| November 11, 2016 | "Irreverent, but never irrelevant" | | | | John Lothian
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From the Top
By John J. Lothian
Phupinder Gill is retiring at the end of the year, the CME announced. That is the cover story. What the real story is will be more difficult to discover, but this much is clear, this was not the plan.
When I interviewed Gill at a Chicago Executive's Club luncheon earlier this year we discussed the approach of developing your successor. Gill laid out how the CME had identified a group of CME executives that were all being groomed as successors. To have Terry Duffy named as CEO, and Gill to exit so quickly, smacks of some other kind of decision making.
I suspect there was some kind of confrontation at the board level and an ultimatum. Gill lost. The CME is historic for its rivalries between executives and senior political powers. Terry Duffy won the board battle, and Gill is out.
It will be interesting to see how CME Group may now adjust its strategy, if much at all. The company is heading into much friendlier waters, or so investors believe, with the Trump administration, and its stock is rising dramatically - up to $117.05 yesterday, from $103.07 a week ago, with a market cap of $42.1 billion. The company's average daily volume so far this year is up 8 percent to 15.4 million contracts, according to its third quarter earnings report held just last week. The CME Group is performing well, with solid growth in volumes coming from Europe, up 20 percent year over year in Q3 and Asia, up 7 percent. While revenues and net income were essentially flat, down 1 percent for the quarter but still solid. It is indeed, a curious move by CME while the company is performing so well on paper.
But this is not a loss for Gill. He won his freedom to retire and enjoy the fruits of a storybook career. He won more time with his teenage son while he is still at home. What will be interesting to see is how many other senior executives will follow Gill out the door in the coming months.
Congratulations to Terry Duffy as the new CME CEO and Bryan Durkin as the new CME president. The CME is in seasoned hands, with a great team behind them. This is your chance to really let your light shine.
(Jim Kharouf contributed to this story)
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The New Dodd-Frank?
Jim Kharouf - JLN
Today's headlines focused on a Dodd-Frank Act repeal or overhaul under the Trump administration; you can find in them in Lead Stories. Many in the industry may find this welcome news, as this industry has battled its way through six years of Dodd-Frank rules in the US.
Details are fuzzy at best right now, but another plan is starting to get some traction as a possible replacement. The Financial CHOICE Act - the corny acronym that could only be made in Washington - stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs. It is a bill introduced over the summer by House Financial Services Committee Chairman Jeb Hensarling (R-TX), a rumoured candidate for Treasury secretary, and covers a variety of areas from repealing the Volcker Rule, to new banking capital and liquidity standards, to the end of bank bailouts and "Too Big To Fail" policies.
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LaSalle Street Trading Tech Event A Growing Success
John J. Lothian - JLN
There was a terrific turn out at the LaSalle Street Trading Tech as colleagues across the Chicago financial district and the Boy Scouts celebrated the success and future plans of the Trading Tech 300 program.
XR Trading, Glenstar Properties, Advantage Futures and DRW were among the firms honored for conducting TT300 merit badge clinics. Today, Glenstar is holding the Search and Rescue merit badge, a program that was delayed a week because of the Cubs World Series parade a week ago.
The plan for the summer for TT300 is to hold three weeks of merit badge clinics, one in June, one in July and one in August. We are seeking firms to participate in this growing impactful program.
Two scouts who have earned badges at five or more of the TT300 workshops were honored with the first Harlan Ten Pas Award. Harlan is a longtime Scouter and partner at RSM, formerly McGladry.
Harlan is my own accountant and has been an inspiration to my adult scouting career. He was surprised and very happy to be honored with the naming of this award after him.
I would like to thank all of those who donated to support the TT300 program and Boy Scouts in the coming year. We named the Chicago Board of Trade Clearing Corp Foundation a "Founding Member" of TT300 for their generous donation.
I closed the formal presentation of the evening with two requests. I asked people to consider holding a merit badge workshop at their firm, or helping us find firms that would. I also asked them to make a donation to help the new STEM Scout program that is in beta development at the Pathway to Adventure Council and 11 other councils in the U.S.
The request went like this: Imagine you have a new nephew or niece. You would buy them a birthday present every year. Now consider making a similar donation to the Scouts to help support a STEM Scout. You may never meet this Scout, but you are helping to create a program that will attract that young person away from gangs, guns and drugs and toward a brighter and more productive future. Make a difference in a kid's life. Help us solve our violence problem by helping create a better future for them.
You can make a difference too. Help the Scouts by hosting a workshop, make a donation or both. Just ask me for details.
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Ex-HFT Trader and MIT-Grad Tackles Spoofing
FuturesRadioShow
Today we talked to a man who has been ahead of the technology curve an entrepreneur since he was 12. He graduated MIT at the age of 19 and his latest technology is now changing the trading industry. His name is David Widerhorn, CEO of Neurensic.
David and his company are addressing the inefficiencies within the HFT universe, and recreating the trade surveillance industry using Artificial Intelligence and Machine Learning.
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***** I had technology when I was 12, but it was a transistor radio.
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Motorbikes & Teddy Bears
by Stephanie Lenchard Warren
Gerald Brock, better known as "Gerry," "Shag," or "G", rides a 2008 Ultra Classic Dresser: a buffed-up Harley stocked with saddlebags, a fairing, and tour pack. It's big, hot, and bright redÂGerry's favorite color. Gerry got his first bike when he was 17 years old, taking after his older brother Wendell, who also had a motorcycle at the time. A farm kid drawn to mechanics and country roads, G immediately fell in love with the sport. "My first bike was a 1969 Harley Sprint," he tells me. "It was a 350cc single cylinder. And now I ride a bike that's 96 cubic inch twin cam. My first bike weighed about 350 pounds soppin wet, and this one goes about a thousand!"
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***** This is a story for Veterans Day by Stephanie Lenchard Warren, the daughter of Deb Lenchard of Spot Trading and brother of Jonathan Lenchard Warren, an intern for us last summer. Stephanie is a recent graduate and is a writer and artist.
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Steve Grob, Fidessa  The Innovator's Dilemma
MarketsWikiEducation.com
What are the chances the firm you work for will be around in five or 10 years?
In our video from JLN's MarketsWiki Education World of Opportunity Event in London 2016, Steve Grob, director of group strategy with Fidessa, talks about why most businesses will inevitably fail and how to see that coming. For him, most failures come down to an unwillingness to take the blinders off and listen to any outside influences.
"The point I'm trying to make is that so many firms are so engrossed in solving the very short-term, immediate, and short-sighted needs of their customers, that they simply don't get the big change that is going on."
Innovation is not so much about eureka moments, rather collaborative efforts of diverse groups over a period of time. Grob gives the example of Encyclopedia Britannica as one to avoid. That institution refused to see that there is more to its product than beautiful, leather-bound books  it was caught addressing very short-term issues and was blindsided by the CD-ROM.
Watch the video »
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Thursday's Top Three
Top of the charts yesterday was news that one prop shop, Teza, was going to blow up its business model and focus on its own hedge fund. Flash Crash Trader Sarao Pleads Guilty to Fraud, Spoofing marked the end of a long and winding tale of a guy trading from his parents' basement, and it also won our silver medal. In third was the only story in the top three that pertained to the election, Donald Trump's Financial Advisory Team Stocked With Wall Streeters.
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| Lead Stories | CME Group chief to quit three years before contract ends; News of Phupinder Gill's impending departure surprises investors and analysts
by: Gregory Meyer in New York - FT
The chief executive of CME Group, the dominant US futures exchange, has resigned more than three years before the end of his contract. Phupinder Gill, 56, will retire from CME and its board at the end of the year, the company said in a statement late on Thursday. Terry Duffy, 58, executive chairman, has added the role of chief executive.
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CME Group CEO Phupinder Gill Announces Retirement; Board Expands Role of Terry Duffy to Chairman and CEO; Appoints Bryan Durkin as President
CME Group
CME Group today announced that its Chief Executive Officer Phupinder Gill has informed the Company's Board of Directors that he is retiring from the organization and Board, at year end, December 31, 2016. At the Board's request, Terry Duffy has assumed the expanded role of Chairman and Chief Executive Officer. Bryan Durkin, who is currently Chief Commercial Officer, has been named President of CME Group.
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Trump's Transition Team Pledges to Dismantle Dodd-Frank Act
By Jesse Hamilton- Bloomberg
President-elect Donald Trump has started to translate some of his populist campaign rhetoric into policy statements, including the contention that Wall Street banks are still too big to fail and that one of his priorities is scrapping the Dodd-Frank Act.
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Carry Trades Collapse as Emerging-Market Yield Advantage Shrinks
Lilian Karunungan, Natasha Doff - Bloomberg
Higher U.S. yields diminish appeal of riskier alternatives; AllianceBernstein sells most of EM currency holdings
Add emerging-market carry trades to the early list of losers from a Donald Trump presidency.
/goo.gl/4mHR17
Bonds Tumble by $1 Trillion This Week as Trump Seen Game Changer
Lilian Karunungan - Bloomberg
Door is open for Fed to hike in December, CBA's Donaldson says; Selloff pushes German bund yield to highest since February
More than $1 trillion has been wiped off the value of bonds around the world this week as U.S. President-elect Donald Trump's policies are seen boosting spending and quickening inflation.
/goo.gl/vaZMGK
Copper Explodes Above $6,000 With Prices Set for Best Week Ever
Kevin Crowley, Eddie Van Der Walt - Bloomberg
Metal being driven by speculative Chinese trading: Citigroup; Prices in London have soared 28 percent in three weeks
Copper briefly surpassed $6,000 a ton and headed for the biggest weekly rally ever as the metal became the focus for traders speculating on Donald Trump's pledge to pour money into U.S. infrastructure.
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Trump rhetoric must be measured by markets; 'Trumpflation', a 'tariff tantrum' and a fight with the Fed are all on the risk list
by: John Authers - FT
Peter Thiel, the billionaire who became Donald Trump's most prominent backer in Silicon Valley, made a critical distinction last week. He complained that the media tended to take the man literally, but not seriously.
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Donald Trump Thinks Jamie Dimon Is a Wimp
By William D. Cohan - Bloomberg
Donald Trump is not known for being shy on any topic, let alone the topic of litigation. Generally speaking, the Donald prefers to fight his lawsuits, not settle them. And so, not surprisingly, he has a bone to pick with Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase & Co., who is close to settling civil litigation with the Justice Department for an estimated $13 billion.
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Donald Trump Could Put Climate Change on Course for 'Danger Zone'
Coral Davenport - NY Times
President-elect Donald J. Trump, who has called human-caused climate change a "hoax" perpetuated by the Chinese, will have the power next year to water down President Obama's climate change regulations and ignore the United States' commitments under last year's Paris climate agreement. If he does, experts in climate change policy say, the world may have no way to avoid the most devastating consequences of global warming, including rising sea levels, extreme droughts and food shortages, and more powerful floods and storms.
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Futures, option trading volume hit record after Trump win: CME Group
Reuters
Combined trading volume on financial and commodity futures and options set a one-day record on Wednesday as Donald Trump's stunning U.S. presidential win triggered massive market swings, exchange operator CME Group (CME.O) said on Thursday. Volume across all asset classes including stocks, Treasuries and oil totaled 44,516,949 contracts on Wednesday, topping the record of 39,567,064 contracts set on Oct. 15, 2014, CME said.
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Quick View: EU's extra time raises LSE-DB deal temperature; Europe's antitrust watchdog may demand more concessions
by: Philip Stafford - FT
The London Stock Exchange Group and Deutsche Börse are entitled to feel that the extra time Brussels will have to assess their deal is a positive sign.
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What Happens in Europe If Trump Dismantles Dodd-Frank?
Bloomberg
Bloomberg Gadfly Columnist Lionel Laurent reports on possible U.S. banking regulation changes under a Trump administration and the impact on European banks. He speaks on "Bloomberg Surveillance." His opinions are his own.
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| Brexit | | Financials stories regarding the recent decision of the United Kingdom to leave the European Union | U.K. Says Court Erred in Ruling Brexit Needs Lawmaker Approval
Alex Morales - Bloomberg
Government says it has power to trigger Brexit unilaterally; Ruling due to be appealed in the Supreme Court Dec. 5-8
Judges were wrong to rule that ministers must seek parliamentary approval before formally triggering Brexit, the U.K. government said as it outlined the case it will put in an appeal to the Supreme Court next month.
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Post-Brexit London Takes Step Forward With Shanghai Stock Link
John Detrixhe - Bloomberg
The companies agreed to "develop rules and implementation arrangements," according to a joint announcement Thursday. The statement suggests the U.K. is looking to deepen ties with other markets at a time when its access to Europe's single market is in jeopardy. The paper was light on details about connecting the markets, which faces obstacles in part because the operations are in different time zones.
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| Exchanges, OTC & Clearing | | Top news from exchanges, clearing, settlement and trade execution facilities | CME Group Volume Reaches All-Time Daily High of 44.5 Million Contracts on November 9
CME Group
CME Group, the world's leading and most diverse derivatives marketplace, reached a record high in single-day volume with 44,516,949 contracts traded across all asset classes on November 9, 2016, breaking the previous record of 39,567,064 contracts set on October 15, 2014.
jlne.ws/2fFVNl2
CME Group's CEO to Retire at Year's End
Maria Armental - WSJ
CME Group Inc.'s Chief Executive Phupinder S. Gill, who took over the world's largest futures-exchange operator in 2012 following the collapse of the brokerage MF Global Holdings Ltd., intends to retire on Dec. 31. A CME spokeswoman said Mr. Gill informed the board this week of his decision to retire early.
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Japan commodity exchange halts as heavy trading after Trump victory overwhelms system
Reuters
The Tokyo Commodity Exchange (TOCOM) has twice halted trading since early Thursday morning, with at least one of the interruptions caused by heavy trading orders following Donald Trump's surprise U.S. presidential election victory.
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UK and China agree closer ties between London and Shanghai stock markets
Reuters
Britain and China have agreed to press on with closer links between London and Shanghai's stock exchanges, British finance minister Philip Hammond said on Thursday after meeting Chinese Vice Premier Ma Kai.
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Nasdaq Wins RiskTech 100 Best Operational Risk & GRC Software Solution
By GlobeNewswire
Nasdaq, one of world's leading Governance, Risk management and Compliance (GRC) solution providers, has been recognized as the Best Operational Risk & GRC Solution by the RiskTech100 2017 awards in New York. The BWise GRC platform is used by hundreds of organizations across industry sectors worldwide.
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Eurex Exchange's T7 Release 4.0: Important information for production start
Eurex
Eurex Exchange will launch Release 4.0 of Eurex Exchange's T7 on 21 November 2016.
The connection test for Eurex Exchange's T7 Release 4.0 will take place on Saturday, 19 November 2016, between 15:00 and 17:00 CET. Participation is strongly recommended for all Participants and Multi-Member Providers.
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Amsterdam, Frankfurt, London, Paris & Zurich are now "Fit for MiFID"
Eurex
Successful Deutsche Börse Workshop Tour throughout Europe
Deutsche Börse called and more than 300 people all over Europe followed and joined our workshops covering the ongoing MiFIR/MiFID II regulations. In some of Europe's most attractive cities and selected locations, the participants were provided with an updated overview of the regulatory timeline as well as the scope and impact it will have on the key markets Eurex & Xetra.
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Euronext announces calendar for 2017
Euronext
Euronext today announced the 2017 trading days for its markets in Amsterdam, Brussels, Lisbon, London and Paris.
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Four new WisdomTree smart beta ETFs launched on Xetra
Deutsche Börse Group
Four new exchange-listed index funds issued by WisdomTree have been tradable on Xetra and Börse Frankfurt since Thursday. These new WisdomTree smart beta ETFs enable investors to participate in the performance of high-dividend stock corporations with sufficient liquidity and market capitalisation.
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SIX - October 2016: Slightly Increased Number Of Trades
Mondovisione
The number of transactions on SIX Swiss Exchange and SIX Structured Products Exchange climbed to a total of 3'525'653 in October 2016. This represents a rise of 1.6% compared with the preceding month. However, this increase was not reflected in overall trading turnover, which saw a slight decline of 3.5% to CHF 91.8 billion.
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Israeli Achievements Honored at New York Stock Exchange
The Tower
"Israel Day" was held at the New York Stock Exchange on Thursday, comprising a series of events highlighting Israel's technological advancements and its outsize impact on Wall Street.
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Changes of Designated Securities for Short Selling
HKEX
The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), announces that with effect from 18 November, 2016 (Friday), 37 additional securities will be eligible for short selling and 28 existing designated securities will be removed from the list. The total number of designated securities for short selling will be 882 after the revision.
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London Stock Exchange Welcomes First Ever Chinese Green Covered Bond
London Stock Exchange Group
London Stock Exchange today welcomes the listing of the first ever Chinese Green Covered Bond, issued by Bank of China. The bond, part of Bank of China's wider MTN programme, creates in effect a new and innovative asset class for global investors, raised $500m. To celebrate the listing, Tian Guoli, Chairman, Bank of China and Simon Kirby MP, Economic Secretary to the Treasury opened London trading.
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| Politics | | An overview of politics during an election year as it relates to the financial markets | Trump Team Considering Dimon for Treasury Secretary, CNBC Says
Hugh Son - Bloomberg
President-Elect Donald Trump's advisers are considering JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon for Treasury secretary, CNBC reported, citing two people familiar with the matter. Dimon isn't interested, one of the people told CNBC.
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Investors, economists brace for new dangerous game: parsing Trump's words
Jonathan Spicer - Reuters
Move over, Janet Yellen. The Federal Reserve chief has a challenger for the title of speaker most scrutinized by Wall Street, and it's Donald Trump. All new U.S. President-elects are closely monitored by the financial community for clues about what their policies mean for markets. But Trump's speaking style, often using enthymemes or incomplete sentences that leave room for interpretation, along with vague or contradictory campaign promises make him all the more challenging to decipher.
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Trump's economic policy explained: the era of fiscal restraint is over
Sam Fleming and Shawn Donnan - Financial Times
As Donald Trump prepares for the White House, a theme is beginning to emerge: the era of fiscal restraint in the US could be coming to an end. Mr Trump was scathing during the campaign about the increases in US national debt under Barack Obama, and the businessman at one point claimed implausibly that he would pay the entire $19tn stock off in eight years.
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Goldman CEO Blankfein says Trump's plans may be good for economic growth
Olivia Oran - Reuters
Goldman Sachs Group Inc CEO Lloyd Blankfein said the surprising U.S. election results show "democracy at work" and could bode well for the firm and its clients, in a voicemail to employees on Wednesday.
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With Trump's Election, a Bonanza for Washington Lobbyists
Eric Lipton - NY Times
Trent Lott, the former Republican senator from Mississippi, had gleefully flown back from Florida, where he had been working for the campaign of Donald J. Trump. Now a powerful lobbyist, his phone had been buzzing nonstop and he was busy helping to organize a briefing Thursday morning for dozens of corporate clients. He was not alone. The stunning surprise of the election, and the political chaos it created, is a boon for Washington's lobbying corridor known as K Street.
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Trump Campaigned Against Lobbyists. Now They're on His Transition Team.
By ERIC LIPTON -NY Times
President-elect Donald J. Trump, who campaigned against the corrupt power of special interests, is filling his transition team with some of the very sort of people who he has complained have too much clout in Washington: corporate consultants and lobbyists.
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Donald Trump's Financial Advisory Team Stocked With Wall Streeters; Many Republican policy hands and CEOs involved in past campaigns have steered clear of Mr. Trump
By ANUPREETA DAS and NICK TIMIRAOS - WSJ
Donald Trump's successful insurgent bid for the White House promised to upend a global power structure that benefited large corporations. Now, several Wall Street financiers and other successful business leaders could be in line to run top posts in his presidential administration.
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Common cause for Trump and Yellen in continuing job and wage growth
Howard Schneider - Reuters
U.S. President-elect Donald Trump and Fed Chair Janet Yellen may emerge as unlikely allies as the incoming administration moves toward policies Federal Reserve officials have long advocated and the Fed contemplates a "high-pressure" economy to try to boost jobs and wages, at least in the short term.
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Trump's business empire poses unprecedented potential conflicts of interest
Joseph Ax - Reuters
Donald Trump campaigned for president as a savvy billionaire who would apply his business acumen to improving the U.S. economy, cutting taxes for Americans and negotiating better trade deals. But his vast, complicated network of businesses under the Trump Organization, including numerous foreign investments and debts, could create unprecedented conflicts of interest when he takes the oath of office as U.S. president in January, government ethics experts said.
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Prepare for a reversal of monetary rule under President Trump
Gillian Tett - Financial Times
Three and a half decades ago, a Yale student called Adam Glick tried to persuade his fellow students to embrace the freshly elected president Ronald Reagan. It was hard. Back in 1980 most of the establishment  and gilded students  sneered at the idea of a former B-list Hollywood actor in the Oval Office. Almost nobody guessed that Reagan might end up a Republican icon.
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Trump Team Considering Rep. Jeb Hensarling as Treasury Secretary; House Financial Services Committee chairman has pursued top GOP priorities, such as rolling back Dodd-Frank
By DAMIAN PALETTA, RYAN TRACY and MICHAEL C. BENDER - WSJ
Aides to President-elect Donald Trump are considering Rep. Jeb Hensarling (R., Texas) as a candidate for Treasury secretary, a pick that would bring an elected official with a free-market background and deep GOP ties into one of the cabinet's most powerful posts, people familiar with the matter said.
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Russian Investment Official: We Welcome Trump Era
Ira Iosebashvili - WSJ
Donald Trump has been president-elect for less than two days, and already, the Russians are here. Kirill Dmitriev, chief executive officer of the Russian Direct Investment Fund, a $10 billion vehicle for investing some the country's wealth, arrived in New York on Wednesday to meet with investors on the eve of what he believes will be a new, more fortuitous era for the U.S. and Moscow.
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Trump's Yuan Manipulator Tag May Be More Politics Than Practical
Enda Curran, Saleha Mohsin - Bloomberg
Label could just be meaniningless phrase: ex-Treasury's Truman; Treasury, IMF currently don't designate China a manipulator
Donald Trump, the candidate, made much about China ostensibly influencing its currency for an advantage in trade. As U.S. president, he could find that an official designation of China as a manipulator actually may entail more legalese than he'd like.
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| Investing & Trading | | Today's top stories from fixed income, currencies and commodities (FICC) | Trump Butterfly Effect Spurs Copper Gains, Emerging Market Rout
James Regan, Stephen Kirkland - Bloomberg
More than $1 trillion wiped off global bonds this week; European stocks give up gains, S&P 500 futures decline
Donald Trump's plans for a U.S. construction boom have set off a chain reaction that's invigorated commodities prices, hammered bonds, buttressed the dollar and is now ripping into emerging markets.
/goo.gl/RVpm4u
The Search for Alpha Reaches New Frontiers
Valerie Bogard - TABB Group
Financial services companies increasingly are exploring non-traditional data sets in order to generate alpha. Once solely within the purview of large quantitative funds, mining alternative data has reached a tipping point in adoption, with usage expanding to smaller hedge funds, long-only asset managers, and sell-side firms. As a result, the market for alternative data in the US, currently at about $200 million, is likely to double in the next 5 years.
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Why is the currency ban causing markets to rise?
Monika Halan - LiveMint
The sudden shock of the currency ban and an unexpected election result in the US caused markets to open 6% down on 9 November. But a day later, the story has changedÂall markets are up. So why are stock markets surging? Why are bond markets happy? Why are real estate magnates walking like zombies? What lies ahead for your money?
jlne.ws/2fFVWVx
Donald Trump win sparks renewed interest in coal ETFÂfor now
Ryan Vlastelica - MarketWatch
The largest exchange-traded fund to specifically track coal companies has seen a surge in interest this week, following the unexpected presidential victory by Donald Trump, who has promised to "bring back coal 100%."
jlne.ws/2fFWlHJ
Junk-bond issuers cautious as pace picks up
Davide Scigliuzzo - Reuters
Bankers are advising junk-bond issuers to be prudent in the aftermath of Donald Trump's US electoral victory, warning that conditions are likely to remain volatile for some time to come.
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Investors Take Cues From Three Words : 'Rebuild Our Infrastructure'
Chris Dieterich - WSJ
What three words deserve a chunk of credit for the post-election rally in stocks and selloff in bonds? "Rebuild our infrastructure." In his victory speech Wednesday at about 3:00 a.m. Eastern time, didn't focus on immigration or trade, but on infrastructure. Here's exactly what the President-elect said: "We are going to fix our inner cities and rebuild our highways, [...]
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Investors' Trumped-Up Inflation Expectations
Justin Lahart - WSJ
With Donald Trump's presidential victory, markets are saying that inflation will return from its long hiatus. But after years of nearly flat prices, there are reasons to doubt that inflation will rise meaningfully. In the two days after the election, Treasurys, which fare worse under higher inflation, have fallen sharply. Inflation expectations embedded in Treasury-inflation-protected securities have pushed higher. Shares of cyclical companies, which perform better in a higher-inflation environment, have risen, while the bond-like dividend paying stocks have suffered.
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Citadel exec laments fragmentation of US Treasury liquidity
Mackenzie Smith - Risk.net
A proliferation of new electronic trading venues for US Treasuries is "fragmenting" the market and making it harder for traditional market makers to compete with speed traders, a senior executive at Citadel Securities has claimed. "My question [for new trading venues] is, why are you fragmenting the market? I don't think that solves the transparency problem or the flash crash problem," said Nicola White, global chief operating officer for fixed income at Citadel Securities.
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Trump's Win Yields Investing Wisdom
By Barry Ritholtz
One of the best things to do when confronted by a major surprise is to see what there is to be learned from the experience. I always try to identify what sorts of lessons can be gleaned from nonmarket events. You would be surprised at how often there are rules and insights to be had about investing.
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Carlyle Hedge Fund's $400 Million African-Refinery Investment Disappears; Carlyle's Vermillion loses $400 million investment tied to Moroccan oil refinery
By MATT JARZEMSKY and JULIET CHUNG - WSJ
A Carlyle Group LP hedge fund has lost the $400 million it invested last year in a Moroccan oil-refinery deal, according to a securities filing and people familiar with the matter.
/goo.gl/KZ1wZ9
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| Banks, Brokers & Managed Funds | | The latest from banks, brokers, hedge funds and managed futures | ABN looked at using undercover security staff to prevent cyber attacks
Tom Bergin - Reuters
Dutch Bank ABN-AMRO considered sending undercover security staff amid employees to help improve cyber security but has decided not to follow this practice, officials said. As the risk of cyber attacks increase, many banks are developing more sophisticated ways to prevent security lapses.
/goo.gl/fYu6ge
BOJ can cut rates only to minus 0.5 percent: ex-BOJ official
Leika Kihara - Reuters
The Bank of Japan has little room left to expand stimulus with a cut to around minus 0.5 percent the limit to how much further it can deepen negative interest rates, Hideo Hayakawa, a former senior central bank executive, said on Thursday. Hayakawa, who retains close contact with incumbent policymakers, also said the BOJ will eventually slow the pace of its government bond purchases but will do so very cautiously.
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Bank outlook mixed as team Trump vows to 'dismantle' Dodd-Frank
Will Caigers-Smith - Reuters
Investors continued to plough cash into US bank stocks and bonds on Thursday as president-elect Donald Trump's transition team vowed to "dismantle" the Dodd-Frank Act. But market participants cautioned that rolling back post-crisis financial regulation too much could make bank debt riskier.
/goo.gl/qqg1KM
Fiscal stimulus would lead to faster rate hikes: Fed's Lacker
Jason Lange - Reuters
The Federal Reserve could raise interest rates more quickly if Washington used lower taxes or higher spending to boost economic growth, Richmond Fed President Jeffrey Lacker said on Thursday.
/goo.gl/70r3AX
Wells Fargo CEO says bank changing handling of whistleblower complaints
Dan Freed - Reuters
Wells Fargo & Co (WFC.N) Chief Executive Officer Tim Sloan told workers on Thursday the bank was changing the handling of whistleblower complaints after allegations it retaliated against employees who called an ethics hotline to report sales abuses.
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Goldman Sachs Stops Protesters From Entering Its Madrid Offices
Rodrigo Orihuela, Macarena Munoz Montijano - Bloomberg
Anti-eviction group spends over nine hours demonstrating; Group claims Goldman venture evicting low-income tenants
Goldman Sachs Group Inc.'s Spanish staff faced an hours-long demonstration by anti-eviction activists who sought to break into its Madrid offices in a protest over the firm's investment in low-income housing earlier this decade.
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| Fintech | | A roundup of today's market tech news and a look at tomorrow's disruptors | Why Machines Still Can't Learn So Good
Nishant Kumar and Taylor Hall - Bloomberg
Anthony Ledford and his colleagues at Man AHL spent three painstaking years building a machine-learning model to do something mere mortals often can't: find fresh ideas in an avalanche of data. But even Ledford, chief scientist at the $19 billion Man AHL in London, rolls his eyes when he hears people say that machine learning, a type of artificial intelligence, is going to transform hedge funds tomorrow.
jlne.ws/2fFQP7Q
Liquidnet Aims to Take Power from the Sell Side with Virtual High Touch Launch
John Brazier - WatersTechnology
Institutional trading network Liquidnet announced the launch of Virtual High Touch (VHT), a new trading solution aimed specifically at supporting the shifting balance of power from the sell side to the buy side. VHT comprises data analysis, adaptive learning algorithms, unique liquidity search tools, and real-time analytics, although some elements of the technology have not yet been rolled out to the EMEA region.
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| Regulation & Enforcement | | For more regulatory, visit MarketsReformWiki, our website focused on current market reform efforts. | Elizabeth Warren says she'll fight Trump over dismantling Dodd-Frank
Robert Schroeder - MarketWatch
Elizabeth Warren and Donald Trump are heading for a collision course over the Dodd-Frank law, with the Massachusetts senator saying Thursday she'll fight to protect it. Trump's presidential transition web site says his team is already working to "dismantle" the law, which was the Obama administration's response to the financial crisis.
jlne.ws/2fFNqpI
SEC fraud trial of 'Diva of Distressed' Tilton wraps up
Nate Raymond - Reuters
A lawyer for financier Lynn Tilton on Thursday accused the U.S. Securities and Exchange Commission of pursuing a fraud case against the private equity chief straight out of a "fantasy world," as an administrative trial drew to a close. During his closing argument in a Manhattan courtroom, Tilton's lawyer Randy Mastro expressed anger that the SEC had accused the founder of Patriarch Partners of fraud, given what he called the lack of evidence presented at trial.
jlne.ws/2fFOv0K
CFTC's Market Risk Advisory Committee Announces Agenda for November 17 Public Meeting
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today announced the agenda for the upcoming Market Risk Advisory Committee (MRAC) public meeting on November 17, 2016 at CFTC's headquarters in Washington, D.C. [See CFTC Press Release 7477-16 for attending, viewing and listening instructions.]
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FINRA names former JPMorgan top lawyer to its board of governors
Reuters
The Financial Industry Regulatory Authority named Stephen Cutler, vice chairman and former linchpin lawyer for JPMorgan Chase & Co (JPM.N), to its board of governors Thursday. He replaces Greg Fleming, Morgan Stanley's (MS.N) last head of wealth management, who resigned from the board earlier this year.
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U.S. judges probe spoofing in convicted trader's appeal
Tom Polansek - Reuters
A panel of U.S. appeals court judges sought answers on Thursday about how widespread spoofing is in U.S. financial markets and whether it represents an advancement in trading, as they considered whether to overturn the nation's first criminal conviction for the banned practice.
jlne.ws/2fB0XMQ
44 in fray for Sebi chairman's post
Business Standard News
The contest for next chairman of the Securities and Exchange Board of India (Sebi) has gained pace. Sources say 44 people, including top bureaucrats and bankers, have applied, in response to the advertisement.
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U.S. charges Florida man in case linked to JPMorgan hacking probe
Nate Raymond - Reuters
A Florida man is the latest individual to face criminal charges in connection with what U.S. prosecutors say was an illegal bitcoin exchange owned by an Israeli accused of being behind hacking attacks on companies including JPMorgan Chase & Co.
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Italian regulator investigates diamond sales through bank branches
Maria Pia Quaglia - Reuters
An Italian regulator is investigating the sale of diamonds through bank branches across the country after a TV report alleged the stones were missold to the public. Several Italian banks distribute diamonds for diamond brokers, an unusual partnership that generated around 300 million euros ($332.88 million) in sales for the brokers last year.
jlne.ws/2fFXizN
Firm Charged With Misleading Investors About Binary Options Profitability
SEC
The Securities and Exchange Commission today announced that an Israeli-based firm must pay more than $1.7 million for misleading investors into trading binary options over the internet, and the agency warned that other firms may be out there actively trying to do the same thing.
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Singapore Court Convicts Ex-BSI Banker in 1MDB Probe; Singapore is the first country to convict someone in the alleged fraud at the Malaysian state fund
By JAKE MAXWELL WATTS and P.R. VENKAT - WSJ
A Singapore court Friday sentenced a key suspect in a continuing probe into alleged misappropriation at the Malaysian state fund 1MDB, making Singapore the first country to successfully prosecute an individual linked to the alleged multibillion-dollar fraud.
/goo.gl/qOdjIQ
For Brokerages, Regulatory Relief Rally Isn't Their Reality; Preparations for 'fiduciary rule' go on despite expectations that Trump administration will ease regulations
By MICHAEL WURSTHORN and SARAH KROUSE - WSJ
The Wall Street firms preparing for new retirement rules are moving ahead despite uncertainty surrounding the Trump administration's plans to roll back federal regulations. Some investors, however, appear to be wagering that the so-called fiduciary rule won't be as onerous for brokerages and asset managers.
/goo.gl/qSy7tg
Trump transition vows to 'dismantle' Dodd-Frank
TheHill
President-elect Donald Trump's transition team says the next administration will work to "dismantle" the Dodd-Frank financial reform law. A section devoted to financial regulations on his official transition website makes clear President Trump would work to undo President Obama's landmark Wall Street regulation law.
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Donald Trump's Transition Team: We Will 'Dismantle' Dodd-Frank; GOP eager to make litany of changes that until recently stood little chance of avoiding President Barack Obama's veto
By RYAN TRACY - WSJ
President-elect Donald Trump's transition team promised to dismantle the 2010 Dodd-Frank law, declaring that the coming administration will seek to remake the way the U.S. oversees the financial sector.
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| Regions | | Stories of local interest from the Americas, EMEA and Asia-Pacific regions | India banks overwhelmed after shock note withdrawal
Amy Kazmin - Financial Times
Indians flooded to banks on Thursday, as the country began the process of replacing more than $223bn in cash, after this week's shock demonetisation of more than 80 per cent of all the cash currently circulating in the economy. As banks opened for the first time since the announcement late on Tuesday, people queued for hours to obtain small sums of the new money, either through the exchange of old notes or withdrawals.
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Fear rocks Mexican markets after Trump win, peso posts record slump
Michael O'Boyle - Reuters
Mexico's peso sank again on Thursday, taking its biggest two-day tumble in more than 20 years, while bonds and stocks had their worst day in five years on fears U.S. President-elect Donald Trump's anti-free trade rhetoric could hit exports.
/goo.gl/0XRW2r
World Oil And Its Seven Biggest Chokepoints
Zero Hedge
It's common knowledge that most of the world's oil is transported internationally by tankers. What might not be so commonly known is the fact that almost half of the crude shipped around the world passes through waters where piracy, the danger of terrorist attacks, or the possibility of local governments shutting down the waterway are all too real.
jlne.ws/2fFYuTB
From avocados to autos, Mexican businesses fear tough times with Trump
Joanna Zuckerman Bernstein and Christine Murray - Reuters
>From avocado orchards to border factories, Mexican exporters who have prospered under two decades of NAFTA face the prospect of an abrupt end to the boom if U.S. President-elect Donald Trump carries out his threats to ditch the free trade pact. Trump says the North American Free Trade Agreement favors Mexico at the expense of U.S. workers and has vowed to either rewrite or withdraw from the deal, as well as build a giant border wall and possibly slap steep tariffs on imports.
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Saving China's Stock Market - Analysis
Yi Huang, Jianjun Miao and Pengfei Wang - Eurasia Review
The Chinese Shanghai Stock Exchange Composite Index dropped by a third in mid-2015, wiping out billions in share value. One of the responses of the Chinese government was to directly participate in the stock market. This column assesses the costs and benefits of this intervention, finding that the resulting gains amounted to about 5% of Chinese GDP.
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Trump's Vow to Crack Down on China Set to Run Into Complex Reality
Andrew Mayeda - Bloomberg
China likely to retaliate if U.S. imposes import tariffs; Chinese may actually welcome lighter U.S. engagement in Asia
On the campaign trail, Donald Trump hurled threats at China, telling it to level the playing field on trade or accept the consequences. Now as president, confronting the world's second-biggest economy will be a much taller task.
/goo.gl/7SDDI0
Crowds Line Up at India's Banks to Exchange Banned Rupee Notes
By ELLEN BARRY and SUHASINI RAJ - NY Times
Thousands of security forces were deployed on Thursday to keep the peace at India's banks, where crowds of people had formed jittery, snaking lines in the early morning, desperate to exchange now-useless currency notes.
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| Miscellaneous | | Stories that don't quite fit under the other sections | Law Firm Arnold & Porter to Merge With Rival Kaye Scholer
Elizabeth Olson - NY Times
Two prominent law firms, Arnold & Porter and Kaye Scholer, winding up months of talks, announced on Thursday that they would combine to become a firm with more than 1,000 lawyers effective Jan. 1. The new firm will be called Arnold & Porter Kaye Scholer. The combination was not a surprise. Each firm brings complementary expertise  Arnold & Porter is a litigation and regulatory issues powerhouse in Washington, and Kaye Scholer, based in New York, which is almost half the size of Arnold & Porter, is best known for its financial services and life sciences work.
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This Algorithm's Taste in Wine Is Better Than Yours; With the new site Verve Wine, master sommelier Dustin Wilson sides with the robots.
Ian Frisch - Bloomberg
So, you want to buy a bottle of wine. You sort of know what you likeÂbold reds, crisp whitesÂbut not much more than the names of a few grapes. You head to your local wine shop, which, being a proper local wine shop, has a dizzying array of options: reds from Oregon, Argentina, and Italy; whites from South Africa, New York state, and California; bubbly from France. How can you be sure your money will be well spent? You approach the counter, where the cashier is smiling in anticipation of the question she knows is coming: Umm, could you help me out?
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