CME pulls ahead in race to control bitcoin futures

First Read

Custody Battle Brewing Over Crypto Assets, and That’s a Good Thing
Jim Kharouf, JLN

It was just a few months ago that the cryptocurrency markets were bemoaning the lack of institutional-grade custody services. Without them, no right-minded fund or asset manager was going to get anywhere near this market.

And if they did, they had already written their firm’s obituary and put it in a drawer just in case. It reads something like this: “Thank you, dear customer, for investing your hard-earned fiat currency into our kick-ass digital asset fund. Unfortunately, someone in the Seychelles, Pyongyang, Kiev, Tehran or all of the above has stolen our crypto assets. With regret, we will be liquidating the fund. With no crypto assets left, there will be no repayment. Please come back and invest more hard currency in this space when we launch our next and hopefully more secure fund.” This narrative is changing rather quickly.

For the rest of this story, go HERE.

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Hits & Takes
By JLN Staff

Yesterday’s most read story was Bloomberg’s Can’t Afford a House? Blame the Apocalypse about New Zealand’s ban on foreign ownership of homes. A Guardian piece said from 2008 to 2014, two-thirds of property purchases in London were made by companies from just four overseas tax havens.~JK

It’s not too late to sign up for the Voice of Blockchain Conference 2018 – August 24th and 25th at Navy Pier. Click here and enter the code “vob18” for a $50 discount on registration. ~CM

ISDA Quarterly (IQ) is out. A PDF copy can be found here.~SD

The Canadian ETF business, much like that of the U.S., is booming. According to ETFGI, ETFs and ETPs listed in Canada reached a record high of $123 billion in assets in July. ~SD

Going into the office yesterday was a more painful experience than I expected, after the fact. Perhaps I am not quite there physically yet.~JJL

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MWE World of Opportunity – Transitioning Between Startups and Large Companies

JohnLothianNews.com
“One of the things you need to understand about yourself is how you manage your personal finances. A lot of people don’t talk about that. But if you want the flexibility to go to a startup, you can’t do that with two car payments, and a mortgage at the top rate, and credit card debt.”

All companies are not created equal. Healthcare, time off, travel – these aspects of a job will differ depending on the firm. In this video from MarketsWiki Education’s Chicago event, Adam Honoré, executive director, head of product management, data services with CME Group, discusses the differences between working at a startup compared to a large, established company and the skills needed to succeed in both.

Watch the video here »

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Could Trade War Lead to the Real Thing?; Historically, we’ve failed to see tipping points until too late.
Kevin Rudd – Bloomberg
News that China and the U.S. will resume trade talks this week swiftly lifted markets. This follows the first meetings at the annual summer retreat of the Chinese Communist Party leadership at the beachside resort of Beidaihe. As might be expected, the main topic this summer has been the U.S.-China trade war, where it might lead and what could conceivably be done to avert it without an unacceptable loss of political face.
/jlne.ws/2MDvcW5

***** Yes, they can.~JJL

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The Most Powerful Fed Economist You’ve Never Heard Of Is Retiring
Craig Torres – Bloomberg
David Wilcox, the Federal Reserve division director who guided three chairs on the outlook for the U.S. economy, will retire at year end, the central bank’s Board of Governors said on Monday.
As director of the Division of Research and Statistics in Washington since July 2011, Wilcox, 59, served under chairs Ben Bernanke, Janet Yellen and Jerome Powell. A search for his successor will begin later this year.
/bloom.bg/2OQyZNo

****** Who?~JJL

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Roland Schwinn leaves Eurex
Eurex
Roland Schwinn, regional head for Asia at Eurex, has decided to resign for personal reasons as of 31 August. “I thank Roland very much for his excellent work and commitment to our business”, says Eurex CEO Thomas Book, who is also Executive Board Member of Deutsche Boerse Group. “He contributed significantly to Eurex’ success and growth in Asia, being a highly valued contact for our clients, regulators and Eurex colleagues all over the world.”
/jlne.ws/2OPL31g

***** Best wishes to Mr. Schwinn.~JJL

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Monday’s Top Three
Our top stories of the day were led by Bloomberg’s piece Can’t Afford a House? Blame the Apocalypse on the curious step New Zealand is taking to ban foreign ownership of real estate, making London readers go “hmmmmm.” Second is the Wall Street Journal piece Wall Street Erases the Line Between Its Jocks and Nerds, as part of the non-stop categorization trend. Third was the JLN report on the only Congress that appears to be working, in Report from the International Blockchain Congress

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MarketsWiki Stats
131,545,226 pages viewed; 23,256 pages; 214,652 edits
MarketsWiki Statistics

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Lead Stories

CME pulls ahead in race to control bitcoin futures; Rival Cboe relaxes trading rules in attempt to bolster cryptocurrency business
Gregory Meyer in New York – FT
The world’s largest exchange group is pulling ahead in the nascent bitcoin derivatives market and its rival has retooled its product to stay in the race.
/jlne.ws/2MCO7Aq

Winklevoss Effort to Self-Regulate Cryptocurrency Gets Members; Exchanges will use new association to push for standards, transparency
Paul Vigna – WSJ
Several cryptocurrency exchanges have signed on to what appears to be the industry’s first self-regulatory organization, a step toward transparency in the notoriously opaque and volatile market.
/jlne.ws/2BvXFZF

Jump Trading joins challenge to banks in Treasury market making; High-frequency trader aims to take asset management and pension fund clients
Joe Rennison in New York – FT
One of the biggest high-frequency trading firms is looking to cut into banks’ long-held dominance in Treasury markets, as non-bank dealers increase their reach in the world’s largest government bond market.
/jlne.ws/2MGtm73

Bakkt CEO: Crypto Trading Platform Won’t Support Margin Trading
Muyao Shen – Coindesk
Two weeks after the Intercontinental Exchange (ICE) introduced Bakkt, a new digital assets platform, the latter’s CEO has set out to explain what the service will offer consumers. Bakkt chief executive Kelly Loeffler outlined the fundamentals for a platform to trade, store or spend cryptocurrencies in a post published on August 20. The platform is currently working with what she described as “a proven framework that underpins exchanges” which will include three characteristics: it will be consistent with existing regulations, provide a transparent system for price discovery and offer “institutional quality pre-and post-trade infrastructure.”
/jlne.ws/2ORhVXu

***** Kelly Loeffler is the CEO of Bakkt? How did I miss that? It was announced the day after my surgery. There you go. Congratulations Kelly~JJL

The Biggest Digital Exchanges Are Teaming Up To Police the Crypto Space
Matthew Leising – Bloomberg
The Virtual Commodity Association seeks to stamp out cheating; Members include Gemini, Bitstamp, BitFlyer and Bittrex
Several of the world’s largest digital exchanges joined an effort to root out bad behavior in the $214 billion cryptocurrency industry.
/jlne.ws/2nSns4u

JP Morgan to unveil new investing app with an eye-catching, disruptive price: Free
Hugh Son – CNBC
J.P. Morgan Chase is about to lob a grenade into the increasingly competitive world of retail investing. The bank is rolling out a digital investing service next week that comes bundled with free or discounted trades, a sophisticated portfolio-building tool and no-fee access to the bank’s stock research. Anyone who downloads J.P. Morgan’s mobile banking app or uses its website can get at least 100 free trades in the first year.
/jlne.ws/2MLj7hA

Exclusive: Trump demands Fed help on economy, complains about interest rate rises
Jeff Mason, Steve Holland – Reuters
U.S. President Donald Trump said on Monday he was “not thrilled” with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.
/goo.gl/RxdKTd

Row erupts as Sibos takes hard line on ‘ragbag’ crypto firms
Yolanda Bobeldijk – Financial News
The organiser of Sibos, the world’s biggest banking technology conference, has taken a hard line on cryptocurrency firms exhibiting at its upcoming conference in Australia, sparking a row between the events company and the fintech sector. Fintech firms have been told by sales representatives at Sibos that the annual gathering — which will see more than 8,000 people gather in Sydney in October — is cracking down on crypto startups presenting their products at the event, according to people familiar with the matter.
/goo.gl/ngcMyV

Ex-Barclays Trader’s Win Opens Path for Fired London Bankers
Jonathan Browning and Kaye Wiggins – Bloomberg
Fotheringhame wins long-shot court case to permit return; Banker had been fired at 2015 request of New York regulator
David Fotheringhame said he doesn’t bear grudges. The former Barclays Plc trader, fired at the behest of a New York regulator for misusing an electronic trading program, was pursuing the longest of shots in his fight against the bank. Sitting without an attorney, facing top lawyers on the other side of a London courtroom, Fotheringhame insisted from the very outset he wanted his old job back.
/jlne.ws/2nUbcRh

Eurekahedge: Hedge Funds Trailing Behind Last Year’s Performance
AllAboutAlpha
According to Eurekahedge, with the July numbers on hedge fund performance now available, 8.5% of hedge fund managers have posted double-digit gains in 2018 to date. Most of that gain is focused on those with a long/short equities mandate.
That number is quite low. Eurekahedge contrasts it with the first seven months of 2017, when roughly 22.7% of the fund managers had posted double-digit gains.
/goo.gl/3k6qkh

Credit Suisse becomes first bank to issue debt tied to Sofr
Joe Rennison in New York – FT
Credit Suisse has become the first bank to issue debt tied to the new US interest rate chosen to replace the London Interbank Offered Rate (Libor), selling a $100m six-month certificate of deposit on Monday.
/jlne.ws/2MEGzxg

Interactive Brokers fined $5.5 million for violating short selling rules; FINRA has fined Interactive Brokers for failing to comply with short selling rules between 2012 and 2015.
Hayley McDowell – The Trade
Interactive Brokers has been fined $5.5 million by US financial authorities for violating regulations related to short selling and supervisory failures.
/jlne.ws/2OWdVoN

Korea Exchange says it checking Merrill Lynch trades because of public concerns
Hayoung Choi, Cynthia Kim – Reuters
The Korea Exchange (KRX) said on Tuesday it was monitoring Merrill Lynch’s (BAC.N) Seoul operations after media reports and petitions regarding the investment bank’s trades.
/goo.gl/zJvjNK

Exchanges, OTC and Clearing

trueEX exploring sale of post-trade derivatives platform; Derivatives platform truePTS launched just under three months ago, but trueEX confirms it is looking for a buyer.
Hayley McDowell – The Trade
US-based swap execution facility trueEX is looking for a buyer for its derivatives processing platform just weeks after it was officially launched, The TRADE understands.
/jlne.ws/2BvuZQn

Euro Fixed Income Futures: Definition of reporting and position limits for September 2018
Eurex
The reporting and position limits for the September 2018 contracts in the
Euro Fixed Income Futures were set as follows:
/jlne.ws/2OSKdAK

OTC Clear Welcomes New Clearing Member After Volume Surges Nearly 500 Per Cent
HKEX
The volume of OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), has surged nearly 500 per cent this year while it welcomes China CITIC Bank International (CNCBI) as its 22nd Clearing Member.
/jlne.ws/2BtRRA4

Fintech

What, Exactly, Is Under the Hood at Fintech Companies?
Ben Walsh – Barron’s
There was a time when fintech had a novel idea: What if you could take social media data, run a bunch of analysis on it, and use it to make lending decisions?
Mortgages priced using Facebook profiles! Credit card offers based on how many times you Instagram from expensive restaurants. Or, in reality, far less whimsical things like “big data underwriting for payday loans.”
bit.ly/2OO1dbm

KPMG: Fintech investments in China sets new record
Enterprise Innovation
Fintech investment in China hit a record high in the first half of 2018, buoyed by record-setting fundraising and a number of massive deals, finds KPMG’s latest Pulse of Fintech report.
bit.ly/2LenEoe

Derivatives Vet Tessier Named Minium CEO
Hamad Ali – WatersTechnology
London-based Minium, a provider of real-time, post-trade technology and services to international investment banks and brokers, has promoted Patrick Tessier to CEO, following last week’s departure of Veronica Augustsson from parent company Cinnober, who served as CEO of Minium in her role as group CEO.
/goo.gl/k23avM

Shenwan Hongyuan Securities chooses Itiviti’s technology for ETF options market making; Itiviti services a substantial and diversified client base in China.
Markets Insider
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today announced that Shenwan Hongyuan Securities Co., Limited (Shenwan Hongyuan), one of China’s leading securities firms has selected Itiviti’s market making solution to support its ETF options market making business. Itiviti currently services 25 buy-side and sell-side clients in mainland China, including large asset managers, securities houses, trading firms and brokerages.
/jlne.ws/2nUYRfv

Thomson Reuters and the Singapore FinTech Association join forces to fight financial crime
Valentina Kirilova – Reuters
Information giant Thomson Reuters (NYSE:TRI) and the Singapore FinTech Association (SFA) have announced that they have committed to join forces on projects and initiatives contributing to the development of the FinTech industry in Singapore. The collaboration will involve working closely with financial institutions, local universities and startups, focusing on leveraging emerging technologies to solve issues around financial crime.
bit.ly/2OWDl5J

Nikko Asset Management Selects FactSet for its Fixed Income Operations
FactSet
FactSet, a global provider of integrated financial information, analytical applications, and industry-leading services, announced today that Nikko Asset Management (“Nikko AM”) has selected the FactSet Linear Multi Asset Class (MAC) risk model to help manage risk across its global fixed income portfolios.
/goo.gl/78939i

‘Amazon Bank’ Is Already Here
Steve Cocheo – The Financial Brand
Nothing can stop Amazon. Not even banking regulators or geographic borders can slow them down. With patents, patience, a willingness to fail, a huge and devoted customer base, a universe of data, and gobs of money, Amazon represents a real threat to the traditional banking industry.
/goo.gl/uXD64r

Cryptocurrencies

Here’s What Maduro Has Said of Venezuela’s Petro Cryptocurrency
Eric Lam – Bloomberg
Petro token will fluctuate in price, Maduro said on television; Critics have questioned whether the cryptocurrency is a ‘scam’
Venezuela’s 95 percent devaluation of the bolivar over the weekend is generating fresh interest in its cryptocurrency, which was designed to be devaluation-proof. Yet, months after the Petro was first offered to the public, President Nicolas Maduro has yet to remove some of the mystery surrounding the mechanics of the digital coin.
/jlne.ws/2MEp6Vz

The Biggest Digital Exchanges Are Teaming Up To Police the Crypto Space
Matthew Leising – Bloomberg
Several of the world’s largest digital exchanges joined an effort to root out bad behavior in the $214 billion cryptocurrency industry.
Created by Gemini Trust co-founders Cameron and Tyler Winklevoss, the Virtual Commodity Association expanded its roster of exchange participants to include Bitstamp, BitFlyer USA and Bittrex, according to a statement Monday. Representatives from the four marketplaces will meet for the first time in September to discuss setting up the self-regulatory organization.
/goo.gl/DnxWSQ

Gap Between Ethereum Longs and Shorts Rises to its Highest Level Ever
Trustnodes.com
The biggest disparity between ethereum longs and shorts has been seen on August 19th when 75% were betting ethereum’s price will rise (long), while just 25% thought it would fall (short).
That disparity is bigger than even during the peak in November-December when longs were slightly lower at 74%, and bigger than during April when longs were at 70%.
bit.ly/2ORpEVq

‘Bitcoin Jesus’ Is Having a Hard Time Winning Over True Believers
Olga Kharif – Bloomberg
Roger Ver, the virtual currency advocate often referred to as Bitcoin Jesus, is finding it tough to win converts to the supposed second coming of the the world’s biggest cryptocurrency.
/bloom.bg/2w11UHn

After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors
Nathaniel Popper and Su-Hyun Lee – NY Times
Pete Roberts of Nottingham, England, was one of the many risk-takers who threw their savings into cryptocurrencies when prices were going through the roof last winter.
/jlne.ws/2MLjl8q

Bitcoin Bulls’ Favorite Lingo On the Decline as Crypto Prices Fizzle
Lily Katz – Bloomberg
A popular slang term among Bitcoin believers is losing steam as the slump in global cryptocurrency prices continues.
/jlne.ws/2MHY4wk

The SEC Is Weighing a Bitcoin Futures ETF – Here’s What That Means
Christine Kim – Coindesk
The U.S. Securities and Exchange Commission (SEC) will decide on two proposed bitcoin exchange-traded funds (ETFs) this week – but what are they weighing exactly?
ProShares, the tenth largest provider of ETFs according to CNBC, has two proposals in the running, both based upon bitcoin futures contracts approved by the Commodity Futures Trading Commission in 2017.
bit.ly/2Lc9QdK

Key Executive Exit Leaves Tron’s Acquisition of BitTorrent Lacklustre
Nilesh Maurya – Coingape
The much-celebrated acquisition of BitTorrent by Tron seems to be on bumpy roads already, especially as far as retaining talent is concerned. In the recent news that is surfacing reports that two senior management employees which were from BitTorrent have already resigned. The report also states that three other employees that came to Tron from BitTorrent have also been fired.
bit.ly/2OTIefB

Three Minutes With Joseph Hernandez, Founder Of Chicago Blockchain Project
Jessica Darmoni – Hehmeyer
“The world is moving from competition to collaboration, and Chicago Blockchain Project aims to accelerate that change starting right here in Chicago,” said Joe Hernandez, founder and CEO of the Chicago Blockchain Project (CBP), which will host its inaugural Voice of Blockchain conference on August 24th and 25th at Chicago’s Navy Pier.
/jlne.ws/2OSQoVs

An evolving market; The need for trusted price formation
Kelly Loeffler
Two weeks ago we introduced Bakkt, a new company designed to bring digital assets to the mainstream and help unlock the potential of this important technology. We appreciate the response to our announcement and the conversation since.
/jlne.ws/2Bwsm0Z

ICE’s Bakkt CEO: Platform Won’t Support Margin Trading, Contracts to Be Fully Collateralized
Cointelegraph
ICE’s Bakkt CEO: Platform Won’t Support Margin Trading, Contracts to Be Fully CollateralizedNEWS
Bakkt — the forthcoming regulated global ecosystem for crypto assets recently unveiled by Intercontinental Exchange (ICE) — will not support margin trading for its Bitcoin (BTC) contract, according to an official Medium post published August 20.
/jlne.ws/2OVL6sG

Politics

Trump complains over Fed chair Powell interest rates at GOP fundraiser
Bob Bryan – Business Insider
During a Republican fundraiser on Friday, President Donald Trump reportedly privately attacked Federal Reserve Chairman Jerome Powell’s interest-rate hikes.
According to Bloomberg, Trump complained that Powell — the president’s own pick for the Fed’s top job — was raising interest rates instead of delaying rate hikes and keeping monetary policy loose.
/read.bi/2vYurNJ

New Russian Hacking Targeted Republican Groups, Microsoft Says
David E. Sanger and Sheera Frenkel – NY Times
The Russian military intelligence unit that sought to influence the 2016 election appears to have a new target: conservative American think tanks that have broken with President Trump and are seeking continued sanctions against Moscow, exposing oligarchs or pressing for human rights.
/jlne.ws/2nXRNyB

*****FT Version, NY Times Version

Brexit and Corbynism usher in paranoid politics; The lesson of Trump for the UK is the value of a row in defining one’s enemies
Robert Shrimsley – FT
Sometimes the signal is the noise. And in a fairly quiet summer the primary din has been politicians fostering division where once they endeavoured to build coalitions.
/jlne.ws/2MIi1Dk

Trump Accuses China, EU of Currency Manipulation
Saleha Mohsin – Bloomberg
President’s accusation conflicts with Treasury report; U.S. doesn’t officially consider any nation to be manipulator
President Donald Trump accused China and the European Union of manipulating their currencies as he tries to wrestle concessions from two of the U.S.’s largest trade partners.
/jlne.ws/2MGVXJi

Fed chief navigates treacherous political and economic waters; Jay Powell’s first Jackson Hole address comes as Trump adds to wider debate on rates
Sam Fleming in Washington – FT
On the surface, the economic backdrop to Jay Powell’s first Jackson Hole address as Federal Reserve chairman could hardly look much more benign.
/jlne.ws/2nUd1h5

Regulation

SEC Charges Unregistered Brokers Who Sold Woodbridge Securities to Main Street Investors
SEC
The Securities and Exchange Commission today charged five individuals and four companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors. Woodbridge collapsed into bankruptcy in December 2017 and the SEC previously charged the company, its owner, and others with operating a massive $1.2 billion Ponzi scheme.
/goo.gl/EvKq1R

FINRA Fines Interactive Brokers $5.5 Million for Regulation SHO Violations and Supervisory Failures
FINRA
FINRA announced today that it has fined Interactive Brokers LLC (Interactive) $5.5 million for Regulation SHO violations and supervisory failures spanning a period of at least three years.
/goo.gl/P2qUJM

Interactive Brokers Fined $5.5 Million for Naked Short Selling Violations; Industry regulator Finra settles with retail brokerage firm over what it says were ignored red flags
Alexander Osipovich – WSJ
A unit of Interactive Brokers Group Inc., IBKR 1.23% one of the largest U.S. retail brokerages, has been fined $5.5 million over allegations that it broke federal rules on the “naked” short selling of stocks thousands of times over a three-year period.
/jlne.ws/2Bx5MVO

Federal Reserve: David W. Wilcox, Director Of The Division Of Research And Statistics, To Retire At Year End
Press Release
David W. Wilcox, director of the Division of Research and Statistics, will retire at the end of this year after 30 years of service with the Federal Reserve Board, including seven years as the director of the division.
/goo.gl/7Pgt1a

Former managing director of mining company found guilty of insider trading
ASIC
Mr Darren James Lind, aged 47 of Brighton, South Australia, has been found guilty of two charges of insider trading in shares of ASX listed mining exploration company Minotaur Exploration Ltd (Minotaur).
/jlne.ws/2MEjhHI

Key Findings from DSB Consultation on OTC ISINs; Industry looks to DSB for additional use cases for OTC ISINs
Mondovisione
Following extensive consultations with industry which began earlier this year in May, ending July 27th, the Derivatives Service Bureau (DSB), has today announced the publication of their Industry Consultation Report, August 2018. This report comprehensively captures industry feedback, and documents a significant call from industry for the DSB to create additional use cases for ISINs on OTC Derivatives.
/jlne.ws/2MEy0CC

Merrill Lynch to Pay $8.9 Million to Settle Conflict-of-Interest Charge; SEC says 1,500 accounts through relationship with third party are at issue
Lisa Beilfuss – WSJ
Merrill Lynch will pay $8.9 million to settle charges it failed to disclose a conflict of interest, the Securities and Exchange Commission said Monday.
/jlne.ws/2BrXvlW

Proposed Rule Change to Amend Section 4(c) of Schedule A to the FINRA By-Laws Relating to Qualification Examination Fees
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Section 4(c) of Schedule A to the FINRA By-Laws to
/jlne.ws/2OYmYFR

SEC Adopts Rule Amendments to Improve Municipal Securities Disclosure
SEC
The Securities and Exchange Commission adopted amendments to enhance transparency in the municipal securities market. The adopted amendments to Rule 15c2-12 of the Securities Exchange Act will focus on material financial obligations that could impact an issuer’s liquidity, overall creditworthiness, or an existing security holder’s rights.
/jlne.ws/2OToKHY

CFTC Revokes Eurex Zurich AG FBOT Registration after Voluntary Closure
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that it issued an order revoking the foreign board of trade (FBOT) registration of Eurex Zurich AG (EZAG).
/jlne.ws/2OSjZ1h

Statement of CFTC Commissioner Brian Quintenz Regarding the Virtual Commodity Association
CFTC
Given the absence of federal oversight jurisdiction in the crypto market, in February and again in March of this year I called on the crypto platform community to come together and develop a self-regulatory organization-like entity that could develop and enforce rules.[1] I am pleased that progress has been made on such a concept. Ultimately, an independent and empowered SRO-like entity could have a meaningful impact on the integrity and credibility of this young marketplace. Today’s announcement is a positive step towards that realization.
/jlne.ws/2Bxm5SN

FCA commences criminal prosecution against Mark Starling in relation to an unauthorised investment scheme
UK FCA
The Financial Conduct Authority (FCA) has commenced a criminal prosecution against Mark Barry Starling (date of birth: 23/01/1961) of Farnham, Surrey, for three offences relating to unauthorised investment schemes alleged to have been operated between 1 August 2008 and 25 April 2017.
/jlne.ws/2OQDU0O

Investing and Trading

This Year’s Best Performing Commodity Is Seen Set to Double
Anna Shiryaevskaya – Bloomberg
Carbon Tracker sees CO2 price at 35-40 euros a ton from 2019; Rally to speed up switch to natural gas, phaseout of lignite
Energy traders should get ready for European carbon allowance costs to almost double in the next year, boosting demand for cleaner-burning natural gas, a prominent forecaster said.
/jlne.ws/2nSsldQ

At Heart of New Fed Debate: Bonds or Bills?; The Federal Reserve must decide how to manage the mix of long-term versus short-term in its Treasury portfolio
Nick Timiraos – WSJ
Federal Reserve officials left many important questions unanswered when they decided last year to begin shrinking the central bank’s $4.5 trillion portfolio of mostly mortgage and Treasury securities.
/jlne.ws/2MEDaP0

Trade Outsourcing Picks Up
Rob Daly – MarketsMedia
More and more buy-side firms are re-examining ways to improve their workflow and operational efficiencies as market regulations like MiFID II eliminate many past practices such as research bundling and soft dollaring.
/goo.gl/fxmd44

Gundlach Proves a Short Squeeze Excites Everyone; DoubleLine’s CIO again marvels at speculators’ big bet against U.S. Treasuries.
Brian Chappatta – Bloomberg
Jeffrey Gundlach left the mostly unchanged U.S. Treasury market with a warning heading into this past weekend: Everything could change soon.
/jlne.ws/2nW2VvY

US bull market poised to become its longest; S&P 500 is set to have gone 3,453 days without a drop of 20% or more
Nicole Bullock – FT
What has been labelled the most hated bull market in US history is poised to become the longest.
/jlne.ws/2MBYRiF

Commodity prices suffer as emerging markets tumble; Fear that slumping resources prices are harbinger of weaker growth in China
Henry Sanderson and David Sheppard – FT
The sell-off in emerging markets has spilled into commodities, hitting prices of key resources from copper to oil.
/jlne.ws/2MMzwmh

Global liquidity squeeze looks set to continue; All eyes will be on the central bankers’ annual jamboree at Jackson Hole
John Plender – FT
Against a background of heightened geopolitical risk, intensifying trade war and a squall in emerging market currencies, the recent weakness in the gold price may seem counter-intuitive.
/jlne.ws/2OWa8I5

Institutions

What’s in a name? For TCA by ETrade, everything
Jeff Benjamin – InvestmentNews
as Trust Company of America hitched its wagon to a star or turned its back on loyal clients?
It depends on whom you ask.
Either way, the $275 million acquisition in April of TCA by discount broker ETrade has the custodian world buzzing.
/goo.gl/vHrvAJ

A lack of forethought leaves GAM hoping for smooth redemption; Shareholders are entitled to ask why GAM is running funds that have to be immediately liquidated if more than 10% of investors withdraw
David Wighton – Financial News
Some of the world’s most successful asset managers have a strict rule: never buy shares in an asset manager.
Despite their reputation as reliable cash machines, insiders know that most traditional fund companies are actually highly volatile businesses, dependent on fickle investor confidence, a few successful products and a handful of star managers. An apparently small hiccup can lead to a life-threatening spiral of decline.
/goo.gl/J8ZMN7

Deutsche Bank Confirms Bid to Buy Noble Bonds
Manju Dalal and Saurabh Chaturvedi – WSJ
Deutsche Bank said Saturday that it is acting on its own to buy bonds of Noble Group Ltd., days before a crucial shareholder vote on a $3.5 billion restructuring of the Singapore-listed commodity trader.
/on.wsj.com/2w0piF1

Wealthsimple Launches No-Fee Trading Service in Canada
Julie Verhage – Bloomberg
A new free stock trading app is coming to Canada. Wealthsimple Inc., a Toronto-based startup currently offering investing and savings products, is launching a stock trading platform with zero commissions for its Canadian users. Popular trading app Robinhood, a natural competitor, is still only available in the U.S.
/bloom.bg/2w0HRJh

****Missed this near the end of last week.

Paul Singer, Doomsday Investor; The head of Elliott Management has developed a uniquely adversarial, and immensely profitable, way of doing business.
Sheelah Kolhatkar The New Yorker
On May 18, 2017, Jonathan Bush was standing at the stern of his luxury catamaran, the Zenyatta, named for a champion Thoroughbred racehorse, when he received a text message from a colleague warning him not to answer calls from phone numbers he didn’t recognize.
/jlne.ws/2MHWfzu

StanChart Private-Equity Spinout Gets Backing From ICG
Donal Griffin , Kiel Porter , and Joyce Koh – Bloomberg
Bank may sell $1 billion of assets to ICG as part of deal; Unit’s CEO Jaisingh would lead team taking over portfolio
The managers of Standard Chartered Plc’s private-equity unit have secured backing for a multibillion-dollar spinoff from Intermediate Capital Group Plc as the British-based bank exits that business, according to people with knowledge of the matter.
/jlne.ws/2MIuOFO

US hedge funds join chorus for change at Europe’s conglomerates; Vocal investors increasingly behind corporate shake-ups on the continent
Michael Pooler in London and Patrick McGee in Frankfurt – FT
There was a time when a person might count on a Philips product at almost any waking hour of the day.
/jlne.ws/2MDgA9m

JO Hambro announces sudden departure of chief executive; Ken Lambden has left JO Hambro with immediate effect and has been placed on gardening leave for his six-month notice period.
Hayley McDowell – The Trade
Less than two years after taking up the role, the chief executive at JO Hambro Capital Management (JOHCM) is leaving the company with immediate effect.
/jlne.ws/2OVDzKq

Nikko Asset Management upgrades fixed income operations with FactSet; FactSet has deployed its multi-asset risk model to help Nikko Asset Management manage risk across its fixed income portfolios.
Hayley McDowell – The Trade
Nikko Asset Management has implemented a risk model service and analytics from FactSet to update and enhance its global fixed income operations.
/jlne.ws/2OTMbkr

Regions

Swiss Cows Get Too Fat for Their Own Good
Mara Bernath – Bloomberg
Smaller cows are more efficient at producing milk: farm group; Swiss farmers reared bigger cows through targeted breeding
As parched pastures force farmers across Europe to purchase expensive feed crops for their hungry herds, a Swiss dairy association may have part of the answer: smaller beasts.
/jlne.ws/2MLJh48

Doors Slam Shut for China Deals Around the World; Tighter rules for CFIUS are echoed in great scrutiny from Europe to Australia.
Nisha Gopalan – Bloomberg
Doors are slamming shut in the developed world not just to Chinese investment in technology but potentially to a wave of acquisitions with a tech element, as diverse as smart heaters and robotic lawnmowers.
/jlne.ws/2MLn2ei

Chinese ETF Investors Throw Gold a Lifeline
Luzi-Ann Javier – Bloomberg
Bosera Gold attracts over $1 billion this year as prices fell; Limits on China property buying helping boost gold demand
Just when you thought investors have given up on gold, the Chinese swooped in.
/jlne.ws/2MLJVP6

Market ructions to delay Greece’s post-bailout bond sale
Abhinav Ramnarayan, Virginia Furness – Reuters
Greece celebrated the end of eight years of bailouts on Monday, but expectations that it will mark its new-found fiscal independence with a much-anticipated bond sale next month may be dashed as wider tensions play out.
/goo.gl/GsoH6r

Greece’s Bailout Is Ending. The Pain Is Far From Over.
Liz Alderman – The New York Times
When Dimitris Zafiriou landed a coveted full-time job two months ago, the salary was only half what he earned before Greece’s debt crisis. Yet after years of struggling, it was a step up.
“Now, our family has zero money left over at the end of the month,” Mr. Zafiriou, 47, a specialist in metal building infrastructure, said with a grim laugh. “But zero is better than what we had before, when we couldn’t pay the bills at all.”
/goo.gl/nkkizS

Brexit

Risk of a no-deal Brexit matters for European bank bonds; Fund managers worry that paper sold under English law may not comply with EU rules
Robert Smith – FT
The rising threat of a no-deal Brexit is causing consternation for investors who are worried that more than EUR100bn of European bank debt issued under English law could no longer comply with the EU regulation.
/jlne.ws/2MH979b

Britain can’t afford to close door to EU banks after Brexit
Huw Jones – Reuters
Britain is expected to keep the door open for European Union banks and investors after Brexit to try to preserve London’s global financial clout, irrespective of whether it gets a good trade deal from the bloc, bankers and industry officials say.
Nerves in the City of London financial district were rattled last month when the UK government proposed future financial services trade with the EU based on “reciprocal” arrangements.
/goo.gl/9TgSRj

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