| October 03, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Keynote Address of Chairman Rostin Behnam at the Futures Industry Association Expo 2023, Chicago, Illinois
CFTC
Markets continue to demonstrate volatility amid economic and geopolitical uncertainty. And that means that the Commission must act purposefully while remaining careful stewards of our resources. I feel more committed than ever to these principles of deliberation and stewardship during this time of uncertainty. Recognizing the responsibilities of a financial regulator, my duties include prioritizing market resilience and stability, and protecting the public from fraud and abuse, while resisting calls for action rooted in short-termism that may place our markets at risk. Every decision we make, and every word we say impacts people and markets, and this reality will continue to anchor me.
/jlne.ws/3rzRQW0
| | | | | | Lead Stories | | | Cboe and S&P launch 'credit Vix' indices as higher rates squeeze corporates
Nicholas Megaw and Harriet Clarfelt - Financial Times
Volatility indices linked to US and European corporate bonds will debut next week as highly indebted companies and their lenders attempt to navigate an environment of drastically higher interest rates.
The four "credit Vix" indices, which have been developed by exchange operator Cboe Global Markets and benchmark provider S&P Dow Jones indices, will track volatility expectations over the following month in US and European investment-grade and high-yield markets.
/jlne.ws/3tnmFxs
Wall Street Sell-Off Worsens, VIX Spikes As Bond Yields Rise Further, Dollar Strengthens: What's Driving Markets Tuesday?
Markets Insider
It's a red Tuesday for the U.S. stock market, with all major indices on Wall Street plummeting by over 1% during midday trading in New York.
This downward spiral can be attributed to the relentless surge in yields on U.S. Treasuries. The 10-year yield has shattered the 4.75% barrier, reaching levels not seen since August 2007, while the 30-year yield has surged past 4.9%, inching closer to the significant 5% milestone.
/jlne.ws/3Q2Ja3W
Hedge funds using computers to sell up to $30 billion of stocks soon - UBS
Nell Mackenzie - Reuters
Hedge funds using computers to trade equities are expecting to start selling to the tune of $20 billion to $30 billion in the next two weeks given retreating stock markets, a UBS note seen by Reuters shows. Hedge funds using algorithms to follow market trends have turned neutral from bullish on stocks, the UBS note said.
/jlne.ws/3PEmhlJ
Europe's Volatile Gas Market Lures Traders From Far Afield
Priscila Azevedo Rocha - Bloomberg
Europe's energy crisis has made its main gas market a popular destination for traders around the world seeking to get exposure to extreme volatility.
While large international trading desks in Europe, the US and Asia are regular participants in the market, it was previously less common for institutions outside of those key hubs to trade the region's fuel. But Russia's war in Ukraine sent Europe's gas prices to record highs last summer, and while they've eased since then, they still remain volatile and have lured new entrants to the market.
/jlne.ws/3F3ScaC
Japan finance minister says volatility, not yen levels, key on intervention
Tetsushi Kajimoto - Reuters
Japanese Finance Minister Shunichi Suzuki said on Tuesday that any decision on currency market intervention would be based on volatility, not specific yen levels, as investors brace for a possible move if the yen breaches the 150-per-dollar threshold.
Authorities are watching the currency market closely and stand ready to respond, Suzuki said, repeating a warning against speculative moves as the yen hovered near a one-year low versus the dollar, just shy of the 150 mark.
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Weakening crop prices and high production costs weigh on farmer sentiment
CME Group
Agricultural producers' sentiment declined for the second month in a row, as the Purdue University/CME Group Ag Economy Barometer index fell 9 points to a reading of 106 in September. Producers expressed concern about their current situation as well as future prospects for their farms. The Current Conditions and Future Expectations Indices both declined 10 points to a reading of 98 and 109, respectively. Notably, all three indices stand below their readings from one year ago. This month's Ag Economy Barometer survey was conducted from September 11-15, 2023.
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| | | | | | Exchanges | | | Cboe Global Markets and S&P Dow Jones Indices to Launch New Credit VIX Indices on October 13
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, and S&P Dow Jones Indices (S&P DJI), the world's leading index provider, today announced plans to launch four new Credit Volatility Indices (Credit VIX) on Friday, October 13, 2023.
/jlne.ws/3F2rqza
Strong Year-to-Date Gains for Cboe's VPD, VPN, SPEN Indices
Matt Moran - Cboe
This Index Insights Monthly Scorecard provides an update on the performance of dozens of indices that track the levels of volatility or the performance of hypothetical strategies that invest in options or futures.
/jlne.ws/3rtx0aR
CME Group Reports Second-Highest September and Q3 ADV on Record
CME Group
Highest-ever Q3 volume for interest rate and agricultural products; Record Equity Index options in September and Q3. CME Group, the world's leading derivatives marketplace, today reported its September and Q3 2023 market statistics, reaching an average daily volume (ADV) of 22.7 million contracts in September, representing the company's second-highest September ADV on record. Q3 ADV was 22.3 million contracts, the second-highest Q3 volume ever. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
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JPX Monthly Headlines - September 2023
JPX
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
Every month, we showcase the highlights of these efforts in short and concise summaries just for you.
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| | | | | | Regulation & Enforcement | | | Commodity Futures Trading Commission's Request for Comment on the Impact of Affiliations on Certain CFTC-Regulated Entities
CCP Global
The Global Association of Central Counterparties ("CCP Global") is the international association for central counterparties ("CCPs"), representing 42 members who operate over 60 individual CCPs across the Americas, EMEA, and the Asia-Pacific region.
CCP Global appreciates the opportunity to respond to the Request for Comment on the Impact of Affiliations on Certain CFTC-Regulated Entities ("the Request") issued by the Commodity Futures Trading Commission ("CFTC" or "Commission"). We appreciate the CFTC's outreach to the industry to better inform its understanding of the impact of affiliations between designated contract markets ("DCMs"), derivatives clearing organizations ("DCOs"), and/or swap execution facilities ("SEFs") and intermediaries, such as a futures commission merchant ("FCM") or other market participants.
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| | | | | | Strategy | | | Should You Own a Covered-Call ETF Like JEPI?
Lan Anh Tran - Morningstar
Covered-call funds have recently come back into the spotlight. Investors poured over $26 billion into the now-$65-billion derivative income Morningstar Category in the trailing 12 months, and over half of those inflows went to J.P. Morgan Equity Premium Income ETF JEPI. Covered-call funds hold an underlying equity position, then sell call options against it and distribute the premium collected to shareholders. Their recent payouts were impressive: JEPI's 12-month yield was 11.7% at the end of 2022, compared with only 1.7% for the S&P 500 index.
/jlne.ws/3PAP8aG
How Treasury market upheaval is rippling through global markets in 4 charts
Joseph Adinolfi - MarketWatch
Soaring U.S. government bond yields sent shock waves across global markets in September. Now, yields have started October by pushing even higher, threatening to upend markets and the economy.
Signs of stress in the Treasury market abound. As prices across the bond-market have slumped, some long-dated Treasury securities have been trading below 50 cents on the dollar. Moreover, a popular exchange-traded fund tracking U.S. government debt that matures in 20 years or longer cemented its lowest close on Monday since 2007.
/jlne.ws/3LLl8rn
VIX Index Hits 20
Cboe (Video)
In #Vol411, Tim Biggam discusses the $VIX Index hitting 20 today, the headwind for stocks due to elevated yields and a flattening of the VIX #futures term structure at the front end.
/jlne.ws/3tdcrjb
| | | | | | Miscellaneous | | | Experts at FIA Expo see promise for tokenization of collateral; Despite short-term regulatory challenges and up-front cost hurdles, panelists remain optimistic
Jeff Reeves - FIA MarketVoice
At FIA's Expo conference in Chicago on 2 October, a diverse panel of experts had a frank discussion about the future outlook for the technology and the path to widespread adoption of tokenized collateral. The general consensus was that the industry is a long way from a widespread embrace of the technology, but market participants are still making steady progress and strategic investments in the future of this technology.
/jlne.ws/3RJs8c9
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