First Read
Hits & Takes
JLN Staff
CryptoMarketsWiki.com will be launched later today in what we are describing as a soft launch. More details to come.~JJL
Eurex Clearing announces its first US-based general clearing member, INTL FC Stone US.~JJL
Had enough of this planet? Want to get off? You are in luck. Become a citizen of the nation of Asgardia and hope it makes good on its promise to colonize the moon (it already has 200,000 citizens and a government).~JB
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FIA IDX 2018 – Coalescing Liquidity, Periodically
JohnLothianNews.com
Cboe Europe CEO Mark Hemsley recalls how a few years ago, a University of Chicago economics professor, Eric Budish, made the rounds talking about periodic auctions as a potential replacement to continuous markets and a means of stemming the influence of high frequency trading. That is not the route that Cboe Europe took when it implemented its periodic auction offering, but prioritizing size over speed has been a successful effort. In this video, Hemsley talks about what periodic auctions have to offer and why periodic auctions are off to a hot start.
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The future is not what it used to be; Game changers in the derivative industry
Eurex
That markets and industries are continuously changing is nothing new. New is the speed in which these changes happen. Steady evolutionary development is outdated; disruptive is the word of the day. What does that mean for us? What are the game changers in our industry?
/goo.gl/LRhinE
****”The only thing that is constant is change.” ~Heraclitus
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Facebook Loosens Ban on Cryptocurrency Ads for Approved Vendors
Sarah Frier – Bloomberg
The update partially reverses a policy implemented in January; Social network still prohibits ads for binary options, ICOs
Facebook Inc. is loosening its ban on advertisements that promote cryptocurrencies like Bitcoin, saying such content will be allowed on the social network after going through an application process to determine the safety and legitimacy of the products.
/goo.gl/TMA4T5
****If there’s one thing I’m confident of, it’s that Facebook always has its users’ best interests in mind. *eyes roll*~SD
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Blockchain for Physical Commodity Markets – A Realist’s Perspective
Julie Lerner – MarketVoice
People are excited about blockchain. They believe it will solve inefficiencies in everything from stocks and bonds to production and delivery of commodities. Some even claim it will end global poverty. I am skeptical, however, about the current feasibility of implementing blockchain in commodity trading. I am not a specialist in this new technology, but I have spent my career in the commodity trading business. I know from personal experience that it will be extremely difficult to garner industry-wide support for such a massive change in technology. Below, I’ll outline some of the primary obstacles standing in the way of blockchain adoption in this industry.
/goo.gl/RWzEGW
****Sometimes when you have a hammer, everything looks like a nail, right?~SD
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Tuesday’s Top Three
Our top story Monday was Business Insider’s There’s been a big shakeup at Goldman Sachs, and it shows how Wall Street’s playing catch-up with high-speed traders. Second was Bloomberg’s The Biggest Digital Heist in History Isn’t Over Yet. Third was OCC Launches New Brand Identity
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MarketsWiki Stats
128,655,165 pages viewed; 23,166 pages; 213,717 edits
MarketsWiki Statistics
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Lead Stories
Hedge Fund Managers See Echo of Past Crashes in Markets
Nishant Kumar and Suzy Waite – Bloomberg
The ranks of hedge fund managers expecting impending market chaos are growing. Greg Coffey, the former star manager at Moore Capital Management who started trading at his own firm this year, is comparing the turmoil in May to the end of dotcom bubble in 2000. Horseman Capital Management’s Russell Clark, one of the most bearish hedge fund managers in Europe, invoked memories of the financial crisis of 2008 in a letter to clients.
/jlne.ws/2lFnzPY
Bank Stocks Are On Their Longest Losing Streak Ever
Sarah Ponczek and Felice Maranz – Bloomberg
S&P 500 Financials Index falls for 12th straight day; Financial Select Sector SPDR Fund ETF sees 8 days of outflows
Bank stocks just hit a record — a record of losses. The S&P 500 Financials Index fell for the 12th straight day Tuesday, the longest losing streak on record. Coming into the year, many cited the tax overhaul and a rising rate environment as reasons for banks to rally. Instead, they’ve endured pressure from a flattening yield curve. The losses also come ahead of the final phase of the Federal Reserve’s annual stress tests and waning consumer confidence.
/jlne.ws/2lAYbL7
Tradition unit makes seven hires for FX markets push
Philip Stafford – FT
DeepWell Liquidity Management, an agency broker owned by Swiss interdealer Tradition, has made seven senior managers to spearhead its push into global forex and fixed income trading as banks retreat from markets they once monopolised.
/jlne.ws/2lEhBPq
U.S. charges S&P analyst, 2 others with insider trading in paint merger
Jonathan Stempel – Reuters
The U.S. government on Tuesday criminally charged a Standard & Poor’s credit ratings analyst and two friends, all from Manhattan, with insider trading related to Sherwin-Williams Co’s $9.3 billion purchase of Valspar Corp.
/jlne.ws/2lB5t1x
Nasdaq Commodities to Launch European Spot Market
GlobeNewswire
Nasdaq Commodities today announced a plan to offer Day Ahead Auction Markets for Electricity in Germany, France and the Nordics alongside the existing Power Futures contracts.
/jlne.ws/2lB0pKt
LSEG acquires minority stake in AcadiaSoft
LCH
London Stock Exchange Group (LSEG) today announced that it has acquired a minority circa 16% stake in AcadiaSoft. The terms of the transaction have not been disclosed.
/jlne.ws/2lB7gUj
****The Trade here
Bob Diamond joins Rothschild group in Kepler Cheuvreux bet; Former Barclays chief makes move to seek profit from Mifid II upheaval
Martin Arnold and Hannah Murphy in London – FT
Bob Diamond has teamed up with the Edmond de Rothschild group to become the largest shareholder in Kepler Cheuvreux in a bet that the French brokerage will emerge as one of the winners from the sector’s recent regulatory upheaval.
/jlne.ws/2lCpN2D
Japan’s FSA shows how to war game cryptocurrency risks; No reason to believe all the right lessons have been learned
Leo Lewis – FT
Last Friday, Japan’s Financial regulator sprinkled six anti-money-laundering business improvement orders over some of the country’s biggest cryptocurrency exchanges — all of which it had carefully and prominently licensed only nine months ago.
/jlne.ws/2lDvSfh
****More from Coindoo
Exchanges, OTC and Clearing
CME Group Announces the Launch of Options on Black Sea Wheat FOB (Platts) and Black Sea Corn FOB (Platts) Futures
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of options on its Black Sea Wheat FOB (Platts) and Black Sea Corn FOB (Platts) financially settled futures contracts, to begin trading on July 16, 2018, pending all relevant regulatory review periods.
/jlne.ws/2lB0I85
CME to add options for Black Sea grain futures
Reuters Staff
CME Group is to introduce options contracts for its Black Sea wheat and corn futures as it seeks to further develop the derivatives targeting a major export zone.
/goo.gl/177vT9
The World Federation of Exchanges publishes revised ESG Guidance & Metrics
WFE
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published a revised edition of its Environmental, Social & Governance (ESG) Guidance & Metrics.
bit.ly/2N33ob9
TMX Extends to London Hours
MarketsMedia
Luc Fortin, president and chief executive of the Montréal Exchange and global head of trading at TMX Group, said the extension of the Canadian exchange group’s hours to cover London will boost volumes.
/goo.gl/oH3w5f
China’s largest stock exchanges say risks from share-backed loans controllable
Reuters Staff
China’s two largest stock exchanges said in notices posted on Tuesday that risks to the market from share-backed loans can be controlled, seeking to reassure investors worried by turbulence from global trade tensions.
/goo.gl/gMaH1t
Moscow Exchange launches US 500 Index Futures
MOEX
Moscow Exchange launched US 500 Index Futures. The underlying asset for US 500 Index Futures is the Solactive US Large Cap Index, a benchmark mirroring the performance of the 500 largest US companies.
Renaissance Broker and Region Investments will quote buy and sell orders of 100 contracts each for the nearby contracts throughout the main trading session. The contract’s code is U500.
/goo.gl/dE9811
Too Many Trading Platforms; Nothing New To Trade
Kurt Dew – Seeking Alpha
Joshua Levine’s original trading platform, which became the core of the first high-speed electronic platform, Island, since bought by Nasdaq Inc. (NASDAQ: NDAQ), was an important advance in trading technology. But Levine’s true stroke of genius was to make Island’s code open source. Freeing a creative concept is, surprisingly, more effective than a patent in protecting and promoting it. Imitation is, indeed, the sincerest form of flattery. So when Island-clone platforms became a dime a dozen, the world sat up and took notice. The value of new platforms rapidly went to zero, their introducers’ secondhand creations getting no respect. The respect went to Levine.
bit.ly/2N3R2zE
“Interest in our MSCI options has increased”: Three questions for Ralf Huesmann
Eurex
The June roll in the MSCI derivatives has just come to an end. We spoke to Ralf Huesmann, Eurex Product Research and Development, about how the segment has developed recently.
/jlne.ws/2lDwl0Z
US Finra ATS tier 1 stats update: June 25 release for June 4
Meanderful
UBS and Credit Suisse remained ensconced at #1 and #2 respectively. Barclays dropped a couple of slots to 6th.
/goo.gl/TL8Y5k
SGX welcomes new Issue Managers for Mainboard listings and Catalist Sponsors
SGX
Singapore Exchange (SGX) is pleased to welcome the following new Issue Managers for Mainboard listings and Catalist Sponsors:
/jlne.ws/2lAbwmZ
SGX to report FY2018 results on 27 July
SGX
Singapore Exchange (SGX) is reporting its results for Financial Year 2018 (FY2018) after the market closes on 27 July 2018.
/jlne.ws/2lGUP9H
Fintech
Clear the Hurdles of Trade Compliance and Surveillance with TT Score, Now Fully Integrated with the TT Platform
Trading Technologies Blog
Why is this a big deal? The newly integrated TT Score is another way that we can help our customers reduce costs and create efficiencies while making compliance surveillance capabilities easily available to the masses.
/goo.gl/68cn5c
U.S. Treasury Department to Weigh In On Fintech Innovation
Kilpatrick Townsend & Stockton LLP – JDSupra
Press reports indicate that the U.S. Treasury Department anticipates releasing a report during the next few weeks that will provide some recommendations on financial services regulation. The report will be the fourth and final in a series from the Treasury Department on regulatory reforms, as mandated by President Donald Trump (the previous reports focused on asset management, banking, insurance and capital markets).
bit.ly/2MtQbXE
LiquidityBook Selected by Dalzell Trading
Finextra
LiquidityBook, a leading Software-as-a-Service (SaaS)-based provider of buy- and sell-side trading solutions, today announced that LBX Outsourced Trader, an advanced POEMS (portfolio, order and execution management system) with fully integrated FIX connectivity, has been selected by Dalzell Trading.
/jlne.ws/2lAARgs
Questions remain after the CEO of fintech VC Anthemis resigns
Steve O’Hear – TechCrunch
Anthemis Group, the fintech VC fund based in London, has lost its long-time CEO after Nadeem Shaikh handed in his resignation earlier this week.
The Financial Times broke the story yesterday, quoting Shaikh citing a “shift in the company’s strategy.” However, TechCrunch understands from sources that Shaikh’s decision to leave Anthemis came after a formal complaint by another staff member at the firm and following a subsequent internal investigation.
/tcrn.ch/2tJKj53
Small banks try to move into fintech’s fast lane
Hilary Burns – American Banker
Nbkc bank wanted a front-row seat to innovation.
To get that, the Kansas City, Mo., company took an unusual step for a community bank — creating its own fintech accelerator with help from a local partner. After months of work, the $619 million-asset company began accepting applications last week for the program called Fountain City Fintech.
bit.ly/2Msi9mV
Nationwide launches £50 million fintech venture fund
Scott Carey – Computerworld UK
Nationwide has launched a £50 million venture fund, targeting strategic, early-stage investments in fintech startups working in a selection of core areas. In return, startups will get support from senior Nationwide staff for things like marketing.
bit.ly/2Msx6Fl
Cryptocurrencies
Crypto Collapse Spreads With Hundreds of Coins Plunging in Value
Olga Kharif – Bloomberg
Finder.com says more than 80% of tokens dropped in price; Weekly survey finds average decline in value of 19 percent
The meltdown in Bitcoin is weighing on more than the biggest cryptocurrency. Over 80 percent of 1,586 digital coins Finder.com tracks in a weekly survey decreased in price in the past seven days. The tokens fell 19 percent on average, Finder.com found in the week ended June 25.
/jlne.ws/2lB2eaj
Facebook eases ban on cryptocurrency related ads
Reuters
Facebook Inc on Tuesday decided to allow certain ads promoting cryptocurrency and related content from pre-approved advertisers, but would continue its ban on those tied to binary options and initial coin offerings.
/reut.rs/2KnhuSO
CryptoAds’ Public Crowdsale Kicks off With an Announcement of the New Hardware Wallet
NewsBTC
As virtually everyone in the crypto world knows, one of the most critical and persistent issues plaguing the space is wallet security. Problems abound: phishing, fraud, theft, hacking – all of these risks have to be taken into account by cryptocurrency holders. Experts estimate that more than a billion dollars have been stolen from crypto wallets just since the beginning of 2018. The best possible solution to these threats is a hardware wallet, which users have full control over, and this is just what’s being offered by a pioneering blockchain digital advertising distribution hub CryptoAds Marketplace.
bit.ly/2tJL0LH
Crypto Startup Uphold Moves to Become Licensed U.S. Broker-Dealer
Nikhilesh De – Coindesk
Digital money platform Uphold is looking to become a broker-dealer in the U.S. after acquiring a registered firm called JNK Securities, it was announced Wednesday.
The company has now filed with the Financial Industry Regulatory Authority (FINRA) for approval of the change of ownership to become a registered broker-dealer.
bit.ly/2tHmz1f
Robert Shiller Says Bitcoin Is a ‘Remarkable Social Phenomenon’
Kevin Costelloe – Reuters
Bitcoin is a social movement whose popularity splits along geographic lines in the U.S., Nobel economics prize winner Robert Shiller said.
/jlne.ws/2lEArpy
Carney is down with the crypto kids
Thomas Hale – FT
A venerable institution like the Bank of England must be wary of appearing too, well, venerable. Especially in an era of supposedly unprecedented technological innovation. Because if you don’t innovate, you will, definitely, die.
/jlne.ws/2lzwwua
Cryptojacking malware on the rise, says McAfee report; Programs that steal computing power to generate cryptocurrencies increase 600%
Hannah Murphy – FT
The types of a malware that steal other people’s computing power to generate cryptocurrencies increased by more than 600 per cent in the first quarter of 2018 in a sign that cyber criminals are increasingly exploiting the nascent digital currency technology.
/jlne.ws/2lGebvf
Cryptocurrency Universe Expands Far Beyond Bitcoin
The code base is increasing and improving every day as computer science graduates from top schools jump on board.
By Aaron Brown – Bloomberg
A sort of “cryptobrawl” broke out last month at the Milken Institute Global Conference between economist Nouriel Roubini and panel participants more optimistic about the future of cryptocurrency technologies. I had the opportunity to participate in a partial rematch at Battle of the Quants, where Roubini was just as negative and DMS Governance’s John D’Agostino presented a moderate defense.
/goo.gl/FnGZTE
Swarm tokenizes Dash masternodes
Leaprate
Swarm, the blockchain for private equity, today announced the launch of DMN Token representing fractional ownership of a Dash masternode, extending block rewards and voting rights to all token holders. Additionally, investors may now use Dash to participate in all investment opportunities on Swarm’s marketplace.
/jlne.ws/2lDLJdw
Politics
Trump says CFIUS can protect U.S. technology from Chinese acquisitions
Steve Holland and David Lawder – Reuters
President Donald Trump said on Tuesday that sensitive U.S. technology can be protected from acquisition by China through the committee that scrutinizes foreign acquisitions of American companies, but the ultimate method was still being worked out.
/reut.rs/2IutbW9
The Great Soybean Conspiracy
Paul Krugman – NY Times
The Trump administration appears to be headed for a trade war on three fronts. As far as anyone can tell, it is simultaneously going to take on China, the European Union and our partners in the North American Free Trade Agreement. The economic fallout will be ugly.
/jlne.ws/2lEg5gc
Fintan O’Toole: Trial runs for fascism are in full flow; Babies in cages were no ‘mistake’ by Trump but test-marketing for barbarism
Fintan O’Toole – The Irish Times
To grasp what is going on in the world right now, we need to reflect on two things. One is that we are in a phase of trial runs. The other is that what is being trialled is fascism – a word that should be used carefully but not shirked when it is so clearly on the horizon. Forget “post-fascist” – what we are living with is pre-fascism.
/jlne.ws/2lEQ7Jw
Trump Decides Against Harshest Measures on China Investments
Saleha Mohsin and Jenny Leonard – Bloomberg
The White House opted to take a less confrontational approach toward Chinese investments in the U.S. as it pushes Congress to strengthen an existing review process rather than invoke a little-used law reserved for economic emergencies.
President Donald Trump wants Congress to pass legislation to bolster the Committee on Foreign Investment in the U.S., or CFIUS, so it can prevent companies from violating intellectual-property rights of American companies, two administration officials said Wednesday, speaking to reporters on the condition of anonymity.
/goo.gl/8JFqvX
Regulation
Ex-State Street executive convicted in U.S. of hidden fee fraud
Nate Raymond – Reuters
A former State Street Corp (STT.N) executive was convicted on Tuesday of participating in a scheme to defraud several of the bank’s customers by charging them secret commissions on billions of dollars of trades.
/reut.rs/2ItQW0o
SEC Charges Credit Ratings Analyst and Two Friends with Insider Trading
SEC
The Securities and Exchange Commission today charged a credit ratings agency employee with tipping two friends about The Sherwin-Williams Co.’s confidential plans to acquire The Valspar Corp., which he learned of through his work. The SEC also charged the two friends with trading on the illicit tips, which reaped them substantial profits.
/jlne.ws/2lz6tTM
Capital Progress
ISDA
The checklist of post-crisis reforms now has neat ticks alongside each item. Clearing of standardized derivatives – tick. Reporting, trading on regulated venues where appropriate, margin requirements for non-cleared derivatives – tick, tick, tick. Revised capital rules – tick. With these requirements in place, our focus is now on two key issues: making sure the entire rule set is appropriate and reflects risk, and we achieve a globally convergent regulatory framework. When it comes to the capital rules, the rubber is really about to hit the road. The Basel Committee on Banking Supervision published its final Basel III package in December 2017, and it now falls to national authorities to implement those rules.
/goo.gl/H3wFUm
FCA publishes update on wide-ranging review of retail banking sector
UK FCA
The Financial Conduct Authority (FCA) has today published an update on its Strategic Review of Retail Banking Business Models.
/jlne.ws/2lGjUkJ
Custodians could play a role in MiFID II research provision; HSBC’s head of global custody believes custodians could play a part in the front-end decision-making process for clients.
Jon Watkins – The Trade
MiFID II’s changes to research payments could provide an opportunity to data-rich custodian banks, according to HSBC’s head of global custody.
/jlne.ws/2lEdNO5
Morgan Stanley Adds Former S.E.C. Chairwoman to Its Board
Emily Flitter – NY Times
A former chairwoman of the Securities and Exchange Commission was named on Tuesday to the board of Morgan Stanley, the latest in a series of moves the bank has made to bolster its brokerage business.
/jlne.ws/2lC6iXO
The SEC Has Had Its Own Questions About LaCroix; Beverage maker declined to provide regulator with requested figures to clarify sales claims
Jennifer Maloney – WSJ
LaCroix maker National Beverage Corp. FIZZ -4.61% is known for issuing colorful news releases peppered with exclamation points, outsize boasts and attacks on critics.
/jlne.ws/2lB63fF
Investing and Trading
The growing short position in USD investment grade credit
IHS Markit
It has been a challenging year for investment grade credit investors. Since the start of 2018 IG tracking ETFs have declined in value by 6% on average. The IG ETFs also sport a 4% YTD underperformance relative to high-yield tracking funds, which appears to be driven by a greater inverse correlation between IG bonds and rising US treasury yields. While credit shorts took some exposure off during the rally in the last days of March and early April, they’ve since built the position to over $55bn notional, an increase of $7.8bn since the start of 2018.
/goo.gl/fTzH8i
It’s Been a Rough 2018 for Many Quant Hedge Funds
Saijel Kishan and Vincent Bielski – Bloomberg
Manoj Narang loses biggest investor after posting losses; Woodriff’s QIM tactical fund slumps 35% this year through May
/bloom.bg/2N2GX5Y
The Fed’s Latest Challenge: Keeping Benchmark Rate in Check; Central bank wants rate closer to middle of its range and has said it could make more tweaks if it doesn’t budge
Katy Burne – WSJ
The Federal Reserve recently tweaked how it sets short-term interest rates in an effort to keep them from drifting too high—but an increase in its benchmark raises questions about its ability to keep borrowing costs in check.
/jlne.ws/2lFoAYi
Investors bet on Korea unification equity funds; South Korea’s asset managers ride on wave of optimism over reconciliation
Song Jung-a in Seoul – FT
South Korea’s asset managers are scrambling to roll out unification-themed equity funds that make a bet on a unified Korea.
/jlne.ws/2lDH8bg
Morgan Stanley Sees ‘Rolling Bear’ Reaching High-Quality Stocks
Andreea Papuc – Bloomberg
Failure of 10-year U.S. yields to hold 3% is warning: Wilson; U.S. small caps may be resilient to rolling bear, Wilson says
The Federal Reserve’s monetary tightening, and a less-synchronized global economic expansion, is dealing a series of blows to financial markets in a pattern that ultimately will encompass higher-quality U.S. stocks, according to Morgan Stanley.
/jlne.ws/2lB4Zsb
World’s LNG Giant Is Pumping $20 Billion Into U.S. Oil, Gas
Rachel Adams-Heard – Bloomberg
Qatar Petroleum set to back Golden Pass LNG project in Texas; Final decision on terminal expected in early 2019: al-Kaabi
Qatar Petroleum, the world’s biggest seller of liquefied natural gas, is looking to get even larger, investing $20 billion in America’s oil and gas fields at a time when rival U.S. exporters are expanding.
/jlne.ws/2lC4r5i
Ready to Catch Falling Knives in Stocks? These Investors Are
Ksenia Galouchko – Bloomberg
After a near 5 percent decline in two weeks, investors should be brave and buy the dip in European equities as fundamentals are set to eclipse political noise and trade saber-rattling in the second half of the year, according to Barclays Investment Solutions and Allianz Global Investors.
/jlne.ws/2lDNLKA
Equity Markets Are Living on Borrowed Time; Eroding sentiment about the global economy leads market commentary.
Robert Burgess – Bloomberg
Shrinking outlook. Photographer: Joel Saget/AFP/Getty Images
With just three trading days left in June, the MSCI All-Country World Index of stocks is down 1.63 percent for the year. And barring a miracle, it will most likely post its worst first half of a year since 2010. The surprise is that things aren’t worse.
/jlne.ws/2lAxtlK
Soros Backs Personal Injury Lawsuits in Market With 20% Returns
Miles Weiss – Bloomberg
Soros bankrolls firm that helps finance advances to plaintiffs; The billionaire George Soros has found a new way to make money from personal-injury lawsuits. Soros Fund Management is pushing into a branch of litigation finance that few hedge funds have entered. His family office is bankrolling a company that’s creating investment portfolios out of lawsuits, according to a May regulatory filing.
/jlne.ws/2lCpbdl
The federal debt is headed for the highest levels since World War II, CBO says
Jeff Stein – The Washington Post
Government debt is on track to hit historically high levels and at its current growth rate will be nearly equal in size to the U.S. economy by 2028, the Congressional Budget Office said Tuesday.
/jlne.ws/2lAY8ip
Institutions
JPMorgan Reorganizes Its China Investment Bankers; Traditional industry groups no longer ‘align well,’ bank says, so it created seven new ones underpinned by the technology sector
Julie Steinberg – WSJ
JPMorgan JPM 0.07% Chase & Co. is reconfiguring its investment-banking operations in China ahead of anticipated regulatory changes and a swell of new business.
/jlne.ws/2lEdxi5
EU Needs to Do More to Prevent Bank Havoc, Says Bank of England
John Glover – Bloomberg
Central bank says trillions of pounds of contracts are at risk; ‘Action is needed’ by both sides to ensure continuity
Mark Carney warned that time is running out to remove the threat that Brexit poses to trillions of pounds of derivative contracts, stepping up pressure on the European Union to act.
/jlne.ws/2lEB1ne
Wells Fargo Brokers Loved Structured Notes; Also de-stressing the stress tests and cryptfluencing.
Matt Levine – Bloomberg
The way a lot of bank structured notes work is that you give the bank $100, and in a few years, if the S&P 500 index or whatever is up, the bank gives you back more than $100, based on some multiple of the index’s performance. If the index is down, though, the bank gives you back your $100. Heads you win, tails you don’t lose: You get a guaranteed return of your principal plus some extra money if the stock market does well. The bank has sold you a bond (or a certificate of deposit), and instead of paying you interest on that bond, it uses the interest to buy an option on the S&P 500 or whatever. You get the combination of (1) a bond that doesn’t pay interest and (2) a “free” option.
/jlne.ws/2lAYBkF
Exclusive: Ackman makes fresh layoffs at Pershing Square hedge fund
Svea Herbst-Bayliss – Reuters
Billionaire hedge fund manager William Ackman, whose investment assets have shrunk by more than half in the last three years, has made a second round of staff cuts and laid off three investor relations team members, two sources familiar with the matter said on Tuesday.
/jlne.ws/2lGfD0F
Regions
China to reduce import tariffs on soybean from India, other nations
Business Standard News
China will cut import tariffs on goods from India and certain Asia-Pacific countries, starting from July 1, China’s central cabinet announced on Tuesday.
/goo.gl/4Ri8xZ
China’s Yuan Tumble Blindsides Traders, Spurs Worry Over Impact
Tian Chen, Eric Lam and Anooja Debnath – Bloomberg
Whiff of ‘panic’ hit before yuan pared day’s loss on Wednesday; ‘There are no costless options’ for China on trade response
Global investors might shrug at a bear market in Chinese domestic stocks — largely walled off from the rest of the world. But a tumble in the yuan that’s blindsided currency forecasters is now triggering warnings of potential contagion.
/jlne.ws/2lDurNT
China Think Tank Warns of Potential ‘Financial Panic’ in Leaked Note
Bloomberg News
A leaked report from a Chinese government-backed think tank has warned of a potential “financial panic” in the world’s second-largest economy, a sign that some members of the nation’s policy elite are growing concerned as market turbulence and trade tensions increase.
/goo.gl/ikRY4Y
Germany’s Banks Betting Billions on Tech to Boost Revenue
Stephan Kahl – Bloomberg
Study examines strategies of 50 largest commercial banks; Digital investments have not paid off so far in many cases
German banks — jostling for position in one of Europe’s most competitive markets — will plow billions of euros into digitization over coming years to boost revenue. The question is how many will get their money back.
/jlne.ws/2lAxKVO
Brexit
BoE hits out at Brussels over post-Brexit planning; Central bank says bloc has not done enough to ensure financial stability in case of hard Brexit
Chris Giles, Economics Editor – FT
The Bank of England has fired shots at Brussels in an increasingly acrimonious dispute over preparations by the financial sector for Brexit.
/jlne.ws/2lEd5jT
EU Heavyweights Will Block U.K. Single-Market Bid, Spain Says
Ian Wishart – Bloomberg
Some countries would back migration curbs, Borrell says; Brexit is a “pain in the ass,” says Spanish foreign minister
The European Union’s biggest countries will block any U.K. attempt to combine single market membership with immigration curbs, Spain’s foreign minister said, piling further pressure on Prime Minister Theresa May as she seeks to finalize her vision for the country’s post-Brexit ties with Europe.
/jlne.ws/2lAaS8S
BofA starts trading operation shift from London to Paris; US bank says three senior executives will move to French capital next year
Martin Arnold in London – FT
Bank of America is accelerating its preparations for Brexit by relocating three senior UK-based executives to Paris, as it beefs up its investment banking operations in the French capital.
/jlne.ws/2lz3qei
A $38 trillion financial crunch is looming on the horizon – and it could hit early next year
Business Insider
A major financial crunch on contracts worth almost £30 trillion ($39.7 trillion) could be on the horizon in March next year, the Bank of England warned on Wednesday.
The UK’s central bank used its latest Financial Stability Report — which looks at the risks to the safety of the UK economy and the global financial system — to warn that Britain’s impending exit from the European Union could have a huge impact on over-the-counter derivative markets.
/goo.gl/mUhTvy
Miscellaneous
Why Camping Alone Can Make You a Mental Winner; When you venture into the wilderness by yourself, you can restore your focus and well-being. Here’s what to pack for the trip
Clint Carter – WSJ
Last November I spent a night shivering on the ground, huddled against a hubcap-sized stone that held a trace of the day’s warmth. I had hiked alone into Harriman State Park, about 40 miles from my Brooklyn home, and in an effort to test the limits of ultralight camping, I’d packed skimpily. My sleeping bag was too thin, and instead of a tent, I carried a feathery hammock that allowed the freezing air to circulate beneath me and steal warmth from my shivering muscles. About 3 miles from the nearest road, I dropped to the dirt, swaddled myself in the hammock, and slept in blinking intervals waiting for the sun to re-emerge. It was an amazing trip.
/jlne.ws/2lGigzz
The post Hedge Fund Managers See Echo of Past Crashes in Markets appeared first on John Lothian News (JLN).