First Read
Hits & Takes
JLN Staff
Galina Hale, Arvind Krishnamurthy, Marianna Kudlyak and Patrick Shultz from the Federal Reserve Bank of San Francisco have published an economic letter, “How Futures Trading Changed Bitcoin Prices.”~JJL
You may know Matthew Scharpf as the extraordinary vice president of fixed income derivatives and clearing, Americas at Eurex in Chicago. But he’s an equally talented musician with a new album called “All That I’ve Left” which is now officially released and available on iTunes, Amazon, Spotify, Pandora, Napster and CDbaby. Matt’s band will be playing live on May 12 at Wire in Berwyn, IL at 8 pm. A great musician, and great speaker at our Marketswiki Education event, who is worth checking out.~JK
Don’t miss the Trading Show at Navy Pier in Chicago this week on May 9-10.~JJL
I am off on Friday to Missouri to see my son, Timothy Lothian, graduate from the University of Missouri with a bachelor’s degree in geography. Tim is currently working for a Montessori school as the head teacher and implementing a sustainability program that includes an outdoor classroom he designed and is building. He gives credit to his interest in sustainability to his internship with Deutsche Boerse a couple of summers ago.~JJL
Maria Aranda has left the Pathway to Adventure Council of the Boy Scouts of America and accepted a position as a young adult engagement coordinator at Archdiocese of Chicago. Maria was a great help with the Trading Tech 300 program. ~JJL
Natasha Solis is now managing director, global sales at Matrix Executions.~JJL
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U.S. Markets Regulator Considers Buyouts, Extension of Hiring Freeze; Stuck with a flat budget, CFTC also asks other government agencies for help with its work
Gabriel T. Rubin – WSJ
After years of budget pressure and escalating responsibilities, the U.S. derivatives regulator is considering employee buyouts and the extension of a hiring freeze. It also is asking other government agencies for help with some work.
/jlne.ws/2I4sB1Q
***** The stinginess of Congress towards the CFTC is a recipe for disaster.~JJL
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Moving Beyond SunGard – Andrew Whyte, FIS
JohnLothianNews.com
It was summer 2015 when FIS announced it was acquiring SunGard. Nearly three years later, FIS and SunGard are integrated, and according to Andrew Whyte, group president, post trade services at FIS, the firm can now concentrate on revamping its tech. In this video from JLN’s annual series with industry leaders, Whyte lays out the three areas of focus for FIS.
Watch the video and read the rest here »
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Hehmeyer Announces Impressive Performance Of Its Cryptocurrency Index Fund
Hehmeyer
After launching on April 1, 2018, Hehmeyer Trading + Investments today announced a successful first month of its Hehmeyer Cryptocurrency Index Fund. The Fund ended its first month up 51.07%. These results are net of management fees but not expenses.
/jlne.ws/2rrZzT0
*****Get your seatbelts on for this ride.~JJL
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Microsoft commits $25M over 5 years for new ‘AI for Accessibility’ initiative to help people with disabilities
GeekWire
The aim of the new program announced at the Microsoft Build developer conference in Seattle this week is to use AI to help people with disabilities deal with challenges in three key areas: employment, human connection and modern life.
/jlne.ws/2rvYCcq
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The Spread – Amelia Island – 5/4
JohnLothianNews.com
It took 30 minutes of Spencer messing up his lines for us to get 2 minutes of commentary about the Options Industry Conference which was held in Amelia Island, Fla. from May 2 through May 4. Next year’s conference will be hosted by MIAX and held in… Miami!
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Monday’s Top Three
Our top read story of the day on Monday was the FT’s US judge scraps trial into CME Group’s defence of home market. Second was what we all think about, The case for a five-hour working day, from the FT. And third went to Bloomberg’s New Crypto Exchanges Don’t Want (to Hold) Your Money
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One Wall Street: New York landmark raises the bar for luxury living; The regeneration of historic One Wall Street in Downtown Manhattan is nearing completion, with luxury condominiums now available to Hong Kong buyers.
South China Morning Post
New York City has always been on the map for global real estate investors. Now, multibillion dollar developments are creating even more opportunities to live and invest in the very heart of the world’s most famous city.
/jlne.ws/2HYh6NL
***** Live near the ghost of Alexander Hamilton.~JJL
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Vanilla ice cream off the menu as traders cannot afford the spice
Chris Dyer – Telegraph
It has been one of the most popular flavours of ice cream for generations and its taste is synonymous with the traditional British summer. But vanilla is being taken off the menu by some independent retailers who cannot afford the ingredient after a shortage sent prices rocketing.
/jlne.ws/2HXL4l0
***** Maybe the Spice Girls can fix this.~JJL
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MarketsWiki Stats
125,403,935 pages viewed; 23,094 pages; 212,958 edits
MarketsWiki Statistics
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Lead Stories
NYSE Owner ICE Is Said to Be Working on Bitcoin Trading Platform
Matthew Leising and Sonali Basak – Bloomberg
Intercontinental Exchange Inc., the owner of New York Stock Exchange, has been working on a trading platform that would let investors bet on Bitcoin, according to two people with knowledge of the project.
/jlne.ws/2I13iSk
***Business Insider here
Republican Regulator Who Blasted Dodd-Frank Rules to Step Down; Michael Piwowar’s departure will leave the agency with four commissioners, meaning some votes could be deadlocked
Dave Michaels – WSJ
A Republican member of the Securities and Exchange Commission who was a frequent critic of post-crisis regulations and helped quash some rules embraced by Democrats plans to leave the agency in July.
/jlne.ws/2I11kli
NY attorney-general Schneiderman quits after misconduct claims; #MeToo movement supporter resigns after 4 women accuse him of physical abuse
Kadhim Shubber – FT
Eric Schneiderman, the New York attorney-general who has been a prominent supporter of the #MeToo movement, resigned late on Monday after four women accused him of physical abuse in a New Yorker article.
/jlne.ws/2HVTrNI
CME’s SOFR futures debut with more than 50 participants
Karen Brettell – Reuters via CNBC
The CME Group Inc on Monday saw more than 50 global firms participate in its new futures contracts backed by the Secured Overnight Financing Rate (SOFR), a U.S. alternative to the benchmark Libor interest rate.
/jlne.ws/2I7tjM1
Bitcoin drop tied to CME futures listing, Fed paper shows
Reuters
Bitcoin’s drop in value from its December 2017 peak of $19,511 was tied directly to the listing of futures contracts tied to the cryptocurrency’s value, new research published by the San Francisco Federal Reserve showed Monday.
/jlne.ws/2FSRVWX
****Full Fed white paper here.
The Father Of Digital Trading Jumps Into The Ranks Of The Top 20 Richest Americans
Max Jedeur-Palmgren – Forbes
The stock of Thomas Peterffy’s Interactive Brokers has outperformed most over the last year – up 114% – catapulting its founder up to an all-time high on the FORBES 400 Real-time ranking.
/jlne.ws/2IjSU7I
Swiss Wealth Manager Loses Paris Fight Over $1.2 Million Bail
Gaspard Sebag – Bloomberg
Man was charged with enabling 4.4 million-euro insider trade; Bail required to ensure Swiss man doesn’t vanish during probe
A Swiss wealth manager embroiled in an insider-trading case linked to Air Liquide SA’s $13.2 billion takeover of Airgas Inc. has lost his bid to avoid posting bail of 1 million euros ($1.2 million).
/jlne.ws/2HYrqp1
Dimon Says Prepare for 4% Yields, Potential Volatility Rise
Stephen Engle and Chris Anstey – Bloomberg
U.S. borrowing may jump to $400 billion a quarter, Dimon says; Volatility could rise as QE exit proceeds, JPMorgan chief says
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said it’s possible U.S. growth and inflation prove fast enough to prompt the Federal Reserve to raise interest rates more than many anticipate, and it would be wise to prepare for benchmark yields to climb to 4 percent.
/jlne.ws/2ImNGIp
Big Banks Steal Smaller Brokers’ Thunder; Popularity of ETFs, decline in active asset managers and Europe’s new rules on research hurt smaller brokerages
Telis Demos – WSJ
It’s a good time to be a megabank. In many businesses, the largest global banks such as JPMorgan Chase JPM 0.87% & Co. and Bank of America Corp. BAC 1.16% are getting bigger, while others are struggling to keep pace. The latest example: the volatility-induced surge in first-quarter stock-trading revenue that smaller U.S. investment banks almost universally missed out on.
/jlne.ws/2I64yje
Exchanges, OTC and Clearing
CME Group considers raising corn, soybean storage rates
Reuters
Exchange-operator CME Group Inc is weighing an increase in the storage rates for its corn and soybean futures to address concerns the contracts’ prices are not accurately reflecting the underlying U.S. cash grain markets.
/jlne.ws/2HTRsJM
JCCH volume report for April 2018
JCCH
www.jcch.co.jp/uploads/volume_open_interest/2018/April_2018.pdf
HKEX announces plan to offer MSCI Asia ex Japan index futures from 11 June
HKEX
HKEX’s first regional stock index futures contract; Underlying index: MSCI All Country Asia ex Japan Net Total Return Index
Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce MSCI All Country (AC) Asia ex Japan Net Total Return Index (MSCI AxJ) Futures, the first regional stock index futures contract for HKEX, on Monday, 11 June 2018, pending regulatory approval.
/jlne.ws/2IqaMOc
Pioneering CCP transparency to maintain safer markets (part 5)
Eurex
The Public Quantitative Disclosure (PQD) is an internationally agreed format defined by CPMI-IOSCO with the intention of enhancing CCP market transparency. Eurex Clearing has been publishing its PQD since 2015 and continues to strongly support CCP transparency and market stability.
/jlne.ws/2HZQcVs
Barclays Acquires Licenses for Two EURO iSTOXX 50 ESG Focus Indices
Eurex
STOXX Ltd., the operator of Deutsche Boerse Group’s index business and global provider of innovative and tradable index concepts, has licensed to the British bank Barclays the use of the EURO iSTOXX 50 ESG Focus Index and the EURO iSTOXX 50 ESG Focus GR Decrement 5% Index issued as underlyings for the issuance of structured products.
/jlne.ws/2HZgS96
Fintech
China’s Got Jack Ma’s Finance Giant in Its Crosshairs
Bloomberg News
Draft rules would impose capital requirements on Ant Financial; Regulatory risk looms over company’s highly anticipated IPO
There’s no other company on Earth quite like Ant Financial. Spanning online payments, insurance, lending, credit scores, asset management and more, Jack Ma’s Chinese behemoth resembles a mashup of PayPal, Geico, Wells Fargo and Equifax — with a bit of BlackRock thrown in for good measure.
/jlne.ws/2HYdYkP
Money.Net Adds Real-Time Futures Prices
MarketVoice
Money.Net, the market data and financial news platform that positions itself as a low-cost alternative to Bloomberg and Reuters terminals, has added real-time futures and options on futures from exchanges in Europe, Asia-Pacific and the Americas. The company is sourcing the price data from CQG and other providers, and making it available through its new cloud-based HTML5 platform.
/jlne.ws/2ruyAGp
It’s IPO Time for iZettle, Europe’s Answer to Square
Nate Lanxon – Bloomberg
Sweden’s iZettle plans initial public offering for 2018; Intends to raise about $227 million to expand business
Swedish fintech company iZettle AB announced its intention to file for an initial public offering on the Nasdaq Stockholm stock exchange.
/jlne.ws/2ItDm18
Cryptocurrencies
Bitcoin Sees Wall Street Warm to Trading Virtual Currency
Nathaniel Popper – WSJ
Some of the biggest names on Wall Street are warming up to Bitcoin, a virtual currency that for nearly a decade has been consigned to the unregulated fringes of the financial world.
/jlne.ws/2HZoKr5
Buffett and Gates Are the Latest Bitcoin Critics, Halting $10,000 Push
Camila Russo and Katherine Chiglinsky – Bloomberg
Surprise! Bitcoin is getting no love from two of the world’s wealthiest men.
/jlne.ws/2HYt4qH
Dancing Badgers Draw More Attention Than SEC at Ethereum Meeting
Camila Russo – Bloomberg
In the crypto world, all eyes are on a meeting today where U.S. regulators may discuss whether Ethereum is a security, but developers at the center of the network showed few signs of caring at a three-day gathering that ended this weekend, where scaling and security were the main focus.
/jlne.ws/2Iq7LNS
Bitcoin to Rally on Consensus Conference, Fundstrat Analyst Says
Matthew Leising – Bloomberg
Bitcoin is relatively cheap ahead of a major cryptocurrency conference in New York next week, setting the stage for a rally, according to researchers led by Tom Lee of Fundstrat Global Advisors.
/jlne.ws/2HXFCOW
Oracle Is Rolling Out Blockchain Products
Nico Grant – Bloomberg
Oracle Corp. will unveil its blockchain software starting this month, joining the growing list of companies offering products that use the digital-ledger technology behind Bitcoin.
/jlne.ws/2HYa9vZ
Blockchain May Soon Be Helping Puerto Rico Keep the Lights on
Naureen S Malik – Bloomberg
Australian blockchain firm seeks to deploy exchange on island; Goal is to stop an exodus of workers from Puerto Rico
Solar panels. Batteries. Emergency fossil fuel-fired generators. They’ve all been deployed across Puerto Rico to help get the lights back on in the months following devastating hurricanes Irma and Maria.
/jlne.ws/2wi50tc
‘Put your money where your mouth is’: Winklevoss twin challenges bitcoin hater Bill Gates
Frank Chaparro – Business Insider
The cofounder of one of the largest cryptocurrency exchanges is calling out Bill Gates for his recent anti-bitcoin comments.
/jlne.ws/2I234GD
Bill Gates says he would short bitcoin if there was an easy way to do it
Aaron Hankin – MarketWatch
Microsoft co-founder doubles down on bitcoin take
Microsoft co-founder Bill Gates is the latest billionaire to pour cold water on digital currencies, saying if there was an easy way to bet against bitcoin and other cryptocurrencies he would.
/jlne.ws/2I8p0Ad
Blockchain ETF Asks for Patience; Founder of Reality Shares and BLCN says he is focused on blockchain technology’s future
Gerrard Cowan – WSJ
The term “blockchain” conjures up, for most, thoughts about cryptocurrencies. However, the technology has far wider implications for investors, says the founder of an exchange-traded fund that tracks the technology.
/jlne.ws/2wmjubE
Politics
Eric Schneiderman: New York attorney general resigns following assault allegations; Schneiderman, who is suing Harvey Weinstein over sexual misconduct claims, accused in New Yorker of assaulting four women
Lauren Gambino and agencies – The Guardian
New York’s attorney general, Eric Schneiderman, abruptly resigned on Monday night following accusations published in the New Yorker that he physically assaulted four women he was romantically involved with.
/jlne.ws/2IrizeZ
***WSJ here
Trump to Make Announcement on Iran Nuclear Deal Tuesday; President has criticized the pact as ‘ridiculous;’ there have been no indications that his concerns have been assuaged
Michael R. Gordon, Felicia Schwartz and Ian Talley – WSJ
Washington’s European allies were bracing for the U.S. to withdraw from the Iran nuclear accord, after President Donald Trump said he would announce on Tuesday his decision on the landmark agreement that he has repeatedly condemned.
/jlne.ws/2I0gtDa
Donald Trump set to reveal decision on Iran nuclear deal, Announcement by the president expected at the White House at 2pm Eastern Time
Patrick Wintour – The Guardian
Donald Trump is set to announce a decision on the Iran nuclear deal at the White House, in what could mark the most significant foreign policy move of his presidency.
/jlne.ws/2HYws4T
The World According to Trump; Maybe the president really believes that allies, values and institutions are for losers. But it’s the U.S. that will lose.
The Editors – Bloomberg
President Donald Trump recently wrapped up a three-week whirlwind of summitry, meeting with the leaders of Japan, France and Germany. If his visitors found the experience bewildering, who can blame them?
/jlne.ws/2I1b7rh
Regulation
CFTC probed CDS market under last enforcement head; Goelman compares manufactured payouts to match-fixing, and says CFTC has jurisdiction to bring case
Kris Devasabai, Helen Bartholomew – Risk.net
The former head of the US Commodity Futures Trading Commission’s division of enforcement has backed the agency’s efforts to clamp down on ‘manufactured’ credit default swap payouts, in which a market participant strikes an agreement with the reference entity, helping both firms but potentially hurting other CDS users.
/jlne.ws/2HVSftI
Remarks of Chairman J. Christopher Giancarlo at the Association of German Banks, Berlin, Germany
CFTC
Thank you, Andreas Krautscheid for that kind introduction. I also wish to thank the Bankenverband for hosting this event. Good afternoon. Thank you all for coming.
/jlne.ws/2HXowRc
Upcoming Board Meeting
FINRA
This week, the FINRA Board of Governors will convene for its May 2018 meetingóour second of the year. Our agenda includes discussions on a range of important topics, and we will be joined by two guest speakers from the SECóPeter Driscoll from the Office of Inspections and Examinations and Kevin Goodman from the FINRA and Securities Industry Oversight group.
/jlne.ws/2IqXDEH
Scheduled Maintenance of FINRA Order Form
FINRA
FINRA will perform scheduled maintenance of the FINRA Order Form on the evening of Friday, May 11, 2018. The maintenance will not impact user functionality. However, any FINRA Order Forms saved in draft status will be deleted.
/jlne.ws/2IlEvrz
New Rate for Fees Paid Under Section 31 of the Exchange Act
FINRA
Effective May 22, 2018, the Section 31 fee rate applicable to specified securities transactions on the exchanges and in the over-the-counter markets will decrease from its current rate of $23.10 per million dollars in transactions to a new rate of $13.00 per million dollars in transactions.
/jlne.ws/2IhX5kD
SEC commissioner announces plans to step down
Kevin Dugan – NY Post
Wall Street’s favorite regulator is on his way out.
/jlne.ws/2HVOzrU
****FT here
Investing and Trading
A Private-Market Deal Gone Bad: Sketchy Brokers, Bilked Seniors and a Cosmetologist; Investments called private placements are among the fastest growing in finance, outpacing the public stock market. They are frequently populated by brokers with red flags in their record
Jean Eaglesham and Coulter Jones – WSJ
Ray Kay, who works as a financial adviser in Beverly Hills, Calif., advertised on the radio a purportedly low-risk, high-income investment.
/jlne.ws/2InCWcM
The Next Bond Crash: An ETF Story
Dave Nadig – ETF.com
These are the two statements you most often hear about liquidity and ETFs: ETFs are only as liquid as what they own [and] ETFs are only as liquid as what you see on the screen.
Both of these are fundamentally flawed, and interact in interesting ways. And nowhere are there more histrionics about these issues then junk bonds and their ilk (say, bank loans).
/jlne.ws/2HVq1PX
Pension Funds Still Making Promises They Probably Can’t Keep; Public pension fund projections don’t always match actual experience
Heather Gillers – WSJ
The value of investments by public pension funds declined last quarter, widening the gap between what these funds say they will earn and what they actually earn.
/jlne.ws/2IoIrYF
Oil Market May Get Blindsided by Iran Deal; Crude oil bulls have factored in too much from President Trump’s decision on sanctions on May 12
Spencer Jakab – WSJ
The oil market has surged on the expectation that President Donald Trump will reimpose sanctions on Iran. No matter what Mr. Trump decides, oil bulls and other beneficiaries of higher prices shouldn’t get too confident.
/jlne.ws/2woYTDD
Top Collectors Reveal the Secrets of How to Invest in Art; Returns can be eye-popping, but collectors must avoid the pitfalls of forgeries, fakes and rapidly changing tastes.
Fredrik Balfour – Bloomberg
Andy Warhol once said: “Making money is art.” But what about making money from art?
/jlne.ws/2IkgW2l
Institutions
ING to expand debt capital markets business into US
Alexandra Scaggs – FT
Dutch bank ING Groep NV is building out its debt capital markets (DCM) business in the Americas, with the aim of underwriting its clients’ investment-grade US bond issuance.
/jlne.ws/2IlbDQf
Barclays appoints Matt Pecot to run equities trading in APAC; Barclays raids Credit Suisse again as new head of equities for APAC joins from Swiss bank.
John Brazier – The Trade
Barclays has appointed Matt Pecot from Credit Suisse as head of its equities business in Asia Pacific.
/jlne.ws/2HVONPM
Activist Sets Sights on Citigroup; ValueAct puts focus on bank’s ability to grow as a service provider for companies
David Benoit, Cara Lombardo and Telis Demos – WSJ
Activist investor ValueAct Capital Partners LP has built a roughly $1.2 billion stake in Citigroup Inc., C 0.82% a bet that the giant bank’s strength as a service provider to corporations will enable it to thrive in the post-crisis era and make up ground its shares have lost in recent years.
/jlne.ws/2Iq8Cyf
Exclusive: World’s biggest gold ETF launching new low-fee fund – source
Peter Hobson – Reuters
The World Gold Council, owner of the world’s largest gold-backed exchange traded fund (ETF), is launching a new fund with a cut-price management fee to fend off rivals with lower charges, a source familiar with the matter told Reuters.
/jlne.ws/2I6bRaO
D.E. Shaw fired a high-profile hedge-fund manager after an investigation into alleged inappropriate behavior, and now he’s fighting back
Rachael Levy and Olivia Oran – Business Insider
A longtime D.E. Shaw portfolio manager says he was unfairly terminated after an investigation into allegations of inappropriate behavior. Now he’s fighting back.
/jlne.ws/2wt4Oro
Regions
Ireland set to pick up legal business from derivatives market
Irish Legal News
Ireland is set to pick up more legal business from financial services companies after Brexit following a boost from the International Swaps and Derivatives Association (ISDA).
/jlne.ws/2FSyOw1
Bruised Swedish krona vulnerable with quiet summer trading ahead; ‘The market hates being wrong, and has sold the krona hard’
Cat Rutter Pooley – FT
The Swedish krona has picked up from the near nine-year low it reached against the euro last week, but with the Riksbank showing few signs of departing from its super-cautious monetary policy stance, analysts are divided about the path for the currency.
/jlne.ws/2HXXc5n
A Newspaper Is Sold, and Cambodians Fear the End of Press Freedom
Julia Wallace and Mike Ives – WSJ
A newspaper widely seen as the last bastion of a free press in Cambodia has been sold to a Malaysian investor with ties to Cambodia’s strongman prime minister, a move that critics say further highlights the country’s slide toward outright authoritarianism.
/jlne.ws/2InQx3D
Macquarie lays off analysts as Mifid bites; Equity research regulations spur shake-up at Australian bank’s European arm
Laura Noonan – FT
Macquarie’s European division is laying off a handful of analysts and reshaping its coverage around six key sectors, as EU groups get to grips with regulations forcing investors to explicitly pay for reports and analysts’ time.
/jlne.ws/2HZn6pp
Brexit
For a win-win financial services Brexit deal, a reboot is needed
Barnabas Reynolds – City AM
If the EU and the UK are each to achieve a win-win outcome in the Brexit trade talks, the EU must become more accountable politically to its own citizens.
/jlne.ws/2IqaCGA
The real divide over the UK’s post-EU future is hope and despair; Negativity will depress confidence but there is a strong case for optimism
Norman Blackwell – FT
With less than a year to go until the UK leaves the EU, the real divide is no longer between former Leavers and Remainers. Rather it is between those who, whichever way they voted, now take an optimistic view of Britain’s future and those who are entrenched in a negative outlook. While the pessimists are entitled to their view, the danger is that their continued disparagement of Britain’s prospects is itself a source of damage ó reducing economic confidence and raising doubts for foreign investors. It is time we all embraced a realistic but positive stance on long-term opportunities.
/jlne.ws/2ImOT2p
Boris Johnson calls Brexit customs partnership plan a ‘crazy system’; UK foreign secretary’s comments bring cabinet divisions into the open
Robert Wright – FT
The British cabinet’s divisions over post-Brexit customs policy burst into the open on Monday when Boris Johnson, the foreign secretary, criticised Prime Minister Theresa May’s preferred policy as a “crazy system” that would leave the UK “locked in the tractor beam of Brussels”.
/jlne.ws/2HYaNtz
All Creatures Great and Small Will Get Stuck at Brexit’s Border; A shortage of veterinarians promises another Brexit trading nightmare.
Suzi Ring – Bloomberg
For Colin Moore’s family-run fish bait business in southwestern England, eggs are essential. They stiffen a paste made of semolina, fishfeed and other flavorings so it can be rolled into boilies, which carp anglers across Europe love to toss into freshwater to make the huge oily fish easier to catch.
/jlne.ws/2wnunKm
The post ICE working on bitcoin platform; SEC’s Piwowar stepping down; NY AG quits appeared first on John Lothian News (JLN).