Kraken Pulls Out of Japan; Attorney Berkovitz to CFTC; Russia blamed for global cyber attack

First Read

Hits & Takes
JLN Staff

A JLN Special: The 4th annual FinTech Exchange hosted by Barchart on April 25 & 26 in Chicago is giving away 10 tickets to the event, hosted at Venue SIX10 at 610 South Michigan Avenue. This year’s event will showcase presentations from fintech leaders on alternative data, trading innovation, blockchain in capital markets and cryptocurrencies. Hear from the bitcoin exchange Kraken, CME Group, Cboe Global Markets, AFX’s Richard Sandor and many more. This year’s event also features a new, half-day competition on April 25 called Startup Exchange, featuring fast presentations from 16 startupsóincluding 5 startup exchanges. To grab a free ticket click HERE

Interestingly, the price of bitcoin has a 91% correlation with Google searches for bitcoin (the article is several months old but thought I would share anyway).~JB

The World Federation of Exchanges annual WFE IOMA Derivatives Market Report today showed that equity derivatives now make up 48 percent of all derivatives traded globally, commodities at 24 percent and interest rates at 16 percent.~JK

University of Chicago’s Booth School of Business was ranked number one by U.S. News & World report for the first time, the Chicago Tribune reported.~JJL

++++

Leveling the Clearing Field – Patrick Tessier, Minium

JohnLothianNews.com
Why can’t banks and brokers use the same sort of technology that clearinghouses have access to? Minium, the new client clearing focused subsidiary of Cinnober, is looking to address that very question.

In this video from JLN’s annual series with industry leaders, Patrick Tessier, Minium’s chief operating officer, talks about its early growth, bringing better clearing capabilities to the sell side and the decision to go with a cloud solution.

Watch the video and read the rest here »

++++

Here are the winners of the 2018 Pulitzer Prizes
Ren Laforme – Poynter
Winners of the 2018 Pulitzer Prizes were announced at Columbia University in New York City on Monday. The Pulitzers are highly revered and mark the best in journalism in 14 categories.
/jlne.ws/2H4zUWU

****SD: Get this – Seattle Times reporter Mike Rosenberg pointed out on Twitter that at least four Pulitzer winners since 2015 had left journalism for public relations by the time they won the award. (Or you could go more glass half full and consider that there are 21 Pulitzer categories each year, so maybe four in three years isn’t too bad.)

++++

++++

The Spread – Week of 4/9 to 4/13 and 4/16
JohnLothianNews.com

Don’t be confused! The plaintiff in the Cboe VIX manipulation suit is named Spencer, but has nothing to do with the host of “The Spread.” That, and more, gets cleared up in this week’s options news recap.

Watch the video and see the stories referenced here »

++++

Growth In Americas Helps Derivatives Market Offset Declines In EMEA & Asia-Pacific
WFE
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and central counterparties (CCPs), published its annual WFE IOMA Derivatives Market Report today, which shows the total volume of derivatives traded in 2017 declined by 0.2%.
Growth In Americas Helps Derivatives Market Offset Declines In EMEA & Asia-Pacific
/jlne.ws/2HLo1Xj

***** We may not have invented chaos, but we perfected it here in the U.S.~JJL

++++

LME to launch responsible sourcing plan after child labour fears
Henry Sanderson – FT
The London Metal Exchange has warned that companies will be booted off the exchange if they fail to meet responsible sourcing guidelines, following concerns that some of its metal may have been linked to child labour.
tinyurl.com/yck622be

++++

Monday’s Top Three
Our top read story of the day on Monday was garbage. The Wall Street Journal’s Chicago’s Traders Cling to Their Last Remaining Tradition: Littering took the top spot. Second went to Gary DeWaal’s Bridging The Week commentary on Disruptive Trading; Spoofing and a Supreme Court Appeal. Third was from David Weisberger’s column in Medium, Crypto Confusion, Wall Street Delusion, about his experience in the crypto trading world.

++++

MarketsWiki Stats
123,750,611 pages viewed; 23,078 pages; 212,789 edits
MarketsWiki Statistics

Lead Stories

Cryptocurrency Exchange Kraken Pulls Out of Japan
Yuji Nakamura – Bloomberg
Kraken, one of the world’s longest-operating cryptocurrency exchanges, will end its trading services for Japanese residents. The San Francisco-based company cited the rising costs of doing business in Japan for its decision, though it said it may re-enter the country in the future. It tentatively plans to cease all its services, which began in October 2014, by the end of June, it said in an emailed statement.
/goo.gl/RuuHzT

Trump to nominate attorney Berkovitz to CFTC
Reuters
President Donald Trump plans to nominate Dan Berkovitz, a partner at law firm WilmerHale, as commissioner to the Commodity Futures Trading Commission for the rest of a five-year term ending April 13, 2023, the White House said on Monday.
/goo.gl/kLd7Sq

U.S., Britain blame Russia for global cyber attack
Jim Finkle and Doina Chiacu – Reuters
The United States and Britain on Monday accused Russia of launching cyber attacks on computer routers, firewalls and other networking equipment used by government agencies, businesses and critical infrastructure operators around the globe.
/goo.gl/RZDjMQ

Russia Sanctions Throw Global Aluminum Industry Into Chaos
Thomas Biesheuvel and Jack Farchy – Bloomberg
Rusal alumina buyers face ‘nightmarish scenario,’ CRU says; Rio said last week it declared force majeure on some contracts
The U.S. sanctions on United Co. Rusal that have sent aluminum prices surging should be great news for rival producers like Rio Tinto Group.
tinyurl.com/y7uwfk2p

U.S. Libor Replacement, Two Weeks After Debut, Has Some Issues
Alex Harris – Bloomberg
New York Fed finds erroneous data in SOFR calculation. Two weeks after its debut, the presumptive heir to Libor in the U.S. is already running into some turbulence.
tinyurl.com/y8eqks5u

Global interest rate derivatives contracts reach largest number on record; Data from the World Federation of Exchanges showed 3.9 billion interest rate derivatives contracts were traded in 2017.
Hayley McDowell – The Trade
The number of contracts traded globally for interest rate derivatives reached the highest number on record in 2017, according to statistics from the World Federation of Exchanges (WFE).
tinyurl.com/y8jlru7j

Trump to nominate Clarida, Bowman to Fed’s Board of Governors
Reuters
U.S. President Donald Trump said on Monday he would nominate Richard Clarida, an economist who advises fund manager Pimco, and Michelle Bowman, a Kansas banking regulator, for two key positions at the U.S. Federal Reserve.
/jlne.ws/2J13KfC

Incoming chairman to expand Rothschild in the US; Alexandre de Rothschild wants to diversify core French and British advisory business
Harriet Agnew – FT
For Alexandre de Rothschild, the incoming chairman at the eponymous Franco-British investment bank, it will be “evolution” rather than revolution under his watch, and he is determined to expand the group in the US where it has historically struggled.
tinyurl.com/yb7vu5zt

Wall Street still has lessons to learn about overworked staff; There is no evidence that the culture of long hours yields better results
Brooke Masters – FT
Boutique investment bank Moelis & Co has been on a roll. It is advising Saudi Aramco on its plans for a huge flotation; it helped Broadcom on its blocked bid for Qualcomm; and ranked fourth among boutique banks in the first quarter with $85m in fees, according to Thomson Reuters.
tinyurl.com/y7eco2cs

Euribor Trader Blames Rigging on French-Speaking `Big Fish’
Franz Wild – Bloomberg
Five traders on trial in London court for fixing rate; Palombo’s attorney alleges French-speakers worked together
A trader accused of illegally manipulating a key London interest rate was only a bit player in a conspiracy run by more experienced bankers who used French to help obscure their actions, his defense attorney told a London court.
tinyurl.com/y9onpbcr

U.S. fund Manikay to take Tel Aviv bourse stake, public to buy 30 percent
Steven Scheer – Reuters
U.S.-based investment fund Manikay Partners will buy 19.9 percent of the Tel Aviv Stock Exchange in a deal valuing it at 551 million shekels ($156 million) while at least 30 percent of the exchange will be sold to the public, TASE said on Monday.
/jlne.ws/2vj1gY8

Exchanges, OTC and Clearing

German liquidity provider opts for Cboe’s SI technology; SSW Trading has implemented Cboe’s Europe’s technology to allow for easier access to its systematic internaliser.
Hayley McDowell – The Trade
The market making arm of a German-based liquidity provider has opted to use technology from Cboe Global markets across its systematic internaliser (SI) business.
tinyurl.com/ycfmuqtt

SSW Market Making Selects Cboe Europe as Technology Provider for Systematic Internaliser Services
Cboe
Cboe Global Markets, Inc. today announced that SSW, an innovative pan-European liquidity provider in a very broad universe of instruments, has started its Systematic Internaliser (SI) business by utilising Cboe Europe’s SI technology services to efficiently connect to and service their clients.
tinyurl.com/y74y9oca

LSEG loses global government relations and regulatory strategy head; Liz Stevenson had been with LSEG for nearly a decade overseeing global political and regulatory strategy for the exchange group.
Hayley McDowell – The Trade
The global head of government relations and regulatory strategy at the London Stock Exchange Group (LSEG) has left after nearly a decade with the group, The TRADE understands.
tinyurl.com/y9yqs5n7

Uniting Forces And Planning Market Development – Shenzhen Stock Exchange Convenes 2018 Members’ General Meeting Date
Mondovisione
The meeting was focused on pushing forward the three major tasks proposed in the financial work conference, and enhancing the CPC’s leadership. On the meeting, SZSE vowed to strengthen its responsibilities and those of members, actively fulfill its responsibilities, and unite and lead members to implement the decisions and arrangements of the CPC Central Committee, and jointly build world-class investment banks, a leading stock exchange, and an internationally competitive capital market.
/goo.gl/bbDQke

Cboe SEF Launches Two New NDF Currency Pairs
Cboe
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced that its swap execution facility, Cboe SEF, has launched trading of U.S. Dollar (USD)/ Russian Ruble (RUB) and USD/Peruvian Sol (PEN) non-deliverable foreign exchange forward currency pairs.
tinyurl.com/yccyngbo

Fintech

The rapid evolution of compression: Keeping pace with optimisation activity
Capitallab – Risk.net
It has been 15 years since compression emerged, and it continues to evolve at a rapid rate. At a forum convened by Risk and sponsored by Capitalab, our panel discusses current hurdles, upcoming challenges and whether innovation is keeping pace with the activity, concluding with what each party can do to improve this ever-changing landscape.
/jlne.ws/2IZPqE0

Data labs becoming essential for managers to advance growth
Christine Williamson – Pensions and Investments
When it comes to machine learning and money managers, the coolest “must have” is a bona fide data lab, preferably one with close links to a well-respected university and proximate to a major technology center.
BlackRock Inc., New York, is the latest firm to establish a data research center, checking off the boxes by locating the lab in Palo Alto, Calif., in Silicon Valley near Stanford University.
/jlne.ws/2H3sFyl

The Future of Capital Markets – How to Thrive Amidst Artificial Intelligence, Blockchain and Massive Disruption
TABB Forum
Technology is redefining every corner of our world, including capital markets. Capital markets professionals need to understand the trends and causal relationships in order to succeed, they need to understand the dynamics of disruptive innovation within the financial sector, and they need to recognize the implications of an increasingly decentralized world. Here are 5 recommendations to help financial professionals plan for a future dominated by AI and blockchain.
/jlne.ws/2H5Adkn

Cryptocurrencies

Barclays Is Sounding Out Clients About Trading Crypto
Julie Verhage, Stephen Morris, and Sonali Basak – Bloomberg
Bank says it has no current plans to trade digital currencies; Bitcoin has halved in value since December peak of $19,000
Barclays Plc has been gauging clients’ interest in the British bank starting a cryptocurrency trading desk, potentially joining Goldman Sachs Group Inc. in pioneering a new business on Wall Street, according to people with knowledge of the matter.
tinyurl.com/yayrz3fp

Mastercard Will Use Blockchain For Identity Protection – The Blockchain Journal
Guillaume Belisle – The Blockchain Journal
Last week, in a patent application released by the U.S. Patent and Trademark Office (USPTO), Mastercard describes a blockchain that could receive and store identity data. The system would store associated attributes of a person such as its “name, a street address and a tax identification number”.
/jlne.ws/2Hw525d

Majority of Americans are Hiding Their Cryptocurrency Gains as Tax Day is Upon Us – Toshi Times
Andrius Vaökevicius – Toshi Times
Nobody likes doing taxes but April 17th is the official tax filing deadline in the United States. Going through vast records of a years’ trades and reporting profits is a time-consuming and complex operation and apparently most Americans, who make a living from crypto trading, are not doing it.
/jlne.ws/2qCZPyH

Op-ed: Cryptocurrencies Are Not A Zero-Sum Game
Alec Ziupsnys – The Distributed Post
Let’s start with a quote to get some perspective on how small of a market cryptocurrencies are. During the recent G20 meeting, Governor Mark Carney of the Bank of England, stated:
Even at their recent peak, [cryptoassets’] combined global market value was less than 1% of global GDP. In comparison, just prior to the global financial crisis, the notional value of credit default swaps was 100% of global GDP.
/jlne.ws/2qFykoc

Is This The Biggest Myth About Cryptocurrency?
Brian Roberts – Forbes
Total cryptocurrency market capitalization is now at $321,233,020,883 according to CoinFi, a cryptocurrency market intelligence platform. Given that, it’s no surprise most know about it. But that’s where the knowing stops, according to December 2017 survey data.
Of the 1,035 American adults polled for the survey, 78 percent didn’t know where to buy cryptocurrencies and another 66% didn’t know what an “ICO” was.
/jlne.ws/2Hw5Irh

With the RBI cracking down, India’s cryptocurrency exchanges look to Singapore, Switzerland, and Malta
Nupur Anand – Quartz
The Indian central bank’s crackdown on virtual money may drive cryptocurrency exchanges out of the country to more friendly locations.
Earlier this month, the Reserve Bank of India (RBI) issued a directive that, by July 06, lenders must close the bank accounts of firms dealing in cryptocurrencies. Banks are also forbidden from offering loans or other services post-deadline. Essentially, this marks the end of the road for the digital currency-related operations in India.
But the exchanges are not giving up just yet.
/jlne.ws/2HpCOZM

Blockchain cryptocurrency wallet hires top Goldman Sachs exec
Arjun Kharpal – CNBC
Blockchain, a cryptocurrency wallet service, has hired a former Goldman Sachs executive to help boost its presence with institutional clients.
Breanne Madigan joined the firm this month, Blockchain announced Tuesday.
/jlne.ws/2HyT7U2

The Fintech Files: Crypto craze goes institutional
Yolanda Bobeldijk – Financial News
Forget the dismissive remarks of some top bankers, wholesale finance continues its push into crypto land. Family offices are getting stuck in and new groups serving this market are springing up all the time. The latest one to emerge is BCB Group ó launched by ex-Barclays and Lloyds executive Oliver von Landsberg-Sadie. This crypto brokerage initially targeted the retail market but has now responded to demand by shifting its focus to institutional clients. It has already signed deals with digital custodian Vo1t, NKB Asset Management and investment boutique Peregrine & Black, Von Landsberg-Sadie told me.
tinyurl.com/y728z7yo

Politics

Trump Bucks Treasury in Ripping China, Russia as FX Meddlers
Katherine Greifeld and Saleha Mohsin – Bloomberg
President Donald Trump accused China and Russia of devaluing their currencies, breaking from his own administration’s view that no major trading partners are currency manipulators.
/jlne.ws/2IZQR5m

The two sides of Trump damage the markets; The protectionist president is also attacking great US success stories
John Redwood – FT
Share markets have been brought down by fears of a trade war. The growing hostility of governments on both sides of the Atlantic to the great technology companies has also produced a stumble in their share prices, after they led the bull market in recent years. The EU is threatening a turnover tax on the main US internet players. Donald Trump is tweeting against Amazon and everyone is busy questioning the Facebook business model after revelations over how some of their data is used.
tinyurl.com/y83m5xja

Harvard, Yale Are Among Colleges Working to Repeal Endowment Tax
Janet Lorin – Bloomberg
A group of colleges is helping find sponsors for a new bill; About 30 schools would pay annual 1.4% tax on net gains
A tax on wealthy college endowments isn’t set to be collected for more than a year, yet schools are working behind the scenes to roll it back.
tinyurl.com/y8d87sq9

Warren Gets Scant Help From Wall Street Watchdogs on #MeToo Push
Elizabeth Dexheimer and Benjamin Bain – Bloomberg
Finra says termination forms don’t focus on sexual harassment; Firms haven’t reported workplace-discrimination issues: SEC
Elizabeth Warren is struggling to get data that shows how bad sexual harassment might be on Wall Street.
tinyurl.com/y87hxohq

Regulation

Getting Ready for Initial Margin: The Steps to Take
ISDA
Each September until 2020, increasing numbers of entities will be required to meet initial margin regulations as the threshold level for compliance reduces. Preparation for meeting these requirements will take significant time, and will involve intensive work to ensure systems, processes and documentation are in place.
/jlne.ws/2J0NGdU

Bank Capital Rules Need More Than Fine-Tuning; The Fed’s tweaks don’t come to grips with the bigger problem.
The Editors – Bloomberg
Having spent nearly a decade crafting new capital requirements to bolster the resilience of the country’s largest banks, the U.S. Federal Reserve is getting ready to do some fine-tuning. The rules can certainly be improved — but what’s needed is more than tinkering around the edges.
tinyurl.com/y9hyx6u4

Coinbase Engages SEC about Turning into a Regulated Brokerage: Report
CCN
The San Francisco-based cryptocurrency exchange is reportedly in talks with the US Securities and Exchange Commission (SEC) about becoming a regulated brokerage firm and trading platform. According to The Wall Street Journal, Coinbase reached out to regulators about the getting licensed even as the SEC moves closer to crafting some regulatory framework by which exchanges and other market players would operate.
tinyurl.com/ydc9m7qa

Investing and Trading

US Small Caps Are Working. But Why?
Jessica Rabe – Datatrek Research
US small cap stocks had a good week and as a result are now up on the year, unlike their large cap counterparts.
/jlne.ws/2J0336k

Institutions

Ten years after the financial crisis, New York’s largest banks are gearing up for a shopping spree
Aaron Elstein – Crain’s New York Business
Sterling National Bank grew the old-fashioned way last year: via acquisition. The bank purchased rival Astoria Federal Savings for $2.2 billion, a move that doubled Sterling’s assets to $30 billion. And the bank isn’t done.
/jlne.ws/2J0ggvN

JP Morgan sees surge in European electronic trading as MiFID II takes effect; CFO Marianne Lake says JP Morgan has witnessed ‘material increase’ in electronic trading in the first quarter this year.
Hayley McDowell – The Trade
JP Morgan has seen a material increase in electronic trading across Europe, the Middle East and Africa (EMEA) in the early days of the new MiFID II regime.
tinyurl.com/y9j4y8wq

Goldman Sachs Reports Higher Earnings; Results boosted by lower taxes and newly active markets
Liz Hoffman – WSJ
Goldman Sachs Group Inc. reported higher profit and revenue from a year ago, catching the wave of lower taxes and newly active markets that boosted other big banks’ quarterly earnings.
tinyurl.com/y98bp3te

Regions

Latin American Scorecard: Q1 2018
Silvia Kitchener – S&P Dow Jones Indices
March 30, 2018 marked the end of the first quarter of 2018, and so far, the regional indices for Latin America have shown strong performance. The S&P Latin America BMI, which is designed to measure the performance of 287 companies in Brazil, Chile, Colombia, Mexico, and Peru, returned 7.4% for the period. Even more impressive was the S&P Latin America 40, which seeks to represent the 40 largest, most-liquid stocks in the region, as it returned nearly 10% for the quarterómeanwhile, the S&P 500 and S&P Europe 350 were down 0.8% and 2.1%, respectively.
/jlne.ws/2H6f6OQ

Defending the Hong Kong dollar takes a more sociable approach
Emma Dunkley and Ben Bland – Financial Times
Monetary authorities tend to rely on traditional forms of communication, such as emails and website updates, when informing journalists about market-sensitive news.
But Hong Kong’s de facto central bank, the Hong Kong Monetary Authority, likes to take a slightly different, arguably more sociable approach.
/jlne.ws/2J09W7G

How Long Until China Cranks Up the Debt Engine?; Its economy’s steady first-quarter growth masks some worrying signs
Nathaniel Taplin – WSJ
Cherry blossoms are blooming in Asiaóand so is the Chinese economy, at least on the surface.
tinyurl.com/ybbkcmup

As Saudi, Egypt Stocks Become Mideast Stars, Dubai Gets Ignored
Filipe Pacheco – Bloomberg
Trading in Dubai’s main bourse has fallen to lowest since 2015; Investors see lack of catalysts in the emirate’s share market
The rise of Saudi Arabia and Egypt as the top Middle East choices for equity investors is taking a toll on Dubai.
tinyurl.com/yb8wv656

Brexit

British Businesses Aren’t Backing a Second Brexit Vote
Suzi Ring and Charlotte Ryan – Bloomberg
U.K. businesses want certainty rather than reversing course; Anti-Brexit campaigners want a vote on the final divorce deal
The plot to reverse Brexit is missing a key ally: U.K. business.
tinyurl.com/yaouuwgl

Miscellaneous

The TRADE Magazine, Spring 2018; John runs through what you can find in the latest issue of The TRADE, now available to read online.
John Brazier – The Trade
The latest issue of The TRADE is now available to read online, so with the longer days and warmer weather, why not relax with a cool drink and delve into all the best content from the Spring 2017 issue:
tinyurl.com/ybqm4bpw

Billionaire Banking Heir Matthew Mellon Dies at 54
AP
Billionaire banking heir Matthew Mellon has died. He was 54.
tinyurl.com/ybabqw9w

The post Kraken Pulls Out of Japan; Attorney Berkovitz to CFTC; Russia blamed for global cyber attack appeared first on John Lothian News (JLN).