley’s better-than-expected results on Wednesday capped a strong second-quarter earnings season for large U.S. banks.
/reut.rs/2L4lkER

Morgan Stanley boss Gorman hits out at Fed stress tests
Matt Scuffham – Reuters
Morgan Stanley’s top executive criticized the Federal Reserve’s annual health checks of the biggest U.S. lenders and predicted changes to the tests going forward after his bank reported better-than-expected quarterly earnings on Wednesday.
/jlne.ws/2JykOJO

UBS appoints new head of Luxembourg wealth management unit
Reuters Staff
Swiss bank UBS (UBSG.S) will swap out leadership at its Luxembourg wealth management (WM) unit in October amid changes in the region, including the Swiss bank’s move in January to acquire Nordea’s private banking business there.
/jlne.ws/2JB6n7C

Hedge Funds Circle Around Debt-Binge Firms
Alastair Marsh – Bloomberg
Headhunter says funds adding most staff in at least two years; Investors are preparing for more troubled assets in Europe
Hedge funds and private equity firms are positioning to profit from the collapse of companies in Europe that have binged on debt.
/jlne.ws/2Ljifjz

JPMorgan Chase, Fifth Third invest in a $5.5 million fund for minority entrepreneurs in Chicago
Lauren Zumbach – Chicago Tribune
JPMorgan Chase and Fifth Third Bank are investing $5.5 million in a new fund designed to boost minority entrepreneurs on Chicago’s South and West sides.
/jlne.ws/2JBAWKG

Regions

The Growth of Emerging ASEAN
Utkarsh Agrawal – S&P Dow Jones Indices
The Association of Southeast Asian Nations (ASEAN) region is well known for its growth potential among market participants who seek to diversify their exposure within emerging markets. ASEAN originally consisted of Indonesia, Malaysia, Philippines, Singapore, and Thailand. It then expanded to include Brunei, Cambodia, Laos, Myanmar, and Vietnam. Within ASEAN, the World Bank classifies Singapore and Brunei in the high-income category, while the others fall under the middle-income group.
/goo.gl/uj4FX9

CITGO says CEO’s U.S. visa has been revoked
Reuters Staff
Citgo Petroleum Corp, the U.S. subsidiary of Venezuelan state-run oil company PDVSA, said on Wednesday that the United States had revoked the visa of its president and chief executive Asdrubal Chavez, cousin of Venezuela’s late president Hugo Chavez, but it did not say why.
/jlne.ws/2uPfEnc

Trump’s Trade War May Spark a Chinese Debt Crisis; A tighter dollar will make the bursting of the credit bubble an inevitability.
Anne Stevenson-Yang – Bloomberg
There’s no chance China will cut its trade surplus with the U.S. in response to President Donald Trump’s tariff threats. For starters, Washington has made no specific demand to which Beijing can respond. But its efforts may have an unexpected side effect: a debt crisis in China.
/jlne.ws/2JAuHqq

HKMA lays out guidelines to help banks in fintech push
Enoch Yiu – South China Morning Post
The Hong Kong Monetary Authority has announced a range of measures to encourage banks to work with third parties to promote financial technology.
/jlne.ws/2JAVmmJ

Russia sharply cuts its holdings of US Treasuries; Sales in May result in exposure plunging to under $15bn after imposition of sanctions
Joe Rennison and Max Seddon – FT
Russia is no longer one of the biggest holders of US Treasuries, having aggressively sold its holdings just as international criticism of the country has escalated.
/jlne.ws/2uJPEKb

A China Borrower’s $11 Billion Debt Mountain Comes Crashing Down
Bloomberg News
Wintime Energy’s debt quadrupled in less than five years; Company’s flop likely to be echoed as deleveraging rolls on
China this month recorded one of its biggest corporate-debt defaults yet, with the downfall of a coal miner that had ridden the country’s wave of credit until policy makers changed the game with their deleveraging campaign.
/jlne.ws/2LliOJP

India’s Dirty Secret Is an Oil Market Headache; Refiners will face a costly cleaning bill.
David Fickling – Bloomberg
What do you do when your dumping ground cleans up its act?
/jlne.ws/2Ls5KCi

Brexit

The Brexit Barometer Is Coming to Life Again; The pound should become more volatile as the U.K.’s exit from the European Union looms
Richard Barley – WSJ
Pressure on the pound is building. The one unlikely outcome is that it stays where it is.
/jlne.ws/2JC4CXY

DTCC to open Dublin office in preparation for Brexit
Philip Stafford – FT
The Depository Trust & Clearing Corporation, the world’s largest trade repository, is planning to open a hub in Ireland in coming months as the market’s biggest infrastructure operators race to insulate themselves from Brexit next year.
/jlne.ws/2JAsWcO

‘Brexit continues to mean Brexit’: May presses on with her plan
Elizabeth Piper, William James – Reuters
Prime Minister Theresa May refused to budge from her position on Brexit on Wednesday, brushing aside criticism from all corners of parliament and saying her strategy was already being negotiated with the European Union.
/jlne.ws/2uNF0ln

The post SEC votes to improve oversight of dark pools; Powell’s Crypto Comments appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Are your interns signed up for MarketsWiki Education in Chicago on July 30, 31 and August 2? This don’t miss series still has some room for more. Sign up at www.marketswikieducation.com.~JJL

With the large number of stories out there about artificial intelligence taking over (see yesterday’s piece in The Trade) – it’s fitting to relink to a JLN video from earlier this year – Myths and Misconceptions Surrounding Artificial Intelligence. Basically, saying “artificial intelligence” doesn’t always mean the super complicated thing you think it means. The video features Inderdeep Singh of CME Group, Brian Peterson of DV Trading, Matt Dixon of IIT and Morgan Slade of CloudQuant talking about the subject. ~SD

Are we heading toward a T+1 settlement cycle? Murray Pozmanter of DTCC believes there are ways to shorten settlement times including one method that sends matched T+1 trades to the clearinghouse in the morning rather than end of day.~JK

I was not aware that the UK’s high value payment system was called the Clearing House Automated Payment System or CHAPS – how quaint.~SD

Nasdaq was scheduled to list its U.S. 10-YR DV01 Treasury Futures on Thursday, but announced the date of listing “will be moved to accommodate additional client and market maker onboarding and clearinghouse testing.” The new listing date is TBD.~SD

HKEX’s USD/CNH Options Hit a Record High with 1127 contracts traded, beating the previous record of 909 on July 3, 2018.~JJL

Over 5,500 people viewed my LinkedIn post of the FIA’s announcement of the sad passing of Bernadette Connolly. What a great expression of the love for Bernie.~JJL

Pages of CryptoMarketsWiki.com that were updated yesterday included: Gavin Andresen??, Global Markets Exchange Group International LLP (GMEX)??, Mt. Gox??, Mark KarpelËs?? and CFTC.~JJL

++++

The Spread – Playing Ketchup – 7/19
JohnLothianNews.com
As there was no installment of “The Spread” last week, we added a brief lightning round to the end of this week’s options news recap. This week’s episode also features celebrity appearances by Mr. Bill and the Kool-Aid Man.

Watch the video and see the stories referenced here »

++++

YCharts Adds Michael Kraines to Board of Directors; Kraines brings more than 25 years of investment banking and fintech leadership experience to support YCharts in its accelerated growth trajectory
YCharts
YCharts, a modern investment research platform that enables smarter investments, today announced Michael Kraines, President and CFO at Trading Technologies International, Inc. (TT), has been appointed to its Board of Directors.
/jlne.ws/2LnNaLG

***** A smart addition by YCharts. JLN commentary on the move can be found here. ~JJL

++++

Nobody Knows Where to Take Shelter From Trump’s Trade War; The battle over tariffs is starting to get investors’ attention, but there’s no clear defense.
Sarah Ponczek – Bloomberg
During months of heated rhetoric surrounding trade and tariffs, Wall Street strategists and advisers largely assumed it was all just brinkmanship. But suddenly more of them are advising investors to go defensive. Easier said than done in 2018, when every global market is intertwined. S&P 500 companies got 43 percent of their sales from overseas in 2016, according to a report from S&P Global Inc. “There is a lot of debate on what is a defensive sector,” says Emily Roland, head of capital markets research at John Hancock Investments.
/jlne.ws/2LotqHX

***** Managed futures?~JJL

++++

Migrants are key to productivity gains for countries; There are many reasons to believe that migration may be a highly effective driver of knowledge diffusion across borders, write Dany Bahar and Hillel Rapoport
London School of Economics and Political Science
For decades, the focus of the economic literature when studying migration was, for the most part, on the impact it has on labour-related outcomes such as wages and unemployment, among others. But these studies have been able to tell us one side of the story. As is the case with other flows, such as trade and investment, there are many other aspects of migration that go beyond the localised short-term impact it might have on the labour force.
/jlne.ws/2LvYTbm

****** Knowledge diffusion goes both ways, good and bad. However, you can’t truly stop it, and it has led to some of the world’s greatest achievements.~JJL

++++

Thursday’s Top Three
Our top read story of the day on Thursday was Quartz’s Citadel’s Kenneth Griffin says “there’s no need” for cryptocurrencies, but I suspect deep down inside, he doesn’t believe that. Second went to the DOJ announcement Two Connecticut Men Charged For Deceptive Trading Practices Executed On U.S. Commodities Markets. The guys in Boca Raton are saying, “whew, finally it’s not us.” Third was the New York Times’ piece Did Goldman Sachs Just Edge Away From Its Bonus Culture?

++++

MarketsWiki Stats
129,822,747 pages viewed; 23,206 pages; 214,309 edits
MarketsWiki Statistics

Lead Stories

Texas Smashes 1925 Heat Record as Power Prices Surge on Demand
Margot Habiby and Chris Martin – Bloomberg
Dallas-Fort Worth region climbs to 108 degrees Fahrenheit; State broke power-demand record on Wednesday, prices surged
North Texas smashed a 93-year-old daily heat record Thursday, with the mercury climbing to 108 degrees Fahrenheit (42 Celsius) in the Dallas-Fort Worth area.
/jlne.ws/2LpGWLb

****Also from Bloomberg – Sizzling U.S. Heat Strains Power Grids, Withers Texas Cotton

The Most Important Number in Finance Is Going Away. Wall St. Isn’t Prepared.
Matt Phillips – NY Times
In the world of finance, there is one number that arguably matters more than any other. You can find it in the small print on adjustable-rate mortgages and private student loans, it is the basis for enormous corporate loans, and it underpins nearly $200 trillion of derivatives contracts.
/jlne.ws/2Lrz4c4

**It took about 17 paragraphs to get to the Libor alternative, SOFR

Trump’s Trade Tweets Now Matter for Only One Asset Class
Luke Kawa – Bloomberg
Goldman sees lack of relationship between trade tweets, VIX; Online missives have some impact on soybeans, strategists find
Donald Trump’s tweets once rattled markets more than a North Korean nuclear test, with attacks on individual companies sparking stock selloffs.
/jlne.ws/2LvKmwl

Free Trade With or Without the U.S.; As America lurches toward protectionism, Europe and Asia are shrewdly lowering trade barriers.
Editorial Board – Bloomberg
President Donald Trump is intent on punishing other nations for “ripping off” the U.S. in trade. Their governments aren’t exactly falling into line. They’re getting on with promoting trade and leaving the U.S. behind.
/jlne.ws/2Lq64l6

Trump says he’s ‘ready’ to put tariffs on all $505 billion of Chinese goods imported to the US
CNBC
President Donald Trump has indicated he is willing to put tariffs on all $505 billion of Chinese goods the U.S. imports. The rhetoric marks ramps up the U.S-China trade war another step, though each country has issued just $34 billion in tariffs so far.
/goo.gl/qe5XHJ

Hedge fund assets eclipse record level for eighth consecutive quarter
Hedgeweek
Hedge fund capital ended Q2 2018 at a new record level for the eighth consecutive quarter as investors reversed Q1 strategy flow trends, allocating new capital to Equity Hedge strategies while redeeming from Macro strategies, with Relative Value Arbitrage and Event Driven also showing small outflows.
/goo.gl/6jdehD

So This Is Why Trump Tweets About Oil; High fuel prices hit red-state drivers the most, right in time for midterms.
Mark Gongloff – Bloomberg
Never let it be said President Donald Trump doesn’t understand his voters.
Back in April, he started tweeting angrily at OPEC about high oil and gasoline prices. Last month, he pushed Saudi Arabia to raise production. It’s hard to say how effective he’s been – oil is more expensive than when his jawboning started, though it’s fallen a bit since his Saudi pitch. National gas prices have stabilized just below $2.90 a gallon, up about 60 cents from a year ago. There’s still talk Trump might tap the Strategic Petroleum Reserve. The truth is, neither he nor OPEC can fully control the market, which has been squeezed by his threat to bottle up Iranian oil.
/jlne.ws/2Loz24V

U.S. Grain Prices Crunched by Trade Fears; Gluts of corn, wheat and other crops are finally easing after years of oversupply, but prices have yet to meaningfully rebound
Benjamin Parkin – WSJ
Gluts of corn, wheat and other crops are finally easing after years of oversupply, but prices have yet to meaningfully rebound.
/jlne.ws/2LryLhq

No End in Sight for Commodity Crash With Charts Sending Bear Signals
Luzi-Ann Javier – Bloomberg
Money managers’ copper position swung to a net-short: CFTC; Crude oil rallies, defying sell-off in raw materials
What’s next for commodities after a recent price collapse? It looks like more bad news, if the chart watchers are right.
/jlne.ws/2LmwQe5

Trump lays into the Fed, says he’s ‘not thrilled’ about interest rate hikes
Jeff Cox – CNBC
In a stinging and historically rare criticism, President Donald Trump expressed frustration with the Federal Reserve and said the central bank could disrupt the economic recovery.
Presidents rarely intercede when it comes to the Fed, which sets the benchmark interest rate that flows through to many types of consumer debt.
/cnb.cx/2L8lwCZ

****SD: He doubled down on the criticism in a tweet.

Blockchain Efforts Move Beyond the Hype: ‘This Is Happening Now’
Matthew Leising – Bloomberg
Big leap from when focus was mostly on research & development; Bank-backed consortium has completed real-world transactions
There has been more talk in recent years about how blockchain technology can change the world than actual projects showing what it can do.
But now, after years of research and development, companies are using blockchain networks to conduct trade finance, track diamonds and prove the provenance of marijuana.
/goo.gl/46Xk9Y

Stolen Crypto Millions Paid Back for Cents on Dollar, Guaranteed
Olga Kharif, Brian Louis, Julie Edde and Katherine Chiglinsky – Bloomberg
Few want to talk about it, but more insurers selling coverage; AIG, Allianz among those taking crypto-insurance plunge
In the staid and buttoned-up world of insurance underwriting, few want to talk about it. You won’t find many ads promoting it or details on company websites offering it.
/jlne.ws/2Ln6kkP

CFTC Reduces Risk for Customer Funds Held by Derivatives Clearing Organizations by Expanding Investment Options
CFTC
The Commodity Futures Trading Commission (CFTC) unanimously approved an order that allows registered derivatives clearing organizations (DCOs) to invest customer euro cash in French and German sovereign debt. Allowing DCOs to invest customer euro cash in high-quality European sovereign debt poses less risk than the current practice of holding customer euro cash at commercial banks.
/jlne.ws/2uBeP25

There’s a new global stock exchange centered on digital assets being built in Malta
Zoe Bernard – Business Insider
A global trade market for decentralized assets like cryptocurrencies and equity tokens is taking root in Malta, the tiny European country that has positioned itself as a pioneer in the blockchain industry.
/jlne.ws/2Lsi7hV

CFTC Official to Congress: Don’t Be ‘Hasty’ With Crypto Rules
Nikhilesh De and Christine Kim – Coindesk
The director of the Commodity Futures Trading Commission (CFTC)’s fintech initiative cautioned against what he called “hasty regulatory pronouncements” during a Congressional hearing on Wednesday
/jlne.ws/2Lq6lo8

Powell Wants to Create Some Mystery Around Fed Meetings; A slower or faster pace of rate hikes, an extended pause, or even a cut are all possibilities at this point.
Tim Duy – Bloomberg
Change is in the air at the Federal Reserve. Chairman Jerome Powell’s semiannual monetary policy testimony in the Senate gave a big hint that we can no longer count on the explicit policy of gradual interest-rate hikes to continue too much longer. That doesn’t mean gradual rate increases will end, only that the Fed will rely less on forward guidance. A slower or faster pace of hikes, an extended pause, or even a rate cut are all possibilities at this point.
/jlne.ws/2Ls84cy

Murdoch Caps Long Career by Laughing All the Way to Bank
Anousha Sakoui and Nabila Ahmed – Bloomberg
Disney’s winning bid for Fox assets will net him billions; Cements the 87-year-old’s legacy as a great media dealmaker
Rupert Murdoch had one more blockbuster deal in him. And it might be the grizzled veteran’s sweetest yet.
/jlne.ws/2Ln5gxl

Exchanges, OTC and Clearing

A Different Approach to Accelerating Settlement and Reducing Risk
Murray Pozmanter – DTCC
The financial industry’s model for clearing and settling securities has been on a long trajectory toward shorter cycles. One of the last remaining exposures in the settlement system today is time, which increases the risk an unpredictable event could affect the transfer of cash or ownership of securities from the point of execution through settlement.
/jlne.ws/2Lja2Mx

Scott Bradley on Turquoise periodic auctions
The Trade
Scott Bradley, head of sales and marketing for LSE cash markets and Turquoise, tells TRADE TV about how Turquoise periodic auctions have seen increased activity post-MiFID II.
/jlne.ws/2LpIAwq

‘We need a call to action’: Stacey Cunningham, the NYSE’s first female president; She is the first woman to lead the New York Stock Exchange in its 226 years. Faced with falling sales and government pressure, though, she finds the attention to her gender a distraction
Dominic Rushe. – The Guardian
The Fearless Girl is on the move. launched a million selfies and became an unlikely avatar of . Soon it will be transported a few hundred metres down the road in downtown Manhattan to confront another symbol of entrenched masculinity: the New York Stock Exchange (NYSE). Stacey Cunningham says she couldn’t be more delighted.
/jlne.ws/2LnVHhM

The other London Stock Exchange
City AM
NEX Exchange is a growing stock exchange servicing a highly diverse range of companies. Providing the most cost-effective route to market in London, the NEX Exchange’s personal relationship-based approach helps companies realise their growth ambitions.
/jlne.ws/2LoDmRH

Deutsche Boerse receives four Global ETF Awards; Awarded as Europe’s highest performing and most proactive ETF exchange, for the largest number of ETF listings and as the most innovative ETF index provider
Deutsche Boerse
Deutsche Boerse has been honored four times at this year’s Annual Global ETF Awards in New York and has received prizes as “Most proactive ETF exchange in Europe”, “Exchange with the largest number of primary listed ETFs in Europe”, “Largest exchange for ETFs by dollar turnover in Europe “and” Most innovative ETF index provider in Europe “for their STOXX indices.
/jlne.ws/2Lnbw8j

Winners unveiled in SGX Orb Awards recognising best of financial news and content
SGX
Judging by independent panel comprising senior executives from Deloitte, Google News Lab, Nasdaq and an international broadcasting industry veteran; Awards broaden SGX’s efforts to enhance financial education for investors and acknowledge content contributors
Singapore Exchange (SGX) has announced the winners in its inaugural SGX Orb Awards, recognising excellence in financial journalism and content in an evolving media landscape. Following the theme of “Connecting Perspectives and Inspiring Conversations,” the awards are an extension of SGX’s efforts to enhance financial education and empower investors.
/jlne.ws/2LrG0pC

MOEX Commits To FX Global Code
MondoVisione
Moscow Exchange (MOEX: MOEX) announces it has signed a statement of commitment to the FX Global Code, pledging to support robust, fair, liquid, open and transparent foreign exchange markets.
/jlne.ws/2LncCAX

Fintech

IHS Markit Brings Bond Pricing Data to Municipal Securities Rulemaking Board’s Market Transparency Platform
IHS Markit
IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced that its benchmark yield curve for AAA-rated municipal bonds is now available to investors through the Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access (EMMA) platform.
/jlne.ws/2LAhuzP

Maven Wave Harnesses Google’s Machine Learning and Cloud Technologies to Optimize Digital Marketing Analytics and Execution
Maven Wave
Maven Wave, a technology consulting firm and Google Cloud Premier Partner that enables digital transformation for enterprises, announces its new solution that harnesses Google’s sophisticated analytics and cloud services to optimize and automate customers’ digital marketing strategies. Through a comprehensive three-phase approach, Maven Wave builds integrated warehouses of marketing data, delivers insights using machine learning tools, and automates historically manual digital marketing practices to help customers get the most out of their marketing budgets.
/jlne.ws/2LpHYqx

State Street to buy Charles River for $2.6 billion; Custodian announces deal to acquire investment management front office service provider Charles River Development in a landmark $2.6 billion deal.
Jon Watkins – The Trade
Boston-based custodian bank State Street is set to acquire buy-side front office services provider Charles River Development in a landmark $2.6 billion deal.
/jlne.ws/2LsnvBB

NICE Actimize Voted “Best Anti-Money Laundering Compliance Solution Provider” for Fifth Consecutive Year in 2018 Waters Magazine Rankings
NICE Actimize
NICE Actimize is recognized for its new Suspicious Activity Monitoring solution which reduces investigation time for a single alert by up to 70 percent
/jlne.ws/2LmvJe

Cryptocurrencies

Derivatives veteran and market makers combine to launch cryptocurrency reference rates; Bitcoin and Ether reference rates and indices launched by cryptocurrency liquidity providers and trueDigital Holdings.
Jon Watkins – The Trade
A new set of Bitcoin and Ether reference rates and indices have been launched by trueDigital and 10 market makers including Genesis Global Trading, Circle and Hehmeyer.
/jlne.ws/2LoD3X3

Surrey Police get budget boost after £1.25m bitcoin seizure
Caroline Binham – Financial Times
Surrey Police has become the first UK force to seize and convert bitcoin as part of a criminal probe, netting £1.25m worth of the cryptocurrency, some of which will pay for financial investigators at a time of reduced budgets.
Kingston crown court on Thursday ruled that Seregjs Teresko, a convicted Latvian money-launderer with ties to organised crime, must forfeit £1.45m of his ill-gotten gains, including bitcoin.
/on.ft.com/2LxxPVV

Fed chief casts doubt on benefits, safety of cryptocurrencies
Sylvan Lane – The Hill
Federal Reserve Chairman Jerome Powell on Wednesday expressed doubts about the usefulness of cryptocurrency for anything other than obscuring illegal activity.
/jlne.ws/2LsgLnh

The Dark Side of Cryptocurrencies Highlighted yet Again at House Hearing
Viraj Shah – [blokt]
US senators are not convinced that cryptocurrencies could be used for positive purposes. During a House Financial Services Committee hearing titled ‘The Future of Money: Digital Currency,’ four witnesses spoke before the house to highlight the state of cryptocurrency. Proponents suggested that cryptos being used for illegal activities is not enough to criminalize their use. However, there was harsh criticism of digital currencies and the demand for an outright ban was discussed.
bit.ly/2LvrzRs

Hong Kong’s Blockchain Trade Finance Platform to Go Live By September
Wolfie Zhao – Coindesk
The Hong Kong Monetary Authority (HKMA), the autonomous Chinese territory’s de facto central bank, is poised to launch a live blockchain trade finance platform within two months.
/jlne.ws/2Lmzel3

LabCFTC head warns against haste in cryptocurrency rules
SmartBrief
Daniel Gorfine, director of the Commodity Futures Trading Commission’s fintech initiative LabCFTC, told a US House Committee on Agriculture hearing there should not be “hasty regulatory pronouncements” on cryptocurrencies and digital assets. Gorfine said regulators “need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation.”
/jlne.ws/2LrzxLm

SEC Will Go Against Companies Using ‘Blockchain’ On Their Names To Boost Prices
Jose Antonio Lanz – EthereumWorldNews
United States Securities and Exchange Commission (SEC) is taking the hype of blockchain technologies more seriously by standing against companies using misleading names to promote an artificial increase of their stocks value.
/jlne.ws/2LoLEsM

Cryptocurrencies – An Overview of the Legal Landscape, The Risks of Investing, and the Future of the Markets – Part 1
Trace Schmeltz – Barnes & Thornburg
In this two-part blog series, I will be giving an overview of the legal landscape of cryptocurrencies, touch on the biggest risks for those who want to trade cryptocurrency, as well as a look into what the future of this market looks like.
/jlne.ws/2Lkqmg3

Why Litecoin’s Creator Is Buying Into a Bank (And How It Could Go Wrong)
Leigh Cuen – Coindesk
One of the most unusual and potentially transformative deals in the cryptocurrency space started as an argument on social media.
/jlne.ws/2Lt8sHK

‘Blockchain Island’ to host regulated trading of tokenised securities on new exchange; Malta Stock Exchange partners with digital asset trading venue OKEx to launch tokenised securities trading venue with support from government.
Jon Watkins – The Trade
The Malta Stock Exchange has partnered with digital asset trading venue OKEx to launch a new regulated tokenised securities venue in 2019.
/jlne.ws/2LsgiBB

Surrey Police get budget boost after £1.25m bitcoin seizure; Court ruling on money-laundering assets aids force’s stretched finances
Caroline Binham in London – FT
Surrey Police has become the first UK force to seize and convert bitcoin as part of a criminal probe, netting £1.25m worth of the cryptocurrency, some of which will pay for financial investigators at a time of reduced budgets.
/jlne.ws/2LmDTn8

Politics

White House invites Putin to Washington for fall meeting
Zeke Miller, Ken Thomas and Lisa Mascaro – The Associated Press
Unbowed by criticism over his Helsinki summit, President Donald Trump extended an invitation to Russian President Vladimir Putin to meet in Washington in the fall, the White House said Thursday.
/goo.gl/NpaFHE

Trump Blasts Powell’s Rate Hikes, Trespassing on Fed’s Independence
Christopher Condon and Craig Torres – Bloomberg
President Donald Trump criticized the Federal Reserve’s interest-rate increases, breaking with more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the U.S. central bank.
“I’m not thrilled” the Fed is raising borrowing costs and potentially slowing the economy, he said in an interview with CNBC broadcast Thursday. “I don’t like all of this work that we’re putting into the economy and then I see rates going up.”
/goo.gl/nAUj7R

With Blankfein’s exit, Goldman Sachs loses major DC influence
John Crudele – NY Post
I’d like to wish Goldman Sachs’ Lloyd Blankfein a happy retirement. God and I both appreciate ó and understand ó what he really did.
/jlne.ws/2Lkr1hx

U.S. Says It Will Alert Public to Foreign Influence Operations
Chris Strohm – Bloomberg
Rod Rosenstein says ‘information warfare’ threatens U.S.; Deputy attorney general speaks as new report is published
The U.S. Justice Department is considering ways to alert the public to foreign efforts to influence Americans and U.S. elections as the threat from adversaries such as Russia “continues to grow,” Deputy Attorney General Rod Rosenstein said.
/jlne.ws/2Lsk3ab

Trump Is Being Manipulated by Putin. What Should We Do?; Lawmakers must keep the American people informed of the current danger, writes a Republican congressman from Texas.
Will Hurd – NY Times
Over the course of my career as an undercover officer in the C.I.A., I saw Russian intelligence manipulate many people. I never thought I would see the day when an American president would be one of them.
/jlne.ws/2LsjxsL

***Mr. Hurd, a former C.I.A. officer, is a congressman from the 23rd District of Texas.

Trump’s CFPB nominee suggests she would support action against Equifax
Steve Goldstein – Marketwatch
Kathleen Kraninger spent most of her confirmation hearing to be director of the Consumer Financial Protection Bureau on Thursday ducking questions about her involvement in Trump administration policies such as the zero-tolerance immigration enforcement and Puerto Rico rebuilding efforts.
But one thing she made clear was that she supported the agency’s taking enforcement action against Equifax, the credit-rating agency that didn’t prevent hackers from stealing information on 143 million Americans.
/goo.gl/GRkjFv

Regulation

Federal Court In District Of Columbia Orders “Prediction Market” Companies To Pay $3 Million Civil Monetary Penalty For Illegally Trading Binary Options And Violating A 2005 CFTC Cease And Desist Order
Mondovisione
The Commodity Futures Trading Commission (CFTC) today announced that on July 5, 2018, Senior Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia issued an Opinion and Order (Order) against Defendants Intrade The Prediction Market Limited (Intrade) and Trade Exchange Network Limited (TEN), Irish companies based in Dublin, Ireland, requiring them to pay, jointly and severally, a $3 million civil monetary penalty for violations of the Commodity Exchange Act (CEA) and CFTC Regulations.
/goo.gl/qFjzAu

Payment and lending fintechs gearing up for OCC’s “fintech charter” decision
Jinman Li – MarketWatch
When Manu Smadja and his partner founded financial technology startup Mpower Financing in 2014, the online lender was only licensed to operate in Washington, D.C., New York and Massachusetts. Like many other nonbank loan originators that aspire to expand their businesses, Mpower wanted to expand but was stymied by the need to apply for licenses in each state in their expansion plan.
/jlne.ws/2Loxjwx

Fed’s banking supervisor backs new interest rate benchmark; Fed Governor Randal Quarles endorsed an alternative to the London Interbank Offered Rate, a guide banks have long used for what to charge each other for overnight lending.
Jeff Cox – CNBC
The Federal Reserve’s banking supervisor gave his backing Thursday to a new interest rate benchmark for institutions to use when lending to each other.
/jlne.ws/2Lp3agG

CFTC Chairman Giancarlo to Testify before the House Committee on Agriculture
CFTC
/jlne.ws/2LxBnY6

Concerns raised about ‘too big to fail’ KPMG; Regulators, competitors and clients have posed hard questions about firm’s strength
Madison Marriage, Caroline Binham and Martin Arnold – FT
When Arthur Andersen collapsed after becoming entangled in the Enron scandal in 2002, the US accounting firm was written off by many in the audit profession as an outlier.
/jlne.ws/2LowN1v

HSBC fined $1.2 million for failures in bond sale; HSBC failed to assess risk of individual bonds before recommending them to clients in Asia.
Hayley McDowell – The Trade
HSBC’s securities broking business in Asia has been fined a total of $1.2 million (HK$9.6 million) for failing to carry out proper due diligence on bonds it recommended and sold to clients.
/jlne.ws/2LsgQaD

Bank of England probed risks to KPMG’s viability after string of scandals; Regulator sought assurances in wake of firm’s role in South Africa and at Carillion
Madison Marriage and Patrick Jenkins – FT
The Bank of England has probed the strength of KPMG’s business after a string of high-profile corporate scandals damaged the reputation of the Big Four accounting firm.
/jlne.ws/2Lqssuz

ESMA Launches Dedicated Template for Systematic Internalisers Calculations Ahead of August 1 Publication
ESMA
The European Securities and Markets Authority (ESMA) has today provided access to the template which will be used to publish the first set of figures necessary for investment firms to assess whether they are systematic internalisers in specific financial instruments on August 1.
/jlne.ws/2Lw5tyA

Lend to Friends and Family – But Only if You Follow These 3 Tips
Pete Chandler – FINRA
There’s a maxim associated with risky investments (think penny stocks) that goes like this: Don’t invest money you can’t afford to lose. The same holds true with lending money to friends and family, but with an added caution. A “friendly” loan can be a good way to lose moneyóand tarnish a good relationship with the borrower.
/jlne.ws/2LsfoF4

Podcast: CFTC Talks EP052: MARK YALLOP FMSB Part One
CFTC
This week on CFTC Talks, we speak with Mark Yallop, chair of the Fixed Income, Currencies and Commodities Markets Standards Board. We cover the enormous cost to the world financial system of bad behavior…
/jlne.ws/2LqtPcH

Bank of England, FCA, PRA and PSR conduct review of Memorandum of Understanding in relation to payment systems in the UK
UK FCA
The Bank of England (BoE), the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Payment Systems Regulator (PSR) have a Memorandum of Understanding (MoU) that sets out the high-level framework the Authorities use to cooperate with one another, in relation to payment systems in the UK. The Financial Services (Banking Reform Act) 2013 requires the Authorities to review this MoU annually. The Authorities committed that this review would include feedback from regulated entities, and that a summary of the review’s findings would be published. 2018 saw the third such review.
/jlne.ws/2LkwHrR

Investing and Trading

Emerging market volatility fuelling currency trading boom
Tommy Wilkes – Reuters
Emerging market foreign exchange trading is growing at a double-digit clip this year, as economic and political worries stoke volatility and sell-offs in currencies such as the Chinese yuan, Turkish lira and Mexican peso, industry data shows.
/reut.rs/2O2BEE7

Analysis: 10 years after global financial meltdown, big banks still play with fire
James Royal, Ph.D. – NerdWallet
It’s been a decade since the global financial crisis rocked the world. In the years since 2008, the U.S. and other countries mended their broken economies, assessing what went wrong and trying to curb the abuses that could lead to another crisis. But today many factors that contributed to the implosion still pose a threat.
/jlne.ws/2LmwHr8

Firmer U.S. dollar boosts corporate interest in currency hedging
Saqib Iqbal Ahmed, Jessica DiNapoli, Caroline Valetkevitch – Reuters
U.S. multinational companies are starting to reevaluate their currency hedging strategies after a surge in the dollar in recent months, as the impact of the stronger greenback starts to show up in second-quarter corporate earnings.
/jlne.ws/2LvLsYZ

Hate ETFs? Quants Say They Found Anomaly to Profit on Their Flows
Lu Wang – Bloomberg
Shares prices seen distorted by passive flows before reversing; Deutsche Bank study shows ETF signals enhance factor returns
Stock managers sick of being steamrolled by the onslaught of passive funds may have a new weapon to wield, one that was born of the very success their enemies had in overrunning the market. According to quant strategists at Deutsche Bank, investors can beat equity benchmarks by building portfolios out of stocks that get whipped around the most when exchange-traded funds rebalance.
/bloom.bg/2O0nPWG

Opinion: Tilray’s IPO is creating a buzz, but don’t overspend on marijuana stocks
Nigam Arora – MarketWatch
Money is to be made in marijuana stocks in the long run. But the recent buzz may be overdone.
/jlne.ws/2LseSqH

Wall Street’s $6.3 trillion man is worried about a trade war
Paul R. La Monica – CNN
The CEO of the world’s largest money management firm said Wall Street is getting increasingly nervous about a trade war.
/jlne.ws/2LvliFo

US Treasuries market volatility gauge falls to new low
Joe Rennison – FT
A widely-watched measure of volatility in Treasury markets has fallen to a new low for the year, despite broader consternation over trade disputes and warning signals in the bond market that the US may be headed toward recession.
/jlne.ws/2LvFRSt

West Monroe Partners Appoints Zach Jones as Chief Financial Officer; Jones succeeds Holly Kay, who has built and led Finance and Shared Services functions to support the firm’s 35% CAGR
West Monroe Partners
West Monroe Partners, a national business and technology consultancy, today announced that it has appointed Zach Jones to chief financial officer, effective August 1, 2018. Jones, currently the director of finance, succeeds Holly Kay, who has served as the firm’s CFO since 2006.
/jlne.ws/2LpHjFJ

US income inequality continues to grow; In 2015, the top 1 percent of families in the United States made more than 25 times what families in the bottom 99 percent did, according to a paper from the Economic Policy Institute.
Carmen Reinicke – CNBC
The rich are getting richer and the poor are getting poorer, at least in the United States.
/jlne.ws/2LkosMr

Thieves Jump on Cobalt Craze With $10 Million Warehouse Heist
Mark Burton – Bloomberg
Trade group says 112 tons of cobalt was stolen in Rotterdam; A three-fold jump in cobalt prices is starting to lure crooks
It’s not just hedge funds that have noticed the cobalt boom — thieves have too.
/jlne.ws/2LslGof

Big hedge fund bet on NXP hit by trade war; Chip deal that appeared to offer easy winnings caught in US-China tensions
Arash Massoudi, Eric Platt and Lindsay Fortado – FT
Some of the world’s biggest hedge funds are learning the hard way that there is no such thing as a slam-dunk trade.
/jlne.ws/2Low6W0

Institutions

Pritzkers Raise $1.8 Billion From Wealthy Families for Fund
Simone Foxman – Bloomberg
PPC Partners’ fund will target packaging, health-care firms; Tony Pritzker says ‘We’re very different from private equity’
Just because you raise a buyout fund doesn’t mean you’re a private equity manager.
/jlne.ws/2LsaPuv

BofA loses analysts in London as Mifid rules bite; Many junior staff are departing to take in-house roles at asset managers
Hannah Murphy – FT
Bank of America Merrill Lynch has lost dozens of analysts from its London office this year with many departing to join asset managers, as Europe’s Mifid markets rules begin to squeeze investment bank research departments.
/jlne.ws/2LoyHPH

Goldman’s 1MDB Role Is the Subject of Banker’s Plea Talks
Greg Farrell and Sridhar Natarajan – Bloomberg
Leissner, ex-Southeast Asia chief, discussing U.S. cooperation; U.S. questioning whether bank should have flagged bond deals
U.S. prosecutors negotiating a possible deal with a former Goldman Sachs Group Inc. executive are pressing for information about whether the bank turned a blind eye to the plunder of a Malaysian investment fund, according to a person familiar with the matter.
/jlne.ws/2LlvW1H

Rothschild Bank Broke Money-Laundering Rules in 1MDB Case
Patrick Winters – Bloomberg
Rothschild Bank AG and one of its subsidiaries were found to have seriously breached money-laundering rules in the multi-billion-dollar 1MDB Malaysian corruption case, which has ensnared lenders around the world.
/jlne.ws/2LvMxQx

Goldman Sachs, Once Closed to Outsiders, Is on a Hiring Spree; Goldman Sachs has brought in 15 outsiders at the elite rank of partner over the past year, the biggest influx of senior executives in two decades
Liz Hoffman – WSJ
For years, Goldman Sachs GS -0.70% Group Inc. rarely hired from the outside, guarding its culture with an insularity that, to rivals, bordered on arrogance.
/jlne.ws/2Lku2yn

BNY Mellon shares drop on client losses
Diptendu Lahiri – Reuters
Bank of New York Mellon Corp’s (BK.N) second-quarter outflows more than doubled, as the world’s largest custodian bank said it lost two clients and warned that the departures would impact results in the next few quarters.
/jlne.ws/2LvqkBM

Regions

An old movie is playing in emerging markets
Financial Times
If it walks and quacks like an emerging markets balance of payments crisis, is it really an emerging markets balance of payments crisis? We are not yet there, and hopefully it will not come to one. But the patterns recently displayed by global financial markets are sufficiently redolent of capital flight from poorer countries in the past that caution is in order.
/on.ft.com/2JEN39B

The greening of the Emerald Isle: Dublin’s divestment decision
David Harris – FTSE Russell
Ireland has become the first nation state to ban its sovereign wealth vehicle, the $8 billion Ireland Strategic Investment Fund, from investing in companies with significant exposure to fossil fuels. Norway, with its $1 trillion SWF, has been considering similar moves, and others may not be far behind.
bit.ly/2JBXBGH

China central bank says cannot refuse, discriminate against cash payments
Reuters Staff
Companies or individuals cannot refuse or discriminate against cash payments, China’s central bank said on Friday, but stressed the rules won’t apply to online payments and unmanned stores.
/jlne.ws/2Lsci3Z

Putin Hedges Trump Bet by Dumping Treasuries to Safeguard Assets
Anna Andrianova, Evgenia Pismennaya and Olga Tanas – Bloomberg
Russia learned from Iran’s experience, ex-central banker says; Sell-off started the same month new sanctions were imposed
Russian officials are hoping Vladimir Putin’s rapport with Donald Trump will lead to rapprochement with the U.S. But they’re not taking any chances.
/jlne.ws/2LqYN4x

Brexit

FCA fines fall 60% as Brexit dominates watchdog’s workload; Regulator offers little explanation for the drop in fines but caseload figures jump as it seeks to crack down on financial crime
Mark Cobley – Financial News
Financial penalties imposed by the UK’s markets regulator fell by more than 60% last year ó a period the authority said was increasingly dominated by its work on Brexit.
/jlne.ws/2LpFHeZ

London’s Financial-Center Appeal Undimmed in AIM Listings
Viren Vaghela – Bloomberg
London’s allure as a global financial center remains undimmed, at least in terms of activity on the London Stock Exchange’s AIM market. Listings on the bourse for smaller companies reached $1.4 billion in the first half, the highest for such a period in four years, even as the U.K. government’s Brexit planning remained mired in uncertainty.
/jlne.ws/2LpbGME

The U.K. Stock Market Isn’t Paying Attention to Brexit Chatter
Justina Lee – Bloomberg
Almost daily, ministerial spats, intra-party broils and corporate objections to government fill U.K. newspapers. You couldn’t tell from looking at the stock market.
/jlne.ws/2Lsn5ez

Miscellaneous

Amazon Prime Day crash: internal docs reveal scramble to fix
Eugene Kim – CNBC
Amazon failed to secure enough servers to handle the traffic surge on Prime Day, causing it to launch a scaled-down backup front page and temporarily kill off all international traffic, according to internal Amazon documents obtained by CNBC.
/cnb.cx/2O3TXZA

Sinclair’s ‘misrepresentation’ in WGN sale to connected auto dealer derailed Tribune Media acquisition, FCC says
Robert Channick – Chicago Tribune
AFederal Communications Commission order Thursday said Sinclair Broadcast Group’s “misrepresentation or lack of candor” in its since-withdrawn agreement to sell WGN-TV to a Maryland auto dealer was a major factor in derailing the proposed $3.9 billion acquisition of Tribune Media.
/jlne.ws/2Loy0WB

The post Texas Heat Record; Wall St. Unprepared for Libor’s Absence; Trump’s Trade Tweets appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

MarketsWiki Education World of Opportunity in Chicago is just a week away. There is still room to sign up students and interns for the series. For that matter, anyone is welcome who is interested. See www.marketswikieducation.com for details.~JJL

For the first time in 11 years, I did not head north with my Boy Scout Troop for summer camp. However, I am going to make a day trip on Tuesday just to check on them.~JJL

BarclayHedge reported that hedge funds took in $4 billion in May and assets remained at an all-time high of $3 trillion. Managed futures took in $530 million in May, the firm said.~JK

‘Hi, I’m a soybean’: In trade war, China deploys cartoon legume to reach U.S. farmers. ~JB

What’s in an index? How about market makers. The trueDigital Bitcoin and Ether reference rates and indices are based on bid and offer pricing from Hehmeyer, Genesis Global Trading, XBTO Group, Circle, DV Chain and Altonomy.~JK

From the Wall Street Journal’s piece today on the CME Group ags, open interest on its ag contracts hit a record 10 million contracts in June.~JK

++++

Fraud v. Fraud-Based Manipulation; Litigation Holds; Gifts and Entertainment; ATSs; Customer Funds Investments
Gary DeWaal – Bridging the Week
A federal court in Brooklyn, New York, rejected a defendant’s request to reconsider an earlier denial of his motion to dismiss an enforcement action against him by the Commodity Futures Trading Commission for fraud in connection with his alleged provision of virtual currency trading advice and discretionary trading of virtual currencies. The defendant had claimed that a subsequent decision in a California federal court related to a metals dealer supported the proposition that the CFTC has no authority to bring an anti-fraud case in connection with transactions involving commodities that are not derivatives, unless the CFTC alleges that a fraud-based market manipulation has occurred. Separately, the Securities and Exchange Commission sanctioned a broker-dealer for inadvertently deleting audio records of telephone conversations of eight salespersons subject to an SEC request, as well as for not properly documenting and maintaining records of some employees’ gifts and expenses.
bit.ly/2LB5i4K

++++

The Future of the U.S. Looks a Lot Like Chicago; How can Sun Belt cities learn from what Chicago got right and wrong?
Conor Sen – Bloomberg
Of all America’s major cities, Chicago may be unique. The rest of the nation — particularly newer, faster-growing cities — should pay close attention to its evolution, because the future of America looks a lot like Chicago.
/jlne.ws/2LtCtY6

***** The future looks deep dish and gooey?~JJL

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Deadly Japan Heat Wave Continues as Temperatures Reach Highest Ever
Eli Meixler – Time
A deadly heat wave blistering across Japan has claimed more than 40 lives this month, with little relief in sight as record temperatures are expected to persist until later this week.
/jlne.ws/2Ls43VA

***** Stay cool my friends!~JJL

++++

Friday’s Top Three
The common thread on Friday was about busting things. The New York Times’ piece about Libor, The Most Important Number in Finance Is Going Away was the top read piece. The second most read piece of the day was from DTCC’s Murray Pozmanter on reduced settlement times in Regulation Asia’s A Different Approach to Accelerating Settlement and Reducing Risk, busting up the T+2 settlement times. Third was about two guys named Edward Bases and John Pacilio who got busted by the US Department of Justice, in Two Connecticut Men Charged For Deceptive Trading Practices Executed On U.S. Commodities Markets

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MarketsWiki Stats
129,905,379 pages viewed; 23,206 pages; 214,315 edits
MarketsWiki Statistics

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Lead Stories

Chicago’s CME Strains to Reflect Global Grain Trade
Benjamin Parkin – WSJ
Tariffs add to forces changing wheat and soybean flows, threatening to leave futures pioneer behind. The world’s largest exchange company is struggling to keep up with tariffs and a surge in global crop production that is reshaping agricultural trading.
/on.wsj.com/2OcpZT1

Are we sliding back to the chaos of the 1930s?
Tim Lister – CNN
US President Donald Trump swept through Europe like a hurricane. He asked why his country was obliged to defend its allies, carped about “unfair” trade practices, blasted the UK and Germany as weak on migration and suggested President Vladimir Putin was as credible as America’s own intelligence agencies when it came to Russian hacking.
/jlne.ws/2LyhrHI

Currency War Erupts, Threatening to Ripple Across Global Markets
Katherine Greifeld – Bloomberg
Trade fight spreads to FX as president talks down dollar; Equities, oil, and emerging-market assets at risk from FX war
The currency war has arrived. So say some of the best and brightest in the $5.1 trillion-per-day foreign-exchange market. U.S. President Donald Trump on Friday accused China and the European Union of “manipulating their currencies and interest rates lower.” The comments came after the yuan plunged to its lowest level in a year, with little sign of China’s central bank intervening to stem the slide. They also follow a decline in the euro this year and add to the calculus that European Central Bank policy makers might need to consider when they meet next week.
/jlne.ws/2LtuRon

Decade After Crisis, a $600 Trillion Market Remains Murky to Regulators
Emily Flitter- NY Times
In the maze of subsidiaries that make up Goldman Sachs Group, two in London have nearly identical names: Goldman Sachs International and Goldman Sachs International Bank. Both trade financial instruments known as derivatives with hedge funds, insurers, governments and other clients.
/jlne.ws/2LsACTf

Trump Opens a Dangerous New Trade-War Front; Competitive currency devaluation probably won’t end well.
Mark Gongloff – Bloomberg
President Donald Trump hasn’t quite won the trade wars yet. Just a week ago, some were arguing his tariffs, and threats thereof, had already made China blink, suggesting the war was over before it had really begun. It turns out China wasn’t so much blinking as napping – not even bothering to negotiate with the U.S., according to Trump adviser Larry Kudlow. So Trump has cranked the rhetoric up to 11, threatening to slap tariffs on all $500 billion-plus of Chinese imports and hinting at a new weapon: devaluing the dollar to boost American exports.
/jlne.ws/2Lr9R1J

Climate Change Is Disrupting the Planet’s Seasons; Four decades of temperature observations show what many suspected: Human activity is disrupting the behavior of plants, animals, and the march of the seasons.
Eric Roston – Bloomberg
Poring over four decades of satellite data, climate scientists have concluded for the first time that humans are pushing seasonal temperatures out of balance—shifting what one researcher called the very “march of the seasons themselves.” Ever-mindful of calculable uncertainty and climate deniers, the authors give “odds of roughly 5 in 1 million” of these changes occurring naturally, without human influence.
/jlne.ws/2LCcaPG

Trade Tensions Threaten Global Economic Growth, G-20 Cautions
Patrick Gillespie, Paul Jackson, and Jorgelina Do Rosario – Bloomberg
Global economy is less synchronized than it was in March; Pledge to refrain from currency devaluation removed from text
Trade tensions threaten global growth as the engines of leading economies fall out of sync, the world’s top finance chiefs warned on Sunday.
/jlne.ws/2LvxHcp

JPMorgan is thriving under Dimon a decade after financial crisis
Jonathon Trugman – NY Post
In an interesting twist of fate, Lloyd Blankfein’s departure from Goldman Sachs, announced last week, leaves JPMorgan’s Jamie Dimon as the lone survivor from the financial crisis. (Blankfein will officially retire Sept. 30.)
/jlne.ws/2LqgLV1

Tread Warily Into China’s Massive Bond Market; Foreign interest is rising fast, even as defaults and yields head upward
Andrew Peaple – WSJ
Chinese domestic bonds may once have been the world’s biggest market that no one paid attention to. No longer. Mounting defaults and steepening yields have raised doubts about the $12 trillion market’s health, just as China’s economy shows signs of faltering. All the same, foreign investors have been piling in this year. Are they headed for a rude awakening?
/jlne.ws/2LxgbVa

BOJ Policy Change Speculation Roils Markets
Masaki Kondo and Chikafumi Hodo – Blomberg
Central bank’s offer to buy unlimited bonds drew no sellers; Yield curve bear-steepens before 40-year debt sale on Tuesday
A dramatic day for Japan’s debt market saw yields surge on media reports of possible changes to the nation’s ultra-loose monetary policy, spurring the central bank to offer to buy an unlimited amount of bonds.
/jlne.ws/2LC8mxS

Stock-pickers to manage less than 30% of assets by 2022; Fund managers should use the proceeds of a bumper 2017 to retool for the future, management consultancy BCG advises
Mark Cobley – Financial News
Traditional stock-picking equity and bond managers will account for less than a third of the global asset management industry within five years, according to Boston Consulting Group.
/jlne.ws/2LB6Zz8

KPMG appoints risk management chief after accounting scandals; Mary O’Connor hired by auditor for new position
Hannah Murphy – FT
KPMG has created a new position to oversee both its risk and legal operations in the UK, as the Big Four auditor grapples with a string of damaging accounting scandals and recent scrutiny from regulators over its resilience.
/jlne.ws/2LudkfW

Activism in banking is tougher than on the fringes of finance; A bank break-up has proved impossible due to concerns about financial stability
Patrick Jenkins – FT
Europe’s financial services companies, particularly the region’s banks, have long seemed ripe for intervention by activist investors.
/jlne.ws/2LqkKAX

AngloGold poaches new CEO from rival Barrick Gold
Neil Hume – FT
AngloGold Ashanti has moved to fill the hole left by the departure of its chief executive by poaching a senior director from rival Barrick Gold.
/jlne.ws/2JJ8I0x

Exchanges, OTC and Clearing

Maker-taker irony as NYSE and Nasdaq challenge SEC; Regulator’s scrutiny of fee structure highlights need for greater transparency
Norma Cohen – FT
The New York Stock Exchange and Nasdaq, two of the world’s largest stock exchanges, are pitched against some of their biggest customers in a row with national regulators over the assessment of trading fees.
/jlne.ws/2LynFHA

CODA Markets Releases Second Quarter 2018 metrics for CODA Block
CODA
Markets, operator of on-demand auction markets for U.S. equities, today announced Second Quarter 2018 metrics for CODA Block, the 30-second on-demand equity auction facility. Launched in February 2017, CODA Block helps institutional investors discover and aggregate natural liquidity, reduce information leakage and minimize market impact.
Among the highlights of CODA Block’s Second Quarter 2018 metrics:460,000,000 – shares initiated over 27K auctions.2,829 – successful auctions, or 10.2 % hit rate for initiating orders. 16,900 shares – average auction initiation size. 6,900+ – average trade size. 33% – daily unique symbol hit rate.0.76bps – NBBO average mid-move at 30 seconds post-auction.

China’s investor curb raises concerns on HKEX listings; Restriction has wide ramifications for foreign companies, including Saudi Aramco
Emma Dunkley in Hong Kong – FT
When luxury Italian fashion brand Prada listed on the Hong Kong stock exchange in 2011, it was among a number of foreign consumer companies seeking to take advantage of the increasingly affluent population in mainland China while appealing to the local investor base.
/jlne.ws/2LsFAPT

The NYSE holds a troubling monopoly on trade data
J.W. Verret – TheHill
In recent years and across a multitude of policy areas, Washington policymakers are asking questions about who owns the data you provide through online apps or via payment methods. The simplest and arguably best solution so far has been to leave the question to the terms of the contract. If a user freely contracts to allow their data to be sold in exchange for, say, a free email service, then the terms are fairly negotiated.
bit.ly/2LBOjj7

First mover advantage; The Australian Securities Exchange (ASX) has been the first adopter of blockchain technology for its equity post-trade infrastructure. Will this move resonate with other clearing houses, and is this the time to embrace blockchain?
By Sarfraz Thind – The Trade
Blockchain had its first major foray into the clearing and settlement process with the announcement last December that the Australian Securities Exchange (ASX) will replace its legacy CHESS equity clearing platform with distributed ledger technology (DLT) developed by Digital Asset. Full deployment is set to go live by 2021 but participants are already taking note.
/jlne.ws/2uYSScP

Round-up: our Equity segment in Q2
Eurex
We at Eurex offer roughly 750 equity options and 800 single stock futures from more than ten countries. Below you will find the latest news on our Equity segment in Q2.
/jlne.ws/2uYgJJw

LCH Ltd commits to FX Global Code and UK Money Markets Code
LCH
LCH Ltd (LCH), a leading global clearing house, today confirmed its commitment to the FX Global Code and the UK Money Markets Code. The FX Global Code is a set of global principles of good practice in the foreign exchange market, and the UK Money Markets Code sets out the standards and best practice expected from participants in the deposit, repo and securities lending markets in the United Kingdom.
/jlne.ws/2JNbzFT

SGX enables listing at earlier development stage for MOG companies
SGX
Singapore Exchange (SGX) is amending the Mainboard and Catalist Listing Rules for mineral, oil and gas (MOG) companies to reflect how the sector categorises companies based on each firm’s stage of development.
/jlne.ws/2uVGVV5

BSE, NSE put detailed framework in place for enhanced monitoring of cos
BS India
Leading stock exchanges BSE and NSE have put in place a detailed framework for shortlisting and reviewing of securities under graded surveillance measures (GSM), wherein investors need to be extra cautious while dealing in such stocks. These additional guidelines have been made after a joint surveillance meeting of markets regulator Sebi with exchanges last week, the bourses said in separate circulars. Under the new criteria, securities having a networth of less than or equal to Rs 10 crore and net fixed assets of less than or equal to Rs 25 crore are eligible for inclusion under the GSM framework.
/jlne.ws/2JScBQY

MiFID II – Six Months On – SIX Trader Survey
MondoVisione
It is just over six months since the implementation of MiFID II and the findings from the SIX trader survey, conducted in April this year, make for interesting reading.
/jlne.ws/2JNYc82

Fintech

Private messaging apps increasingly used for public business
Ryan J. Foley – AP
One app promotes itself as a way to discuss sensitive negotiations and human resources problems without leaving a digital record. Another boasts that disappearing messages “keep your message history tidy.” And a popular email service recently launched a “confidential mode” allowing the content of messages to disappear after a set time.
/jlne.ws/2LB3kBo

Barclays signs up artificial intelligence to aid bankers; Deal with simulation firm gives UK lender advanced modelling skills
Laura Noonan in Dublin Y- FT
Artificial intelligence could soon be powering a new way of making decisions across Barclays’ trading, lending and risk management divisions after the UK bank became the flagship customer of AI simulation firm Simudyne Technology.
/jlne.ws/2Lym6JI

State Street to build out Charles River team following acquisition; State Street will make additional hires to the Charles River team and will invest in its technology and software.
Jon Watkins – The Trade
State Street has outlined plans to build on Charles River’s team with new additions following the announcement of its $2.6 billion acquisition of the front-office services provider.
/jlne.ws/2JOLcz5

Credit Suisse invests in buy-side software startup; Assetmax gains investment from Credit Suisse’s SME FinTech investment arm SVC Ltd.
Hayley McDowell – The Trade
Credit Suisse has participated in a funding round for a Zurich-based software platform provider for asset managers though its investment vehicle, SVC Ltd.
/jlne.ws/2uYtHH4

Blackstone Wins EU Approval To Buy Thomson Reuters Financial And Risk Unit
MondoVisione
The European Commission has given antitrust approval for U.S. private equity firm Blackstone Group to acquire a majority stake in Thomson Reuters’ Financial and Risk unit.
/jlne.ws/2JSdx7W

Cryptocurrencies

trueDigital Launches Bitcoin and Ether Reference Rates and Indices; Provides the transparency and confidence needed to enable institutional-grade derivative products
trueDigital Holdings
trueDigital Holdings (“TDH”), a leading developer of institutional-grade digital asset trading solutions, has partnered with 10 liquidity providers and contributors including Genesis Global Trading, XBTO Group, Circle, DV Chain, Hehmeyer and Altonomy to create the first market maker based Bitcoin and Ether pricing indices. The launch of the trueDigital Bitcoin and Ether reference rates sets a new standard for the digital asset market and allays common concerns about the robustness and lack of transparency inherent in retail exchange-based bitcoin pricing composites.
/jlne.ws/2LB5iBM

Japanese Minister Denies Association with Cryptocurrency Firm Under Investigation
CCN – Japan
Seiko Noda, Japan’s internal affairs minister, denied having an interest in a cryptocurrency company under investigation and interfering in that investigation, according to a report in Asahi Shimbun. As a Cabinet minister, Noda could be accused of trying to influence a government investigation.
/jlne.ws/2Ls8pMq

EU Issues Worrying Warning Over Future Of Bitcoin
Billy Bambrough – Forbes
Despite bitcoin’s latest price rally, the world’s largest cryptocurrency is still struggling to reach mainstream adoption, and now the European Union (EU) has warned bitcoin and other decentralised cryptocurrencies could be derailed by the world’s central banks.
/jlne.ws/2Lu6l6I

Blockchain: India Likely To See Brain Drain As 80% Developers May Move Abroad
Meha Agarwal – Inc42.com
Blockchain: India Likely To See Brain Drain As 80% Developers May Move Abroad
More than 80% of the blockchain developers in India may move abroad in search of better opportunities due to lack of “robust regulatory framework” in the country on blockchain technology.
/jlne.ws/2Ls6mIe

India’s cryptocurrency exchanges face another 50 days of uncertainty
Nupur Anand – Quartz
The wait continues for Indian cryptocurrency exchanges.
On July 20, after a short hearing, India’s supreme court set Sept. 11 as the date for the next hearing—and the pronouncement of a verdict—in the cases filed by the bourses against the Reserve Bank of India (RBI).
bit.ly/2Lyqdp8

The reality of what asset managers are really doing about cryptocurrencies; The exploration of cryptocurrencies from asset managers should not always be taken as a sign of intent, more just what you’d expect from the biggest players in the financial markets.
Jon Watkins – The Trade
In what may seem like conflicting stances, some of the world’s largest traditional asset managers are exploring cryptocurrencies, while at the same time seeing little demand from clients, according to multiple industry experts. This exploration is not always a sign of intent however, more just what you would expect from some of the biggest financial institutions on the planet – essentially just having their finger on the pulse.
/jlne.ws/2JNVQpI

Broker to world’s biggest banks explores crypto trading; TP Icap working group was set up under recently-ousted CEO John Phizackerley
By Samuel Agini – Financial New
TP Icap, one of the largest brokers sitting between banks in the global financial markets, has set up a working group to examine how it should approach cryptocurrencies.
/jlne.ws/2JRfQb4

Aite Reports Crypto Trading Will Hit and Breach $1Tr in 2018
John D’Antona Jr. – Traders Magazine Online News
Aite Group, in its latest report, “The Cryptocurrencies Market Landscape: A New Frontier,” wrote that forecasts the total trading value of cryptocurrencies to be just over US$1 trillion in 2018.
Bitcoin has failed to gain much attention and adoption for its original purpose, which is to serve as a digital cash payment system replacing the fiat currency payment system. But both trading volume and market cap of bitcoin have grown dramatically over the past few years and have led to an entirely new market of tradable instruments, which are collectively known as cryptocurrencies. With rapid price appreciation and an increase in total market cap, cryptocurrencies have quickly emerged into a new asset class that nobody can afford to ignore.
/goo.gl/nX7jA1

Politics

Trump threatens tariffs on all $500 billion of Chinese imports
Lisa Lambert – Reuters
U.S. President Donald Trump on Friday said he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.
/jlne.ws/2LrHWPf

Trump and the U.S. dollar: Actions speak louder than words
Saqib Iqbal Ahmed and James Thorne – Reuters
U.S. President Donald Trump may not be happy about the strength of the U.S. dollar, but the greenback’s recent rally may partly be a product of his own making.
/reut.rs/2O24Lat

Reagan aide: Condemn Trump’s ‘enemy of the people’ rhetoric
Mark D. Weinberg -CNN
In a rare display of bipartisan unity, Republican and Democratic senators and representatives are practically tripping over each other to get in front of television cameras to blast Russian President Vladimir Putin for attempting to undermine our democracy by seeking to tamper with the 2016 presidential campaign. They correctly claim that interference with our elections strikes at the heart of America, is something that cannot be ignored and must not be allowed to happen again.
/jlne.ws/2LtCbjY

George Soros Bet Big on Liberal Democracy. Now He Fears He Is Losing; His enemies paint him as all-powerful, but the billionaire philanthropist believes that his political legacy has never been in greater jeopardy.
Michael Steinberger – NY Times
On a clammy Tuesday morning in Paris at the end of May, George Soros, the world’s second-most-vilified New York billionaire (but worth many billions more than the other one), addressed the European Council on Foreign Relations, an organization he helped found a decade ago. Described by the woman who introduced him as a “European at heart,” the Hungarian-born Soros, who made his fortune running a hedge fund and is now a full-time philanthropist, political activist and freelance statesman, was there to share his thoughts on salvaging the European Union.
/jlne.ws/2LwjCvl

America’s creditors are fed up with Trump’s squander of US economic growth as he picks fights
William Pesek – South China Morning Post
Donald Trump is irked about many things – China’s trade policies, Russia-related investigations, critics in the media. Now, add the Federal Reserve to the US president’s fed-up list.
/jlne.ws/2LrH4tX

Trump Lines Up Fed Chairman as Fall Guy If Tax, Trade Moves Sour
Rich Miller – Bloomberg
President again criticizes Fed for raising interest rates; Treasury secretary says Trump ‘fully supports’ independent Fed
President Donald Trump looks to be lining up Federal Reserve Chairman Jerome Powell to be the fall guy if the president’s trade and tax policies don’t succeed.
/jlne.ws/2Lxkhww

The GOP has one big problem in November
Dean Obeidallah – CNN
President Trump took to Twitter on Saturday to lash out at someone. (I know, what’s new?) While Trump’s target, special counsel Robert Mueller, was familiar, Trump’s line of attack was new. The President tweeted that the Mueller investigation “seems intent on damaging the Republican Party’s chances in the November Election.”
/jlne.ws/2LwKHyB

As Trump Struggles With Helsinki’s Fallout, Congress Faces a New Charge: Complicity
Nicholas Fandos and Sheryl Gay Stolberg – NY Times
In the nearly two years since Russia attacked the American democratic process, congressional Republicans have played conflicting roles in the drama: Some have pressed to impose sanctions on Russia and quietly pursue investigations, but they have been outshouted by Republicans who have obfuscated and undercut efforts to uncover the Kremlin’s plot.
/jlne.ws/2LuudXT

Putin-Trump idea for bilateral business forum hits early trouble; Deep scepticism in Russia that plan hatched at Helsinki summit can get off the ground
Kathrin Hille and Henry Foy in Moscow – FT
An idea Vladimir Putin and Donald Trump hatched at their summit a week ago for a new dialogue forum for Russian and American business leaders already appears to be dead in the water, highlighting the difficulty of making even small steps forward in the deadlocked relationship between Moscow and Washington.
/jlne.ws/2Lwip7h

Regulation

Deutsche Bank to pay nearly $75m for mishandling ADRs, SEC says
Kadhim Shubber – FT
Deutsche Bank will pay nearly $75m to settle charges it improperly handled US securities that represent shares in overseas companies, the Securities and Exchange Commission said on Friday.
/jlne.ws/2LvzeiF

Deutsche to pay $75 million to settle ADRs abuses case, U.S. SEC says
Katanga Johnson – Reuters
The U.S. Securities and Exchange Commission said on Friday that Deutsche Bank (DBKGn.DE) (DB.N) has agreed to pay nearly $75 million to settle an investigation into the mishandling of pre-release American Depositary Receipts (ADR).
/jlne.ws/2LrbAEf

Deutsche Bank to Pay Nearly $75 Million for Improper Handling of ADRs
SEC
The Securities and Exchange Commission today announced that two U.S.-based subsidiaries of Deutsche Bank AG will pay nearly $75 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).
/jlne.ws/2uWpF24

Former executive charged with insider trading
ASIC
Former executive of Healthe Care Pty Limited Mr Gregory Campbell, of Bundall, Queensland, has been charged with three counts of insider trading. The filing hearing for Mr Campbell’s charges was listed at the Melbourne Magistrates’ Court on 20 July 2018.
/jlne.ws/2JLYoF1

ESMA fines five banks EUR2.48 million for issuing credit ratings without authorisation
ESMA
The European Securities and Markets Authority (ESMA) has today fined Danske Bank, Nordea Bank, SEB, Svenska Handelsbanken and Swedbank EUR495,000 each and issued five public notices for negligently breaching the Credit Rating Agencies Regulation (CRAR). ESMA found that the five banks infringed the CRAR by issuing credit ratings without being authorised by ESMA to do so.
/jlne.ws/2uS8PkW

CFTC Chairman J. Christopher Giancarlo Response to Bollettino
CFTC
/jlne.ws/2uXNlDk

FCA and Practitioner Panel publish findings from 2018 joint survey
UK FCA
We and the Practitioner Panel have published a report from our 2018 joint survey of FCA-regulated firms. The survey gives views across the financial services sector of our performance as a regulator.
/jlne.ws/2JLAKbP

Investing and Trading

Opinion: This Wall Street magic trick makes stocks appear cheaper than they are
Mark Hulbert – MarketWatch
Some Wall Street analysts are playing games with the S&P 500’s price/earnings ratio. These analysts are calculating the S&P 500’s SPX, -0.09% P/E ratio on the basis of what they think corporate earnings will amount to in the coming calendar year. Nowadays, that means their P/Es are based on 2019 earnings — a number that won’t actually be known for another 20 months or so.
/jlne.ws/2LB2bd4

Volatility’s Coming for Your Summer Break as Headwinds Build
Dani Burger – Bloomberg
Liquidity risk takes center stage amid August’s thin trading; Managers prepare to do work on vacation if shock materializes
A yuan slump, a correction in commodity markets, Trump broadsides against the Fed, a trade war, and fresh Italian risk. For Voya Asset Management in New York, they’re headwinds threatening to disrupt the summer break.
/jlne.ws/2LuROYo

It’s Apple vs. Amazon in the Race to $1 Trillion
Brad Stone – Bloomberg
As we head into the heat of earnings season this week, two technology giants sit at the threshold of a monumental achievement: surpassing $1 trillion in market capitalization.
/jlne.ws/2LBMz9z

Consultants’ claims and the evasion of responsibility; ‘Safety in numbers’ mindset contributes to investment herding
John Authers – FT
Few things in life are harder, but more necessary, than to take responsibility for our actions.
/jlne.ws/2LvCmLr

Prolonged Slump in Bond Liquidity Rattles Markets; Investors are finding it harder to buy and sell bonds
Riva Gold and Christopher Whittall – WSJ
Many bonds around the globe are becoming harder to trade, prompting some investors to shift to other markets and raising concerns about a broad decline in liquidity.
/jlne.ws/2JLMXNJ

Institutions

This Is What the Market Looks Like Without FANGs
Elena Popina and Lu Wang – Bloomberg
The tech megacap bloc is no help to the Nasdaq 100 right now; Averages still eke out a gain as earnings exceed estimates
Rarely does a day go by in the U.S. stock market without someone decrying its addiction to gains in the FANG bloc of tech megacaps.
/jlne.ws/2LCbzNW

Can factor investing kill off the hedge fund?; Data-driven funds that systematically exploit human weaknesses are disrupting traditional asset management
Robin Wigglesworth in New York – FT
In 2001 Clifford Asness, a cerebral but fiery-tempered hedge fund manager with a penchant for comic book memorabilia, penned a paper arguing that his industry’s skills were “overstated”. Understandably, it went down like a lead balloon.
/jlne.ws/2LxjCv2

CNNMoney exclusive: Jamie Dimon on the trade war, infrastructure ’emergency’ and Trump
Julia Horowitz – CNN Money
JPMorgan Chase CEO Jamie Dimon is worried the economy’s momentum could be derailed by President Donald Trump’s trade wars.
/jlne.ws/2Lwfqf5

Julius Baer Falls as Asset Growth Slows to Three-Year Low
Jan-Henrik Foerster – Bloomberg
Market volatility, weaker new money weigh on assets, fees; Helvea says shares look fairly valued on ‘normalized’ growth
Julius Baer Group Ltd. fell in Swiss trading as assets under management grew at the weakest pace in three years, rekindling concern that the wealth manager may not be able to sustain past growth rates.
/jlne.ws/2LreJUz

UBS Bucks Trend by Keeping $2 Million Threshold for Rich Clients
Frederik Balfour – Bloomberg
Cites example of Chinese client enriched by company listing; China head of global wealth management speaks in interview
UBS Group AG has no plans to follow other banks and raise the $2 million threshold for access to its private banking services, the Swiss bank’s China head of global wealth management said.
/jlne.ws/2LwmvfF

Questions of culture divide Goldman from Lehman Brothers; The collapsed bank failed to heed sensible advice to control its toxic elements
Andrew Hill – FT
The senior partner of a law firm asks colleagues a simple question to assess the health of the organisation’s culture: “Why do you stay?”
/jlne.ws/2LubR9q

Pimco Executive Resigns After Allegations of Inappropriate Behavior; Bill De Leon’s resignation follows an internal review into his alleged behavior at a May 2017 charity event
Justin Baer – WSJ
A senior Pacific Investment Management Co. executive resigned on Friday after facing allegations he acted inappropriately toward a colleague, people familiar with the matter said.
/jlne.ws/2JOJhdR

Regions

U.S. tariffs to cost Germans up to 20 billion euros this year: report
Reuters Staff
U.S. President Donald Trump’s tariffs will lead to a drop in prosperity in Germany this year and are likely to cost Germans up to 20 billion euros ($23.44 billion), the head of German think-tank IMK said.
/jlne.ws/2LyhJyi

The Chinese Blind Spot in U.S. Companies’ Financials; Some multinationals are partially audited by Chinese accounting firms that U.S. regulators can’t check
Michael Rapoport – WSJ
There’s a blind spot in U.S. regulators’ oversight of audit firms–and it could mean investors in companies like Walmart Inc., Pfizer Inc. and 3M Co. are vulnerable.
/jlne.ws/2Lrap7N

Imagine a World Without OPEC; The NOPEC bill would decimate the world’s energy safety net.
Julian Le – Bloomberg
Imagine a world without OPEC. This is what the sponsors of legislation introduced in both houses of Congress seem to want. Versions of the “No Oil Producing and Exporting Cartels Act,” or the NOPEC bill, are working their way through the Senate and the House of Representatives, and are likely to find much more support from the White House than they have in the past — Presidents George W. Bush and Barack Obama both threatened to veto similar legislation.
/jlne.ws/2Lv4heM

Korea GDP in Focus for Global Investors Piling Into Bond Market
David Finnerty – Bloomberg
Strong print would put BOK hike back on the table for August; Global funds have bought net $29 billon of local bonds in 2018
A lone dissenter at the Bank of Korea’s July gathering is raising the specter of a rate hike as soon as next month, adding extra weight to this week’s growth figures for international bond investors who’ve p
/jlne.ws/2LsBhUJ

Iran’s Rouhani warns Trump about ‘mother of all wars’
Reuters Staff
Iranian President Hassan Rouhani on Sunday cautioned U.S. President Donald Trump about pursuing hostile policies against Tehran, saying “war with Iran is the mother of all wars”, but did not rule out peace between the two countries.
/jlne.ws/2Lv3BGg

Bank of Korea Sees Possible Impact From China Deleveraging Plan
Heejin Kim – Bloomberg
South Korea GDP May Be 0.3 Percentage Point Less in 2018; China defaults appear to be ‘natural’ restructuring procedure
The economy of South Korea, which is very reliant on China, may see more adverse impact than previously expected from China’s plan for deleveraging, the Bank of Korea said in a report on Sunday.
/jlne.ws/2Ls7Kuq

Renminbi weakness represents a new risk for Asian currencies; For investors the latest shift suggests risk of broader market and economic stress is rising
Roger Blitz – FT
China’s weakening renminbi represents a new risk for a number of Asian currencies that had managed to escape much of the recent rout in emerging markets until now.
/jlne.ws/2LwhcNh

India Shortchanges Its Banks; Politics and fear-mongering have doomed a key reform.
Ila Patnaik – Bloomberg
India needs a strategy to get the government out of banking. Non-performing loans among state-owned banks — a legacy of India’s socialist past which account for nearly 70 percent of deposits — have crossed 5 percent of GDP. The central bank has restricted lending at 11 of them and forced one, IDBI Bank Ltd., to sell itself to the government-owned Life Insurance Corporation of India.
/jlne.ws/2Lwg8ZN

Top Japanese Official Has No Interest in Trade Deal With Just the U.S.
Connor Cislo and Emi Nobuhiro – Bloomberg
Chief Cabinet Secretary Suga says U.S should return to TPP; Suga expects Abe to stand for re-election as party chief
One of Japan’s top policy makers indicated the government will continue to resist U.S. efforts to create a bilateral free trade agreement between the two nations.
/jlne.ws/2LvHvmQ

Brexit

Brussels rejects UK’s financial services Brexit plan; Barnier dismisses white paper’s ‘enhanced equivalence’ and says EU needs autonomy
Jim Brunsden in Brussels – FT
Brussels has rejected the UK’s proposals on how to govern the City of London’s access to the European market after Brexit, saying Theresa May’s latest financial services plan would rob the EU of its “decision making autonomy”.
/jlne.ws/2LygvDc

The City of London just suffered a major defeat from the EU over plans for Brexit
Will Martin 0m – Business Insider
The European Union late last week dealt a major blow to the UK’s financial services sector in the lead up to Brexit, after negotiators rejected the plans for the sector laid out by the British government in Prime Minister Theresa May’s controversial white paper.
/jlne.ws/2Ls51RI

U.K. Says It Won’t Blink First on Brexit So EU Must Back Down
Patrick Donahue and Tim Ross – Bloomberg
British Foreign Secretary Jeremy Hunt said the U.K. will not “blink” in Brexit negotiations, as he warned the European Union it risks forcing the country to crash out of the bloc with no deal.
/jlne.ws/2LtvMFl

Amazon Warns No Deal Brexit Risks ‘Civil Unrest,’ Times Reports
Colin Keatinge – Bloomberg
Amazon.com Inc.’s U.K. head, Doug Gurr, said there could be “civil unrest” within two weeks if Britain leaves the European Union with no deal, the London-based Times reported.
/jlne.ws/2LxUVyS

US banks urge UK to cut corporate taxes to stop Brexit exodus; Wall St executives say London is losing edge against New York after Trump deregulation drive
Martin Arnold, Banking Editor – FT
US banks are calling on the British government to cut taxes and red tape that they say could lead to financial assets and jobs pouring out of the UK after Brexit.
/jlne.ws/2Lz0FrW

The post Chicago’s CME Strains to Reflect Global Grain Trade appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

I am taking a day trip to Camp Freeland Leslie, the Scout camp where my Boy Scout Troop, Exploring Club and Venturing Crew is spending the week. Every year there are some older council leaders who come to camp for one day, normally Thursday when we have the leaders luncheon. I am coming Tuesday for the leaders steak dinner. Despite the menu difference, I have officially turned into one of the old-timers. Arghh!!!~JJL

We are one day closer to MarketsWiki Education World of Opportunity in Chicago. Our sponsors for the Chicago series include Cboe Global Markets, CME Group, Barchart, OCC, The IFM, The Stuart School of Business at Illinois Tech and Trading Technologies. Thank you to all for your support for this program.~JJL

There is still time to sign up your interns, college-age children, neighbors children or friends children for MarketsWiki Education World of Opportunity. They will remember you for signing them up.~JJL

Yesterday marked the one-year anniversary of the FTSE Russell return to CME Group. Average daily volume in the E-mini Russell 2000 is 141,600 contracts, with open interest at 602,000 contracts. Well done, Tim McCourt, Ron Bundy and teams.~JK

Nasdaq’s information services generated $667 million in revenues last year, with 55 percent coming from exchange market data, 26 percent from index licensing and data and 19 percent from investment data and analytics.~JK

ISDA posted links highlighting three research papers on credit default swaps and client clearing.~SD

Did you know that of the U.S. shale regions, it is Appalachia – not the likes of Permian, Eagle Ford or Anadarko – that supplies the most natural gas in the United States? ~SD

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CFTC Chairman J. Christopher Giancarlo Response to Bollettino
CFTC
The Congregation for the Doctrine of the Faith recently published the above-referenced Bollettino on economic and financial issues. Building on the premise that “no area of human action” is outside ethical principles, the document lays out ethical foundations to govern economic and financial systems, including in the usage of derivatives (paragraph 26). We thank you for such a thought-provoking reflection.
/goo.gl/q5rbMf

***** News Flash: A Bollettino is a bulletin.~JJL

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Economists Can’t Write Economically, Driving Demand for Brevity
Ben Leubsdorf – WSJ
A backlash is building against inflation—the kind showing up in economics journals.
The average length of a published economics paper has more than tripled over the past four decades, and some academics are sick of wading through them. At this year’s American Economics Association conference, Massachusetts Institute of Technology professor David Autor compared a 94-page working paper about the minimum wage to “being bludgeoned to death with a Nerf bat” and started a Twitter hashtag, #ThePaperIsTooDamnedLong.
/on.wsj.com/2Liva6m

***** This is not to be confused with hippopotomonstrosesquipedaliophobia.~JJL

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Politicized Trolling Is Worse Than Fake News; Orchestrated attacks on social media are more destructive than propaganda or campaigns of deception.
Leonid Bershidsky – Bloomberg
Online disinformation and the spread of deceptive political messages are pernicious, but they aren’t necessarily the worst abuse of social networks by governments and political actors. Rational people are resistant to propaganda, and irrational ones only consume messages that stroke their confirmation biases. No one, however, can be impervious to personal attacks on a mass scale.
/jlne.ws/2uXPWgD

***** Trolls are a real thing and they are ugly.~JJL

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Friday’s Top Three
Two of our top stories of the day were Chicago-centric, with a third that was bean-centric. The most read piece was Bloomberg’s The Future of the U.S. Looks a Lot Like Chicago. Second was the Wall Street Journal’s Chicago’s CME Strains to Reflect Global Grain Trade. In third was Reuters’ piece, ‘Hi, I’m a soybean’: In trade war, China deploys cartoon legume to reach U.S. farmers

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MarketsWiki Stats
129,938,942 pages viewed; 23,211 pages; 214,354 edits
MarketsWiki Statistics

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Lead Stories

Google Expands Blockchain Push With Digital Asset Tie-Up
Jeff John Roberts – Fortune
Google is increasingly betting that blockchain technology, which creates a permanent ledger across multiple computers, will be key to competing with Amazon and Microsoft in cloud services. To that end, Google and the New York-based startup Digital Asset announced a partnership on Monday to bring blockchain to Google Cloud.
/jlne.ws/2uZiLZT

Are Credit-Default Swaps a Cardinal Sin?; The CFTC chairman tangles with the Vatican over Pope Francis’s criticism of the derivatives product
Gabriel T. Rubin – WSJ
Can a good Catholic trade credit-default swaps? A top U.S. markets regulator and the Catholic Church are debating the issue, after a May treatise from the Vatican criticized derivatives—specifically credit-default swaps—as a kind of “economic cannibalism” that leads to profit from the misfortune of others.
/jlne.ws/2v26K63

CFTC’s Giancarlo and Tuckman Respond to Vatican Criticism of Derivatives
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo and Chief Economist Bruce Tuckman penned a letter in defense of derivatives in response to the Bollettino published by the Vatican’s Congregation for the Doctrine of the Faith and Dicastery for Promoting Integral Human Development on May 17, 2018, titled “Oeconomicae et Pecuniariae Quaestiones: Considerations for an Ethical Discernment Regarding Some Aspects of the Present Economic Financial System.” Giancarlo and Tuckman address derivatives broadly, as well as the specific criticism of credit default swaps (CDS) contained within the Vatican’s Bollettino.
/jlne.ws/2A571uL

Leon Cooperman Is Turning Omega Hedge Fund Into Family Office; Veteran fund manager writes ‘I don’t want to spend the rest of my life chasing the S&P 500’
Rachael Levy – WSJ
Renowned hedge-fund manager Leon Cooperman on Monday told clients that he would be returning capital and turning his firm into a family office, a dramatic shift for one of the country’s best-known stock pickers.
/jlne.ws/2v1nbQ9

CIM Renews and Expands Lease with Chicago Trading Company
Business Wire
CIM Group announced today the signing of a 114,000-square-foot lease renewal and expansion with Chicago Trading Company (“CTC”) at 425 S Financial Place at Gateway Plaza, the 39-story, approximately 1.04 million-square-foot office complex, formerly known as 440 S LaSalle.
/jlne.ws/2v0n8nz

Trading firm expands at Loop office tower
Danny Ecker – Crain’s Chicago Business
A Chicago proprietary trading firm is adding more office space while most of its industry consolidates, and it’s a much-needed boost for its landlord. Chicago Trading recently renewed its lease and expanded its footprint by about 27,000 square feet in the 39-story Loop office tower at 440 S. LaSalle St., the company announced.
/jlne.ws/2v1pra9

State Street’s Acquisition of CRD: Off Their Meds, or Crazy Like a Fox?
Larry Tabb – TABB Forum
State Street just acquired the buy-side order management platform Charles River Development for $2.6 billion – that’s nearly nine times revenues and almost three times the global annual software spending for all order management platforms combined. But there is no way anyone would pay that much for a platform in this space, argues Larry Tabb. State Street has another plan.
/goo.gl/QNTn2j

China should normalize stock index futures trading, regulator says
Reuters Staff
China should scramble to resume normal trade in stock index futures, a top Chinese securities regulator said on Monday, in an effort to satisfy the risk management needs of both domestic and foreign investors. The easing gesture, which came after a fall of about 14 percent in the stock market this year amid a nascent trade war with the United States, points to regulators’ commitment to free up financial markets.
/goo.gl/4fzRAd

Digital Asset and Google Cloud Collaborate to bring Blockchain Solutions to the Cloud
Digital Asset
Digital Asset, a leading provider of distributed ledger solutions, today announced a new collaboration with Google Cloud to bring Digital Asset’s blockchain platform and developer tools to Google Cloud Platform. Developers now have access to a comprehensive suite of tools and services to build, test and deploy distributed ledger applications on-demand and without having to configure the underlying platform.
/jlne.ws/2uJignp

When Wall Street Showed Up, Fortunes Sank in This Small American Town; Steel bridge leading into Ballard County, KY, crossing over where the Ohio and Mississippi Rivers meet.
Thomas Black and Christopher Cannon – Bloomberg
Like most everybody else lucky enough to land a job at the mill out on Fort Jefferson Hill Road, Lynn Garner remembers when he started: Aug. 8, 1994. Or exactly 10 years and 267 days before Wall Street showed up.
/jlne.ws/2uXNOWb

Goldman Warns of Liquidity-Fueled Sell-off After ‘Volmageddon’
Tracy Alloway – Bloomberg
Weakened liquidity might have set stage for volatility surge; February event stands as warning to consider hedges: Goldman
More than five months after February’s so-called volmageddon, the causal connection with a sudden slide in U.S. equity liquidity is only now becoming clear, according to Goldman Sachs Group Inc.
/jlne.ws/2v8Fymn

London fintech nudges the bond market towards digital revolution; Algomi CEO Scott Eaton sees end of central bank bond-buying as a tailwind that will drive ‘electronification’ of the market
Samuel Agini – Financial News
The new boss of one of London’s most feted financial technology companies said he left the investment banking world because, as computers began taking over markets, there was less and less for traders like him to do.
/jlne.ws/2v0fycI

Exchanges, OTC and Clearing

Intercontinental Exchange Completes Acquisition of TMC Bonds
BusinessWire
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that it has completed its acquisition of TMC Bonds LLC. The transaction, which was completed for $685 million in cash, will not have a material impact on 2018 financial results and will not impact capital returns.
/goo.gl/or7pV4

Will CME and NEX Transform the Global Marketplace?
James Wolstenholme – TABB Forum
The acquisition of NEX, the largest U.S. Treasury dealer trading platform, by CME Group, operator of the primary U.S. futures exchange, creates a trading powerhouse. But the deal also can catalyze CME’s global reach into sovereign markets, leveraging NEX’s full trade lifecycle FX and bond platform technology.
/goo.gl/H4MWPm

One year of E-mini Russell 2000 Index Futures at CME Group
FTSE Russell Blog
FTSE Russell and CME Group recently celebrated a very important milestone – July 10, 2018 marked the one-year anniversary of when E-mini Russell 2000 Index Futures launched on CME.
/goo.gl/AKsCSd

China’s investor curb raises concerns on HKEX listings; Restriction has wide ramifications for foreign companies, including Saudi Aramco
Emma Dunkley in Hong Kong – FT
When luxury Italian fashion brand Prada listed on the Hong Kong stock exchange in 2011, it was among a number of foreign consumer companies seeking to take advantage of the increasingly affluent population in mainland China while appealing to the local investor base.
/jlne.ws/2LsFAPT

Brokers move appellate tribunal against NSE’s plan to retro levy STT
PALAK SHAH – TheHinduBusinessLIne.com
Claim there is no provision to tax derivative trades that end in delivery
Mumbai-based stock brokers association (ANMI) has dragged the NSE to the Securities Appellate Tribunal with regard to securities transaction tax (STT) on newly introduced physical settlement of equity derivative trades. ANMI has particularly challenged NSE’s circular of July 17 on a specific clause that says the exchange reserves the right to collect more STT from brokers in a retrospective manner if and when specified by the tax department, source told BusinessLine. A hearing will be held on Tuesday.
/jlne.ws/2uXUnrN

The art of designing markets; Part 1: execution models
Eurex
Market design recognizes that well-functioning markets are more than the confluence of supply and demand. They depend on detailed rules. Market designers try to understand the rules and procedures as well as the workings and requirements of particular markets well enough to fix problems or to build completely new markets when they seem promising.
/jlne.ws/2Li0Jgp

EuroCCP to become a clearer for Frankfurt Stock Exchange; Agreement with Deutsche Börse follows similar deals for EuroCCP with Borsa Italiana and Euronext Dublin.
John Brazier – The Trade
Deutsche Börse has selected EuroCCP to provide central counterparty clearing (CCP) services for the Frankfurt Stock Exchange as of Q1 next year.
/jlne.ws/2uXD4XL

Fintech

Financial firms accelerate their move to the cloud, with spend on cloud to increase from 30% of IT budgets in 2017 to 47% by 2019
Thomson Reuters
Financial firms intend to rapidly increase their investment in public cloud to exploit the benefits of the cloud in managing the financial data that powers their business decisions, according to a new global survey of senior technologists and market data managers in the financial services sector. In the survey from the Financial & Risk business of Thomson Reuters, respondents said their firms would be increasing investment in public cloud by over a half, from 30% of IT budgets in 2017 to 47% in 2019.
/tmsnrt.rs/2OaGcs5

Edelweiss Securities Selects Itiviti for New OMS and Connectivity Solution; Itiviti expands its footprint in India with rapid market growth
Itiviti Group AB
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today announced that Edelweiss Securities Limited (ESL), India’s leading brokerage firm has successfully deployed Itiviti’s client connectivity and high touch trading solution to support its algorithmic trading business. ESL made the decision to replace their existing system with Itiviti’s best in class modular solution to better capitalize on trading opportunities in India’s dynamic, fast-growing markets.
/jlne.ws/2v1IfWy

Sumitomo Mitsui Trust Bank (U.S.A.) Adopts DTCC ALERT GC Direct to Efficiently Manage Settlement Process
DTCC
The Depository Trust & Clearing Corporation, the premier post-trade infrastructure for the global financial services industry, today announced that Sumitomo Mitsui Trust Bank Limited has become the first Japanese global custodian to go live on the ALERT Global Custodian Direct workflow. With GC Direct, SuMi TRUST USA can maintain and provide standing settlement instruction data to its clients through ALERT, the industry’s largest and most compliant online global database for the maintenance and communication of account information and SSIs.
/goo.gl/wjfDR5

Innovation forcing CIOs to compromise IT security
David Beach – bobsguide
Cyber criminals are frequently targeting systemically vital infrastructure in healthcare, government and finance, and are increasingly sponsored by nation states.
/goo.gl/a5Mpf5

Blackstone wins EU approval to buy Thomson Reuters unit
Reuters Staff
U.S. private equity firm Blackstone Group (BX.N) has secured EU antitrust approval to acquire a majority stake in Thomson Reuters’ (TRI.TO) Financial and Risk unit, the European Commission said on Monday.
/jlne.ws/2v1ljqy

The Trade War Is Already Hurting American Gadget Makers; The pain is affecting small startups that make earbuds, e-cigarettes and smart-home products and could spread to Sonos and even Apple.
Selina Wang – Bloomberg
Win Cramer never thought his small consumer electronics business would suffer so much under a Republican president who promised to put America first. The chief executive officer of JLab Audio has had to rethink his entire strategy as a result of the tariffs that Trump has levied on China and says about 70 percent of his company’s products will be affected.
/jlne.ws/2v1Frsu

Fintech Velocimetrics boosts US team to target North American market; New US Technical Director and VP of Sales for North America join –
Fintech Velocimetrics
Fintech Velocimetrics, a leading provider of business flow tracking and performance analytics, has today announced the hire of two key players in New York, as the company makes a bid to capitalize on its foot print in the US and add more US and Canadian clients to its stable of investment banks, international hedge funds and exchanges.
/jlne.ws/2LitNVl

Cryptocurrencies

Indian supreme court to rule on cryptocurrency case on Sept. 11
Nupur Anand – Quartz
The wait continues for Indian cryptocurrency exchanges.
On July 20, after a short hearing, India’s supreme court set Sept. 11 as the date for the final hearing. The court will also pronounce the verdict at the end of those hearings—in the cases filed by the bourses against the Reserve Bank of India (RBI).
/goo.gl/8up6Yg

Operator of shuttered bitcoin platform pleads guilty to U.S charges
Brendan Pierson – Reuters
The operator of a shuttered bitcoin-denominated exchange pleaded guilty on Monday to federal charges that he defrauded investors and lied to U.S. securities regulators investigating the theft by hackers of virtual currency now worth about $46 million.
/jlne.ws/2uZijeo

Zombie Crypto Stocks Resurface as Bitcoin Stages July Recovery
Lily Katz – Bloomberg
Crypto stocks, the darlings of late last year that quickly lost their luster, may be rising from the dead. Scores of small firms rebranded with blockchain at the end of 2017 to boost their share prices, only to see their market values languish when the Bitcoin bubble burst. Now, as the top digital token stages a comeback, some of these stocks are once again mimicking moves of the biggest cryptocurrency.
/jlne.ws/2uXxFzX

Bank of Canada Study Finds 58% of Canadians Own BTC for Investment Purposes
Helen Partz – Cointelegraph
Canadian citizens used Bitcoin (BTC) mainly for investment purposes in 2017, according to a study by the Bank of Canada (BoC) published July 23.
The study is an update to the results of the Bitcoin Omnibus Survey (BTCOS) conducted by Canada’s central bank within a short period between December 12 to 15, 2017, a few days before Bitcoin reached its all-time high of 20,000 on December 17.
bit.ly/2uWIWAk

South Korean Telecoms Giant KT Has Built Its Own Blockchain
Wolfie Zhao – Coindesk
KT Corporation, one of the two largest telecoms companies in South Korea, has launched a proprietary blockchain network, aiming to apply the technology across areas including ID verification, data roaming and energy trading.
According to a report from CoinDesk Korea, the firm revealed its KT Network Blockchain on Tuesday, boasting a throughput of 2,500 transactions per second (TPS) thanks to an integration with its existing high-speed commercial network.
bit.ly/2v1tlQe

The Week in FinTech and Blockchain Law; Facebook BBNA Linkedin BBNA Twitter BBNA Email BBNA Print BBNA
Robert Kim – Bloomberg Law
Global regulators signaled that they may force banks to meet new capital requirements for their holdings of Bitcoin and other crypto-assets. Based on the results of a review and analysis of banks’ direct and indirect exposures, the Financial Stability Board will consider whether to formally clarify the prudential treatment of crypto-assets.
/jlne.ws/2v4wDCq

Crypto & government: from anarchy to amity in the USA
Jemima Kelly – FT
Crypto bros are known to self-identify as libertarians, believing in the primacy of individual autonomy and the minimal interference of government or any other centralised authority in our lives. Quartz drew a nice Venn diagram of the overlap between the two groups in an article back in May:
/jlne.ws/2Lmj1xe

Politics

When Presidents Bully the Fed, Watch Out; Trump might want to consider the legacies of Lyndon Johnson and Richard Nixon
Stephen Mihm – Bloomberg
Donald Trump is a man on a mission: So many norms to shatter, so little time. Last week he took a swipe at the vaunted independence of the U.S. Federal Reserve, declaring that he’s “not thrilled” that the nation’s central bank seems intent on raising rates in the coming year. On Friday morning he vented his anger in another tweet: “Tightening now hurts all that we have done.”
/jlne.ws/2v2iwNB

Just in Case Moscow Is Still Meddling, Here’s What to Do; Internet platform companies such as Facebook should create teams focused on Russia, an NYU report says.
Peter Coy – Bloomberg
President Trump seemed to say on July 18 that Russians are no longer attacking U.S. elections. But that’s a lonely position: even his director of national intelligence, Dan Coats, disagrees. So it seems like a good idea to erect stronger defenses than those in place in 2016, when Russian ads and fake news sowed discord and possibly helped tip the election in Trump’s favor.
/jlne.ws/2uXyHfj

Donald Trump Weighs Ending Security Clearances for Six Ex-Officials Who Have Criticized Him; White House says Trump could revoke clearances of ex-national security officials
Vivian Salama – WSJ
President Donald Trump is considering revoking the security clearances of six former senior national security officials, the White House said Monday, moving to punish them for comments purportedly politicizing the investigations into Russian interference in the 2016 election.
/jlne.ws/2LmhtU5

PNB fraud defendant Choksi fears ‘mob lynching’ in India
Abhirup Roy – Reuters
One of the main defendants in India’s largest bank fraud case made a court application on Monday for cancellation of an arrest warrant against him, citing fears for his life because of a growing number of mob lynchings in the country.
/reut.rs/2O8OXCR

G-20 Finance Ministers, Failing to Halt Trump’s Trade War, Warn of Its Global Risks
Alan Rappeport – Reuters
Negotiations to ease an escalating trade war between the United States and the rest of the world sputtered to a close with no breakthroughs on Sunday at a summit meeting of finance ministers, who warned that the predicament over President Trump’s tariffs was casting a pall over the global economy.
/jlne.ws/2uVKLxA

Elected Leaders Are Making the World Less Democratic
Lauren Leatherby and Mira Rojanasakul – Bloomberg
Lately, voters in established democracies seem eager to shake things up. Brexit revealed underlying cracks in the European Union. An anti-immigration backlash led to a wave of right-wing populist victories in Europe. And U.S. voters elected President Donald Trump, who has lavished praise on several strongmen leaders. Last week, he sided with Russia President Vladimir Putin over the U.S. intelligence community (he later said he misspoke—and then walked back his walk-back).
/jlne.ws/2uXOw5G

Republican introduces bill calling for carbon tax
David Morgan – Reuters
A Republican lawmaker in the U.S. House of Representatives introduced a bill on Monday calling for a carbon tax, saying he hoped the legislation would at the very least renew a U.S. debate on climate change that has languished for a decade.
/jlne.ws/2v0lUbX

U.S. says 463 migrant parents may have been deported without kids
Tom Hals, Reade Levinson – Reuters
More than 450 immigrant parents who were separated from their children when they entered the United States illegally are no longer in the country though their children remain behind, according to a joint court filing on Monday by the federal government and the American Civil Liberties Union.
/jlne.ws/2v2g5dV

***** Unconscionable.~JJL

Former Trump aide Bannon sets up group to undermine EU
Mark Hosenball – Reuters
Former Donald Trump political strategist Steve Bannon and a top associate have created a Brussels-based political organization intended to undermine, and ultimately paralyze, the European Union, Bannon and the associate told Reuters.
/jlne.ws/2v4w4IO

Exclusive: Alleged Russian agent Butina met with U.S. Treasury, Fed officials
Sarah N. Lynch – Reuters
Maria Butina, accused in the United States of spying for Russia, had wider high-level contacts in Washington than previously known, taking part in 2015 meetings between a visiting Russian official and two senior U.S. officials.
/jlne.ws/2v1FIM2

Regulation

Private Pension Product, Sold by Felon, Wipes Investors Out
Jean Eaglesham – WSJ
Scott Kohn, a 64-year-old felon, ran a company from a Nevada strip-mall mailbox that investors claim took them for more than $100 million in losses.
Mr. Kohn’s company, Future Income Payments, appears shut, according to court filings. His investors are likely to be wiped out, according to lawyers representing them, who plan to sue scores of firms that sold Future Income products as soon as this week. At least 25 states have taken enforcement actions or are investigating the company, it said in April.
/on.wsj.com/2JONoXg

FIMSAC subcommittee recommends formation of working group to address e-trading in fixed income markets
Amanda Maine – Wolters Kluwer
The Technology and Electronic Trading Subcommittee of the SEC’s Fixed Market Structure Advisory Committee (FIMSAC) issued its preliminary recommendation that a joint working group be formed to conduct a review of the regulatory oversight of electronic trading platforms in the corporate and municipal bond markets. The working group would consist of representatives from the SEC, FINRA, and the MSRB.
/goo.gl/W6GSEM

SEC Adopts Disclosure Rules for ATSs
Themis Trading Blog
Yesterday the SEC adopted new rules of disclosure for ATSs. This comes years after fines of dark pool operators, especially in the wake of 2014’s Flash Boys. The new Form ATS-Ns will have to be filed early in 2019 (between January 7th and February 8th),
/goo.gl/1KWdvR

Federal Court Orders Commodity Pool Operator and Its Principal to Pay More Than $1.9 Million for Bitcoin and Binary Options Fraud Scheme
CFTC
On July 9, 2018, a New York federal court ordered Dillon Michael Dean (Dean) of Longmont, Colorado, and The Entrepreneurs Headquarters Limited (TEH), Dean’s UK-registered company, to pay over $1.9 million in civil monetary penalties and restitution in connection with a lawsuit brought by the Commodity Futures Trading Commission (CFTC).
/jlne.ws/2v4zWcO

External report on fees and costs disclosure welcomed by ASIC
ASIC
The Australian Securities and Investments Commission (ASIC) has today released the external report into Regulatory Guide 97 Fees and costs disclosure (RG 97) commissioned in November 2017.
/jlne.ws/2Lg01QO

ESMA review finds improvements with NCAs’ supervision of the suitability requirements
ESMA
The European Securities and Market Authority (ESMA) has issued today a follow-up report regarding oversight by national competent authorities (NCAs) of the Markets in Financial Instruments Directive (MiFID) suitability requirements. The Report assesses the actions ten NCAs have undertaken since the earlier peer review conducted in 2016. The Report identifies enhancements in supervising the requirements and greater deployment of enforcement action by some NCAs. These improvements should lead to an increased level of EU-wide supervisory convergence of the suitability requirements.
/jlne.ws/2LliAmA

Notice of Annual Meeting of FINRA Firms and Proxy
FINRA
FINRA will conduct its Annual Meeting of firms on Tuesday, August 28, 2018, at 2:00 p.m. Eastern Time in the FINRA Visitors Center at 1735 K Street, NW, in Washington, D.C. The purpose of the meeting is to elect individuals to fill one small firm seat, one mid-size firm seat and one large firm seat on the FINRA Board of Governors (FINRA Board).
/jlne.ws/2LlbvTd

SEC Approves Amendments to Arbitration Codes to Provide an Additional Hearing Option in Simplified Arbitration
SEC
FINRA has amended its rules to provide a new option for simplified arbitration. The amendments provide an additional hearing option for parties in arbitration with claims of $50,000 or less, excluding interest and expenses.
/jlne.ws/2LnzHEI

Jurisdictions progress towards implementing standards for payment, clearing and settlement
FINEXTRA
Jurisdictions are reporting progress towards implementing international standards for payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories, according to a new report by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).
/jlne.ws/2uZreMU

Investing and Trading

Trading challenger XTX sees profits kept in check
Samuel Agini – Financial News
Market-maker’s £60m profit for 2017 is unchanged from last year, thanks to investment in new office, new markets and international expansion
bit.ly/2Od7azk

Worth the Share: Business Insider on Citadel Securities’ Designated Market Making Business
Citadel Securities
The following article by Frank Chaparro at Business Insider summarizes how our designated market making business supports the trading of more than 1,400 securities.
Business Insider: A small band of human traders at electronic trading giant Citadel Securities are crushing it, and they could help the firm tap into a $800 billion market
/jlne.ws/2v27pnQ

Heavy industry turns to renewables in drive to go green; Deals from cement plants and aluminium smelters show a developing new market
Leslie Hook and Michael Pooler – FT
In the forests of central Sweden, construction iss about to begin on a giant wind farm with a single purpose: to supply power to the aluminium smelters of Norsk Hydro, one of the world’s biggest producers, for the next 29 years.
/jlne.ws/2v2XLS3

Metals traders look to 2015 playbook as China fears return
Henry Sanderson – Financial Times
China’s weakening currency is alarming metals traders, summoning memories of the country’s 2015 devaluation, which sent the market and mining stocks into a tailspin.
Copper prices have closely followed the renminbi’s dramatic fall towards its lowest level in a year against the dollar this month. It is a correlation that one metal trader says is “the highest it’s ever been”.
/on.ft.com/2OcMEyX

Alternative mutual funds sales plunge as investors turn wary
Attracta Mooney – Financial Times
Investor interest in the mutual fund version of hedge funds has fallen rapidly since 2013, raising concern about the asset management industry’s hope of bringing alternative strategies to the mass market.
Sales of alternative mutual funds, which were set up to offer a liquid alternative to hedge funds and are also known as liquid alts, fell 90 per cent between 2013 and 2017 in the US, or from $53bn in net inflows to just $6bn, according to Morningstar, the data provider.
/on.ft.com/2OcAiXy

2.5 Billion Pounds of Meat Piles Up in U.S. as Production Grows, Exports Slow; Profits, prices are threatened as record amounts of red meat and poultry fill U.S. warehouses
Jacob Bunge – WSJ
Meat is piling up in U.S. cold-storage warehouses, fueled by a surge in supplies and trade disputes that are eroding demand.
/jlne.ws/2v2YMcP

Here Are the Biggest Divisions in Global Markets Right Now
Dani Burger and Sid Verma – Bloomberg
Trade risk meets banner earnings, creating ‘two-tier’ market; High-tax stocks surge; China complex hit; equity vs. credit
Battle-lines are being drawn across markets as bears fret the brewing trade war and higher borrowing costs — while bulls relish the banner corporate earnings season.
/jlne.ws/2v1KI3g

Activism in banking is tougher than on the fringes of finance; A bank break-up has proved impossible due to concerns about financial stability
Patrick Jenkins – FT
Europe’s financial services companies, particularly the region’s banks, have long seemed ripe for intervention by activist investors.
/jlne.ws/2LlvvF8

Institutions

Leon Cooperman, the Hedge Fund Billionaire, Says It’s Time to ‘Fold ‘Em’
Matthew Goldstein – NY Times
Leon G. Cooperman, one of the early standard-bearers of the hedge fund industry, plans to return money to outside investors and convert his firm to a family office by year’s end.
/jlne.ws/2uXUTWL

Leon Cooperman to close hedge fund Omega Advisors for family office; Money will be returned to investors at the end of the year
Lindsay Fortado in London – FT
Leon Cooperman is closing his hedge fund, Omega Advisors, and converting it into a family office because he does not want to spend the rest of his life “chasing the S&P 500”.
/jlne.ws/2uZxPGT

Hedge Funds Are Suffering From Metal Fatigue; They’re selling copper for the first time since Trump’s election, and that’s not all.
David Fickling – Bloomberg
Commodity funds are going soft. The investors who helped bid up the price of LME copper to a four-year high of $7,348 a metric ton last month are beating a path to the door. Holdings of investment funds in Chicago copper futures this month crashed to a net short position for the first time since the election of U.S. President Donald Trump in 2016, having hit a record net long of 125,376 contracts as recently as September.
/jlne.ws/2uZgTjP

MSCI wrong to include China in key index: investor survey
Alun John – Reuters
Global index provider MSCI was wrong in its landmark decision to include mainland China-listed “A” shares in its emerging markets index in June, according to nearly half of the international investors surveyed for a new report into Chinese corporate governance.
/jlne.ws/2v1kWwd

UBS Wealth Merger Hits Targets as Investors Press for Returns
Patrick Winters and Jan-Henrik Foerster – Bloomberg
Investment bank beats analyst expectations for second quarter; Bank had net outflows for the first time in about 18 months
UBS Group AG’s newly combined wealth-management business and investment bank are helping Chief Executive Officer Sergio Ermotti boost growth after investors questioned the lender’s commitment to higher returns.
/jlne.ws/2v22687

UBS Puts a Smile on the Face of Europe’s Banks; It turns out the threat of a trade war isn’t always bad for bankers.
Lionel Laurent – Bloomberg
UBS Group AG has kicked off the European banks’ earnings season after a quarter hit by fears of a global trade war, rising market volatility and slower economic growth. For all the jitters, expectations may be set too low.
/jlne.ws/2uXQZ03

TD to Add 200 Advisers to Help Wealth Unit Reach Profit Goal
Doug Alexander – Bloomberg
Hiring, Greystone deal aimed at growth target of up to 10%; Purchase adds real estate funds attractive to wealthy clients
Toronto-Dominion Bank, building on its deal for money manager Greystone Capital Management Inc. earlier this month, plans to hire 200 advisers in Canada this year to boost profit at its wealth-management division as much as 10 percent.
/jlne.ws/2v0TyhU

Index funds must be activists to serve investors; Since we cannot sell, we have to press management for improvements
Cyrus Taraporevala – FT
Efforts by large index fund managers to engage with public companies have recently come under attack from some business leaders. They complain that we are misusing our rights as shareholders to enforce arbitrary political or social “values” because we raise environmental, social and governance concerns with the boards of the companies in which we invest.
/jlne.ws/2uZDkW3

Credit Agricole outsources listed derivatives operations to asset servicing arm; Asset servicing business of Credit Agricole will also act as the main listed derivatives clearer for the French investment bank.
Joe Parsons – The Trade
French investment bank Credit Agricole CIB has outsourced its listed derivatives back-office operations to CACEIS Investor Services.
/jlne.ws/2uXDjlD

IG Group predicts 10 per cent revenue hit from leverage limits after record year
Jasper Jolly – City AM
Providers of contracts for difference must impose leverage limits from 1 August (Source: Getty)
Spreadbetting firm IG today warned that it expects imminent limits on the leverage available to traders to push down revenues in 2019 after reporting record revenues for the year.
/jlne.ws/2Llh97G

Regions

China is intent on overtaking the US to lead the world in AI; America faces a threat to its tech dominance, with unpredictable military repercussions
John Thornhill – FT
When AlphaGo computer defeated Lee Se-dol at the mind-bendingly complex game of Go in 2016, many people hailed it as a demonstration of the power of human ingenuity and artificial intelligence.
/jlne.ws/2v25903

India’s Sensex stands out from other emerging market equities; Stellar run reflects solid performance of a few major stocks led by Tata
Emma Dunkley in Hong Kong – FT
While global emerging markets have suffered a torrid time this year, Indian equities are full steam ahead.
/jlne.ws/2v0mgzj

China should normalize stock index futures trading, regulator says
Reuters Staff
China should scramble to resume normal trade in stock index futures, a top Chinese securities regulator said on Monday, in an effort to satisfy the risk management needs of both domestic and foreign investors.
/jlne.ws/2v0MEcu

China state-backed funds sit on their hands during stock market slump
Reuters Staff
China’s five state-backed mutual funds, launched during the 2015 crash to rescue the market, sat on their hands last quarter when shares slumped roughly a tenth amid trade war concerns, analysts said on Monday.
/jlne.ws/2v25UWK

China’s Markets Embrace Risk as Traders Bet Big on Stimulus
Sofia Horta e Costa – Bloomberg
Stocks cap biggest three-day rally since mid-August 2016; Bond yields climb from 15-month lows, yuan drops on liquidity
Chinese financial markets are rediscovering an appetite for risk not seen in months, taking cues from the government’s biggest push yet to invigorate this year’s slowing economy.
/jlne.ws/2uXXjoj

Drought May Force Top Wheat Buyer Egypt to Pay More in Tender
Gianlucca De Paoli – Bloomberg
Egypt’s state-run buyer is seeking wheat for Sept. 1-10; Prices seen about $10 a ton higher than in the last tender
A drought that’s hit wheat crops across the Black Sea and Europe will probably force Egypt to pay more for supplies it a tender Tuesday.
/jlne.ws/2v002xm

Brexit

UK refuses to give up on post-Brexit plan for City; Financiers look to Germany, Belgium and Spain to help convince EU27 proposal will work
Patrick Jenkins, George Parker and Alex Barker – FT
The UK is to step up lobbying in EU member states in an effort to win support for Britain’s plan for post-Brexit regulation of the financial services industry, in spite of its rejection by Michel Barnier, the bloc’s chief negotiator.
/jlne.ws/2v3cyMw

Brexit Without a Deal? A Crazy Idea That Might Happen; Nobody thought the U.K. would put jobs and money at risk by leaving the EU without an agreement on trade terms. Until now.
Therese Raphael – Bloomberg
The prospect that the U.K. would leave the European Union without a deal setting out the terms of the withdrawal once seemed laughably remote. When it was mentioned at all, it was mainly as a negotiating tactic aimed at securing favorable trade and tariff agreements between the U.K. and the EU.
/jlne.ws/2v1Ft3A

Brexit latest: There will be no Brexodus at first – but without access the City will shed jobs, MPs are told
Catherine Neilan – City AM
There will not be a “big Brexodus” from the City immediately after the UK leaves the EU – but the numbers could still rise in the longer term if a good deal does not materialise, MPs were warned today.
/jlne.ws/2LhwAxP

The Conservatives have no way out of their own Brexit trap; Cries of betrayal have made it impossible for the Tories to wriggle off the hook
Robert Shrimsley – FT
It would be funny if we didn’t have to live here. The Conservative party which plunged Britain into the chaos of Brexit to overcome its own divisions could now be consumed by the very plan it hatched to save itself.
/jlne.ws/2Lg0uT4

Jeremy Hunt warns of ‘very real risk’ of accidental no-deal Brexit
Cat Rutter Pooley – FT
British foreign secretary Jeremy Hunt has warned there is a very real risk of the UK crashing out of the EU without a deal in March next year.
/jlne.ws/2LjpVDb

Miscellaneous

U.S. Breaks Up Fake I.R.S. Phone Scam Operation
Christine Hauser – NY Times
With stiff sentences for 21 conspirators last week in the United States and a round of indictments in India, the Justice Department says it has broken up what appeared to be the nation’s first large-scale, multinational telephone fraud operation.
/nyti.ms/2Lgaj3r

The post Google Expands Blockchain Push With Digital Asset Tie-Up appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

Today we have the first of the videos from the MarketsWiki Education World of Opportunity series in New York earlier in July. The first video up is Jaclyn Bouchard of S&P Global.~JJL

In response to President Trump’s farm aid announcement, Senator Ben Sasse, a Nebraska Republican, said, “This trade war is cutting the legs out from under farmers and the White House’s ‘plan’ is to spend $12 billion on gold crutches.” Brian Kuehl, the executive director of Farmers for Free Trade, said, “The best relief for the president’s trade war would be ending the trade war. Farmers need contracts, not compensation, so they can create stability and plan for the future.”~SD

Marketwatch’s America’s middle class is slowly being ‘wiped out’ story includes a reference to a Pew study that said, “Before the 2008 crash, only one-quarter of Americans viewed themselves as lower class or lower-middle class. No longer. After the recession of 2008 …a full 40% of Americans viewed themselves as being at the bottom of the pyramid.”~JK

There was a typo in the URL for MarketsWiki Education World of Opportunity yesterday. The correct URL is www.marketswikieducation.com. Sign up your interns and other interested parties today for next week’s Chicago series of WOO.~JJL

I survived my trip to the great woods of northern Wisconsin, though one of our Troop’s leaders took a topple on a bicycle and made a trip to the emergency room 30 minutes away from camp to get checked out. All is OK, though she is sore. It was good to be at camp with the Scouts, and I miss it a lot. Before I left, I left some money for all the Scouts to be able to get an ice cream treat from the camp store, just so they don’t forget me.~JJL

The Wall Street Journal has a story about the fleece vest becoming the new corporate uniform. I give credit to Duncan Niederauer for making this popular. No one wore the fleece vest better, or more often than Duncan.~JJL

According to a new white paper from DTCC and The Field Effect, the industry “must cope with five times more reports than actual trades once Securities Financing Transactions Regulation takes effect.” ~SD

++++

10 Years of PHLX @ Nasdaq
Spencer Doar – JLN

The oldest stock exchange in the United States hit another milestone – the Philadelphia Stock Exchange (PHLX) celebrated its 10-year anniversary as a part of the Nasdaq family on July 24.

While the ’07-’08 timeframe is best remembered in financial circles as the time of “bailout this” and “subprime that,” it was a transformational period for non-crisis reasons at Nasdaq.

Nasdaq purchased PHLX – founded in 1790 as a venue for bond trading – for $652 million in 2008. At the time PHLX was the third largest options exchange, with some 20 percent market share, behind ISE and CBOE. Nasdaq was looking for new products and did not have an existing footprint in U.S. derivatives. (The PHLX deal came with a futures business, too.) Besides a new technological framework, the PHLX move brought some venerable personnel along with it – Meyer (Sandy) Frucher, then PHLX chairman and CEO and now vice chairman with Nasdaq, and Tom Wittman, then a PHLX senior vice president and now a Nasdaq executive vice president, head of global trading and market services and CEO of the Nasdaq stock exchange.

Five months before Nasdaq would complete its PHLX deal, it finished its acquisition of OMX for $3.7 billion, giving the exchange a European foothold. The OMX move came on the heels of a failed bid to purchase the London Stock Exchange in 2007. Nasdaq also acquired the Boston Stock Exchange in this period.

Nasdaq’s purchase of the International Securities Exchange for $1.1 billion in 2016 further grew Nasdaq’s options franchise. According to Tabb’s Options Liquidity Matrix, Nasdaq’s six options exchanges had 35.3 percent market share in June 2018. PHLX accounted for 14.3 percent of that total. The options business at Nasdaq accounts for some $280 million in revenues.

For more on PHLX’s background see this video from Nasdaq.

++++

MWE – What is ESG?

JohnLothianNews.com
“By assessing the underlying issues of these three broad categories, a company can get a better understanding of the holistic risks that can affect their bottom line.”

In this video from MarketsWiki Education’s World of Opportunity event in New York, Jaclyn Bouchard of S&P Global talks about how environmental, social and governance (ESG) concerns are impacting investing and why every company should care.

Watch the video here »

++++

How to spot power-hungry colleagues
Lila MacLellan – Quartz
With all their obvious eavesdropping and forced levity, Machiavellian characters of television and film are hard to miss. At your office, however, the colleagues who crave a seat near the top offer fewer tells—which is what makes new research from an international team of organizational behavior experts so intriguing. Their discovery: Power-hungry people give more advice than others.
/jlne.ws/2v0OCti

***** I know a guy who had all the answers.~JJL

++++

‘Hamilton’ May Be Headed to the Movies; Bidding may exceed $50 million for recording of stage musical made in 2016
Ben Fritz – WSJ
“Hamilton” may be coming to movie theaters, exactly as audiences saw it on Broadway.
/jlne.ws/2uYJp5c

****** Best in show, now best in movies.~JJL

++++

Champagne-Time to Invest?
Patrick Thornton-Smith – Via LinkedIn
Following on from a successful 2017 En Primeur campaign, our focus on un-earthing value and promoting diversification continues with a deeper look at one of the most consistent performing areas of the Fine Wine market: Champagne.
/jlne.ws/2v4LJaO

***** When I think of PTS, I imagine him sipping Champagne.~JJL

++++

Friday’s Top Three
Our top three stories of the day were led by Fortune’s Google Cloud and Digital Asset Announce Blockchain Partnership. Second went to TABB Forum’s Will CME and NEX Transform the Global Marketplace? Third went to Crain’s Chicago Business’ Chicago Trading Company expands at Loop office tower

++++

MarketsWiki Stats
129,987,015 pages viewed; 23,211 pages; 214,361 edits
MarketsWiki Statistics

++++

Lead Stories

Bloomberg snatches trade data partner from rival Reuters; Deal with BrokerTec for rates benchmarks opens new front in war of the terminals
Joe Rennison in New York – FT
Bloomberg is aiming to tighten its grip over pricing information for issuers in the $8tn corporate bond market, following the defection of a data provider from rival Thomson Reuters.
/jlne.ws/2Lmxf0R

CFTC Nears Full Strength as Democrat Coasts Through Nomination Hearing; Dan Berkovitz appears set for Senate confirmation this year, along with Republican counterpart Dawn Stump
Gabriel T. Rubin – WSJ
The Commodity Futures Trading Commission moved a step closer to having a full commission for the first time in four years, with a Democratic nominee getting almost no pushback at a Senate confirmation hearing.
/jlne.ws/2Ljl1Gx

Institutional Investors Swap Bitcoin Futures for Physical BTC in Wall Street First
Josiah Wilmoth – CCN
Bitcoin took a significant step toward becoming a mainstream financial instrument this week, as two institutional investors completed the first-ever exchange for physical (EFP) transaction involving bitcoin futures.
bit.ly/2JSgzZP

Theresa May takes control of Brexit
Tom McTague – POLITICO
The U.K. Brexit department will no longer formally be in charge of Britain’s Brexit negotiations, Theresa May announced Tuesday, taking control of the divorce talks with Brussels.
bit.ly/2JZsIME

Brexit lays bare the extremes that define British society; The greater a society’s contradictions, the more disruptive the snap is when it comes
Martin Sandbu – FT
Who are you and what have you done to my friend Britain? This is what the country’s one-time admirers from abroad — I am one — are asking as we watch it descend into increasingly vituperative politics and a policy course akin to self-sabotage.
/jlne.ws/2v4wFtX

SEC Charges Failed Fyre Festival Founder and Others With $27.4 Million Offering Fraud
SEC
The Securities and Exchange Commission today announced that New York entrepreneur William Z. (Billy) McFarland, two companies he founded, a former senior executive, and a former contractor agreed to settle charges arising out of an extensive, multi-year offering fraud that raised at least $27.4 million from over 100 investors.
/jlne.ws/2v5tstR

CFTC Proposes Rule Update for U.S Markets in Security Futures Products
CFTC
The Commodity Futures Trading Commission (CFTC) unanimously approved a proposal to update a rule impacting exchanges that list security futures products (SFPs). The proposal has the potential to provide greater liquidity in SFP trading, which would facilitate risk management for entities using SFPs.
/jlne.ws/2v5taDh

Insurers Pull Billions From Hedge Funds; Wall Street money managers are having problems hanging onto insurance companies as customers
Mengqi Sun – WSJ
Wall Street money managers are having problems hanging onto insurance companies as customers. American International Group Inc. AIG 0.56% and MetLife Inc. MET 0.72% pulled more than $700 million from hedge funds in the first quarter of 2018, according to filings. That followed billions of dollars in withdrawals over the previous two years.
/jlne.ws/2v4Sn0K

Trump to provide $12 billion in aid to farmers to ease trade pain
Susan Heavey, David Shepardson – Reuters
The Trump administration on Tuesday said it would provide up to $12 billion in aid for U.S. farmers to shield them from the repercussions felt by trade spats between the United States and China, the European Union and others.
/reut.rs/2uMetpF

****Marketwatch here, WSJ here.

Swiss Banks’ Defense Against Cautious Clients
UBS suffered a slowdown in client activity but it has defenses against that
Paul J. Davies – WSJ
UBS is fine: It’s the Swiss bank’s clients you should worry about. Trading and risk taking among UBS’s global base of wealthy customers slowed in the second quarter, according to results reported Tuesday.
/jlne.ws/2v2T62E

EU prepares retaliatory tariffs on $20 billion of U.S. goods
Johan Ahlander, Paul Carrel – Reuters
The European Commission is drawing up a list of $20 billion of U.S. goods to hit with duties if Washington imposes tariffs on imported cars, European Union trade commissioner Cecilia Malmstrom said on the eve of her boss’s meeting with U.S. President Donald Trump.
/jlne.ws/2v0Mthe

Trump Says U.S., EU Must Cut All Tariffs Ahead of Key Talks
Nikos Chrysoloras – Bloomberg
EU chiefs meet Trump in last-ditch bid to prevent car levies; Europe prepares $20 billion retaliation if U.S. raises tariffs
President Donald Trump said that the U.S. and the European Union should eliminate all tariffs, barriers and subsidies, with the bloc’s trade chiefs set to present him with proposals in that direction in a crunch meeting at the White House later Wednesday.
/jlne.ws/2v4N3ui

How the Fleece Vest Became the New Corporate Uniform
Jacob Gallagher – WSJ
The fleece zip-up vest, the capstone of a new corporate uniform, lurks in air-conditioned corporate cubicles across America. It covers the sweating backs of nervous interns ordering supersize coffees at Starbucks. It has become as ubiquitous as the take-out salad in humdrum workplaces, and is slowly supplanting the suit and tie as essential office wear.
/jlne.ws/2v0THSo

Trump Wants the Fed to Roll Back the U.S. Economy; Higher interest rates could revive manufacturing and exports. That will hurt consumers and workers.
Conor Sen – Bloomberg
Doves on the Federal Reserve evidently have a vocal ally in President Donald Trump. He said recently that he’s “not thrilled” about the Fed increasing interest rates – a move the central bank is expected to signal this week, without yet doing so.
/jlne.ws/2v3KpVQ

America’s middle class is slowly being ‘wiped out’
Larry Getlen – MarketWatch
After spending his days teaching AP American history and economics at the public Live Oak High School in San Jose, Calif., Matt Barry drives for Uber. Barry’s wife, Nicole, teaches as well — they each earn $69,000, a combined salary that not long ago was enough to afford a comfortable family life. But due to the astronomical costs in his area, including real estate — a 1,500-square-foot “starter home” costs $680,000 — driving for Uber was a necessity.
/jlne.ws/2uZFwNe

FCA may force banks to pay minimum rates on savings; Regulator reckons move could generate £300m a year in extra interest payments
Nicholas Megaw in London – FT
The Financial Conduct Authority is considering forcing banks to pay a minimum interest rate to all customers with cash savings accounts, after finding lenders “take advantage” of people’s unwillingness to switch providers in order to pay loyal customers less.
/jlne.ws/2Lj3Zbo

Exchanges, OTC and Clearing

IG Group profits jump but regulatory crackdown looms; Trading platform to diversify into other complex trading products
Hannah Murphy in London – FT
IG Group, Europe’s largest contracts-for-difference trading platform, reported record full-year profits on Tuesday, but said it would diversify into other complex trading products as it braces for a regulatory crackdown that will hit its profitability this year.
/jlne.ws/2v5JYdB

NYSE Arca equities market faces brief ‘technical’ hiccup; Big Board had advised firms to ‘route away’ from Arca exchange
Adam Samson in London – FT
NYSE’s all-electronic Arca equities market faced what it called a “critical” technical issue on Wednesday, which was ultimately resolved before the start of the regular trading session on Wall Street.
/jlne.ws/2LjPZyd

Swaps drive new FX trading record in London; Average daily FX turnover in the UK hits new highs in April according to data from the Bank of England.
Hayley McDowell – The Trade
A surge in foreign exchange (FX) swaps trading has led to a new average daily trading record in FX turnover in the UK, according to research from the Bank of England.
/jlne.ws/2LowioX

ICE closes $685 million TMC Bonds deal; ICE said the $685 million purchase will not have any impact on the exchange’s financial results this year.
Hayley McDowell – The Trade
Intercontinental Exchange (ICE) has completed its acquisition of TMC Bonds in a $685 million cash transaction.
/jlne.ws/2LlzlhQ

SGX welcomes DLF Holdings Limited to Catalist
SGX
Singapore Exchange (SGX) today welcomed DLF Holdings Limited to its Catalist under the stock code “KUX”.
/jlne.ws/2uYIvpk

French Tech Star Navya lists on Euronext; Around EUR38 million raised; market capitalisation EUR190 million
Euronext
Euronext today welcomed Navya, the French leader in autonomous vehicles and smart shared mobility solutions, to its Paris’ market.
/jlne.ws/2LlAi9V

Extended trading hours in Asia. A great opportunity to generate alpha says Byron Baldwin
Eurex
In his latest article Byron Baldwin, Deputy Global Head, Fixed Income Trading & Clearing Sales at Eurex, relates to Eurex’s extension of trading hours in the Asia Pacific time zone for liquid Benchmark Fixed Income Products.
/jlne.ws/2LjSqRn

The long (and not the short) of it: three questions for Markus-Alexander Flesch
Eurex
Markus-Alexander Flesch, Global Head of Equity & Index Sales at Eurex, is in constant contact with his customers and their input is key to the development of our products. We asked him how Eurex is increasing its efforts to support the buy side.
/jlne.ws/2Lo17tZ

TMX Group Hosts Seventh Annual Charity Golf Tournament
TMX
Remote market close ceremony to be held at University Golf Club in Vancouver
July 24, 2018 (VANCOUVER) – Toronto Stock Exchange and TSX Venture Exchange are proud to host the seventh annual TMX Charity Golf Classic today at Vancouver’s University Golf Club. Over the past six years, the tournament has raised nearly $500,000 for a variety of charities.
/jlne.ws/2LllLee

ICE SONIA Futures Achieve Record Trading Volume and Open Interest; Extends Lead in SONIA Futures with More Than £100 Billion Notional Traded since Launch
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that ICE One Month SONIA futures achieved record trading volume yesterday of 4,563 contracts and ICE One Month and Three Month SONIA futures both set record open interest on July 24, 2018, totalling 14,034 contracts and representing £33 billion.
/jlne.ws/2LkL8ga

Nasdaq Announces Quarterly Dividend of $0.44 Per Share
GlobeNewswire
The Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.44 per share on the company’s outstanding common stock. The dividend is payable on September 28, 2018 to shareowners of record at the close of business on September 14, 2018. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
/jlne.ws/2Lln0Kh

Nasdaq Reports Second Quarter 2018 Results; Completes Divestiture; Delivers Strong Organic Revenue Growth
GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) today reported financial results for the second quarter of 2018.
/jlne.ws/2LjTRzf

SGX and NSE resume discussion on potential collaboration in GIFT IFSC
SGX
Singapore Exchange (SGX) and the National Stock Exchange (NSE) have resumed discussions on a potential collaboration in Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC).
/jlne.ws/2Lp5YuP

Fintech

5 Questions with Joseph Signorelli of RCM-X
Brian Mehta – Trading Technologies Blog
On May 30, we announced the availability of RCM-X execution algorithm strategies on the TT platform. We sat down with Joseph Signorelli, founder and managing partner of RCM-X, to learn more about the company and their offering.
Prior to forming RCM-X, the technology and execution division of RCM Alternatives, Joe served as a managing director and head of futures for Wedbush Futures. He previously served as managing partner of Wedbush Market Neutral Hedge Fund.
/goo.gl/EtHAUu

TradingScreen Appoints Rishi Gupta as New CFO and Promotes Varghese Thomas as New COO
TradingScreen
TradingScreen Inc. (TS), the all-asset class order and execution management system (OEMS), today announced the appointment of a new Chief Financial Officer (CFO). Experienced financial executive Rishi K. Gupta has joined TS as its CFO. Additionally, current TS Chief Strategy Officer Varghese Thomas has taken on the added role of Chief Operating Officer (COO).
/jlne.ws/2v56xiv

UK fintechs aren’t eating the banks’ lunch just yet
Jemima Kelly – FT
In China, tech giants Ant Financial and Tencent have veritably upended the financial establishment, creating digital ecosystems that bring together social media, e-commerce and payments. In the process, they’ve left traditional banks behind in the dust. For instance, Ant Financial’s Alipay handles more than half of the country’s $15.5trn online payments market, reporting half a billion active users.
/jlne.ws/2LkqhJO

Personal loans are surging in the US, fueled by fintech startups
John Detrixhe – Quartz
Ten years on from the credit crisis, Americans are again piling on debt in all its varieties, from credit cards to student loans to mortgages. These days, personal loans—a category turbocharged by fintech upstarts—are growing especially quickly. With an increasing number of shaky borrowers taking on this debt, the risks are growing for lenders during the next economic downturn.
bit.ly/2v0LA8p

Could Fintech & Blockchain Lending Further Drive The Housing Market Boom?
Roger Aitken – Forbes
It is a seller’s market these days for homes across the top U.S. metro areas. Home prices have been rising – up 8% from 2017 – and homes are shifting fast as inventory and days on the market are down according to recent data by 8% and 7%, respectively. That said, home ownership for many remains a distant pipedream.
Consequently all this is putting pressure on prospective homebuyers to settle deals quickly before opportunities to purchase dry up. Fortunately for buyers all is not lost, even if they do not have the proverbial mom and dad lending them a big hand – aka the bank of mom and dad.
bit.ly/2uZM0f2

Cryptocurrencies

City blockchain group Setl loses co-founder after spat
Yolanda Bobeldijk – Financial News
Setl, the blockchain startup founded by City trading veteran Peter Randall, has lost one of its co-founders after a dispute about the future direction of the company.
Francois Barthelemy left in June, according to filings with Companies House. He and Randall, the former chief executive of stock exchange group Chi-X — now part of Cboe Global Markets — co-founded Setl in 2015.
/goo.gl/KQZvF1

Bitcoin Fever Persists With Fresh ETF Proposal
Asjylyn Loder – WSJ
A new request for Wall Street’s top regulator to allow the launch of a cryptocurrency exchange-traded fund is a sign that bitcoin fever isn’t going away anytime soon.
/jlne.ws/2v55YVV

Could blockchain solve China’s food and drug safety problems?; In the wake of China’s latest vaccine scandal, many are pointing to the technology behind bitcoin as a possible solution. For others, it has too many drawbacks
Amanda Lee – South China Morning Post
A scandal involving a Chinese pharmaceutical firm that forged documents relating to a rabies vaccine for babies has sparked a debate about whether blockchain, the technology best known for underpinning bitcoin, could be a solution to the nation’s food and drug safety problems.
/jlne.ws/2v550ZN

Bitcoin And Crypto Use Gets Coinbase Boost In Europe
Billy Bambrough – Fortune
One of the world’s largest bitcoin and cryptocurrency exchanges, the San Francisco-based Coinbase, is hoping to grow its footprint in Europe with digital gift cards, as users continue to struggle to get their hands on their crypto gains.
/jlne.ws/2uZAoIY

Coinbase Strikes Partnership for Crypto Gift Cards in Europe
Lily Katz – Bloomberg
Cryptocurrency exchange Coinbase Inc. is rolling out a new feature that will allow customers in Europe to cash out their crypto coins for digital gift cards.
/jlne.ws/2v0LLR6

Cryptocurrency Faces Anti-Competitive Hurdles, EU Parliament Research Shows
Christine Masters – Cryptovest
The European Parliament Committee on Economic and Monetary Affairs (ECON) sees crypto assets as an indispensable element of European financial technology (fintech) and warns against anti-competitive behavior by traditional banks. A paper, crafted by the Policy Department for Economic, Scientific and Quality of Life Policies, suggests that organizations and entities could issue crypto assets in lieu of money, as a form of value exchange.
bit.ly/2v62Wkb

Keep an Eye on What Bitcoin Miners Are Doing During This Rally
Olga Kharif – Bloomberg
Researcher says more digital coins are being sold than mined; Miners often sell new coins to meet operating expenses
Bitcoin bulls may want to pay closer attention to the miners. In the last 24 hours, the companies whose computers perform the calculations that validate each transaction and are rewarded with new digital tokens, sold more coins than they mined, according to data from Cryptocomposite.com, a soon-to-be-launched analytics provider. Miners sold $17.3 million of coins, while they earned around $14.4 million, the company said.
/jlne.ws/2v4tQZT

Coinbase Reveal Results of Internal Investigation
Anca Faget – Coindoo
Coinbase has unofficially disclosed that its internal investigation that was aimed at exposing insider trading of Bitcoin Cash came up with no evidence of criminal activity.
The largest cryptocurrency exchange in the US told Fortune in private comments that as of last week, the highly-expected investigation has reached its conclusion, but that “no disciplinary action” would be applied.
bit.ly/2v4X8aC

Politics

Republican tax plans include making U.S. cuts permanent – documents
Reuters
Republican plans to build on last year’s U.S. tax legislation will include making individual and small business tax cuts permanent, expanding savings plans and giving breaks to start-up companies, according to documents released on Tuesday by the chief architect of the legislation.
/reut.rs/2OipQOe

Mueller plans to call IRS, FBI, FinCen witnesses at Manafort trial
Darren Samuelsohn – Politico
Special counsel Robert Mueller’s prosecutors plan to call witnesses from the IRS, FBI and the Treasury Department’s Financial Crimes Enforcement Network as part of the upcoming trial involving Paul Manafort, one of the lead investigators said in court Tuesday.
/jlne.ws/2v2sXRl

GOP ex-gov to Republicans: Call on Trump to step down
Sarah Hallam, CNN
Washington (CNN)A former New Jersey governor is urging fellow Republicans to call on President Donald Trump to resign following his embrace of Russian President Vladimir Putin at the Helsinki summit last week.
/jlne.ws/2v4OSHE

‘Like a Soviet-type economy’: GOP free traders unload on Trump; The president’s $12 billion farm bailout gets an ugly reception among many Republicans in Congress.
Burgess Everett – Politico
President Donald Trump’s bailout for the ag industry is driving his many Republican trade critics to exasperation. Pro-free trade Republicans were already furious with Trump’s escalation of tariffs against U.S. allies and China — a multi-front trade war they say is hurting U.S. farmers and manufacturers. But the administration’s response Tuesday — announcing plans to send $12 billion to farmers hurt by retaliatory tariffs to ease the pain — is the opposite of conservative, free-trade orthodoxy, they said.
/jlne.ws/2v27XKM

Republicans Pan Trump’s $12 Billion Farm Aid Plan
Alan Bjerga – Bloomberg
GOP lawmakers’ responses range from ambivalent to outraged; Crop prices rise in anticipation of agricultural aid program
The Trump administration’s decision to deliver $12 billion in aid to farmers hit by a burgeoning trade war was panned Tuesday by Republicans in Congress as not fixing the underlying problem — the White House’s own trade policies.
/jlne.ws/2v6o5uw

Crypto Exchange Coinbase Forms Political Action Committee
Nikhilesh De – Coindesk
Cryptocurrency exchange Coinbase has formed a Political Action Committee (PAC), according to government documents published Friday night. A disclosure published by the U.S. Federal Election Commission revealed that the exchange formed the “Coinbase, Inc. Political Action Committee” in June 2018, though it has yet to raise or donate any money. The Form 3x – a “Report of Receipts and Disbursements For Other Than An Authorized Committee” – means the PAC is not currently attached to any candidate running for public office.
/jlne.ws/2v2XYos

Democratic Sen. Elizabeth Warren: ‘I am a capitalist’ – but markets need to work for more than just the rich
Elizabeth Warren takes on Trump, the midterms and economic inequality in an interview with CNBC’s John Harwood; On Trump: “What he wants to do is set working people against working people, black working people against white working people.”; On possibly running for president: “Right now we better stay focused on 2018.”
John Harwood – CNBC
Sen. Elizabeth Warren has followed a circuitous path to the largest stages of American politics. Raised in Oklahoma by a family of modest means, she won a college scholarship but dropped out to get married at 19. Later she got her degree, then a law degree, and ultimately became a Harvard Law School professor and a leading authority on the economic struggles of American families.
/jlne.ws/2LjP7JX

Regulation

CFTC Issues Proposal to Streamline Regulations for Swap Dealers, Help End Users
CFTC
The Commodity Futures Trading Commission (CFTC) today issued a proposal approved unanimously by the Commission to reduce unnecessary burdens on registrants and market participants by simplifying overly complex notification provisions, thereby reducing certain intricate and prescriptive requirements that have been found to provide little or no benefit.
/jlne.ws/2v4uR49

SFTR to impact trade booking models
Securities Lending Times
Securities Financing Transactions Regulation (SFTR) is likely to significantly impact trade booking models, according to a white paper jointly published by The Depository Trust & Clearing Corporation (DTCC) and The Field Effect. The regulation is likely to affect 60 percent of current processes resulting in the need to develop new processes.
/goo.gl/J1Pi5q

SEC Detects Silicon Valley Executive’s Insider Trading
SEC
The Securities and Exchange Commission today announced that a senior executive at a Silicon Valley fiber optics company has agreed to settle charges that he made nearly $200,000 in illicit profits by trading on inside information in advance of three disappointing earnings announcements by the company.
/jlne.ws/2v4uM0l

Sebi proposes three-phase process for re-classification of promoters; The issue of re-classification had assumed significance at the time of implementation of minimum public shareholding (MPS) norms
Samie Modak – Business Standard
The Sebi on Tuesday proposed a three-phase process for re-classification of promoters as public shareholders. In the first stage, the concerned promoter shareholder or the company will have to file an application to the stock exchange requesting re-classification. In the next stage, the request will go to the board of directors.
/jlne.ws/2uZBGUk

CFTC responds to Vatican’s criticism of derivatives market; Christopher Giancarlo makes the case against the unethical nature of derivatives products after scathing statement from Pope Francis in May.
Hayley McDowell – The Trade
The US Commodities Futures Trading Commission (CFTC) has countered claims made by the Vatican in May this year that derivatives are unethical financial products.
/jlne.ws/2LqzvEI

Statement of CFTC Chairman J. Christopher Giancarlo Regarding the Proposed Rule on Segregation of Assets Held as Collateral in Uncleared Swap Transactions
CFTC
After more than four years of administering the final rules in subpart L of Part 23 (Commission Regulations 23.700-704), CFTC staff have observed that the detailed requirements of these regulations have been difficult and burdensome for swap dealers to satisfy. The requirements have also caused some confusion by end user counterparties who rely on our markets to hedge commercial risk. These observations were supported by comments made in response to the Commission’s Project KISS initiative.
/jlne.ws/2Lp6Ak7

Statement of Concurrence of CFTC Commissioner Rostin Behnam Regarding Segregation of Assets Held as Collateral in Uncleared Swap Transactions; Amendments
CFTC
I respectfully concur with the Commodity Futures Trading Commission’s (the Commission or CFTC) approval of its proposed rule (Proposal) regarding amendments to subpart L of the Commission’s Regulations (Segregation of Assets Held as Collateral in Uncleared Swap Transactions” consisting of Regulations 23.700 through 23.704), which implement Section 4s(l) of the Commodity Exchange Act (CEA or the Act). While I have strong reservations about the Commission’s proposed interpretation of CEA Section 4s(l) and its slash and burn approach to “simplify” requirements for swap dealers (SDs) and major swap participants (MSPs) absent meaningful consideration of the impact on swap counterparties, I am hopeful that the Proposal’s solicitation of comments on these key points will produce a balanced record from which to adopt a final rule that more precisely simplifies the current requirements and provides tailored regulatory relief.
/jlne.ws/2LjUVDf

Concurring Statement of CFTC Commissioner Rostin Behnam Regarding the Position Limits and Position Accountability for Security Futures Products Proposed Rule
CFTC
I respectfully concur with the Commodity Futures Trading Commission’s approval of its proposed rule regarding Position Limits and Position Accountability for Security Futures Products (Proposal). I commend staff on their hard work in producing this Proposal, and for their thoughtful responses to my questions.
/jlne.ws/2Lpn6AM

Update on the temporary permissions regime
UK FCA
On 24 July 2018 the Government published the draft Statutory Instrument that will form the legislative basis of the temporary permissions regime for inbound passporting EEA firms and funds. At the same time we have provided an update setting out more detail on how the regime will operate including our initial views on the FCA rules we propose will apply to firms while they are in the regime.
/jlne.ws/2LmvhOi

FCA opens a discussion on introducing a basic savings rate in the cash savings market
UK FCA
The Financial Conduct Authority (FCA) has today published a Discussion Paper on price discrimination in the cash savings market.
/jlne.ws/2Lj6yu2

Investing and Trading

Bunge to close Argentine soybean mill, lay off 60 workers -union
Reuters Staff
A union of employees of soy crushing plants in Argentina said on Tuesday that U.S. grains merchant Bunge Ltd told workers it will shutter a mill at the port of Ramallo in the province of Buenos Aires, laying off 60 workers.
/jlne.ws/2v55G1h

Darts Are Beating the Ira Sohn Investing Pros; Bulls’ Eye!; Top 5 dart picks in blue, top 5 Sohn picks in red
Spencer Jakab – WSJ
“Nothing new ever occurs in the business of speculating. What’s happened in the past will happen again and again and again.” Bond king Jeffrey Gundlach’s comments three months ago at the Sohn Conference in New York, which raises money for charity by inviting investing legends to share their stock tips with the masses, were more accurate than he could have imagined. Once again, investors would have been better off picking companies by throwing darts at stock tables than listening to Wall Street’s geniuses.
/jlne.ws/2vbBi5B

Nickel Is New Headache for Automakers as Cobalt Fears Abate
Mark Burton – Bloomberg
Graphite also failing to keep up with electric boom: Benchmark; Nickel looks set to double by 2022 amid shortage: WoodMac
Locking in supplies of key battery raw materials lithium and cobalt has been a headache for electric car manufacturers, but these days it’s the supply of nickel and graphite that’s keeping them up at night.
/jlne.ws/2v4tKBv

Stock Market Boom Shows Trade War Is Becoming Background Noise
Justin Carrigan – Bloomberg
Global equity index heads for best month since January; This could be the start of risk-on phase, Aberdeen says
What trade angst? U.S. stocks are at five-month highs, Australian stocks at decade highs, and equity markets including Canada and India are at or near their highest levels on record.
/jlne.ws/2LnlDek

How the Trump Tax Cut Is Helping to Push the Federal Deficit to $1 Trillion; Corporate income tax collections are near a 75-year low, as a share of the economy, after a new law reduced rates and allowed companies to deduct investments immediately.
Jim Tankersley – NY Times
In the trough of the Great Recession in 2009, as companies laid off hundreds of thousands of workers each month, the amount of corporate income taxes collected by the federal government plunged by almost a third. It was the largest quarterly drop since the Commerce Department began compiling the data in the 1940s. No other period came close. Until this year.
/jlne.ws/2LjlY1z

Institutions

Luc Caytan appointed as new Chairman of ThomasLloyd SICAV in Luxembourg
Thomas Lloyd
The ThomasLloyd Group has appointed Luc Caytan, an experienced senior financial market and investment expert, as the new Chairman of its European AIF fund platform ThomasLloyd SICAV. In his new role, he will take responsibility to enhance relations with the supervisory authorities, market participants and further stakeholders in Luxembourg and increasingly throughout Europe.
/jlne.ws/2v2V8ji

Deutsche Bank’s Sewing Dares to Talk Growth Again After Cuts
Steven Arons – Bloomberg
Lender to redeploy capital to strengthen fixed-income unit; Vows to defend its position as a top global debt trader
Since Christian Sewing took over as Deutsche Bank AG Chief Executive Officer, he has cut jobs, reduced risk and built capital. Four months later, he’s already talking about expanding again.
/jlne.ws/2v2Cisp

For Deutsche Bank’s Escapee, Freedom Is No Reward; DWS has lost more than a billion euros of value since its IPO.
Mark Gilbert – Bloomberg
Four months after escaping from the claustrophobic embrace of Deutsche Bank AG, DWS Group is finding life as a free agent somewhat tougher than it might have hoped.
/jlne.ws/2v2AzDr

Deutsche Bank Is Playing for Time; The idea of radically shrinking the investment-bank is gaining no traction.
Lionel Laurent – Bloomberg
The early release of some of Deutsche Bank AG’s quarterly results last week was a hint that analysts had become too gloomy about the battered lender’s fortunes. But the full figures published on Wednesday are a reminder that much of that gloom is justified.
/jlne.ws/2v5IP5N

Deutsche Bank completes half its workforce cut target; Germany’s biggest lender spent EUR239m on restructuring in the second quarter
Olaf Storbeck in Frankfurt – FT
Deutsche Bank has delivered half of its full-year job cutting target while spending less on restructuring than previously expected and arrested market share losses in key investment banking areas.
/jlne.ws/2LkpLLS

Regions

Euro-U.S. Dollar: The Sway of Politics and the Economics
Erik Norland – CME Group
The contrast between the state of Europe’s economy and the state of its politics could hardly be starker. Despite some evidence of a slight moderation in the pace of growth, Europe’s economy continues to improve even as political situations in Germany, Italy and Spain become increasingly delicate. Brexit remains the source of significant uncertainty; the refugee issue continues to roil politics and NATO’s foundations have developed cracks. As we head to the European Central Bank (ECB) meeting on July 26, markets appear to be more focused on what’s going wrong in Europe rather than what’s going well. From an economic perspective, there are three positive trends that are easily overlooked:
/goo.gl/qt2udr

Turkish Lira’s Plunge Prompts Concern About a Currency Crisis; Sharp slide follows central bank’s refusal to raise key rate in the face of soaring inflation; worries about President Erdogan’s influence
Christopher Whittall and David Gauthier-Villars – WSJ
Turkey’s currency fell sharply amid investor concerns that President Recep Tayyip Erdogan’s growing influence over the central bank could push the country toward a currency crisis.
/jlne.ws/2v2Ss5e

Inflation in This Country Will Skyrocket to 1,000,000% by 2019, Experts Say
Andrew Rosati – Time.com
Venezuela’s inflation will skyrocket to 1 million percent by the end of the year as the government continues to print money to cover a growing budget hole, the International Monetary Fund predicted on Monday.
/jlne.ws/2v5Lk8b

Wine Australia toasts Treasury Wine as exports boom; China demand helps country’s overseas sales soar and sees producer return to profit
Jamie Smyth in Sydney – FT
Treasury Wine Estates was the toast of the town on Tuesday after Australia’s industry group said the country’s wine exports grew at their fastest rate in 15 years last year amid strong demand from China.
/jlne.ws/2v5JiF5

Ruble Rise Shows Traders Aren’t Scared by Debt Sanctions Threat
Natasha Doff and Olga Voitova – Bloomberg
Local bonds slide, catching up with news from Tuesday evening; U.S. earlier concluded bond sanctions could rattle markets
Investors in Russian assets took a skeptical stance on a threat by U.S. senators to introduce a bill that could harm the local bond market.
/jlne.ws/2v4sEp7

Trade War and Brexit Open Door for U.K. Grain Sales to China
Manisha Jha – Bloomberg
China looks to U.K. as potential wheat and barley supplier; Bulk of U.K. wheat, barley exports currently goes to the EU
The global trade war and Brexit uncertainty could give U.K. wheat and barley exporters the chance to break into the Chinese market.
/jlne.ws/2LpiAlO

Virtu Financial registers as HFT in Japan; Virtu Financial’s Singapore entity gains regulatory approval to operate a high-speed trading business in Japan.
Hayley McDowell – The Trade
US-based market maker Virtu Financial has gained regulatory approval to operate as a high-frequency trading (HFT) firm in Japan.
/jlne.ws/2LlzvFZ

Brexit

‘No terminal damage’ of the City because of Brexit, says Barclays boss John McFarlane
Catherine Neilan – City AM
Barclays boss John McFarlane has struck a note of caution about the impact of Brexit on the City, saying he doesn’t believe it will cause “terminal damage”.
/jlne.ws/2LjRNHv

Miscellaneous

Fortnite Mania Fuels Epic Growth to $8.5 Billion; Epic Games’ profits on the game have made “legendary character” Tim Sweeney a billionaire.
Devon Pendleton, Christopher Palmeri – Bloomberg
Tim Sweeney made Fortnite a phenomenon by doing something that sounds crazy: He gave it away. That strategy has made him a billionaire. In an industry chock-a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than $1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
/jlne.ws/2LoVcF5

The post Bloomberg snatches trade data partner from rival Reuters appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

On Monday, MarketsWiki Education World of Opportunity in Chicago begins with the first session at 3 PM at the Stuart School of Business at Illinois Tech. Registration is still open.~JJL

Our second video from the New York series of MarketsWiki Education World of Opportunity is out, featuring Kevin McPartland, managing director, market structure and technology with Greenwich Associates. This is a not to miss video of why staying in tune with market structure is really important to your career.~JJL

Deutsche Boerse reported its second quarter earnings, up 10 percent to EUR687 million. Among its exchange groups, Eurex led net revenues with EUR239 million, up from EUR212 million a year earlier. Second was EEX, its power, gas and carbon and commodities exchange, which posted EUR61.1 million for the quarter, up from EUR51.7 million.~JK

Bravo to EuroCCP for handing over its CEO spot from one woman to another. Cecile Nagel is the new CEO beginning in September, replacing Diana Chan.~JJL

Yesterday was the 23rd anniversary of my racing out of the office at 3:15 PM after receiving a call from my wife that she was ready to give birth to our first child. Timothy James Lothian was breach and so he was delivered by C section and his first act in the world was to moon the doctor as he came out.~JJL

This story from the New York Post called “New diet claims you can lose weight eating only steak and burgers” contains the sentence: “Many carnivores are also passionate about cryptocurrency, and see a common thread between their unorthodox diet and an aversion to traditional banking.” No, not The Onion.~SR

A new VIX suit was filed on Monday. I guess it’s time for another round of the Lethal Weapon VIX meme. (You need to know your Danny Glover cinema to get this one.) ~SD

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Margin rules pose “legal, operational” challenges – CloudMargin
Luke Jeffs – FOW
More trading firms must over the coming years tackle the legal and operational challenges posed by the extension of margin rules designed to protect firms from the demise of a trading counterparty, a new report has warned. Global regulators are extending each year for the next three years the scope of initial margin (IM) rules for non-cleared swaps trading firms so that all but the smallest will be bound by the rules by 2020.
This poses many legal and operational challenges for firms, according to a new paper by technology firm CloudMargin.
/goo.gl/5mVu7U

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MWE World of Opportunity – Market Structure: Why You Should Care

JohnLothianNews.com
“I’m not a particularly good investor. I don’t know if my own portfolio is set up the way it should be. But I can certainly explain to you exactly how an equity trade comes from a pension fund and makes its way all the way down through the market and settles and all the other pipes and plumbing that come with it.”

In this video from MarketsWiki Education’s World of Opportunity event in New York, Kevin McPartland, managing director, market structure and technology with Greenwich Associates, takes a step back from the minutiae of markets to talk about the big structural picture through the lens of a few key themes.

Watch the video here »

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Women Need To Take More Risks To Become Leaders
Roger Trapp – Forbes
The publication earlier this month of the latest report from Cranfield School of Management on the numbers of women on the boards of Britain’s biggest quoted companies makes dismal, if predictable, reading. The study found that, while the percentage of female non-executive directors in the FTSE 100 was at an all-time high of 35.4%, female executive positions had flat-lined for a fourth consecutive year at 9.7%. Meanwhile, at the FTSE 250 the number of female executive directorships dropped from 38 to 30 between October 2017 and June 2018. Female directors were on average nearly two years younger than their male counterparts, but served for less time and had an average tenure of 3.7 years compared to 5.4 years for men.
/jlne.ws/2LrjEFy

***** We need more women leaders.~JJL

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Face of Finance May Soon Be More Female, at Least in China
Natalie Obiko Pearson – Bloomberg
More women than men in China are taking the notoriously difficult Chartered Financial Analyst exams, an indication that a gender shift may be underway — at least in the world’s second-largest economy.
In the latest CFA exam in June, 52 percent of test takers in China were women, compared with just 29 percent in the U.S.
/bloom.bg/2uODBMw

**** This is a 2 X event.~JJL

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A New Exchange In Town: Biva Launches In Mexico City; Bolsa Institucional de Valores (BIVA) becomes the second exchange to operate in Mexico.
Mark Driscoll, AVP, Market Technology, Americas, Nasdaq
Today is a symbolic day in Mexico as the Bolsa Institucional de Valores (BIVA) starts trading, and becomes the second exchange to operate in Mexico. We sat down with María Ariza, BIVA’s CEO, to discuss their ambitions for the new venue.
/jlne.ws/2Lp501Q

***** Larga vida a la competencia!

++++

Wednesday’s Top Three
Our top three stories could be read as all about power – power to compete, grabbing power and the power of the EFPs. Topping our most read stories was the FT’s Bloomberg snatches trade data partner from rival Reuters. Second was Quartz’s article on identifying those looking to move up the ladder, with Giving advice can be a sign of power hungry colleagues. Gotta love the classic picture that goes with the story. Third was the CCN piece Institutional Investors Swap Bitcoin Futures for Physical BTC in Wall Street First. All the power you need is right here.

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MarketsWiki Stats
130,033,792 pages viewed; 23,212 pages; 214,364 edits
MarketsWiki Statistics

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Lead Stories

How Traders Have Changed Since the Massive Selloff Earlier This Year
Elena Popina and Lu Wang – Bloomberg
S&P 500 is less than 1% away from its all-time high in January; Concerns from slowing growth to trade war weigh on sentiment
One by one, the milestones are falling, as stocks claw back from their nightmare winter. One thing that isn’t recovering as fast: the euphoria that foreshadowed the horrors of February and March.
/jlne.ws/2Lo7hdA

NYSE Completes Historic First Half of 2018
NYSE
Holds #1 spot among global exchanges for capital raising and ETFs; Expands trading to include all U.S. securities; Successfully executes launch of the first direct listing
The New York Stock Exchange (NYSE), a wholly owned subsidiary of Intercontinental Exchange (NYSE:ICE), extended its leadership as the premier venue for global capital raising, and the exchange of choice for issuers. The NYSE marked a number of milestones in the first half of 2018, positioning itself for continued growth, including:
/jlne.ws/2v8kEnd

Singapore and Indian exchanges resume talks after derivatives spat
Stefania Palma in Singapore – FT
Singapore’s bourse and India’s National Stock Exchange have resumed talks, according to statements issued by both exchanges on Wednesday, in what was the first sign of realignment following a derivatives dispute that unfolded earlier this year.
/jlne.ws/2LlZGvY

From Exchanges Old To Exchanges New: Chicago Mercantile Exchange and Alt 5 Sigma
Steve Kanaval – Equities.com
As digital currencies move to the center of new asset discovery for investors, many of these nascent management teams seek traction with similar goals to those of the exchanges in the 1980s. One important thing I learned working the derivative trading pits in Chicago in the 70s and 80s as a member of the Chicago Mercantile Exchange (CME[NGS] – $169.52 Trade ) is that experience, skill and voracity of the management team will always be a critical factor in the eventual success or failure of any venture.
/jlne.ws/2Ls4EYg

FCA approves ION-Fidessa deal; The UK regulator has determined to approve the proposed acquisition of Fidessa by ION Bidco.
Finance Magnates
Approximately three months after Fidessa Group plc (LON:FDSA), a provider of trading, investment and information solutions to the financial services sector, decided to recommend the offer made by ION Bidco, an indirect wholly owned subsidiary of ION Investment Group Limited, the deal has secured the nod of approval of the UK Financial Conduct Authority.
/jlne.ws/2v8OHLl

Disrupters could be good for markets — but I’m playing safe; Who knows where the US trade war threat could lead us?
John Redwood – FT
The FT fund has benefited in recent weeks from its relatively cautious stance. The 47 per cent weighting in short-term bonds and cash is largely immune to the fears gripping share markets.
/jlne.ws/2Lme9rX

LIBOR Fallbacks
Chris Barnes – Clarus Financial Technology Blog
ISDA have launched a consultation for a fallback mechanism in the event that a LIBOR rate ceases to be published. This would mean that any contract referencing the LIBOR rate and governed by the ISDA 2006 Definitions would use these proposed “fallback” rates.
/goo.gl/nry7rJ

Charting a Course for a Successful XVA Program
Satyam Kancharla – Numerix
XVA, in the simplest terms, is about capturing the costs of running an OTC derivatives
operation. Doing so, however, is far from simple. As valuation adjustments represent a real
cost and are having increasingly onerous impacts on balance sheets, they must be factored in
everywhere OTC derivative pricing and valuations live within an organization, and should not
be limited to the XVA desk, risk management, or accounting operation.
/goo.gl/bNQYNx

Is there more to Adam Smith than free markets?; He championed laissez-faire economics but also recognised the need for strong social institutions
John Kay – FT
No one is more widely quoted by people who have not read his work. Even those who have never visited a library, far less opened a copy of The Wealth of Nations, know that Adam Smith extolled the public benefit of individual selfishness and the necessity of maximally free markets, excoriating the malign impact of government intervention in economic matters. They are familiar with his metaphor of “the invisible hand” and know that it is “not from benevolence” that the baker provides our daily bread. Smith provided inspiration for Margaret Thatcher and Ronald Reagan, and occupies a place as an icon of economic liberalism. When Gordon Brown invited Alan Greenspan to Kirkcaldy, where Smith was born and Brown educated, Greenspan could suggest that the something in the air was not the smell of linoleum — which hung over that town for a century — but a contagious miasma of economic genius.
/jlne.ws/2Lp84em

‘The next frontier for us’: Inside State Street’s multi billion dollar bet on financial data
Frank Chaparro – Business Insider
“The front-office has been the next frontier for us.” Lou Maiuri, who heads up businesses spanning research, trading, tech and innovation at State Street, is talking about the trading floors across Wall Street that execute trades on behalf of investors. For State Street, which is best known for its sleepy custody business, it’s a new focus, one which has been taken to the next level with the recent deal to buy financial data firm Charles River Development for $2.6 billion.
/jlne.ws/2veYZtN

IOSCO To Launch 2018 World Investor Week To Promote Investor Education
Mondovisione
The International Organization of Securities Commissions (IOSCO) is preparing to launch its second annual World Investor Week (WIW) from 1 through 7 October 2018, following the success of last year´s event in promoting investor education and protection and highlighting the various initiatives of securities regulators in those two areas around the globe.
/jlne.ws/2v8ANZE

Exchanges, OTC and Clearing

Senior LSE markets head appointed CEO at EuroCCP; Cécile Nagel, head of LSE markets global product development and LSE exchange traded products has been named as EuroCCP’s new CEO.
Hayley McDowell – The Trade
EuroCCP has appointed a senior markets business head at the London Stock Exchange (LSE) as its new chief executive officer.
/jlne.ws/2LnFOZs

EuroCCP Appoints Cécile Nagel As CEO
MondoVisione
EuroCCP, Europe’s leading equities clearinghouse, today announces the appointment of Cécile Nagel as Chief Executive Officer. Ms Nagel joins from the London Stock Exchange Group (LSEG) where she was most recently Head of LSE Markets Global Product Development and LSE Exchange Traded Products.
/jlne.ws/2v41Y89

CMC Markets posts profit lift ahead of trading crackdown
Hannah Murphy in London – FT
CMC Markets, the online trading platform, said earnings in its latest quarter were “moderately above” the same period last year as it lured wealthier, experienced traders to its site ahead of a regulatory crackdown on the products it can offer to more amateur punters.
/jlne.ws/2LmFquh

Data and technology businesses drive 17% rise in Nasdaq profits
Nicole Bullock – FT
Nasdaq, the exchanges operator, reported a 17 per cent increase in adjusted quarterly earnings, as demand for its trading technology and data services surged.
/jlne.ws/2LpjvT3

New chairman of Taiwan’s TAIFEX takes office
Sophia Yang, Taiwan News
The Taiwan Futures Exchange (TAIFEX) welcomed former Minister of Finance Sheu Yu-jer as incoming chairman on Monday.
/jlne.ws/2Lq9Vj6

“Data analytics may change the perspective on risk scenarios”
Eurex
From the return of volatility and non-financial risks to the influence of artificial intelligence and data analytics: we spoke to Thomas Laux, Member of the Executive Board and Chief Risk Officer at Eurex Clearing, about current and future topics in risk management.
/jlne.ws/2v6fmbO

Q2 / 2018: Deutsche Börse AG with further high growth
Deutsche Börse AG
Net revenues up 10 percent to EUR 687 million in Q2 / 2018 / Earnings per share (adjusted) in Q2 / 2018 up 14 percent on the previous year / In the first half of 2018, net revenues increased to EUR 1.4 billion (+11 percent) ) / The adjusted consolidated profit for the period of EUR 533 million (+15 percent) in H1 / 2018 / result for the first half of 2018 was thus fully in line with the forecast
/jlne.ws/2v9CN3W

Fintech

How ‘too-big-to-fail’ banking giants limit ways fintech firms can handle your money
Sam Taussig – MarketWatch
Innovative fintech companies let us refinance a loan from home, trade stocks in line at the pharmacy, and buy Girl Scout cookies with a mobile wallet, curbside.
Convenience isn’t the only advantage. Financial technology companies (fintechs) are changing financial behaviors, improving access to credit, increasing savings and investment returns, and providing customized products to meet evolving financial needs. The task of protecting customers and the economy from harm falls to financial regulators who may struggle to differentiate each new business model and the respective risks.
/on.mktw.net/2JXIVlh

What’s an ancient olives broker got to do with artificial intelligence?
MarketBrains
Founded in 2008 in the wake of the Lehman collapse, The Thalesians have progressed through the bleeding edge of quantitative finance, settling recently as an artificial intelligence company specializing in the digital economy, consulting and education.
It was created by quants who saw the unwinding of the financial system from the vantage point of Lehman’s collapse in London: Saeed Amen, who also founded consultancy Cuemacro and is a regular speaker in the financial press, as well as the author of Trading Thalesians; Matthew Dixon, assistant professor of statistics and finance at the Illinois Institute of Technology; and Paul Bilokon, a senior quantitative consultant at BNP Paribas and visiting lecturer at Imperial College.
bit.ly/2uQify5

Rival Systems further expands into equities market with CTA and UTP feed handlers
Rival Systems
Rival Systems (Rival), an award-winning provider of trading and risk management software, today announced the rollout of CTA and UTP feed handlers within its Rival Trader platform. Native support for these equity feeds will provide Rival clients with easy access to equity data.
(NO LINK)

FinTech-Investor Sharks Bite on New Robo
Steve Garmhausen – Barron’s
Three big RIA firms have thrown their backing behind a new, multi-strategy robo-advisor known as Investment POD.
Investment POD was one of three finalists in a startup competition sponsored by
ScratchWorks, a fintech accelerator. The finalists made their pitches to a high-profile group of ScratchWorks-affiliated advisors at Barron’s Top Investment Advisors Summit in March.
bit.ly/2LPT8lo

Maven Wave Achieves the Enterprise Collaboration Partner Specialization in the Google Cloud Partner Specialization Program; Google Cloud Recognizes Maven Wave’s Technical Proficiency and Proven Success In Enterprise Collaboration
Sys.com
Maven Wave today announced that it has achieved the Enterprise Collaboration Partner Specialization in the Google Cloud Partner Specialization Program. By earning the Partner Specialization, Maven Wave has proven its expertise and success in building customer solutions in the Enterprise Collaboration field using Google Cloud Platform technology.
/jlne.ws/2v6JnZ3

Cryptocurrencies

Steve Bannon is creating a ‘deplorables’ cryptocurrency to boost global populism
Gian Volpicelli – WIRED
Bannon will launch a token to power the global populist movement, according to people with knowledge of his plans
/goo.gl/MwFS6M

Bitcoin: No-Fee Cryptocurrency Trading App Takes on Robinhood
Jen Wieczner – Fortune
More competition is coming to the commission-free cryptocurrency trading market. Voyager, a startup backed by an Uber co-founder as well as an early investor in the ride-hailing company, revealed plans Wednesday to offer no-fee trades of at least 15 different cryptocurrencies, including Bitcoin, Ethereum and others.
/for.tn/2LTON0V

Coinbase Finds No Insider Trading of Bitcoin Cash; Popularzier: Brian Armstrong founded Coinbase to make cryptocurrency accessible to the masses; he calls the online exchange “Gmail for digital currency.”
Jeff John Roberts – Fortune
Coinbase, the biggest U.S. cryptocurrency exchange, launched an inquiry last December into whether its employees engaged in improper trading related to the digital currency known as Bitcoin Cash. Now, Fortune has learned, the company has wrapped up the investigation and concluded no wrongdoing took place.
/jlne.ws/2Lrh42k

Coinbase launches gift cards so you can spend your cryptocurrency at the mall
Matthew Beedham – The Next Web
Coinbase is putting a new spin on the cryptocurrency wallet and turning it into a gift card – well, sort of.
The popular exchange desk has partnered with digital gift card provider WeGift to offer a direct route for customers to convert the funds in their wallets into currency for the high street.
bit.ly/2mMXaAi

USAVE Blockchain partners with GMEX Group to build secure digital exchange for physical gold
Hedgeweek
USAVE Blockchain (USAVE) is to partner with GMEX Group (GMEX), a provider of exchange, post-trade and digital technology solutions, to build the digital Monaco Gold Spot Exchange (MGX) which will enable secure trading of physical eco-responsible gold.
/goo.gl/7Knxje

Decentralized Exchange Waves Scored a $6 Million Debut. Then It Got Hacked
Leigh Cuen – Coindesk
When a decentralized cryptocurrency exchange supports fiat tokens and courts banks, yet makes customer identification optional, all bets are off.
/jlne.ws/2LqBrwP

Politics

Judge lets emoluments lawsuit against Trump move ahead
Lorraine Woellert and Stephanie Murray – Politico
A lawsuit arguing President Donald Trump is violating the Constitution by benefiting from business with foreign governments can proceed, a judge for the U.S. District Court in Maryland ruled Wednesday. The president’s lawyers had sought to dismiss the case, but the motion was denied.
/jlne.ws/2LpNhHD

Trump, E.U. announce deal to avert escalation of trade tensions
Damian Paletta and Jeanne Whalen – Washington Post
The United States and the European Union stepped back from the brink of an escalating trade war Wednesday, with the unexpected announcement of a process to ease tensions and avoid further tariffs.
/jlne.ws/2LtehWM

How the Trump Tax Cut Is Helping to Push the Federal Deficit to $1 Trillion
Jim Tankersley – NY Times
The amount of corporate taxes collected by the federal government has plunged to historically low levels in the first six months of the year, pushing up the federal budget deficit much faster than economists had predicted.
/jlne.ws/2Lni73r

Trump Has No Idea What His Tariffs Have Unleashed for Farmers; His trade war will hurt business at a time when the rural population is aging, and it will probably hollow out farm communities.
Robert Leonard – Mr. Leonard is the news director for the radio stations KNIA and KRLS.
Today President Trump is visiting Dubuque, Iowa, where every year at harvest time, millions of tons of grain come via rail and truck to be loaded onto barges on the Mississippi River and shipped to Mexico, China and much of the rest of the world. Harvest puts coin into the hands of farmers, and they and their communities — indeed all of America — profit. Not this year.
/jlne.ws/2LrLhP5

U.S., Europeans Agree to Iron Out Trade Differences; Trump, Juncker agree to hold off on further tariffs as they work to reduce trade barriers
Valentina Pop, Vivian Salama and Bob Davis – WSJ
President Donald Trump and European Commission President Jean-Claude Juncker turned down the heat on a trade dispute between two of the world’s largest economic powers, suggesting Wednesday they would hold off on further tariffs while they talk through their differences.
/jlne.ws/2LmG62N

Regulation

MiFID II spurs EUR20 million additional costs at Deutsche Asset Management; Deutsche Bank’s CFO says external research costs related to MiFID II reached EUR20 million in the first half of the year.
MiFID II spurs EUR20 million additional costs at Deutsche Asset Management; Deutsche Bank’s CFO says external research costs related to MiFID II reached EUR20 million in the first half of the year.
Hayley McDowell – The Trade
Deutsche Bank’s asset management business incurred an additional EUR20 million in MiFID II-related costs in the first half of this year, according to the bank’s financial chief.
/jlne.ws/2LnjCi5

Ex-Deutsche Bank Traders Charged in Expanding Spoofing Probe
Chris Dolmetsch – Bloomberg
James Vorley, Cedric Chanu indicted in Chicago federal court; Charges indicate federal probe into practice still widening
Two former Deutsche Bank AG employees were charged with fraudulent and manipulative trading involving precious metals futures contracts through a practice known as spoofing as a federal probe on illegal market practices continues to widen.
/jlne.ws/2LnRLyd

Bitcoin Ponzi Schemer Fined $1.9M, Disappears From Longmont; Where is Dillon M. Dean? He was fined for defrauding 120 investors in a Bitcoin scheme, but never responded or showed up in federal court.
Jean Lotus, Boulder Patch
A Longmont man who ran an online Bitcoin investment scheme that allegedly bilked up to 600 investors of $1.2 million was ordered July 9 in federal court to pay more than $1.9 million in penalties and restitution. But Dillon Dean, 26, has disappeared.
/jlne.ws/2Lm91UJ

ASIC obtains orders against investment scheme operator Daniel Ali
ASIC
ASIC has obtained final orders in the Supreme Court of Queensland against Daniel Farook Ali, former director of DanFX Trade Pty Ltd (DanFX).
/jlne.ws/2v9kc8b

Final Production Test for TRACE Trade Reporting FIX Tag Changes
FINRA
On Monday, August 20, 2018, FINRA will require a change to all FIX trade reporting related to the processing of execution time during Daylight Savings Time (DST) changes. FIX Tag 60 (TransactTime) will be used to indicate the Execution Time for all products and Tag 22007 (ExecutionTime) will be retired from processing use.
/jlne.ws/2v93RR1

July 2018 Board Update
FINRA
FINRA President and CEO Robert Cook, Chairman Bill Heyman, Board members and FINRA staff provide updates on the July 2018 FINRA Board of Governors meeting.
/jlne.ws/2v2FBje

Testimony of Chairman J. Christopher Giancarlo before the House Committee on Agriculture, Washington, D.C.
CFTC
Thank you, Chairman Conaway, Ranking Member Peterson, and members of the Committee. I appreciate the opportunity to appear before you today to discuss my priorities and the work of the Agency.
/jlne.ws/2vaMnDY

Who’s afraid of regulation?
Thomas Hale – FT
The market for bank capital – already, it’s fair to say, a pretty odd place – has played host to a particularly unusual development over the past few months.
/jlne.ws/2v45XS9

Investing and Trading

How the World’s Governments Are Approaching Earth-Friendly Investing
Nathaniel Bullard and Daniel Shurey – Bloomberg
Green bonds are a fast-growing financial instrument, with annual issuances of less than a billion dollars a decade ago having grown to more than $170 billion last year. They’re increasingly popular as a way to fund environmentally friendly infrastructure, energy efficiency and clean energy. As the market grows, an intriguing split is emerging between green bond markets: Asia gets carrots, and Europe gets sticks.
/bloom.bg/2LOeqjq

What a difference a day makes
Matt Roberts-Sklar – BOE Bank Underground Blog
Often when analysing financial markets, we want to know the statistical distribution of some financial market prices, yields or returns. But the ‘true’ distribution is unknown and unknowable. So we estimate the distribution, based on what we’ve observed in the past. In financial markets, adding one data point can make a huge difference. Sharp moves in Italian bond yields in May 2018 are case in point – in this blog I show how a single day’s trading drastically alters the estimated distribution of returns. This is important to keep in mind when modelling financial market returns, e.g. for risk management purposes or financial stability monitoring.
/goo.gl/9U4qi6

ExxonMobil’s Darren Woods vows engagement and openness; Oil group’s central message has not changed but how it communicates has, says chief
Ed Crooks – FT
“My personal style is I think a constructive conversation is good, it’s healthy,” says Darren Woods. “I don’t mind being challenged on what we’re doing and why we’re doing it.” It is hard to imagine either of Mr Woods’ two predecessors as chief executive of ExxonMobil, Lee Raymond and Rex Tillerson, enthusing as wholeheartedly about the importance of “engagement, discussion, debates”.
/jlne.ws/2LnUNCB

Banker to the Queen Hunts U.K. Startups for Risk-Hungry Clients
Edward Robinson – Bloomberg
Coutts, RBS’s 326-year-old private bank, uses investment club; Wealthy investors want to meet entrepreneurs, not just invest
When British entrepreneur James Dean decided to raise money for his tech startup this year, he did what company founders usually do — he talked to venture capitalists. Yet Dean disliked what he heard, so he sought an alternative. He didn’t choose equity crowd-funding or peer-to-peer loans. Instead, Dean turned to Coutts & Co.
/jlne.ws/2LpV1sT

Institutions

Macquaire Group names head of asset management as first female CEO; Shemara Wikramanayake to succeed Nicholas Moore as Macquaire chief executive and managing director at end of November.
John Brazier – The Trade
Macquaire Group has announced Shemara Wikramanayake the group’s first female chief executive, following the confirmation that current chief executive Nicholas Moore is set to retire.
/jlne.ws/2LqEpBt

Vanguard Sent Erroneous Text Messages to Some 401(k) Customers; Messages said loans had been processed against clients’ retirement savings
Sarah Krouse and Katy Stech Ferek – WSJ
Money management giant Vanguard Group sent some of its 401(k) customers erroneous text messages Tuesday evening saying that the firm processed loans against their retirement savings.
/jlne.ws/2Lrv786

Quant hedge funds lose their allure as performance sags; Inflows into computer-powered quant funds are running at their slowest pace since 2009
Robin Wigglesworth in New York and Lindsay Fortado in London – FT
Investor inflows to computer-powered “quantitative” hedge funds have halved this year to the most sluggish pace since 2009, after a spate of poor performance from many of the industry’s biggest players.
/jlne.ws/2LsyJqw

Banking’s Most Powerful Club Just Got a Shy New Member
Emily Cadman and Matthew Burgess- Bloomberg
Shemara Wikramanayake replaces retiring Nicholas Moore Nov. 30; Company lifer turned asset management arm into profit machine
The little-known Shemara Wikramanayake has just been catapulted into the ranks of the most powerful women in the global financial industry.
/jlne.ws/2LswXpm

Nomura net profits tumble 91% on slump in fixed income and equities; Japanese brokerage suffers worst quarter since 2016 as trade frictions take toll
Leo Lewis and Kana Inagaki in Tokyo – FT
Nomura Holdings suffered its worst quarter since 2016 as trade war jitters turned profit into loss at its flagship wholesale division and Japan’s biggest investment bank failed to match the recent strong results of its Wall Street rivals.
/jlne.ws/2v6EFKR

Regions

Biggest Nordic Bank Warns Election Mess Could Sink Swedish Krona
Ellen Milligan – Bloomberg
Nordea sees krona sliding to about 10.5 per euro ahead of vote; Nationalist could emerge as biggest party in general election
The normally stable affair of Swedish politics is getting interesting for the currency markets.
/jlne.ws/2LrrQFQ

Why even a tweak from the BoJ can shake global markets; Speculation the central bank may scale back stimulus programme has investors on edge
Save to myFT
Leo Lewis in Tokyo, Kate Allen in London and Robin Wigglesworth in New York – FT
The July 30-31 meeting of the Bank of Japan was sitting on the calendar as an ‘interesting’ event for markets. Important because it is Japan, but nothing too white-knuckled.
/jlne.ws/2LoSYFC

Europe to Become ‘Massive’ Buyer of U.S. LNG, Trump Says
Naureen S Malik and Ryan Collins – Bloomberg
More import terminals coming for shipped American gas: Juncker; Trump, European Commission reach agreement to avoid trade war
Europe will build more terminals to import U.S. liquefied natural gas, the head of the European Commission told U.S. President Donald Trump during a meeting aimed at averting a transatlantic trade war.
/jlne.ws/2Lp6GIG

The EU will stand up for rules-based trade; Too often progress at the WTO has been held up by states pursuing narrow interests
Cecilia Malmström – FT
The international trading order is confronting its deepest crisis to date. The threat of a global trade war is looming over us. Some now believe it is time to pull the plug on 70 years of trade diplomacy and pursue trade goals by other means. There is no doubt that if this happens, it will be the public that takes the hit.
/jlne.ws/2v7FPG2

Brexit

A Bad Brexit Deal for Banks Threatens Cities Across the U.K.
Thomas Penny – Bloomberg
Centre for Cities think tank publishes report on Thursday; London is less reliant on financial services than Edinburgh
Cities outside London are more exposed to the effects of a bad deal for financial services after Brexit than the U.K. capital, according to a report published on Thursday.
/jlne.ws/2LnAjKi

Be Ready for Any Brexit Market Hit, U.K. Regulator Tells City
John Glover – Bloomberg
BOE’s Woods speaks in interview about contingency planning; Post-crisis capital rules mean banks are stronger, Woods says
The Bank of England is war-gaming with lenders and insurers for potential market turmoil on Brexit day.
/jlne.ws/2LnzJw6

Miscellaneous

A Non-Gamer’s Guide to Fortnite, the Game That Conquered All the Screens
Sandra E. Garcia – NY Times
Fortnite has taken over. Videos of people playing the game have more than two billion views on YouTube. Drake has played it with Ninja, a celebrity among Fortnite fans. The gaming expo E3 hosted a 100-player tournament that included the rapper Vince Staples, the actor Jon Heder and the mixed martial arts fighter Demetrious Johnson.
/jlne.ws/2LrZnQj

The post How Traders Have Changed Since the Massive Selloff Earlier This Year appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

One takeaway from the CME’s second quarter earnings report yesterday: Average daily volume at the exchange through the first half of the year was 20.2 million. In 2000, ADV was just over 2.5 million.~JK

B3, formerly BM&F Bovespa, posted a volume increase of 52 percent on 1.3 billion contracts for the first half of 2018. FOW noted that it topped the Intercontinental Exchange‘s volume, moving B3 into third in terms of volume behind top exchange, CME Group up 20 percent with 2.5 billion contracts and the National Stock Exchange of India, up 43 percent to 1.6 billion contracts.~JK

Do you know who invented the “Ring The Bell” marketing event at the stock exchange? Equities.com points to a man named Enzo Villani, now a board member of a new crypto markets infrastructure firm called Alt 5 Sigma.~JK

Here is a video of Blythe Masters and her CTO about the partnership between Google and Digital Asset from the Google Next ’18.~JJL

This July, NFA partnered with Six Flags Great America to offer staff discounted admission for the month. NFA auditors will be double checking for fake hand stamps and making sure rider harnesses are nice and tight.~JJL~JK

++++

Global Blockchain Company AlphaPoint Adds Industry Veteran Kristin Boggiano as Chief Legal Officer to Executive Team
AlphaPoint
AlphaPoint, a leading blockchain company focused on enabling institutions to launch, scale, and operate digital asset networks and exchanges all over the world, today announced the appointment of Kristin Boggiano as its Chief Legal Officer. In this role, Boggiano will oversee the company’s legal, regulatory, and government relations functions as well as contribute as a member of AlphaPoint’s executive team.
/jlne.ws/2LrzdNR

**Kristin spoke at our MarketsWiki Education event in New York in 2016 about her trek through the jungles of Ecuador.~JK

++++

Kudlow says US GDP figure will be ‘big’; Top economic adviser says he has no specific knowledge but wanted to ‘help’
Mamta Badkar – FT
US President Trump’s top economic adviser on Thursday told Fox Business that he expected Friday’s US GDP figure to be “big” but denied knowing the specifics, less than two months after Mr Trump’s tweet in advance of a jobs report drew fire.
/jlne.ws/2JZMcR2

***** This is irresponsible.~JJL

++++

Trump Predicts Data Will Show U.S. Economy in ‘Terrific’ Shape
Greg Sullivan and Toluse Olorunnipa – Bloomberg
Bloomberg survey points to 4.2% expansion in second quarter; Data to be released at 8:30 a.m. in Washington on Friday
President Donald Trump predicted data on Friday will show the U.S. economy is in “terrific” shape amid forecasts that growth topped 4 percent in the second quarter, the fastest since 2014.
/jlne.ws/2JXaZFj

***** And so is this.~JJL

++++

Fake news of Napoleon’s death cited in guidance to help traders
Huw Jones – Reuters
Fake news that Napoleon had died is cited in new analysis aimed at helping commodity, bond and forex traders to stop fraud, an industry body said on Friday.
/jlne.ws/2mLvZWr

***** Seems fake news, which we once called rumors, has been around a while.~JJL

++++

The Girl Scouts have gone from baking and sewing to cybersecurity and financial literacy
Myelle Lansat and Richard Feloni – Business Insider
The Girl Scouts is much more than selling cookies; it’s an organization that provides a foundation for young women to take leadership roles in society. And since Sylvia Acevedo was named CEO of Girl Scouts in 2017, it’s also teaching its members about STEM (science, technology, engineering, and math) — shifting the sole focus away from traditionally female tasks, like baking and sewing.
/goo.gl/kwHCjs

***** In the name of fairness, some Girl Scout news.~JJL

++++

Thursday’s Top Three
Yesterday’s top stories were led by Bloomberg’s How Traders Have Changed Since the Massive Selloff Earlier This Year. Second was Equities.com’s From Exchanges Old To Exchanges New: Chicago Mercantile Exchange and Alt 5 Sigma about new crypto trading systems. Third went to Financefeeds’ FCA approves ION-Fidessa deal

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MarketsWiki Stats
130,088,709 pages viewed; 23,215 pages; 214,399 edits
MarketsWiki Statistics

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Lead Stories

Up to Two-Thirds of Bitcoin Transactions Have No Economic Value
Olga Kharif – Bloomberg
Services developing tools to add clarity to blockchain data; Value of activity about half of what appears, researcher says
On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency.
/jlne.ws/2K5LOAM

Bitcoin Drops as U.S. Rejects Winklevoss ETF for Cboe Trading
Todd White – Bloomberg
Technical indicator also moves into bearish territory; Digital currency has declined after more than 30% July rally
Bitcoin fell for a third day, slipping below $8,000, after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss.
/jlne.ws/2K14LEn

Facebook’s $119 Billion One-Day Rout Makes U.S. History
Sophie Caronello – Bloomberg
It’s official. Facebook Inc. just had the biggest stock-market wipeout in American history. Shares tumbled 19 percent on Thursday to close at $176.26 after sales and user growth disappointed investors. The drop translates to a $119.4 billion decline in market capitalization, the largest-ever loss of value in one day for a U.S. traded company.
/jlne.ws/2JWxavv

FINRA Announces Enforcement Structure, Senior Leadership Team; Integration of Enforcement Functions Complete; Unified Enforcement Program Key Outcome of FINRA360
FINRA
FINRA announced today the Department of Enforcement’s new structure and senior leadership team. This marks the completion of the final phase of the integration of FINRA’s enforcement functions—a process that began with the July 2017 promotion of Susan Schroeder to FINRA’s Head of Enforcement to create a unified enforcement function.
/jlne.ws/2K02VDG

Twitter Shares Plunge 17% as Monthly Users Decline
Selina Wang – Bloomberg
Company reports 1 million fewer visitors from previous quarter; Revenue climbs to $711 million, topping analyst’ projections
Twitter Inc. said monthly users dropped by 1 million in the second quarter, and predicted that number will decline further as the company continues to fight against spam, fake accounts and malicious rhetoric on its social network. The shares plunged 17 percent in early trading.
/jlne.ws/2JWSiBO

Hedge Fund Titans Who Bet Big on India Now Say They Were Scammed
Olivia Carville, Anto Antony, and Jeanette Rodrigues – Bloomberg
Axon Capital, CIFF say they are victims of a massive fraud; Dispute is playing out in courts in India and Mauritius
The $1.5 billion India wager that went horribly wrong for some of the world’s biggest hedge funds began with a tantalizing offer.
/jlne.ws/2K0v9hO

Juncker’s Trade Pitch to Trump: ‘I Can Be Stupid, as Well’; How bravado, flip cards and a White House ally helped European official sell U.S. president on trade detente
Valentina Pop and Vivian Salama – WSJ
When Jean-Claude Juncker arrived at the White House on Wednesday, he had no idea how the meeting with President Donald Trump would end.
/jlne.ws/2K01wNF

High speed trader Virtu’s profits miss the mark
Nicole Bullock – FT
Virtu Financial, the high speed trader, reported adjusted net income of $59.6m in the second quarter below Wall Street expectations amid a “markedly worse” operating environment, the company said.
/jlne.ws/2LunLRp

‘F’ Is For? This ETF Is Named After FANGs and Holds No Facebook
Carolina Wilson and Sarah Frier – Bloomberg
Fund, known by ticker FNG, sold out of Facebook during scandal; Earlier, ETF had dumped Apple holdings ahead of earnings boost. What’s in a name? When hearing the acronym FANG, four technology stocks come to mind: Facebook Inc., Amazon.com. Inc., Netflix Inc., and Alphabet Inc.’s Google.
/jlne.ws/2JXeQ5f

Several banks dismissed from U.S. metals price-fixing lawsuits
Jonathan Stempel – Reuters
A U.S. judge has dismissed five large banks from two antitrust lawsuits by investors alleging multi-year conspiracies to rig prices for hundreds of billions of dollars of transactions in the global silver and gold markets.
/jlne.ws/2JWBVFn

Fyre Festival Promoter Pleads Guilty to Ticket-Scam Charges
Bob Van Voris – Bloomberg
Billy McFarland, the architect of the failed 2017 Fyre Festival, pleaded guilty to new charges that he ran a fraudulent ticket business while on bail facing earlier fraud charges connected to the disastrous luxury concert series in the Bahamas.
/jlne.ws/2K0AoOw

Fannie Mae Debt Sale Sets Milestone For New Borrowing Benchmark; New index taking aim at scandal-ridden Libor passes $6 billion test.
Vipal Monga and Daniel Kruger – WSJ
A benchmark lending rate that regulators and investors hope can replace the scandal-plagued Libor as the foundation for trillions of dollars of debt from credit cards to business loans easily passed a key test.
/jlne.ws/2JYY9GR

Exchanges, OTC and Clearing

CME to launch six gasoline futures contracts
Reuters Staff
CME Group says it plans to launch six gasoline futures contracts effective on Aug. 26 and for trading from Aug. 27
/jlne.ws/2K0xN7e

CME Group Achieves International Average Daily Volume of 4.2 Million Contracts in Q2 2018, Up 13 Percent from Q2 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved quarterly international (defined as outside of the US) average daily volume (ADV) of 4.2 million contracts during the second quarter of 2018, up 13 percent over the same period last year.
/jlne.ws/2K07pdJ

CME profits miss despite bump in trading volumes; Concerns around global protectionism sparked higher trade, particularly in agricultural products
Joe Rennison – FT
CME Group, the world’s largest futures exchange, today reported mixed earnings, tempered by trade concerns fuelling volumes as investors sought to protect against price fluctuations.
/jlne.ws/2K1xgSm

CME quarterly earnings boosted by volumes, market data
John McCrank – Reuters
CME Group Inc (CME.O), the world’s largest futures exchange operator, said on Thursday its second-quarter earnings rose on the back of higher trading volumes and market data fees, as it works toward the close of its $5.5 billion acquisition of NEX Group (NXGN.L).
/jlne.ws/2K5ifiu

MGEX Reports 25th Best Electronic Volume Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports July 25th as the fourth July date on the Daily Electronic Volume’s top 25 records list. Coming in at 19,396 contracts and beating out the previous title holder by 160 contracts, yesterday’s electronic volume now occupies the 25th-best overall spot.
/jlne.ws/2K0yeP4

While the ECB holds on to its monetary policy, why not visit the home of the euro yield curve?
Eurex
The European Central Bank has decided to keep its monetary policy unchanged and freeze its benchmark interest rate on the deposit facility at -0.40 per cent. This is again a good opportunity to take a closer look at what Eurex interest rate derivatives have to offer.
/jlne.ws/2LqwSCw

Exchange Publishes CG Code Consultation Conclusions and Guidance for Boards and Directors
HKEX
Proposed changes to CG Code and related Listing Rules receive strong support; Amendments to CG Code and related Listing Rules to take effect 1 January 2019; Exchange publishes “Guidance for Boards and Directors” to help directors to be more effective
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) conclusions from its consultation on its Corporate Governance Code (CG Code) and related Listing Rules (Consultation Conclusions on Review of the Corporate Governance Code and Related Listing Rules, or Consultation Conclusions)1 along with “Guidance for Boards and Directors”.
/jlne.ws/2LuV7iW

Fintech

FIA Announces Partnership With Rise New York, Created By Barclays, To Promote Innovators Pavilion
Press Release
FIA today announced that Rise New York, created by Barclays, has joined the FIA Innovators Pavilion as a community partner. Rise New York will help FIA promote the Innovators Pavilion, FIA’s annual fintech showcase. Now in its fourth year, the Innovators Pavilion is part of FIA Expo, the world’s largest gathering of professionals in the derivatives markets. This year’s FIA Expo will take place in Chicago on Oct. 16-18.
bit.ly/2vbiG5H

Goodbye HipChat: Slack and Atlassian Team Up on Chat Software; Stewart Butterfield’s startup will subsume Atlassian’s corporate chat tools to take on Microsoft.
Dina Bass and Ellen Huet – Bloomberg
Atlassian Corp. is selling its corporate chat software to rival Slack Technologies Inc. and taking a small stake in the startup, as they face greater competition from Microsoft Corp.
/jlne.ws/2JYY3is

Fortnite Mania Fuels Epic Growth to $8.5 Billion; Epic Games’ profits on the game have made “legendary character” Tim Sweeney a billionaire.
Devon Pendleton, Christopher Palmeri – Bloomberg
Tim Sweeney made Fortnite a phenomenon by doing something that sounds crazy: He gave it away. That strategy has made him a billionaire. In an industry chock-a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than $1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
/jlne.ws/2LoVcF5

Schroders CEO: fintech is the ‘greatest opportunity we face’
Mark Cobley – Financial News
Peter Harrison, the boss of one of the UK’s largest asset managers, has said innovations in financial technology are the “single biggest opportunity” for his industry right now — as his firm Schroders steps up its efforts to build links with fintech entrepreneurs.
Speaking as the fund manager reported its first-half results on July 26, Harrison told Financial News the “really interesting step-change for our industry will come from technological innovation”. He added: “We are working with 25 or 26 fintechs across the business, across a whole range of different things — I see this as the single biggest opportunity we face.”
bit.ly/2v5pTnE

CySEC to Establish FinTech Innovation Hub with Focus on Blockchain
David Kimberley – Finance Magnates
Regulatory financial technology (FinTech) initiatives have been springing up across the globe over the past few years. This Friday, the main Cypriot regulator, the Cyprus Securities and Exchange Commission (CySEC), announced that it would also be creating an innovation hub.
bit.ly/2vaVB2Z

Alexa, What’s Wall Street Saying About Amazon’s Earnings Beat?
Joe Easton and Jeran Wittenstein – Bloomberg
Shares up 4 percent pre-market amid cloud, advertising boost; Goldman Sachs, others raise price targets for the stock
Amazon.com Inc.’s record second-quarter profit drew a flurry of price target boosts on Wall Street. Analysts say strength in the cloud and advertising business, as well as operational improvements, have positioned the company for long-term growth. The shares rose 4 percent in pre-market trading in New York and are on track to open at a record high.
/jlne.ws/2K1e4nN

Thomson Reuters unit to be renamed Refinitiv after Blackstone deal
Reuters Staff
Thomson Reuters Corp’s (TRI.TO) Financial and Risk unit, in which U.S. private equity firm Blackstone Group (BX.N) is buying a majority stake, will be renamed Refinitiv once the deal closes, the company said in a statement on Friday.
/jlne.ws/2LptpnM

Cryptocurrencies

The Winklevoss Twins Want To Sell You A Bitcoin Fund; The Winklevoss twins filed a form with the SEC that’s the first step to selling shares in a fund that would track the price of Bitcoin. A look at the next move for the Facebook-suing twins.
Matthew Zeitlin – BuzzFeed News
Tyler and Cameron Winklevoss, impossibly strong-jawed and broad-shouldered rowers, tech entrepreneurs, and famous litigators of Mark Zuckerberg, are now two of the biggest and most famous players in Bitcoin, the cryptographic, digital currency whose wild price gyrations and security issues captivated the business press for a few weeks in March and April of this year. In April, the twins revealed to The New York Times that they owned some $11 million worth of Bitcoin.
/jlne.ws/2K14a5X

Winklevoss-Backed Bid for Bitcoin-ETF Rejected by Regulators
Benjamin Bain – Bloomberg
Cryptocurrency declines after SEC announces its decision; Agency raises concern about oversight of Bitcoin’s spot market
Bitcoin fell after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss, showing the regulator remains skeptical that the market for the cryptocurrency is sufficiently free of abuse to bring trading to the masses.
/jlne.ws/2K1syEa

Brock Pierce: The Hippie King of Cryptocurrency
Neil Strauss – Rolling Stone
Twenty-six men and women are seated along four folding tables laid end to end in the ballroom of a former Masonic lodge in Old San Juan, Puerto Rico. An eclectic mix, ranging from local charity workers to Silicon Valley investors to cryptocurrency early adopters, they all believe that they’re about to make history. Specifically, they are here to help Brock Pierce – a child actor turned video-game entrepreneur turned crypto titan – give away a billion dollars to charity. Not in a will after his death, but now, in the prime of his life and the peak of his career, at age 37.
/rol.st/2v8YBwB

Bitcoin $500,000 Creates a Buzz, But Technicals Point to Rally
Olivia Schaber – Bloomberg
Hedge fund manager predicts correction, then massive rally; Directional index shows biggest divergence since last year=
Comments from Morgan Creek Capital Management hedge fund manager Mark Yusko that Bitcoin could reach $500,000 in six years are heartening battered crypto bulls. They may be better served taking a look at some underlying technicals in the meantime.
/jlne.ws/2K5gIJg

Crypto Futures Expansion Won’t Happen Soon, CME’s Duffy Says
Brian Louis – Bloomberg
Exchange head reiterates cautious approach to other contracts; Rival Cboe has hinted at wanting to expand crypto derivatives=
CME Group Inc. Chief Executive Officer Terry Duffy said that in his nearly four decades in trading, Bitcoin futures “might have been the most controversial launch of a product” and he reiterated the company’s not in a hurry to list more cryptocurrency-related contracts.
/jlne.ws/2K1Qdo9

The World’s Dominant Crypto-Mining Company Wants to Own AI; In a rare interview, Bitmain’s Jihan Wu talks about his plans to take on Nvidia, Intel, and AMD.
Max Chafkin and David Ramli – Bloomberg
Even by the standards of Bitcoin, things are crazy in China. As the boom in cryptocurrencies has become the biggest speculative bubble in recorded history, a single company in Beijing’s Haidian District has been selling the chips that generate as much as 80 percent of the world’s cryptocoins. “We feel lucky,” says Jihan Wu, the co-chief executive of Bitmain Technologies Ltd., which was more or less unknown two years ago and, according to Wu, booked revenue of $3.5 billion in 2017. (On June 4, a Bitmain spokesman said Wu misspoke and the actual figure was $2.5 billion.)
/jlne.ws/2K1LT8j

Crypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin – Bloomberg
In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.
/jlne.ws/2KjhdVi

Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Setting Aside Action by
Delegated Authority and Disapproving a Proposed Rule Change, as Modified by Amendments
No. 1 and 2, to List and Trade Shares of the Winklevoss Bitcoin Trust
SEC
/jlne.ws/2K1BbP9

As Crypto Meets Prediction Markets, Regulators Take Notice
Matthew Leising – Bloomberg
The next confrontation between government regulators and a blockchain startup appears set to ensnare a prediction market platform that goes by the name Augur.
/jlne.ws/2K0zFNi

Mike Novogratz’s Crypto Firm Lost $134 Million in the First Quarter
Doug Alexander – Bloomberg
Crypto-focused merchant bank releases first financial results; Quarterly losses led by trading digital assets, investments
Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, posted a $134 million loss in its first quarter, when the value of Bitcoin and other cryptocurrencies plunged.
/jlne.ws/2K0dYwN

Politics

Butina Sought a Secret Kremlin Line to the U.S. A Rockefeller May Have Helped
Polly Mosendz , Greg Farrell , and Ilya Arkhipov – Bloomberg
O’Neill hosted 2017 dinner for prayer-breakfast delegates; A Russian-language guide to Rohrabacher and other guests
A scion of the Rockefeller clan, George D. O’Neill Jr., was one of the U.S. conservatives who allegedly helped Mariia Butina’s efforts to build a secret line of communication back to the Kremlin, judging by details in recent U.S. filings.
/jlne.ws/2JZwAgD

Mueller Examining Trump’s Tweets in Wide-Ranging Obstruction Inquiry
Michael S. Schmidt and Maggie Haberman – NY Times
For years, President Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself.
/jlne.ws/2K07PRf

Steve Bannon’s plot for the downfall of old Europe; The next EU parliament elections are a chance to defeat the far-right
FT
As an architect of Donald Trump’s 2016 presidential election victory, Steve Bannon knows a thing or two about unconventional political warfare. Now the godfather of the US alt-right is gearing for combat in Europe. His arena is the campaign for the next European Parliament elections, scheduled for May 23-26 2019. His chosen weapons, as in the US, are set to be the stoking of social tensions, economic nationalism, incitement of public anger at elites, systematic attempts to discredit reasoned argument and the spread of misinformation.
/jlne.ws/2K5jAWy

Regulation

U.S. regulator stands by decision to block Winklevoss bitcoin ETF
Trevor Hunnicutt, Michelle Price – Reuters
The U.S. Securities and Exchange Commission on Thursday stood by a decision blocking an exchange-traded fund that would have tracked bitcoin, citing concerns about market manipulation.
/jlne.ws/2K06iuz

FinTech Regulation Bridges Silicon Valley and Washington D.C.
Stephanie MacConnell – Forbes
The FinTech community is closely watching the latest developments within the Consumer Financial Protection Bureau (CFPB). Recently, Kathy Kraninger was nominated as Director of the CFPB and, if confirmed, she will succeed acting Director Mike Mulvaney, who previously attacked the Bureau’s very existence and has worked to change policies and cut budget since taking the helm in November 2017.
/jlne.ws/2JZzO3J

The regulator is looking at platforms and so should you
Taha Lokhandwala – InvestorsChronicle
The Financial Conduct Authority (FCA), the financial services regulator, is investigating whether investment platforms are competitive and work in the interests of investors. It has recently published an interim report on its Investment Platforms Market Study, which has highlighted a number of areas of concern, including the difficulties in switching platforms and the poor rates of interest they offer on cash.
/jlne.ws/2K0xM3k

CFTC Chairman Giancarlo To Keynote The West Texas Legislative
CFTC
/jlne.ws/2K1aXMD

Podcast: CFTC Talks EP053: MARK YALLOP FMSB Part Two
CFTC
This week on CFTC Talks, we speak with Mark Yallop, chair of the Fixed Income, Currencies and Commodities Markets Standards Board. We cover the enormous cost to the world financial system of bad behavior, how to historically break down market misconduct into 7 categories and why trust is the heart of the financial markets.
/jlne.ws/2K1qLz8

Nordic Credit Rating AS registered as Credit Rating Agency
ESMA
The EFTA Surveillance Authority (EFTA SA) has registered today the Nordic Credit Rating AS (NCR) as a credit rating agency under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (the CRA Regulation), as incorporated into the Agreement on the European Economic Area (EEA Agreement). This decision comes into effect on 3 August 2018. NCR is based in Oslo, Norway, with a branch in Stockholm, Sweden. NRC intends to issue corporate ratings.
/jlne.ws/2mMeNQz

FCA proposes changes to rules for crowdfunding platforms
FCA
Following a post-implementation review of its crowdfunding rules, the Financial Conduct Authority (FCA) is opening a consultation on new rules for loan-based crowdfunding platforms.
/jlne.ws/2mSFeo5

Investing and Trading

Is the Key to Beating the Market Written in the Stars?; Henry Weingarten invests his clients’ money by charting the movement of heavenly bodies.
Simon van Zuylen-Wood – Bloomberg
It’s 11 a.m. at the Princeton Club in Midtown Manhattan. A number of financial professionals have gathered here for the “AFund June 2018 Natural Resources Investment Symposium.” Our first speaker is HSBC’s chief precious metals analyst, the aptly named James Steel, who promotes gold as a hedge against populist upheaval. After Steel, there are slideshows from several mining companies seeking investors. After that, lunch. A generic networking event, by all appearances.
/jlne.ws/2K1DDVR

ECB Keeps to Policy Path to End Bond Purchases
Carolynn Look – Bloomberg
Mario Draghi holds media briefing at 2:30 p.m. in Frankfurt; President will be quizzed on economic risks as QE exit nears
The European Central Bank stuck to its plan to end bond purchases as the European Union and U.S. stepped back from a trade war and the currency bloc’s economic expansion remained solid.
/jlne.ws/2K0B2LO

U.S. domestic stock funds report more demand than peers abroad: Lipper
James Thorne – Reuters
Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.
/jlne.ws/2K1vfFM

Wall Street faces up to “bombshell guidance” at Facebook
Jamie Powell
Facebook’s second-quarter results — which prompted the company’s shares to plunge as much as 24 per cent (!!) overnight — was the first time the surveillance-capitalism machine’s revenue growth had missed expectations since 2015.
/jlne.ws/2K5QE0U

It’s All About Social Media Contagion, Not FAANGs: Taking Stock
Arie Shapira – Bloomberg
Stock futures are holding on to their slight gains thanks to Amazon decoupling from most of its FAANG peers, though momentum gets hit from another whiff from a social media bellwether as Twitter plunges ~16% on weak monthly active user numbers.
/jlne.ws/2K5lDKe

Institutions

What Does a Bank Meltdown Cost? Not Much, Actually; Sabadell hasn’t suffered enough from the fiasco at Britain’s TSB.
Edward Evans – Bloomberg
It was a spectacular fiasco, made even worse by the clumsy way in which it was handled. TSB Banking Group Plc’s attempt in April to transfer the records of its 5 million customers to a new IT system left about a million of them unable to access their accounts and vulnerable to fraud. At first, TSB said things were running smoothly. It makes you wonder what their idea of chaos is.
/jlne.ws/2JWQvN6

A $14 Billion Fund Manager Feels ‘Vindicated’ by Facebook Plunge
Olivia Carville and Emily Chasan – Bloomberg
John Streur, an investor who sold his fund’s Facebook Inc. holding after the Cambridge Analytica privacy scandal, said he felt “vindicated” watching the social media giant’s free-fall Thursday.
/jlne.ws/2JWSUaA

Here’s How ETFs With Biggest Facebook Exposure Traded Today
Elena Popina , Sarah Ponczek , and Carolina Wilson – Bloomberg
A six-week old Communication Services Select Sector SPDR Fund just had its worst day ever. A rout in Facebook Inc. is to blame for that.
/jlne.ws/2K5PBy0

UBS to review misconduct policies after rape claim; Woman alleged she was assaulted by a more senior bank employee
Laura Noonan in New York – FT
UBS is reviewing how it handles sexual misconduct allegations after an employee who claimed she was raped by a colleague contacted the head of its investment bank, Andrea Orcel, to complain about how the bank dealt with her case.
/jlne.ws/2JZQGHm

UBS Is Cutting Dozens of Staff in Wealth-Management Revamp
Emily Chasan and Sonali Basak – Bloomberg
16.18CHF+0.18+1.16%
UBS Group AG is laying off dozens of staff at its wealth-management division as it revamps the unit’s leadership team, according to people briefed on the matter.
/jlne.ws/2K1Bjhw

The $5 Trillion Question: How Did the Firm That Pioneered ETFs Lose Its Lead?; State Street developed a hit investment product 25 years ago. Then more-focused rivals came along with better marketing and lower costs. Now the trust bank is No. 3 in the market it started.
Asjylyn Loder – WSJ
For State Street Corp. STT -0.32% , the company that pioneered the $5 trillion exchange-traded fund industry, it’s been a long way down.
/jlne.ws/2JZIqr5

Regions

Why Is China’s Currency Falling?; Worries about competitive devaluation are almost certainly misplaced.
Christopher Balding – Bloomberg
Since April, the yuan has fallen by almost 8 percent against the U.S. dollar. This has led many analysts and politicians to speculate that China is intentionally trying to devalue its currency to offset the effect of President Donald Trump’s tariffs. It almost certainly isn’t.
/jlne.ws/2K1K2QZ

Hey Buddy, Can You Spare 2 Million for Coffee?
Vivianne Rodrigues – Bloomberg
ONE. MILLION. PERCENT. That’s how high inflation will climb in Venezuela by year’s end, according to the latest forecast by the International Monetary Fund.
/jlne.ws/2JYUKry

China should really start to worry about Trump; As Europe wins a reprieve over trade the portents for Beijing have commensurately darkened
Edward Luce- FT
It was Wednesday so Europe went from being a “foe” of America to a “great friend”. Next Monday might be different. Perhaps Europe will still be in Donald Trump’s good books. The only person who can say for sure is Mr Trump. Even he probably has little idea. But my hunch is that the ceasefire he struck with Jean-Claude Juncker, president of the European Commission, will hold. Mr Trump loves applause and the last-minute trade agreement with Brussels earned a transatlantic ovation. Europe has won a reprieve. The portents for China have commensurately darkened.
/jlne.ws/2K5RWZO

Mizuho Eyes $11 Trillion Held by Japan’s Rich Elderly
Gareth Allan and Yuki Hagiwara – Bloomberg
Bank began offering tailor-made trusts for wealthy retirees; Also expanding consulting for Japan pension funds, CEO says
Mizuho Financial Group Inc.’s trust banking arm has its sights set on exactly where the wealth is in Japan: the $11 trillion held by the nation’s elderly.
/jlne.ws/2JZS8ti

Russia Extends Rate Pause as Risks to Inflation Halt Easing
Olga Tanas and Anna Andrianova – Bloomberg
Benchmark kept at 7.25% for third meeting, in line with survey; Central bank stays just a step short of level deemed ‘neutral’
Russia’s central bank kept interest rates unchanged for a third consecutive meeting and warned that external risks and the highest inflation expectations in almost a year mean monetary easing probably won’t resume until 2019.
/jlne.ws/2K1O0cf

Brexit

U.K.’s Brexit Options Narrow as Perilous Choices Loom for May
Tim Ros , Emma Ross-Thomas, and Jess Shankleman – Bloomberg
Barnier rejects compromise at heart of May’s Brexit strategy; Chances of no-deal exit, another election creep higher
The U.K.’s Brexit options are narrowing, and most of the choices are hazardous for Prime Minister Theresa May.
/jlne.ws/2K0YwR5

Major French Tech Company’s CEO Fears Effects of Hard Brexit
Giles Turner and Mark Barton – Bloomberg
Capgemini SE Chief Executive Officer Paul Hermelin is predicting a hard Brexit will cause a knock-on effect to its British clients, potentially weakening demand.
/jlne.ws/2JYXmpn

Miscellaneous

‘Disappeared’ U.S. Records on Detained Migrant Kids Sparks Probe
Erik Larson – Reuters
Claims by a U.S. ethics watchdog that the Department of Homeland Security and other agencies may have lost or destroyed files relating to the separation of migrant children at the border have triggered a government probe into the proper retention of records.
/jlne.ws/2K01vJm

*****Unforgivable.~JJL

The post Up to Two-Thirds of Bitcoin Transactions Have No Economic Value appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

We have three changes for the upcoming MarketsWiki Education World of Opportunity series in Chicago. Renato Mariotti was called to Atlanta by CNN on Monday, so he will not be speaking on Thursday, August 2. We have moved Bill Weldon from Tuesday to Monday to fill Renato’s space and moved Jessica Darmoni from Thursday to Tuesday to fill Bill’s vacated spot. There is always some last minute change. ~JJL

Priceonomics posted a blog about which companies in the S&P 500 generated the most revenue per employee (RPE) in 2017. 13 of the top 20 companies belong to the energy sector – Valero is #1 with $9.4m RPE. Only six of the top 50 are financial companies. One of those was Cboe at 23 – $2.5m RPE. ~SD

SEC Commissioner Hester Pierce dissented from the SEC’s bitcoin ETF decision, saying it “undermines investor protection by precluding greater institutionalization of the bitcoin market,” and “I reject the role of gatekeeper of innovation – a role very different from (and, indeed, inconsistent with) our mission of protecting investors, fostering capital formation, and facilitating fair, orderly, and efficient markets.” ~SD

Volumes for ICE’s FANG+ futures last week were 1873 contracts on Monday, 4774 on Tuesday and 2879 Wednesday and 2307 on Thursday. I wonder why there was that uptick… ~SD

The Sultans of Swap (@CFTC) and the Naked Shorts (SEC) took regulatory cooperation to the softball field on a beautiful night in D.C. ~JJL

Russell Rhoads left the Cboe on Friday after 10 years and starts a new role this morning with the TABB Group.~JJL

The Daily Beast has a story titled “How an Ex-Cop Rigged McDonald’s Monopoly Game and Stole Millions,” that is sad and disheartening. When you can’t even get away from the cheating stories on the street and get a quick Big Mac without being part of another crime.~JJL

Columnist George F. Will wrote in a piece in the Washington Post titled “Our socialist president.” Well worth the read.~JJL

CNBC’s John Harwood narrated a video titled “The Trump-Russia ties hiding in plain sight.”~JJL

Eric “Rick” Bruce Peterson, a former S&P 500 pit trader at the CME and trader of Treasury futures at the CBOT, has passed away at the age of 63 from leukemia. He was a well known swim coach, teacher and author.~JJL

Moving abroad can be good for you.~JJL

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MWE World of Opportunity – Tech, Big Data, and the Capital Markets

JohnLothianNews.com
“I met some people working on financial technology. They were really cool and interesting people solving hard problems and I wanted to join them. That was how I made my career decision.”

In this video from MarketsWiki Education’s World of Opportunity event in New York, Mike Beller, CEO of Thesys Technologies, talks about the electronification of markets and the explosion of trading venues it created. Beller says managing the mass amounts of data generated by this phenomenon is the industry’s biggest challenge.
Watch the video here »

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Deutsche Bank Is Cutting Staff in Chicago in U.S. Retreat
William Canny and Ivan Levingston – Bloomberg
Deutsche Bank AG is cutting dozens of employees and consolidating space at its Chicago office as part of a broader plan to shrink its U.S. operations, according to people briefed on the matter.
/goo.gl/XAH2Fe

***** Two months before Oktoberfest too.~JJL

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Will we ever stamp out fraud?; An entertaining history of financial crime that reveals why we’re still suckers for a scam
Jonathan Ford – FT
The events of October 29 1967, when Reggie Kray murdered Jack “The Hat” McVitie at a party in Stoke Newington, north-east London, are firmly lodged in British criminal folklore. The hit led to the crime boss’s arrest and the fall of “The Firm”, the terrifying 1960s gangland empire he ran with his twin brother Ronnie.
/jlne.ws/2mSn3hX

***** Check out the movie “Legend” about the Kray brothers.~JJL

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The Spread – Rimshot Please – 7/27
JohnLothianNews.com

We’ve added more props for this week’s episode of “The Spread” for your viewing pleasure!

Watch the video and see the stories referenced here »

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Times publisher asks Trump to reconsider anti-media rhetoric
Darlene Superville – AP
The publisher of The New York Times said Sunday he “implored” President Donald Trump at a private White House meeting this month to reconsider his broad attacks on journalists, calling the president’s anti-press rhetoric “not just divisive but increasingly dangerous.”
/jlne.ws/2vj8bx9

**** Some newsrooms have armed guards in front of them now.~JJL

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Between Bridges – July 27, 2018: National Futures Association Proposes Interpretive Notice Requiring FCM, IB, CTA and CPO Disclosures Regarding Virtual Currency Activity
Gary DeWaal – Bridging The Week
The National Futures Association has proposed to adopt an Interpretive Notice that would require futures commission merchants, introducing brokers, commodity trading advisors and commodity pool operators to affirmatively make certain disclosures to customers, counterparties or investors that engage or may engage in activities related to spot virtual currencies or derivatives based on virtual currencies with or through them.
/goo.gl/yTG7pM

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Friday’s Top Three
Friday’s top three shared the common theme of value – and whether something is as valuable as you thought. Bloomberg led with Up to Two-Thirds of Bitcoin Transactions Have No Economic Value. Second was the FT’s look at the value of Virtu, in High speed trader Virtu’s profits miss the mark. Third was Bloomberg’s Hedge Fund Titans Who Bet Big on India Now Say They Were Scammed, who thought they found value but then didn’t.

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MarketsWiki Stats
130,255,231 pages viewed; 23,215 pages; 214,407 edits
MarketsWiki Statistics

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Lead Stories

The Markets Will Stop a Trade War; If the tariffs hurt growth, expect a major selloff. President Trump will be forced to reverse course.
Roger C. Altman – WSJ
The Trump administration is on the verge of launching a global trade war, the magnitude of which the world hasn’t seen in a century. The president got elected promising to end what he calls “cheating” on trade by China and other nations. He believes America’s trade partners have more to lose in such a battle than does the U.S. But if all the threatened Trump tariffs take effect, and the targeted countries respond with the expected retaliatory tariffs on American exports, everyone will lose.
/jlne.ws/2OqeKXh

Nasdaq Holds Closed Door Event to Discuss Policing Crypto
Julie Verhage – Bloomberg
The road to shaking its history of shady transactions and fraud is proving long for cryptocurrencies, but Nasdaq Inc. thinks it can help get the industry on the path to legitimacy
/jlne.ws/2mPATSi

Scorched earth: the world battles extreme weather; Significant forest fires are up 40% in Europe this year and affecting countries previously untouched. Scientists say nations must be better prepared
Leslie Hook and Kerin Hope – Financial Times
Thanasis Kontidis was hosing down the veranda of his family’s summer home in Mati on Monday afternoon when he caught a whiff of acrid smoke. “I looked up and saw the sky was a beige colour so I knew there was a fire somewhere. But I didn’t realise it was getting close.” Half an hour later the 22-year-old university student was fleeing for his life.
/jlne.ws/2OmzAXE

The FCA is ‘failing to enforce’ new Mifid II rules; The Mifid II directive is being ignored and private investors are not given details of all costs involved
Mark Atherton – The Times
The chief City regulator is failing to ensure financial groups comply with new Mifid II regulations on fund charges, say campaigners.
/jlne.ws/2Omh165

Special Report: Spiders, sewage and fees – the other side of renting from Wall Street
Michelle Conlin – Reuters
The rental home seemed so beautiful when McKayla Ferreira first laid eyes on it. The roof had three gables, fruit trees grew in the backyard, and the front porch gleamed with a fresh coat of paint.
/reut.rs/2uXhTpn

From the Poker Table to Wall Street
Steve Friess – NY Times
There is almost nothing on Vanessa Selbst’s tidy, unadorned desk on the second floor of this suburban office building that would suggest its occupant is the most successful female player in the history of professional poker except, perhaps, a neat stack of $5 bills to the left of her three monitors.
/jlne.ws/2OnjhK0

New York Regulator Revokes Its Approval of Charter, Time Warner Cable Merger; State commission also fines Charter another $1 million for failing to meet targeted expansion to rural areas
Kate King and Shalini Ramachandran – WSJ
A New York state regulator on Friday penalized Charter Communications Inc. for failing to fulfill its obligations under its 2016 merger with Time Warner Cable Inc., and essentially ordered the cable provider to exit its operations in the state.
/jlne.ws/2mQRipL

Mark Carney Is Preparing for Brexit and the Next Crisis; What it’s like to be the U.K.’s central bank chief as Britain negotiates its traumatic exit from the EU.
Stephanie Flanders – Bloomberg
Mark Carney seemed revolutionary enough in 2013 when he became the first non-British citizen to be appointed governor of the Bank of England. But the 53-year-old has since had to contend with a much greater upset: the U.K.’s vote to leave the European Union. In an interview last month, he revealed that he spends half his time preparing the financial system and economy for Brexit, which takes effect in March.
/jlne.ws/2viSZ2O

Why Libor Will Disappear – and What It Means for You
Adam Schneider – Partner, Retail & Business Banking and Digital at Oliver Wyman; Pin Su – Associate, Corporate & Institutional Banking at Oliver Wyman
Libor is sometimes called the “world’s most important number.” The London Interbank Offered Rate (Libor) is everywhere in the financial landscape. It is the reference interest rate in a wide range of wholesale and retail financial products, the total notional outstanding value of which exceeds $240 trillion.
/jlne.ws/2voVZuX

Bank of America shakes up derivatives trading team in Europe; The changes come after futures and options volumes shot up in the first half of 2018
Samuel Agini – Financial News
Bank of America Merrill Lynch has shaken up one of its key trading teams after a period of increased activity in the global exchange traded derivatives market.
/jlne.ws/2veonja

Exchanges, OTC and Clearing

Startup Exchange IEX Still Has No Listings; IEX has approached hundreds of companies including Amazon, Starbucks as it seeks to woo firms away from NYSE and Nasdaq
Alexander Osipovich – WSJ
A startup stock exchange has discovered it isn’t easy to pull corporate America away from the mighty New York Stock Exchange and Nasdaq Inc.
/jlne.ws/2veaUrC

Buy-side warming to Virtu Financial’s SI, chief says; Virtu Financial CEO Doug Cifu outlines growth of its systematic internaliser and targets further growth of the service in Europe.
Hayley McDowell – The Trade
Virtu Financial’s systematic internaliser (SI) has gained ground in Europe with the market maker’s chief executive highlighting significant opportunity for further growth in the future.
/jlne.ws/2vg2r7m

Japan Exchange Group, Inc. and Consolidated Subsidiaries Consolidated financial results for the three months ended June 30, 2018, (Based on IFRS), unaudited
JPX
/jlne.ws/2vbWA2O

Bloomberg to Launch New Data Service to Increase Transparency in UST and IRS Pricing
Bloomberg
Bloomberg announced today that it will launch a new data service consolidating NEX’s BrokerTec US Treasuries data with USD Spread-Over data from Tradition’s Trad-X platform. This service, called Bloomberg Capital Markets Package (“BCMP”), will be the most liquid and transparent US capital market reference available, representing the two largest electronic wholesale markets in UST and IRD. This service will be available via the Bloomberg Terminal and as a data feed.
(No Link)

First day of trading for Audiovalley on Euronext Growth
Euronext
AudioValley, a pioneer in BtoB digital audio, listed today on the Euronext Growth market in Paris.
/jlne.ws/2vldJHg

Paper: how Eurex offers synthetic exposure to the MSCI Korea Index
Eurex
As institutional investors increasingly shift their focus towards emerging markets, and in particular towards the Korean Peninsula, the South Korean market is gaining more and more attention. We have now published a paper illustrating how Eurex creates synthetic exposure to the MSCI Korea Index and showing how this exposure could be achieved at substantially below 1 percent tracking error from 2012 to 2017.
/jlne.ws/2vhPnOO

Decommissioning of two low-frequency trading gateways in the T7 production environment
Eurex
In the fourth quarter of 2018, Eurex Exchange is planning to decommission two of the low-frequency trading gateways (L05 and L06) in the T7 production environment. Sessions currently assigned to the affected gateways will be re-assigned to the remaining gateways.
/jlne.ws/2vgVd30

Kazakhstan – the 57th direct connection to Clearstream
Deutsche Bˆrse Group
Clearstream, the international central securities depository (ICSD) of Deutsche Bˆrse Group, is expanding its international network to connect the Kazakh domestic markets as of 30 July 2018. The connection gives foreign investors access to the local market. Clearstream will be able to settle Kazakh government bonds and treasury bills from the Kazakh central bank. Citibank Kazakhstan JSC, a subsidiary of Citibank, NA, acts as a local custodian and money correspondence bank.
/jlne.ws/2voUoFt

HKEX Receives CFTC Certification For Its MSCI AxJ Futures
MondoVisione
The US Commodities Futures Trading Commission (CFTC) has certified that effective 27 July 2018, Hong Kong Exchanges and Clearing Limited’s (HKEX) MSCI AC Asia ex Japan Net Total Return Index (MSCI AxJ) Futures contract meets certain requirements of the US Commodity Exchange Act. This means that intermediaries may offer or sell the contract to customers in the US without any further regulatory action from the CFTC.
/jlne.ws/2venmaQ

Fintech

Twitter User Numbers Slip as It Shuts Fake Accounts; Stock Drops; Company says monthly users fell by a million in the second quarter, could continue to fall
Marc Vartabedian – WSJ
Twitter Inc. said its number of monthly users dropped in the second quarter and could continue to fall as the social-media company purges fake accounts.
/jlne.ws/2mSoDQV

Human Bankers Are Losing to Robots as Nordea Sets a New Standard
Niklas Magnusson – Bloomberg
Something interesting happened in Swedish finance last quarter. The only big bank that managed to cut costs also happens to be behind one of the industry’s boldest plans to replace humans with automation.
/jlne.ws/2vgOKVM

GLMX Appoints Repo Veteran As Managing Director For Europe
Mondovisione
GLMX Europe Limited (GLMX), a comprehensive technology solution for the trading of repurchase agreements (“repo”) and securities lending transactions, has named Phil Buck as Managing Director for Europe. Buck brings to GLMX over 20 years of direct experience in repo and securities lending technology solutions. He will report directly to CEO and Co-Founder Glenn Havlicek and will play a key role in expanding the Company’s European presence.
/jlne.ws/2vjEprW

Social Media Has Failed Its Self-Driving Test
Leonid Bershidsky – Bloomberg
The big problem with artificial intelligence right now isn’t that it’s taking over; it’s that it’s being entrusted with serious tasks with real-world consequences before it works properly. It’s the equivalent of letting self-driving cars operate in a city without lane markings.
/jlne.ws/2vhWqXP

Michael Russo, Options VP, Product Management (Photo: Business Wire)
Business Wire
Options, the leading managed service and IT infrastructure provider to the global capital markets industry, has today announced the appointment of former Finastra and OpenLink Financial executive Michael Russo to its management team. Russo joins the New York team as VP, Product Management where he will be responsible for driving new business growth and supporting the firm’s Managed Application services.
/jlne.ws/2vjRwcH

Cryptocurrencies

A former Goldman Sachs exec is joining a crypto-trading firm as it eyes a major global expansion
Frank Chaparro – Business Insider
Circle, the cryptocurrency exchange operator, has snagged a former Goldman Sachs executive to help navigate the murky regulatory waters as it expands globally, Business Insider has learned.
/jlne.ws/2AdGMCg

Bitcoin Bounces as Traders Seek Silver Lining in SEC ETF Denial
Olivia Schaber and Rachel Evans – Bloomberg
Dissenting SEC Commissioner Peirce reiterated support for ETF; Peirce was outvoted 3-1 when regulator rejected the fund
Cryptocurrency traders don’t know who to believe in the long-running battle to create an exchange-traded fund that invests in Bitcoin.
/jlne.ws/2OpzbUv

New Gallup Poll Shows Only 2% of US Investors Own Bitcoin, But 26% Are ‘Intrigued’
Maxwell William – Cointelegraph
The results of a Wells Fargo/Gallup poll published July 27 finds that only two percent of U.S. investors own Bitcoin, but 26 percent are intrigued by it.
/goo.gl/84By2b

Largest Movie Theater Chain in Thailand Going Crypto
Kevin Helms – Bitcoin.com
Thailand’s largest movie theater chain, Major Cineplex, is reportedly integrating crypto payments to allow customers to pay for its services and products with cryptocurrency, including movie tickets and popcorn. Thailand recently began regulating crypto businesses.
/goo.gl/PBfeHo

Have a Cryptocurrency Company? Bermuda, Malta or Gibraltar Wants You
Nathaniel Popper – NY Times
Hedge funds go to the Cayman Islands to incorporate. Big companies are generally domiciled in Delaware. And online poker companies often set up their bases in Gibraltar and Malta.
/jlne.ws/2vebPZ6

Coinbase Launches Crypto Gift Card Service in Europe
Wolfie Zhao – Coindesk
U.S.-based cryptocurrency exchange Coinbase now offers a way for customers to purchase retail goods and services using crypto assets, thanks to a new partnership with a digital gift card startup.
/jlne.ws/2viQyNJ

An early bitcoin investor explains what most people get wrong about the cryptocurrency
Ali Newhard, Kara Chin and Jacqui Frank – Business Insider
Jeffrey Wernick is an independent investor whose portfolio includes early holdings in Uber and Airbnb. Wernick was also an early investor in bitcoin. He started buying it in 2009, the year it was created.
/jlne.ws/2veLKJr

The biggest crypto firm on Wall Street just took a $134 million loss on bitcoin’s plunge; Former Wall Street macro trader Mike Novogratz’s Galaxy Digital took a $134 million hit in the first quarter.
Kate Rooney – CNBC
Crypto merchant bank Galaxy Digital took a $134 million hit in the first quarter as bitcoin lost half its value and other cryptocurrencies struggled to break out of a bear market.
/jlne.ws/2vfr4RG

Bitcoin believers are flocking to a sympathetic SEC commissioner’s Twitter account
John Detrixhe – Quartz
Crypto Twitter is rallying behind a sympathetic watchdog at the US Securities and Exchange Commission. Not long after commissioner Hester Peirce dissented from the agency’s rejection of a bitcoin exchange-traded fund, her count of Twitter followers soared:
/jlne.ws/2vgyvI9

Novogratz’s Crypto Bank Makes Belated Debut After Bitcoin Plunge
Doug Alexander and Erik Schatzker – Bloomberg
Galaxy Digital to start trading Aug. 1 on Canadian exchange; Founder Novogratz predicts profit by second quarter of 2019
Mike Novogratz is past the point of no return. Two days from now, his cryptocurrency-focused merchant bank, Galaxy Digital LP, will start trading on Toronto’s TSX Venture Exchange. It should be a triumphant moment for the former Goldman Sachs Group Inc. partner and a milestone for the industry, yet Novogratz is having second thoughts. He reflects on the “frustrating” demands of Canadian regulators that dragged out Galaxy’s listing for months and trapped his investors as Bitcoin collapsed and crypto fever cooled.
/jlne.ws/2vgBBMh

Citigroup, Barclays Near End of Blockchain Test Managed by IBM
Matthew Leising – Bloomberg
Banks are hoping to pool tech resources to cut spending; Project offers shared applications on a blockchain network
Barclays Plc and Citigroup Inc. are poised to complete a test of how blockchain technology can streamline their operations as part of a group organized by IBM and one of the world’s largest financial infrastructure providers.
/jlne.ws/2vgoCdu

Politics

Trump Says He ‘Opened Up Europe’ for Farmers. Europeans Disagree; The gap over what was agreed to at the White House on Wednesday indicates the perils of rifts re-emerging
Jacob M. Schlesinger and Emre Peker – WSJ
A day after President Trump hailed “a breakthrough agreement” on trade with Europe, European officials said the president and his aides are exaggerating the scope of their new pact. While Mr. Trump told an Iowa crowd Thursday that “we just opened up Europe for you farmers,” officials in Brussels later said he did no such thing.
/jlne.ws/2mOALT1

Republicans Are Now Conceding Their Core Values
Charles Sykes – Time.com
Political parties do not lose their souls or their identities all at once. Usually, it is a gradual process of compromises that make sense in the moment, but which have a cumulative effect ó like a frog being gradually boiled.
/jlne.ws/2Ajcm1M

Trump’s Misguided Trade War; The president’s approach to China is a threat to American prosperity.
Editorial Board – Bloomberg
U.S. President Donald Trump may sincerely think he’s battling to win Americans a better deal on trade with China. In fact, he’s making a better deal harder to achieve ó and threatening to inflict grave economic damage on the U.S. economy in the process.
/jlne.ws/2KSXtEh

The death of Don Draper
New Statesman
Advertising, once a creative industry, is now a data-driven business reliant on algorithms. The implications are deeply sinister – not only for the consumer but for democracy itself.
/jlne.ws/2Ahf8EB

Cryptocurrency Rules Should Be Congress’s Focus, Key Lawmaker Says
Elizabeth Dexheimer – Bloomberg
‘Muddied and fairly opaque’ markets need oversight, he says; Michigan Republican may seek to lead financial services panel
A key member of the House Financial Services Committee wants to see lawmakers focus next year on oversight of the “muddied and fairly opaque” markets for initial coin offerings and trading digital tokens.
/jlne.ws/2mVjKHb

Democrats demand more information from Trump’s consumer watchdog pick
Katanga Johnson – Reuters
Democratic lawmakers stepped up pressure on President Trump’s pick to lead the Consumer Financial Protection Bureau, demanding more information on her role in the administration’s immigration policies and her stance on consumer finance issues, according to letters seen by Reuters on Friday.
/jlne.ws/2mQRBkp

Trump’s Auto Misfire Will Do Nothing for Detroit; Another round of enforced cost increases is the last thing carmakers need.
Anjani Trivedi – Bloomberg
The latest salvo in President Donald Trump’s trade war promises to do more damage than good to an already-anxious American auto industry.
/jlne.ws/2veybtB

Koch Network Says Trump Trade Moves Causing Long-Term Damage
John McCormick – Bloomberg
Conservative group has long opposed protectionism in trade; Network showing more bipartisan tone with Congress in play
The conservative political network led by billionaire Charles Koch opened a conference in Colorado with sharp criticism of President Donald Trump’s trade policies and leadership style, as it sought to demonstrate a desire for more bipartisan solutions.
/jlne.ws/2vfVfbm

Russian Hackers Appear to Shift Focus to U.S. Power Grid
David E. Sanger – NY Times
State-sponsored Russian hackers appear far more interested this year in demonstrating that they can disrupt the American electric utility grid than the midterm elections, according to United States intelligence officials and technology company executives.
/jlne.ws/2vhXaw5

Regulation

Facebook is sued after stock plunge ‘shocked’ market
Jonathan Stempel – Reuters
Facebook Inc (FB.O) and its chief executive Mark Zuckerberg were sued on Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $120 billion of shareholder wealth.
/reut.rs/2OnhpB9

Swiss financial firm to pay $10.25 million to avoid U.S. prosecution
Reuters Staff
The U.S. Justice Department on Friday said that Switzerland’s Mirelis Holding S.A., a financial and asset management firm, will pay $10.25 million to the United States in order to avoid prosecution for tax-related criminal offenses.
/jlne.ws/2OnUaab

SEC Charges Recidivist In Stock Manipulation Scheme
Mondovisione
The Securities and Exchange Commission today charged Howard M. Appel with manipulating the stocks of three microcap companies while on supervised release following his criminal conviction for a prior securities fraud.
/goo.gl/BG6v7K

No One Needs Paper Piles; SEC Should Get Smart About Broker Disclosure; Innovative ideas for disclosure can help investors be better informed
Jason Zweig – WSJ
Regulators are trying to make it less confusing to learn what you need to know about your stockbroker or financial adviser. But that effort could create new confusion of its own.
/jlne.ws/2AhNaIQ

Barclays FX trader seeks to dismiss US charges over HP deal; Lawyers argue bank had no ‘fiduciary’ duty to US tech group on Autonomy acquisition
Martin Arnold – FT
The US head of foreign exchange trading at Barclays has asked a judge to dismiss criminal charges against him for allegedly defrauding Hewlett-Packard by front-running a £6bn currency deal linked to its takeover of UK software maker Autonomy.
/jlne.ws/2vdcRV2

UK watchdog proposes tougher rules for peer-to-peer lending
Huw Jones – Reuters
Britain’s markets watchdog proposed toughening up rules on Friday for loans offered by crowdfunding platforms to give consumers clear and accurate information and ensure they understand the risks.
/jlne.ws/2vj8OH1

NFA Proposes Enhanced Disclosure Requirements for Members Engaging in Virtual Currency Activities
NFA
The National Futures Association (“NFA”) recently proposed an interpretive notice updating disclosure requirements for its members engaged in virtual currency (i.e. cryptocurrency) activities. Self-Regulatory Organizations are increasingly interested in their members’ activities in the emerging virtual currency market, with the NFA’s notice following on the heels of a FINRA Regulatory Notice encouraging its members to self-report their virtual currency activities. (See here for detail on FINRA’s notice).
/jlne.ws/2vhTCdf

Investing and Trading

Big Oil Leaves Analysts Fuming About Being in the Dark on Refinery Outages
Kevin Crowley – Bloomberg
Profit misses show disconnect between companies and the market; Exxon, Shell, Chevron leaders all started on the refiner side
Darren Woods, Ben van Beurden and Mike Wirth, three of the world’s most powerful oil executives, forged their reputations by efficiently managing razor-thin margins at their companies’ refineries.
/jlne.ws/2OqTFvN

Facebook Dive Sparks Investor Calls to Loosen Zuckerberg’s Grip
Gerrit De Vynck and Emily Chasan – Bloomberg
Co-founder is CEO, chairman; special shares give total control; When Facebook soared, corporate governance took a back seat
Facebook Inc. has always had one absolute leader, cemented by a share class structure that maintained Mark Zuckerberg’s voting control even when he sold millions of shares. Some investors grumbled, but most were happy to stay quiet as the stock surged. This week’s plunge upended that dynamic, increasing calls for changes at the top.
/jlne.ws/2OqeWGj

U.S. says farmers could get cash aid by October but will not be made whole
Hugh Bronstein – Reuters
U.S. farmers could receive cash payments from a planned $12 billion aid package as soon as late September, U.S. Agriculture Secretary Sonny Perdue told Reuters on Saturday, warning that the program will not make tariff-hit farmers whole.
/jlne.ws/2vgxvnn

U.S. Almond Farmers Are Reeling From Chinese Tariffs; Prices for California almonds have fallen by more than 10% over past two months
Lucy Craymer – WSJ
U.S. almond farmers are getting crunched from all sides as they head into what is likely to be a record harvest season.
/jlne.ws/2viNrFw

Citi sees ‘gathering market storm’ and warns against ‘complacency’; Bank questions equity market’s rebound from spring lows
Camilla Hodgson – FT
Analysts at Citigroup have warned that the recent stocks rally may be unjustified in the face of fundamentally unchanged geopolitical risks, and that investors should avoid becoming complacent.
/jlne.ws/2vhNf9M

Institutions

BlackRock’s Rieder halved fund’s emerging market exposure
Trevor Hunnicutt – Reuters
Top BlackRock Inc (BLK.N) bond investor Rick Rieder halved exposure in recent months to a once-major bet in his portfolios on emerging markets on concerns including that the dollar could move higher, he told Reuters on Friday.
/reut.rs/2uSWmyq

The top tech executive at $41 billion investment firm Fortress is leaving to start his own data-focused fund
Frank Chaparro – Business Insider
Hylton Socher, the chief technology and information officer of Fortress Investment Group, the $41 billion hedge fund, is leaving the fund to start his own venture, Business Insider has learned.
/jlne.ws/2AirUmf

NXP Was a Popular Hedge-Fund Trade Before Its Qualcomm Deal Collapsed; It is not known if the funds changed their positions before the deal fell apart on Wednesday
Rachael Levy – WSJ
Qualcomm Inc. QCOM -1.40% wasn’t the only one betting on a purchase of Dutch chip maker NXP Semiconductors . NXPI 2.33% The potential deal attracted some of the hedge fund industry’s biggest names.
/jlne.ws/2Opti9K

AmEx Raised Currency Prices on Business Clients Without Warning, Employees Say; The forex division’s commissions-driven culture was cited by current and former employees as fueling the practice
AnnaMaria Andriotis – WSJ
For more than a decade, American Express Co.’s AXP 1.32% foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, according to people familiar with the matter.
/jlne.ws/2vgb8OP

Regions

Hong Kong prepares to usher in virtual banks, as 60 firms apply to be pioneers in financial revolution
Enoch Yiu – South China Morning Post
When SagaDigits, a HK$2 million (US$254,820) start-up, wanted to add post-merger shareholders and signatories to its corporate bank account, its chief executive approached a Hong Kong bank for help.
/jlne.ws/2OpVwkK

The $500 Billion Market the World Never Thought It Would See; After the financial crisis, China called for a new reserve currency to replace the U.S. dollar. Now it’s swimming in dollar-denominated bonds.
Chris Anstey and Narae Kim – Bloomberg
China used to rail against the outsize role of the U.S. dollar. But in a major turnaround, the world’s second-biggest economy has started embracing the currency of its larger rival.
/jlne.ws/2vl6q2i

South Africa’s Biggest Bank Heist Leaves Trail of Destruction
Sam Mkokeli and Renee Bonorchis – Bloomberg
Customers of VBS queue before dawn to recover their deposits; Directors have been accused of siphoning off 1.5 billion rand
South Africa’s biggest bank heist took place without a single shot being fired.
/jlne.ws/2vjHsQU

BoJ intervenes for third time as investors eye policy meeting; Speculation has intensified that central bank could tweak vast stimulus programme
Leo Lewis and Emma Dunkley – FT
The Bank of Japan intervened in the bond market on Monday for the third time in a week in a show of resolve to cap bond yields within a target range as traders bet the central bank might adjust its multi-trillion yen stimulus programme.
/jlne.ws/2viUazg

Brexit

Europe’s development bank set to stick with London; EBRD mulls Canary Wharf move as it shuns other capitals in post-Brexit boost for UK
Judith Evans – FT
The European Bank for Reconstruction and Development is considering a move to Canary Wharf as it looks set to stick with London rather than move staff to the continent.
/jlne.ws/2vfZzHp

Deutsche Bank shifts half of euro clearing from London to Frankfurt; German lender’s move is latest Brexit blow as European rivals win City business
Olaf Storbeck – FT
Deutsche Bank has moved almost half its euro clearing activities from London to Frankfurt, in the latest sign of European cities winning financial business from the UK ahead of Brexit.
/jlne.ws/2vexRLp

Boum! The Rebirth of Paris Has London Rattled; Office construction and foreign investor sentiment are edging ahead in the French capital.
Lionel Laurent – Bloomberg
Perception isn’t reality, but it matters. A new EY survey has ranked Paris above London as the most attractive destination for foreign investment, for the first time since the accounting firm started doing yearly reports on the subject.
/jlne.ws/2voK5Bh

It’s Not Rationing: Brexit Britain Plans to Stockpile Essentials; Britain is relying on a bit of wartime spirit in the event of it crashing out of the European Union. It could get messy.
Emma Ross-Thomas – Bloomberg
Brexit campaigners have long urged Prime Minister Theresa May’s government to do more to prepare for a no-deal departure from the European Union. They said it would bolster her negotiating position by making threats to walk out more credible.
/jlne.ws/2vi7nbX

Miscellaneous

The Train Robbery Capital of the World
Andrea Navarro and Nacha Cattan – Bloomberg
Raids start with Jesse James-era trick: piling rocks on tracks; Swarms of marauders then swoop in to cart off the loot
Head southeast out of Mexico City for about four hours or so and you will come upon the town of Acultzingo. It is an impoverished, dusty little place nestled up against the rugged peaks of the Sierra Madre. Most inhabitants work the land for a living. They grow corn and avocados and raise cattle and pigs. They also rob trains. Lots of trains. So many, in fact, that Acultzingo (pronounced ah-coolt-ZEEN-go) is not only the train robbery capital of Mexico but, arguably, of the world.
/jlne.ws/2OoGv2z

Gender should be on the agenda of business schools; With sexual harassment being outed, have we reached a tipping point toward gender inclusivity in b-schools? ask Sharon Mavin and Carole Elliott
London School of Economics and Political Science
As business and management educators we have a role to develop greater awareness and appreciation of diversity in society and our workplaces. Gender should be on the agenda of business schools. Gender-inclusive organisations and gender-inclusive management and leadership should be non-negotiable. Business schools have ethical, social and economic imperatives for integrating gender inclusivity into their cultures and curricula.
/jlne.ws/2vfW57P

At Rich Kid Summer Camp, Big Banks Try to Hook Heirs for a Lifetime; Attendees at Next Gen functions hosted by the likes of UBS, Citi Private Bank, and Credit Suisse will one day rank among the world’s most sought-after clients.
Suzanne Woodley – Bloomberg
Fifty-two heirs to lavish fortunes luxuriate in sleek splendor at the Four Seasons. They sip designer lattes and speak the language of wealth. The talk is of money, noblesse oblige, technology, Formula One. At lunchtime, out comes chilled rosÈ, with a tasting led by Jon Bon Jovi’s son Jesse. Welcome to Camp Rich.
/jlne.ws/2vejir6

The post The Markets Will Stop a Trade War; Nasdaq’s Crypto Policing Meeting; Forest Fires appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Correction from JLN yesterday. Renato Mariotti will be speaking at MarketsWiki Education on Thursday, not Monday as scheduled. Bill Weldon was moved to Monday and Jessica Darmoni will speak on Tuesday.~JJL

Today’s MarketsWiki Education World of Opportunity event will again be at the Stuart School of Business at Illinois Tech on West Adams in Chicago, starting at 3:00 p.m. CT. Here is our list of speakers:

*John Tornatore – Cboe Global Markets
*Mike Phillips – VSEC LLC
*Jessica Darmoni – The Title Connection
*Melinda Schramm – The NIBA
*Don Ross – CODA Markets
*Patrick Carey – RCG