| December 20, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Europe's Natural Gas Price Cap Threatens to Intensify Energy Crisis
Stephen Stapczynski, Yongchang Chin, and Vanessa Dezem - Bloomberg
Europe's move to cap natural gas prices threatens to curb supply to the region and intensify its energy crisis.
European nations this week reached a deal to put a ceiling on gas prices, ending months of political wrangling over whether to intervene in its energy sector. But while the mechanism may help prevent extreme price swings, it may leave the region vulnerable to insufficient supplies and stronger competition from Asia.
/jlne.ws/3FMEVD4
The Fed Doesn't Need to Drive Up Unemployment to Fight Inflation. Here's Why.
Josh Bivens - Barron's
It has become conventional wisdom in recent months that the Federal Reserve must "cause pain" to get inflation back to more-normal levels. What is meant by causing pain is pretty clearâthe Fed raising interest rates high enough to cause unemployment to rise significantly. This impression that pain is necessary hasn't come from out of the blue. Influential commenters have made an affirmative case that unemployment must rise sharply to normalize inflation.
/jlne.ws/3v6SF6Y
The yen surges against the dollar after the Bank of Japan sets the stage for ending its era of ultracheap borrowing
George Glover - Business Insider
The central bank on Tuesday widened the targets in its bond market yield curve controls (YCC), which fix long-term interest rates within a band. It said it will keep interest rates at - 0.1%, but will now allow 10-year Japanese Government Bond yields to move between 0.5% and - 0.5%, compared with between 0.25% and - 0.25% previously.
But the BoJ's governor, Haruhiko Kuroda, signaled in a statement that it doesn't want markets to take the shift as an end to the era of its ultraloose monetary policy. Instead, the move was designed to inject some energy into Japan's lifeless bond market.
/jlne.ws/3jh0ap2
Column: Hedge fund oil sales slow as balance of risks shifts
John Kemp - Reuters
Investors sold petroleum for a fifth consecutive week but the pace of selling slowed as the balance of risks began to shift to the upside and beaten-down prices provided a more attractive re-entry point.
Hedge funds and other money managers sold the equivalent of 15 million barrels in the six most important petroleum-related futures and options contracts over the seven days ending on Dec. 13.
/jlne.ws/3FLLHJ9
Crypto Options Market Since FTX's Implosion
CoinDesk (Video)
Market makers' share of crypto options trading volume settled through OTC platform Paradigm has increased as hedge funds, family offices and high-net worth individuals sit on the fence.
/jlne.ws/3jkUjiz
5 Breakout ETFs in 2022 Not From the Top 3 Firms
Todd Rosenbluth - ETF Trends
As we wrap up 2022, it is no surprise to see iShares, Vanguard, and State Street Global Advisors topping the ETFs leaderboard in terms of flows, as the three firms manage nearly 80% of the industry's assets. The Vanguard S&P 500 ETF (VOO) was the most popular with $39 billion as of December 16, with the iShares Core S&P 500 ETF (IVV) and the Vanguard Total Stock Market ETF (VTI) not far behind. However, for State Street Global Advisors, it was not an equity ETF peer that gathered the most money, but rather the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), a less interest rate-sensitive fixed income offering. Yet, many products from firms outside of the industry's big three had breakout years. Let's review five of them.
/jlne.ws/3G7ojaF
| | | | | | Exchanges | | | OCC Announces Two Executive Leadership Promotions
OCC
OCC, the world's largest equity derivatives clearing organization, today announced the promotion of two individuals on its executive leadership team.
Dan Busby, currently Chief Administrative Officer, will take on the role of Chief Operating Officer effective January 1, 2023. He will succeed Scot Warren who previously announced his retirement. Warren will remain at OCC in an advisory capacity until April 2023.
Busby is a 23-year veteran at OCC and previously served as Chief Administrative Officer, and Chief Clearing and Settlement Services Officer. Prior to that, he held leadership roles in Internet and Investor Services, Member Services and Business Operations.
Mike Hansen, currently Managing Director of Clearing and Settlement Operations as well as Head of OCC's Dallas Office, will take on the role of Chief Clearing and Settlement Services Officer effective January 1, 2023. He will also join OCC's Management Committee.
Hansen has more than 20 years of options industry experience and has served in various roles throughout his tenure at OCC, including back-office processing, pricing and Member Services. He represents OCC on the Dallas Regional Chamber's Board of Directors.
/jlne.ws/3PP9Pzu
Cboe Global Markets Announces Election of Hillary A. Sale to Cboe U.S. Securities Exchanges, CFE and Cboe SEF Boards
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced the election of Hillary A. Sale as a new member of the Boards of Directors for the Cboe U.S. Securities Exchanges, Cboe Futures Exchange, and Cboe SEF. Ms. Sale is the Associate Dean for Strategy, the Agnes Williams Sesquicentennial Professor of Leadership and Corporate Governance, and a Professor of Management at Georgetown University. Ms. Sale is being added as an additional director on each of the boards, bringing the number of directors on each board to nine.
/jlne.ws/3HLMuN3
Nasdaq CEO named chair of exchange's board of directors
Reuters
Nasdaq Inc (NDAQ.O) Chief Executive Adena Friedman will take on the additional role of chair of the board on Jan. 1, the company said late on Monday, executing a playbook similar to its peers but frowned upon by some corporate governance advocates.
During her five years as CEO, Nasdaq has diversified its revenue away from its traditional exchange business, into software and anti-financial crime technology, most recently through its $2.75 billion acquisition of fraud detection firm Verafin.
/jlne.ws/3WuRZUo
Exchange Council paves the way for product bundle on EEX power and natural gas markets
EEX
The Exchange Council of the European Energy Exchange (EEX) held its last meeting of the year, chaired by Dr. Bernhard Walter, Head of Market Design and Regulatory Affairs at EnBW AG, on 8 December 2022. The main topics were the expansion of EEX's product portfolio on the Power and Gas Derivatives Markets, the harmonised settlement window and the current debate on a price cap for gas. New members of the Exchange Council are the representatives of Eni Global Energy Markets S.p.A., Philip Van De Wouwer, Flow Traders B.V., Erik-Jan Nieboer, and Roderick Timmer for Cross Options B.V.. All other current members remain on the Council.
/jlne.ws/3WduO0T
HKEX Opens New York Office, Supporting Growing International Client Base
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Tuesday) the opening of its New York office, expanding the exchange group's international footprint and supporting its growing global client base. Headed by Roger McAvoy, Managing Director and Head of Business Development, North America, the New York office will provide an on-the-ground dedicated team for HKEX's North American customers. The new office will promote HKEX's liquid primary and secondary cash markets, its exclusive connectivity with Mainland China's markets and its diverse suite of derivatives, which together constitute Asia Pacific's most comprehensive financial market ecosystem.
/jlne.ws/3FJHZ2J
Key Trends in the Size and Composition of OTC Derivatives Markets in the First Half of 2022
International Swaps and Derivatives Association
The latest data from the Bank for International Settlements over-the-counter (OTC) derivatives statistics shows a significant increase in gross market value and gross credit exposure of OTC derivatives during the first half of 2022 compared to the first half of 2021. The increase in market value was driven by elevated global uncertainty and market volatility related to higher-than-expected inflation and the war in Ukraine.
/jlne.ws/3BNRGfF
| | | | | | Regulation & Enforcement | | | CFTC Staff Extends No-Action Letter Regarding Daily Reporting Requirements for Derivatives Clearing Organizations
CFTC
The Commodity Futures Trading Commission's Division of Clearing and Risk (DCR) announced today it is extending a no-action letter regarding daily reporting requirements applicable to registered derivatives clearing organizations (DCOs) in CFTC Regulation 39.19.
/jlne.ws/3YDqQ3C
FIA responds to Eurex consultation on the implementation of the second skin in the game
FIA
On November 28, Eurex published a circular regarding amendments to their clearing condition to accommodate the implementation of the Second Skin in the Game ("SSITG"). Article 9 (14) of Regulation (EU) 2021/23 published in December 2020 specify that European Central Counterparties ("CCPs") shall use an additional amount of its own pre-funded resources in a default or non-default situation, and that this SSITG shall be effective from February 12, 2023. CCPs already have a first Skin in the Game ("SITG") requirement as per EMIR, using their own pre-funded resources in case of a default which is sued after all the defaulters' resources have been exhausted.
/jlne.ws/3VagkxH
| | | | | | Strategy | | | Traders Closing Holiday Positions
Cboe
Tim Biggam @Delta_Desk on Santa Claus' attempt to bring a market rally to town & large volumes in OTM $VIX calls - all in today's #Vol411
/jlne.ws/3FMmU7S
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