| April 21, 2020 | "Irreverent, but never irrelevant" | | | | John Lothian
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John Lothian News | |
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Hits & Takes
By John Lothian & JLN Staff
That can't happen? It can, and it did. May WTI crude oil on NYMEX at the CME Group traded down to a negative price. It did not just trade negative, it traded $38 negative, and the price of the spread between the front two months was the widest ever on record. The price of May crude dropped 350%. Get your head around that.
This anomaly of price discovery is all about the impending end of trading of the May WTI contract today and the lack of storage for any longs forced to or planning on taking delivery. There is no room at the inn for the oil, and the longs are on the outs.
This anomaly actually exposes a fallacy of risk management that has influenced behavior aspects of participation in the markets. When you go short, you have unlimited risk. When you go long, you can only lose the cost of the commodity; it can't go below zero. But it can, and it has. So forget the bias towards being long as a way to protect yourself from unlimited risk.
Two of the best articles about the oil collapse are the top story in leads and the one from Craig Pirrong, the Streetwise Professor. Both talk about the consequences of 'inelasticity' on the price discovery process. There are many stories below that are also excellent about this anomaly.
Our friends at Quantitative Brokers have launched the first options on futures execution algorithm, "Striker," an intelligent algorithm for options on futures markets. We will have more on this later today.
Symphony has hired former MarkitSERV CEO and Goldman alum Brad Levy as chief revenue officer.
Larry Tabb has been named as an advisor for the Digital Dollar Project, which was created by, among others, former CFTC Chairman Christopher Giancarlo, his brother Charles, and former Lab CFTC head Daniel Gorfine.~JJL
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The next FIA webinar will take place Wednesday, April 22 from 10:30 to 11:30 ET. It is called "Q1 2020 Trends in Futures and Options Trading" and the speaker is Will Acworth, senior VP of publications, data and research at FIA. You can go here for more information and to register. ~SR
FIA is also providing a webinar on Thursday, April 22 from 9:00 - 10:00 ET on "The impact of COVID-19 on cleared derivatives," which will discuss recent UK Government emergency measures and their potential impact. Speakers will be Bruce Savage, head of Europe at FIA, Caroline Dawson, Partner, Clifford Chance LLP and Chinwe Odimba-Chapman, Partner, Clifford Chance LLP. Webinar details are here.~SR
The CME Group prepared for yesterday's negative oil prices and last Wednesday announced that it was ready for such a development. The full advisory regarding clearing member testing, which was published last Wednesday states, "Support for zero or negative futures and/or strike prices is standard throughout CME systems." The notice is available here.~Thom Thompson
Boy Scouts in New York have donated 17,000 neckerchiefs for non-medical face masks.~JJL
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Luc Fortin: TMX Forges Ahead in These Unprecedented Times
JohnLothianNews.com
As part of John Lothian News's Exchange Leaders Series, Luc Fortin, the president and CEO of MX and global head of trading at TMX Group, updated us on current conditions in the Canadian markets. Fortin says while the impact of the coronavirus will inevitably cause "slippage" in exchange plans to add new products and extend trading hours, "It's not a question of scrapping 2020" and client demand will continue to grow post-COVID-19.
Produced by Mike Forrester.
Listen to the podcast here
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WTI - WTF?
Streetwise Professor
Today was one of the most epochal days in the history of oil trading, which is saying something. The front month May contract - which expires tomorrow (21 April, 2020) - (a) settled at a negative price of -$37.63, (b) declined $55.90 from the previous day's settlement, and (c) exhibited a trading range of $58.17, which is about 3.5x Friday's settlement price. Even these eye-popping numbers don't tell the full story. The last traded price was -$13.10. Note that the settlement price is based on the volume weighted average price during the last two minutes of trading, so an average price of $-37.63 in the last two minutes and a last traded price of -$13.10 means prices moved more that $25/bbl in these minutes.
bit.ly/2prHbJo
***** A go to explanation for what happened yesterday. Look out today!~JJL
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QB Launches First Options on Futures Execution Algorithm, "Striker"
Quantitative Brokers
Quantitative Brokers (QB), an independent provider of advanced execution algorithms and data-driven analytics for futures and U.S. Cash Treasury markets, today announced the launch of a first-ever, intelligent algorithm for options on futures markets. Striker joins QB's suite of award-winning best execution algorithms: Bolt, Strobe, Legger, Closer, Octane and The Roll. Striker is the first dynamic agency algorithm for options on futures markets that incorporates both realtime cointegration and implied pricing calculations to determine fair value. The strategy also employs QB's industry-leading, dynamic passive and aggressive child order placement logic. Striker transactions are also seamlessly displayed in QB's complementary Transaction Cost Analysis (TCA) platform, another industry first.
/quantitativebrokers.com/
*****A JLN exclusive release.~JJL
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CME Clearing Plan to Address the Potential of a Negative Underlying in Certain Energy Options Contracts
CME Group - April 8, 2020
The purpose of this advisory is to assure CME clearing firms and end clients that if major energy prices continue to fall towards zero in the coming months, CME Clearing has a tested plan to support the possibility of a negative options underlying and enable markets to continue to function normally.
/bit.ly/2VeJ8ID
*****Here is the notice from April 8 from the CME talking about being prepared for negative prices.
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Internships Have Managed to Survive the Pandemic's Wrath; Company cancellations are lower than expected as many programs move online. But some question the value of a virtual job experience.
Arianne Cohen - Bloomberg
Some 22 million Americans filed for unemployment in the past month as businesses shut down to slow the spread of the novel coronavirus. But internship programs, a key source of future employees for big companies, have proven surprisingly immune to the economic devastation.
/bloom.bg/2RUrZTo
******The world is different. We need to adjust.~JJL
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Munich's Oktoberfest Beer Fair Canceled Over Virus Fears
Katharina Rosskopf - Bloomberg
Festival called off for first time since the Second World War; Decision a severe blow for the Bavarian capital's economy
Munich's famed Oktoberfest folk and beer festival has been canceled for the first time since World War II, the latest major event to fall victim to the coronavirus outbreak and a blow to the Bavarian capital's economy.
/bloom.bg/3cydvkb
*****This is not a good sign for events in the fall. Where can I short pretzel futures?~JJL
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Monday's Top Three
Our most read story Monday was Reuters' NYSE and Nasdaq challenger MEMX delays launch due to coronavirus crisis. MEMX was also our MarketsWiki page of the day. Next was - for the second time on the list - Trump's Coronavirus CEO Death Panel Backfires Hilariously, from New York Magazine. Third was - for the sixth or seventh time on this list - How Ronin Capital fell from Grace as COVID spread, from Crain's Chicago Business.
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MarketsWiki Stats
176,329,111 pages viewed; 24,105 pages; 223,888 edits
MarketsWiki Statistics
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| Lead Stories | The Oil Price Crash in One Word: 'Inelasticity'; Supply didn't fall and demand didn't rise in response to the historic plunge in the price of crude.
Peter Coy - Bloomberg
The historic crash in oil prices on Monday—to below zero, believe it or not—can be explained with one wonky word: "inelasticity." The demand for oil is inelastic. It doesn't respond dramatically to changes in price in the short term. When we're cooped up at home because of Covid-19, we're not going to do a lot of driving no matter how cheap gasoline gets.
/bloom.bg/2XQHvUa
CFTC Designates Bitnomial Exchange, LLC as a Contract Market
CFTC
The Commodity Futures Trading Commission today announced that it has issued an Order of Designation to Bitnomial Exchange, LLC located in Chicago, Ill., granting it status as a designated contract market (DCM), effective today. Bitnomial Exchange is a limited liability company formed under Delaware state law.
/bit.ly/2KmVER7
The Markets Are Wild While You're Asleep; Overnight stock futures trading has skyrocketed, adding to nearly nonstop activity
Annual average daily volumes in overnight trading
Gunjan Banerji - WSJ
Trading in overnight stock futures has skyrocketed, adding to a nearly nonstop stretch of market activity and luring more investors to join in the action. Among the most-traded are E-mini S&P 500 futures contracts, whose overnight trading volumes have surged to a record this year, according to CME Group Inc. CME -3.65% data through March. Daily average volumes have topped 500,000 contracts, more than double the number recorded in 2017. The overnight session begins at 6 p.m. ET on Sundays and weeknights and ends the following day at 9 a.m.
/on.wsj.com/3as1TxN
World's Biggest Oil Storage Firm Says Almost All Space Sold
Fred Pals and Jack Wittels - Bloomberg
Vopak tanks undergoing works are the only ones not booked; Euronav CEO sees tankers increasingly being moved into storage
The world's biggest independent oil storage company has all but run out of space for crude and refined products as a result of the fast-expanding glut that Covid-19 has created.
/bloom.bg/3cMMeuD
Singapore police launch probe into oil trader Hin Leong; Dutch bank ABN follows SocGen in seeking to cut exposure to scandal-hit company
Stefania Palma and Neil Hume - FT
Singapore authorities have launched an investigation into Hin Leong Trading, the heavily indebted oil trader that has admitted to $800m of undisclosed losses and filed for bankruptcy protection.
/on.ft.com/2yuOMyr
Singapore scandal rocks commodity traders and their lenders; Debt disclosure crisis at tycoon OK Lim's Hin Leong group threatens sector's credit lines
Save
Neil Hume in London and Stefania Palma - FT
Singapore energy tycoon Lim Oon Kuin spent decades building a business empire, transforming his "one-man-one-truck" operation selling diesel to fishermen into one of the biggest shipping fuel traders in Asia. But in the space of a few days it has come crashing down, sending shockwaves through the commodity trading industry and the banks that finance global trade.
/on.ft.com/3csH7PY
RSM appoints new chief following shareholder coup; Head of corporate finance Rob Donaldson takes top role at UK accounting firm
Tabby Kinder - FT
RSM has appointed a new chief executive after a torrid annual meeting that ran late into the night as its shareholders disagreed about who should take over.
/on.ft.com/3eOogRs
London Stock Exchange committed to Refinitiv deal in pandemic-hit markets
Huw Jones - Reuters
The London Stock Exchange said on Tuesday it was committed to completing its $27 billion takeover of data company Refinitiv in the second half of the year, with no plans to revise its savings targets for the deal as a deep recession beckons.
/reut.rs/34RYTJO
Sub-zero oil prices threaten big losses for ETF investors; Those betting on crude recovery using exchange traded funds face 'high risks'
David Sheppard - FT
Investors who have flooded into the oil markets to bet on a rebound in crude prices are risking big losses, say commodity specialists, as the exchange traded funds they use are swept up in the current market turmoil.
/on.ft.com/2RUxIZo
The United States Oil Fund mystery, revived
Izabella Kaminska FT
What has happened before will happen again (as someone on a sci-fi TV show once said). In 2008/9 the USO ETF (United States Oil Fund) roiled the oil market when its assets under management mushroomed in size in response to apparently epic inflows from passive long investors.
/on.ft.com/2zjqt78
World's Biggest Oil Storage Firm Says Almost All Space Sold
Fred Pals and Jack Wittels - Bloomberg
Vopak says only tanks under maintenance have not been booked; Company is working hard to complete that tank maintenance
The world's biggest independent oil storage company said that space for traders to store crude and refined fuels has all but run out as a result of the fast-expanding glut that Covid-19 has created.
/bloom.bg/2VKsSzl
The Fed Is Buying $41 Billion of Assets Daily and It's Not Alone
Matthew Boesler and Yuko Takeo - Bloomberg
Fed leads charge as new players take up large-scale purchases; Focus will eventually shift from liquidity to borrowing costs
Central-bank balance sheets are expanding to record levels amid their latest buying spree, raising questions about how big they can get and whether those assets can ever be sold back to markets.
/bloom.bg/3cvVR0g
Trading.com Secures US Approval to Operate as FX Firm; The brand of the Trading Point Group has been registered by the NFA as a forex firm.
Celeste Skinner - Finance Magnates
Trading.com Markets Inc, part of the Trading Point Group, has secured approval from the National Futures Association (NFA) and been registered as a retail foreign exchange (forex) dealer, after applying for the licence more than a year ago.
/bit.ly/3cBMKLQ
Calypso Technology partners with Sophos Solutions, targets Colombia
IBS Journal
San Francisco based Calypso Technology, a provider of cloud-enabled, cross-asset, front-to-back technology solutions and managed services for the financial markets, has announced that the company has partnered with Colombia based financial services-focussed consultants Sophos Solutions, to strengthened its commitment to the Colombian market.
/bit.ly/2yt5Zs6
An 'Epic Supply-Demand Battle' Is Looming Across Bond Markets
Cecile Gutscher - Bloomberg
Pressure seen in Europe bill auctions, costly Australia issue; TD warns of execution risk in U.S. issuance, nervous market
In coronavirus-rocked debt markets, a historic wave of government bond selling is meeting the biggest monetary buying program on record. But even as central banks unleash their trillions, the issuance spree across developed economies is proving far from smooth sailing.
/bloom.bg/2VJ9kv2
Impetus for Automation
ISDA
ISDA Chief Executive Officer Scott O'Malia offers informal comments on important OTC derivatives issues in derivatiViews, reflecting ISDA's long-held commitment to making the market safer and more efficient.
/bit.ly/2XSdraQ
Madoff Victims Will Soon Get Another $378 Million From U.S. Fund
Erik Larson - Bloomberg
Thousands of victims of Bernard Madoff's Ponzi scheme are due to get checks totaling $378 million from a U.S. Justice Department fund created years ago through settlements with some of the con man's oldest customers and his bank, JPMorgan Chase & Co.
/bloom.bg/2XPPjWp
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| Coronavirus | | Stories relating to the COVID-19 pandemic | Data gathering can liberate us from a much longer lockdown; The return of a virus spells trouble if a high percentage of the population remains susceptible to it
Anjana Ahuja - FT
We are not out of the woods yet. Although some societies are starting to reopen, others, such as the UK and Spain, have extended lockdowns to try to bring the Covid-19 pandemic to heel.
/on.ft.com/3cBLaJE
These Face Masks for Cows Have Nothing to Do With Coronavirus; A U.K.-based startup has a wearable device that it hopes will reduce cattle's methane emissions by up to 60%.
Agnieszka de Sousa and Akshat Rathi - Bloomberg
Agriculture is second only to energy in its contribution to global greenhouse-gas emissions, and raising animals—especially cattle—drives almost half the industry's footprint. That hasn't been good news for beef and dairy producers, who are being abandoned by climate-conscious investors and consumer alike. Francisco Norris, however, sees it as an opportunity.
/bloom.bg/3eFjJAE
Americans Are Poisoning Themselves in Their Rush to Fight Virus
Robert Langreth - Bloomberg
Consumers inhale and ingest cleaning products at alarming rate; Spike in cases comes amid rush to disinfect surfaces, food
Poisonings related to cleaners and disinfectants surged in the U.S. last month as the global pandemic spurred a haphazard rush to disinfect everything.
/bloom.bg/2XSjpsh
Religious Group's Mass Gatherings Across Asia Spark Virus Clusters
Faseeh Mangi - Bloomberg
Over 27% of Pakistan's 8,400 cases traced to event near Lahore; Faith-based groups linked to virus hotspots around the world
A conservative religious group's gatherings have emerged as coronavirus hotspots in Malaysia, India and now Pakistan, with authorities tracking people who attended an event with as many as 70,000 worshipers that's responsible for more than a quarter of all cases in the South Asian nation.
/bloom.bg/2RV9GOh
Denmark to test everyone with coronavirus symptoms; Country is being scrutinised as it begins reopening economy after lockdown
Richard Milne - FT
Denmark is to start comprehensive testing of everybody with coronavirus symptoms as part of the closely watched reopening of its economy after lockdown.
/on.ft.com/2XSukSP
Pork producers could euthanize hogs to offset financial losses from coronavirus
Fox News
New York county residents sue WHO over coronavirus response: report
A head lice drug to beat coronavirus? Researchers reportedly exploring potential
DES MOINES, Iowa - From exports to wholesaling and grocery stores, pork farmers across the country have profited over $20 billion per year from pigs - but they've needed to make tough decisions recently, like many industries that have fallen victim to the coronavirus.
/bit.ly/34Tlrd0
'How do we overcome fear?' Americans need confidence before life can return to normal.
Ashley Parker - Washington Post
Danny Meyer — restaurateur and founder of Shake Shack — said he is already envisioning the changes he will make when he finally gets the green light to reopen his restaurant empire. Kitchen employees will have to wear masks and not only have their temperature taken, but also look their manager in the eye and verbally confirm they are feeling healthy.
/wapo.st/2XTyb27
IMF's Georgieva says coronavirus crisis is worst since Great Depression
Reuters
The crisis sparked by the spread of the novel coronavirus is the worst since the Great Depression, IMF Managing Director Kristalina Georgieva said on Monday.
/reut.rs/2XReY0L
Americans at World Health Organization transmitted real-time information about coronavirus to Trump administration
Karen DeYoung, Lena H. Sun and Emily Rauhala - Washington Post
More than a dozen U.S. researchers, physicians and public health experts, many of them from the Centers for Disease Control and Prevention, were working full time at the Geneva headquarters of the World Health Organization as the novel coronavirus emerged late last year and transmitted real-time information about its discovery and spread in China to the Trump administration, according to U.S. and international officials.
/wapo.st/2zb5O4X
NYC Cancels City-Permitted Gatherings, Events in June
Henry Goldman - Bloomberg
Gay Pride, Israel Salute and Puerto Rico parade all affected; De Blasio renews plea for federal reimbursement of virus costs
New York City will cancel all of its permitted gatherings and public events through June while it continues to battle the new coronovirus, Mayor Bill de Blasio said Monday.
/bloom.bg/2XZT6AF
Toilet Paper Shortages May Get Worse on Sawmill Slowdown in Canada
Jen Skerritt - Bloomberg
Lumber capacity cuts come amid rising demand for wood chips; 'We need more of our sawmills running,' industry group says
Supply cuts that were supposed to bolster the beleaguered lumber market are now creating an unintended effect: the wood chips required to make sought-after toilet paper and wipes during the coronavirus pandemic are becoming more scarce.
/bloom.bg/2VMXL6c
The Pandemic Financial Terms You Should Know Right Now; Sneak in one or two on your next Zoom call.
Peter Coy
The coronavirus pandemic has made us all armchair epidemiologists. Master these eight terms to become an armchair economist.
/bloom.bg/2xPRFdh
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| Exchanges, OTC & Clearing | | Top news from exchanges, clearing, settlement and trade execution facilities | ICE ETF Hub Growth Continues in First Quarter With March Notional Volumes Surging, New Functionality Going Live
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that creation and redemption activity on ICE ETF Hub continued to increase throughout the first quarter of 2020, supported partly by new ETF Hub community members and functionality.
/bit.ly/2xOP2Ix
ICE ETF Hub volumes surge to new highs in first quarter; Notional value processed through the ICE ETF Hub in the first quarter surged a huge 220% from record last month.
Kiays Khalil - The Trade
The exchange traded fund (ETF) ecosystem from US exchange group ICE has reported a record surge in notional volumes during the first quarter this year.
/bit.ly/2XOdW5Q
VSTOXX Backwardation Streaks And Short Volatility Trades
Russell Rhoads CFA, Head of Research and Consulting for EQDerivatives
As of the market close on April 14, the short end of the VSTOXX term structure curve has been in backwardation every trading day since Feb. 24. Backwardation may be defined in many ways, in this case backwardation is defined as comparing spot VSTOXX to the first three monthly VSTOXX futures contracts. As an example the figure below shows this curve based on closing prices on April 8.
/bit.ly/2KjaGHL
LSEG plc Annual General Meeting, Tuesday 21 April 2020, Chair's statement by Don Robert
London Stock Exchange Group
We are disappointed that, as a result of the global pandemic COVID-19, we are unable to host our shareholders in person at today's Annual General Meeting. The challenges that we collectively face as a society are unprecedented and we appreciate shareholders' understanding in light of the current circumstances.
/bit.ly/2RXhjnb
London Stock Exchange Group PLC Trading Statement Including Revenues and KPIS for the Three Months Ended 31 March 2020 (Q1); Good Q1 performance against unprecedented market backdrop; Q1 total income up 13% year-on-year to £615 million, driven by increased equity trading in Capital Markets and higher clearing activity across listed and OTC products leading to higher NTI in Post Trade
London Stock Exchange Group
The Group continues to make good progress on planning for the integration of Refinitiv. A number of workstreams on business structure and opportunities, including synergy realisation, are well developed, and the Integration Management Office has been expanded to bring additional resource to the Group.
/bit.ly/3bpbiaw
OTC IRS Production - EURSTR Discounting and Price Alignment Transition Date
CME Group
Please be advised that CME will be delaying the EURSTR Discounting and Price Alignment Transition for cleared EUR interest rate swap products to the close of business July 24, 2020. The transition was previously scheduled to occur on June 19, 2020.
/bit.ly/3eFrzdy
Moscow Exchange announces changes to trading in the Light Sweet Crude Oil futures contract nearest to expiry
MOEX
Moscow Exchange is suspending trading in the Light Sweet Crude Oil contract (contract CL-4.20) expiring on 21 April 2020 at the day trading session on 21 April 2020. This decision was taken to prevent market participants and their clients from incurring additional negative consequences as a result of the unprecedented decline on 20 April in prices on the corresponding contract on NYMEX.
/bit.ly/2xMsdp0
Wall Street's most photographed trader: I beat coronavirus, and am ready to get back on the NYSE floor
Brian Sozzi - Yahoo Finance
Veteran New York Stock Exchange floor trader Peter Tuchman — long ago dubbed the most photographed person on Wall Street because of his Einstein-like white hair and facial expressions that seemingly appear in every investing story — is itching to get back to work.
/yhoo.it/3cywcUT
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| Fintech | | A roundup of today's market tech news and a look at tomorrow's disruptors | Aquis Exchange subscribes to big xyt analytics platform; Equities exchange Aquis is the latest institution to deploy analytics from big xyt, including its Liquidity Cockpit.
Kiays Khalil - The Trade
Pan-European subscription-based equities trading venue, Aquis Exchange, has become the latest company to implement big xyt's Liquidity Cockpit to support market structure analytics.
/bit.ly/2VnL0jw
The Investment Association selects ipushpull to be part of new UK fintech accelerator
InstitutionalAssetManager.co.uk (press release)
ipushpull, an enterprise platform that improves efficiency by allowing secure live data sharing and workflow automation, has been chosen by The Investment Association (IA) to be part of its latest fintech hub 'Engine'.
/bit.ly/2xMmK1q
Funding for fintech startups: Down but not out
Penny Crosman - American Banker
The pace of venture capital investment in fintechs, like many aspects of the economy, has slowed this year — but the demand for digital finance at a time of social distancing, and other factors, are expected to buoy the numbers in coming months.
Globally, venture capital firms invested $6 billion dollars in fintech companies in the first quarter, down 45% from the fourth quarter and 25% less than in the first quarter of 2019, according to the data analysis firm CB Insights.
/bit.ly/3cBKhkk
World FinTech Report 2020: FinTech Collaboration Is Even More Essential Now for Banks to Achieve Customer-Centricity
Yahoo Finance
Capgemini and Efma today published the World FinTech Report 2020 revealing that despite a widening gulf between traditional banks on one side and BigTechs and challenger banks on the other, traditional banks have an opportunity to thrive in today's market by embracing Open X1 and becoming Inventive Banks2.
/yhoo.it/2RV1zkF
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| Cryptocurrencies | | Top stories for cryptocurrencies | dForce attacker returns all $25M stolen funds back to the DeFi project
Yogita Khatri - The Block
In a new twist to the dForce attack saga, the exploiter has returned all stolen funds - worth about $25 million - back to the Chinese decentralized finance (DeFi) project. Yesterday, the attacker returned $2.79 million to dForce, and today the rest of the amount i.e. nearly $22 million, has been returned, according to Etherscan data analyzed by The Block Research.
/bit.ly/3an0Q29
Is 'Libra 2.0' Any More Appealing to Regulators than the Original?
Rachel McIntosh - Finance Magnates
When Facebook unveiled its Libra project last June, the whole world shook. Indeed, a project that the company seemed to expect would move along without any major problems caused a legislative earthquake - governments the world over fired back at Facebook, holding conferences, hearings, and creating new legislation aimed at halting the project in its tracks.
/bit.ly/3cyvSW8
Crypto Staking Wallet Offers 1.5% Daily Returns: Ponzi in Progress?
Greg Thomson - CoinTelegraph
A cryptocurrency staking wallet that offers users as much as 1.5% daily returns is bearing striking resemblance to a Ponzi scheme.
That's according to a Medium article published on April 19 by Jan Kowalski which warns readers to steer clear of an app known as StakedWallet. The website offers Proof-of-Stake "investment opportunities" wherein the user's daily payout increases the longer they keep their funds staked.
/bit.ly/2XPOqgx
Just a Test: China Central Bank Confirms Digital Yuan Mobile App Trials
David Pan - Coindesk
China's central bank confirmed it will be testing a mobile application for storing and exchanging the digital yuan, after screenshots circulated on social media. The People's Bank of China (PBoC) aims to roll out internal tests for the national digital currency (DECP) in Shenzhen, Suzhou, Xiong'An and Chengdu, according to the bank's Friday statement. The same four cities were named on a registration page for the test application.
/bit.ly/2VrkN3B
CFTC Approves New Cryptocurrency Derivatives Platform — Bitnomial to Offer Regulated
Bitcoin Futures
Kevin Helms - Regulation Bitcoin News
The U.S. Commodity Futures Trading Commission (CFTC) has approved a new bitcoin derivatives trading platform. Bitnomial Exchange will list margined and physically delivered bitcoin futures and options. Besides Bitnomial, the CFTC has only approved a handful of other platforms to offer bitcoin derivatives trading, such as CME, Cboe, and Bakkt.
/bit.ly/2XUuFEG
A Chinese EOS-based wallet app reportedly shuts down, leaving $52M in user funds inaccessible
Yilun Cheng - The Block
EOS Ecosystem, a wallet app that has promised high returns for users' EOS deposits, has shut down the platform, and its creators appear to have run away with approximately $52 million user funds, according to a local report.
/bit.ly/2yutUY8
Oxford - Cryptocurrency Regulation is Required to Prevent Financial Meltdown
Kelly Cromley - Cointrust
The recent phenomenon of people moving their assets into crypto as a safe haven in responding to the financial crisis has drawn the attention of the academic world.
According to a post made by an Oxford University Law Faculty, academics have noticed that cryptocurrency trading could turn into a threat to conventional finance and it should be overseen in a stringent manner during exigency to avoid methodical danger to the system.
/bit.ly/2VKJ7we
Cryptocurrency Markets Moved by Regulatory Actions, Federal Reserve Bank Paper Shows
Kevin Helms - Markets and Prices Bitcoin News
The Federal Reserve Bank of Dallas has published a paper showing how cryptocurrency markets are affected by crypto regulatory actions. The research also determines whether the authorities have some scope to make cryptocurrency regulation effective.
/bit.ly/2VK61Ul
Crypto Founder Should Lose SEC Fraud Case as Sanction: Judge
Jennifer Bennett - Bloomberg Law
A cryptocurrency firm and its founder should lose their defense to an SEC fraud case because of their "egregious misconduct and deceit," a California federal magistrate judge recommended Monday. Reginald Buddy Ringgold III, Blockvest LLC's founder, filed false statements to support their opposition to the Securities and Exchange Commission's bid for a preliminary injunction in the fraud suit, a U.S. District Court for the Southern District of California magistrate judge said.
/bit.ly/3cCDt6c
Ethereum development firm ConsenSys cuts 14% of staff, cites impact of coronavirus pandemic
Michael McSweeney - The Block
ConsenSys, the development studio focused on Ethereum projects, has laid off 14 percent of its workforce, or 90 employees. In a statement to The Block, a representative for ConsenSys cited the impact of the ongoing coronavirus pandemic on its business prospects. Crypto news sites Decrypt and CoinDesk first reported the news of the layoffs, with Decrypt quoting the firm's founder and CEO Joseph Lubin as saying that "I considered many levers we could pull to weather this storm" during a virtual town hall on Monday.
/bit.ly/3eHf690
Heifer International Joins Libra Association to 'Support Financial Inclusion'
Nikhilesh De - Coindesk
Global nonprofit Heifer International is joining the Libra Association, it announced Monday, becoming the 23rd official member of the organization. The group joined Libra to facilitate the creation of a low-cost, accessible financial system, it said in a blog post, noting that Libra's stated mission is to build a system that "will support financial inclusion, competition, and responsible financial services innovation."
/bit.ly/3bsx7Gi
Filecoin's mainnet launch delayed again as window is pushed to late July at the earliest
Yilun Cheng - The Block
Decentralized storage network Filecoin will see a further delay for its mainnet launch window, this time moving to between late July and late August. In a new update, the Filecoin team disclosed that project has undergone the first round of its internal protocol security audit. Based on the results, the developers decided that they must implement a number of changes before carrying out the second phase of its testnet.
/bit.ly/34RqLO4
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| Politics | | An overview of politics as it relates to the financial markets | Small Businesses Await Funds as Congress Talks Near an Agreement
Erik Wasson - Bloomberg
Plan would provide $310 billion to Paycheck Protection Program; Senate hopes to vote on nearly $500 billion package on Tuesday
Congressional leaders are on the brink of a deal to bring a fresh round of pandemic relief to small businesses, seeking to overcome partisan squabbling less than a week after the $349 billion Paycheck Protection Program ran out of funds.
/bloom.bg/2XSnqgn
White House, GOP face heat after hotel and restaurant chains helped run small business program dry; With program out of money, backlash prompts executives at Shake Shack to return $10 million loan.
Jonathan O'Connell - The Washington Post
The federal government gave national hotel and restaurant chains millions of dollars in grants before the $349 billion program ran out of money Thursday, leading to a backlash that prompted one company to give the money back and a Republican senator to say that "millions of dollars are being wasted."
/wapo.st/34STkeb
Trump Says He'll Add to Oil Reserve and Eyes Saudi Shipments
Justin Sink and Josh Wingrove - Bloomberg
President Donald Trump said he wants to add as much as 75 million barrels of oil to the nation's Strategic Petroleum Reserve, taking advantage of record low prices for crude, and that he'll consider blocking imports of crude from Saudi Arabia. Oil is at "a level that's very interesting to a lot of people right now," Trump said Monday at a White House news conference. "That would be the first time in a long time it's been topped out -- we'll get it for the right price."
/bloom.bg/3eGgfxB
Trump Is Breaking the Presidency to Save His Re-Election; The presidency was designed to unite the states, not further divide them.
Noah Feldman - Bloomberg
President Donald Trump's encouragement of protests against states' stay-in-place orders is un-presidential in the colloquial sense: it's unbecoming of a president. But Trump's latest gambit is un-presidential in a much deeper sense, too. It contradicts the very constitutional justification for why we have a president in the first place.
/bloom.bg/2VNqyaC
Biden Has His Best Monthly Fundraising, Narrowing Gap With Trump
Bill Allison and Misyrlena Egkolfopoulou - Bloomberg
March haul for Biden, DNC tops Trump's fundraising juggernaut; Trump and RNC retain big cash-on-hand advantage over Democrats
Joe Biden raised $46.7 million in March, his best monthly haul of the U.S. presidential campaign, even though the coronavirus pandemic shut down large swathes of the U.S. and prevented in-person fundraising.
/bloom.bg/2XV4XQ7
Coronavirus deaths greater where Fox News viewers watched 'Hannity' more than Tucker Carlson, says U. of C. study
Steve Johnson - Chicago Tribue
A new study published by the University of Chicago's Becker Friedman Institute for Economics makes a claim that will strike many as incendiary: "Greater viewership of 'Hannity' relative to 'Tucker Carlson Tonight' is strongly associated with a greater number of COVID-19 cases and deaths in the early stages of the pandemic," says the paper.
/bit.ly/2RUwQnS
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| Regulation & Enforcement | | For more regulatory, visit MarketsReformWiki, our website focused on current market reform efforts. | ESMA rejects industry calls for changes to CSDR buy-in regime; Watchdog rejects appeal for an overhaul of key pillars of CSDR from over a dozen concerned trade bodies, including the Investment Association.
Jon Watkins - The Trade
Europe's securities watchdog has denied a formal request to defer or amend the mandatory buy-in regime and phase in new rules for failed settled trades and under the Central Securities Depositories Regulation (CSDR), The TRADE has learnt.
/bit.ly/2RX2UHB
ESMA Newsletter - Nº13
ESMA
?This month ESMA has launched its new page on COVID-19 as it continues to closely monitor the situation in view of the impact the virus is having on EU financial markets. Also, in this issue we take a closer a look at our full list of publications and at some important statements delivered by Steven Maijoor, ESMA's Chair, on the measures ESMA has taken to address the effects of COVID-19.
/bit.ly/3eGmXDN
OTC Transparency Data
FINRA
Currently, there are display issues with the OTC Transparency Data on the otctransparency.finra.org website for the weeks of March 23 and March 30, 2020. NMS Tier 1 data is being displayed on the NMS Tier 2 and OTCE tabs for both ATS and Non-ATS data sets.
/bit.ly/3eCp2kh
SEC Provides for Phased CAT Broker-Dealer Reporting Timelines with Conditional Exemption for Impacts of COVID-19
SEC
The Securities and Exchange Commission announced it has voted to issue two exemptive orders in order to move Consolidated Audit Trail (CAT) implementation forward: (1) establishing a phased CAT reporting timeline for broker-dealers, and (2) permitting introducing brokers that meet certain requirements to follow the small broker-dealer reporting timeline.
/bit.ly/2xB54G5
SEC Issues $5 Million Whistleblower Award
SEC
The Securities and Exchange Commission today announced a $5 million award to a whistleblower who provided significant information that led to a successful enforcement action. The whistleblower provided critical evidence of wrongdoing, which helped save time and resources in the SEC's investigation, and the whistleblower suffered a unique hardship as a result of raising concerns internally.
/bit.ly/3eCpnDz
CFTC's Energy and Environmental Markets Advisory Committee to Meet on May 7
CFTC
Commissioner Dan Berkovitz, the sponsor of the Commodity Futures Trading Commission's Energy and Environmental Markets Advisory Committee (EEMAC), today announced that the EEMAC will hold a public meeting on Thursday, May 7, 2020 to hear remarks on the Commission's Position Limits for Derivatives proposed rule, as approved on January 30, 2020. The meeting will begin at 10:00 a.m. (EDT) and be held via conference call in accordance with the agency's implementation of social distancing due to the COVID-19 (coronavirus) pandemic.
/bit.ly/2yyAsVy
Agricultural Advisory Committee to Meet via Teleconference April 22
CFTC
The Agricultural Advisory Committee (AAC) will hold a public meeting on Wednesday, April 22, 2020, at 3:00 p.m. EDT via teleconference. U.S. Secretary of Agriculture Sonny Perdue will address the meeting, which will focus primarily on the COVID-19 (coronavirus) pandemic and its impact on agricultural commodity markets. CFTC Chairman Heath P. Tarbert is the sponsor of the AAC
/bit.ly/2KorOvu
Revising Initial Expectations: CFTC Proposes Substantial Amendments to Form CPO-PQR and Related Requirements
Katten via JD Supra
The Commodity Futures Trading Commission (CFTC or Commission) proposed to materially simplify reporting obligations for commodity pool operators (CPOs) during the CFTC's first virtual open meeting on April 14 and potentially enable CPOs to satisfy common reporting obligations to the Commission and the National Futures Association (NFA) using a single form — NFA Form PQR.
/bit.ly/2VJj9Jz
Justice Department Announces Additional Distribution of More than $378 Million to Victims of Madoff Ponzi Scheme
U.S. Department of Justice
At the start of National Crime Victims' Rights Week, the Department of Justice today announced that on April 20, the Madoff Victim Fund (MVF) began its fifth distribution of approximately $378.5 million in funds forfeited to the U.S. Government in connection with the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme, bringing the total distributed to over $2.7 billion to nearly 38,000 victims worldwide.
/bit.ly/2RTm6WA
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| Investing & Trading | | Today's top stories from equities, indices and FICC (fixed income, currencies and commodities) | Negative Prices for Oil? Here's What That Means
Sheela Tobben - Bloomberg
Stores never pay shoppers to take their goods away, but in extreme circumstances some businesses do, though generally in a very limited way. What's happened in the oil market, however, was a massive and unprecedented negative swing, as the price on some futures contracts for West Texas crude fell to minus $37.63 a barrel. A collapse in petroleum demand from pandemic-driven lockdowns, a price war among the world's largest producers that flooded the market, storage facilities nearing their capacities and the monthly rhythms of the futures market all played a role in the jaw-dropping development.
/bloom.bg/2RX5qNY
Markets Can't Ignore an Event This Extreme; Negative oil prices are more evidence of a broken global financial order.
John Authers - Bloomberg
April 20, 2020, will forever go down as the day when the price of oil went negative. It has never happened before and with any luck it will never happen again. What should we make of it?
/bloom.bg/3eHxBdu
Oil Spirals Below Zero in 'Devastating Day' for Global Industry
Javier Blas and Will Kennedy - Bloomberg
U.S. crude futures plunged below zero on Monday for first time; Rout will send a deflationary wave through the global economy
The day started like any other gloomy Monday in the oil market's worst crisis in a generation. It ended with prices falling below zero, thrusting markets into a parallel universe where traders were willing to pay $40 a barrel just to get somebody to take crude off their hands.
/bloom.bg/2xAT7QJ
The Era of Airline Buccaneers May Be Ending; Virgin Australia won't be the last to succumb to the coronavirus crisis. State-owned flag carriers will reassert supremacy.
David Fickling - Bloomberg
Aviation has always carried a whiff of the pirate ship about it. Richard Branson, founder of Virgin Atlantic Airways Ltd., likes to describe himself as an "adventurer and troublemaker," and once claimed to have found buried treasure on his private Caribbean island as a prank.
/bloom.bg/2RWa7Yy
As Oil Crashes, Iron Ore's Still Rocking; China's return to work may give the commodity, and Australian miners such as BHP, another year of grace.
Clara Ferreira Marques - Bloomberg
Last year was supposed to be an aberration for iron ore, an unexpected period of sky-high prices after a fatal dam collapse in Brazil and a tropical cyclone in Australia. Instead, it continues to defy gravity. Sheltered from the worst of the pandemic upheaval, Australian diggers like BHP Group, which reported stable output for the March quarter Tuesday, can expect to benefit.
/bloom.bg/3cE7Wkq
Take Oil's Plunge Seriously, Not Literally; The precipitous drop in crude prices was partly technical, but it doesn't bode well. Plus, more market commentary.
Robert Burgess - Bloomberg
Global market participants were fixed on the oil markets Monday as West Texas Intermediate crude futures crashed to negative — yes, negative — $40.32 a barrel from $18.27 on Friday. What this means is that owners of those futures were willing to pay someone $40.32 a barrel to take those contracts off their hands. Don't look for historical comparisons, because there are none. And while yes, the move was shocking, it can largely be explained by technical factors, with traders fleeing the May futures contract ahead of its expiration Tuesday so as not to get stuck actually holding physical barrels of oil with no place to store it. The June contract was more in line with reality, trading at around $21.50 a barrel. Still, the episode speaks volumes about the current state of financial markets.
/bloom.bg/2RT45HW
Stockpickers failed to take 'big chance' in market rout; Rise of volatility and dispersion was supposed to bring a change of fortunes versus passive
Steve Johnson - FT
Last month's market crunch was the biggest test for stockpickers since the global financial crisis — and the evidence is growing that they flunked it.
/on.ft.com/2xNvNiv
Investing in times of uncertainty; Investors must consider the lessons of past downturns as they look to the future
Simon Edelsten - FT
How well you preserve assets at difficult times like this is disproportionately important to your making decent long-term investment returns. My key job as a fund manager is to try to safeguard people's savings, despite much of the data we normally rely on being questionable. It helps that I was trained by people who lived through the market shock of the 1970s and listened to their stories.
/on.ft.com/3eE6foC
Minnesota Pork Plant Shuts Down After Outbreak Among Workers
Jen Skerritt and Michael Hirtzer - Bloomberg
Worthington, Minnesota, facility will wind down operations; Shutdowns spur concerns about shortages in grocery stores
JBS SA, the world's top meat company, will shutter its pork processing facility in Minnesota following an outbreak of coronavirus, adding to concerns that slaughterhouse logjams will tighten meat supplies for consumers.
/bloom.bg/3eIForQ
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| Banks, Brokers & Managed Funds | | The latest from banks, brokers, hedge funds and managed futures | The Small Hedge Funds That Won Big by Betting Against Shale; Long before the pandemic, they were already skeptical of oil and gas producers' finances.
Rachel Adams-Heard - Bloomberg
When Billy Bailey first pitched betting against shale stocks to oil tycoon T. Boone Pickens, crude prices were above $70 a barrel and the fracking boom was in the first few years of its life. Bailey was sitting in a booth across from Pickens at R+D Kitchen in Dallas, asking his boss if he, at 28, could become sole manager of a "long-short" portfolio within Pickens's now-shuttered hedge fund, BP Capital. Long-short portfolios mix conventional investments in equities with short positions—contracts that make money when a stock falls in value.
/bloom.bg/2zdZ7z3
Societe Generale hires HSBC electronic trading global sales head for APAC prime brokerage revamp; Two new teams focused on client management and electronic coverage have been established at Societe Generale, with HSBC's Jonathan Green taking a leadership role.
Hayley McDowell - The Trade
Societe Generale has hired the global head of sales for electronic equities trading at HSBC to lead a newly-created team as part of a major revamp of the bank's prime brokerage business in Asia-Pacific.
/bit.ly/3atvGGa
Banks pull restructuring pros out of retirement for 'perfect storm' of turmoil; Citigroup, HSBC and Lazard are among firms scurrying to keep up with demand for restructuring
Paul Clarke - Financial News
Investment banks are retraining staff, hiring and convincing retirees to come back to the front line in expectation of a surge in restructuring work resulting from the coronavirus crisis.
/bit.ly/2RSOKYc
Liquidity crunch pushing investors to reconsider commitments in secondaries; Private equity secondaries market can expect to see a wave of sales, beginning in early summer
Selin Bucak and Elisângela Mendonça - Financial News
Limited partners who invested in recently closed private equity funds are looking to offload parts of their commitments in the secondaries market, in anticipation of a liquidity crunch, according to industry insiders.
/bit.ly/2XRiFUs
Wells Fargo, JPMorgan Among Banks Sued Over SBA Virus Loans
David McLaughlin, Mark Niquette, and Olivia Rockeman - Bloomberg
Banks prioritized large loan amounts for fees, lawsuits say; Small-business owners say they were shut out of SBA program
Wells Fargo & Co., Bank of America Corp., JPMorgan Chase & Co. and US Bancorp were sued by small businesses that accused the lenders of prioritizing large loans distributed as part of the virus rescue package, shutting out the smallest firms that sought money.
/bloom.bg/2xP2o7D
Deutsche Bank Forms Sustainable Finance Team for Capital Markets
Alice Gledhill - Bloomberg
Deutsche Bank AG has set up a dedicated sustainable finance team within its capital markets division in response to the growing focus on environmental, social and governance issues among its clients.
/bloom.bg/2RV0Ek1
Goldman Sachs 10,000 Women Expands Free Online Education for Small Businesses
Goldman Sachs
World-class learning experience now available to more women around the world for free; 10,000 Women Online is a comprehensive and dynamic tool to support small businesses during the current global crisis; Course now available in Spanish and Portuguese
The Goldman Sachs Foundation today announced that it is making its world-class 10,000 Women online business education course available to more women around the world, free of charge.
/bit.ly/2XSOhcg
Investment Banks Get a Coronavirus Trading Pass; Regulators have decided to relax capital rules for banks that underestimate the riskiness of their trading arms. That requires a lot of trust.
Elisa Martinuzzi - Bloomberg
Regulators and central bankers, pressed to keep economies alive through the Covid-19 lockdowns, have whizzed through their crisis playbooks to pump liquidity into the financial system. The mission is noble, and essential: to make sure banks can support companies and individuals until business activity resumes. But the methods need to be scrutinized carefully. There's plenty that can go wrong when you start going easy on the finance industry.
/bloom.bg/3cFy2Dz
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| Regions | | Stories of local interest from the Americas, EMEA and Asia-Pacific regions | Swiss Gold Exports to U.S. Jump to at Least Eight-Year High
Elena Mazneva - Bloomberg
Shipments to U.S. climbed to 43.2 tons in March: customs data; Swiss gold deliveries to traditional destinations declined
Gold exports from Switzerland to the U.S. soared in March as American investors rushed to buy bullion amid the virus-driven panic.
/bloom.bg/3czQA81
Wall Street Slams Argentina Offer as Formal Negotiations Begin
Scott Squires - Bloomberg
Analysts see room for improvement in nation's initial proposal; Plan includes payment freeze until 2023, steep cut in interest
Wall Street analysts said Argentina's debt restructuring proposal is an aggressive opening salvo that still needs plenty of tinkering to secure the approval of bondholders. Argentina's offer, unveiled Friday, would halt payments on about $66 billion of foreign debt until 2023 and cut interest rates.
/bloom.bg/2XR67fG
Beijing Pays the Price for the Slow Pace of Economic Reform; A creaky financial system hinders China's stimulus efforts.
Shuili Ren - Bloomberg
As the world's largest nations send out helicopter money amounting to well more than 10% of their gross domestic product to fight the economic effects of the coronavirus pandemic, China, which just suffered its first economic contraction in two decades, is conspicuous for its stinginess.
/bloom.bg/2VOlUZQ
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| Brexit | | Financials stories regarding the decision of the United Kingdom to leave the European Union | Letter: EU's lack of consensus puts Brexit into perspective
Hugo Blewett-Mundy, Haywards Heath - FT
Emmanuel Macron's call for an emergency investment fund reminds us that the EU must solve its problem of uncoordinated policy responses ("Thinking the unthinkable", FT Interview, April 17). Just as the 2008 financial crisis reinforced the argument for an EU single fiscal policy, the same approach is needed in the case of the ongoing pandemic.
/on.ft.com/353Ue7T
The Guardian view on Brexit trade talks: folly and distraction
The Guardian
Back in January, the nation was briefly distracted by proposals that Big Ben should chime to mark Britain's formal exit from the European Union at the end of the month. A slightly ludicrous debate ensued, given a higher profile than it deserved by Boris Johnson's invitation to the public to "bung a bob for a Big Ben bong".
/bit.ly/2VZMfEL
Philip Pullman: ministers should face charges if Brexit politics slowed PPE
Philip Pullman - The Guardian
Philip Pullman has said that the UK government "should be arraigned on charges of conspiracy to murder" if it is found that "for Brexit-related reasons" MPs did not take part in the EU procurement scheme to buy PPE. The government has previously said it was unable to join the EU schemes as it had not received an email of invitation. But the Guardian revealed last week that the UK missed three opportunities to be part of the EU scheme to bulk-buy masks, gowns and gloves.
/bit.ly/2KmzBKr
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