| September 06, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | FSB warns of risks posed by hedge funds' 'hidden leverage'; Top financial policymakers step up concerns over impact of bets on bonds
Laura Noonan and Costas Mourselas - Financial Times
Financial policymakers have singled out a group of hedge funds as a potential source of market instability in an escalation of existing concerns about the impact of their bets on bonds. The Financial Stability Board, comprised of the world's top finance ministers, central bankers and regulators, warned on Wednesday that some hedge funds had "very high levels of synthetic leverage".
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'There's No Plan B': Oil Chiefs Sound Alarm on Refining Woes
Elizabeth Low, Yongchang Chin and Sharon Cho - Bloomberg
An increasingly stretched global refining system means fuel-price volatility is set to become more common, according to top oil executives. A lack of spare crude-processing capacity due to under-investment, and shutdowns happening more frequently with refiners ramping up on better margins and deferring planned work were common themes at the APPEC by S&P Global Insights conference in Singapore this week. That's left fuels like diesel and gasoline vulnerable to sudden swings when there are unplanned outages.
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Emerging Markets Set for 'Wild Ride' on Moves in Dollar, Oil
Kerim Karakaya and Zijia Song - Bloomberg
Developing-world currencies and stocks weakened as renewed dollar strength and elevated oil prices hurt sentiment for riskier emerging assets.
MSCI Inc.'s gauge of developing equities fell as much as 0.5%, extending its decline to a second day, while the currencies dropped to the lowest in over two weeks. Volatility across emerging markets have prompted Barclays PLC to predict a "wild ride" in local markets.
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| | | | | | Exchanges | | | EEX Press Release - EEX Group Monthly Volumes - August 2023
EEX Group News
EEX Group reports its August 2023 volumes with the following highlights: Trading volume on the global power markets of EEX Group increased 51% YoY to 624.3 TWh, with 396.8 TWh at European power derivatives, comprising a +53% growth with remarkable increase in Greece. Short-term power trading at EPEX SPOT increased by 16%, also driven by strong Intraday markets with new records in the Netherlands and Denmark. EEX Group natural gas markets amounted to 566.1 TWh in total, with gas derivatives showing a +11% increase compared to August 2022. The EEX European environmental markets recorded growing volumes YoY, both in the emissions spot market (+ 23%) and the emissions derivatives (+8%). Exceptional 92% growth in the North American environmental markets, with Nodal Exchange reporting the second highest monthly volume in this segment.
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Euronext announces September 2023 quarterly review results of the AEX Family
Euronext
Euronext today announced the results of the September 2023 quarterly review for the AEX, AMX, AScX and AEX ESG, which will be implemented after markets close on Friday 15 September 2023 and will be effective from Monday 18 September 2023.
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CME Restarts T-Bill Futures in Response to Demand to Hedge Risks; Exchange plans to start trading Oct. 2, pending review; Supply of bills has grown by more than $1 trillion since June
Alex Harris - Bloomberg
CME Group Inc. will once again offer futures tied to three-month Treasury bills amid growing demand to hedge risks from surging supply and higher short-term interest rates. Uncertainty over the Federal Reserve's policy path and a flood of issuance to finance US growing deficits and rebuild the goverment's cash buffer has sparked increased volatility in this corner of the market.
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| | | | | | Regulation & Enforcement | | | Who Needs a Bitcoin ETF? Actually the SEC Does
The Editors - Bloomberg
Should the US Securities and Exchange Commission approve an exchange-traded fund focused on the spot market for Bitcoin? The question has yet again gained relevance, thanks to the District of Columbia Court of Appeals, which last week reversed the SEC's decision to reject a Bitcoin ETF proposed by Grayscale Investments.
The answer is yes: With a revised approach to the issue, the SEC could turn its loss into a win.
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SEC has 'variety of options' to delay Grayscale bitcoin ETF: DACFP Founder
Brad Smith and Luke Carberry Mogan - Yahoo! Finance
Grayscale was handed a victory in a federal appeals court last week with officials ruling the SEC to reconsider the crypto company's application to convert its bitcoin trust (GBTC) into an ETF. Digital Assets Council of Financial Professionals Founder Ric Edelman discusses the caution crypto bulls should have on this decision based on the SEC's ability to delay the review process.
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SEC Imposes New Fees on Brokers to Fund Massive Audit-Trail System
Lydia Beyoud - Bloomberg
A long-standing fight over who should pay for an expansive market-surveillance system intensified on Wednesday as the Securities and Exchange Commission stuck brokers with most of the bill.
The plan, approved by three of the five commissioners, faces stiff opposition from industry trade groups and heavyweight players like Citadel Securities and Virtu Financial Inc. Banks and others that act as brokers or asset managers have complained that they will face the bulk of the fees.
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Why 'Finfluencers' Will Always Find Addicts; India's quest to weed out dishonest, conflicted investment advice by an unregulated social-media horde is doomed to fail.
Andy Mukherjee - Bloomberg Opinion
In May, India's market watchdog acted against a self-described options trader, allegedly for selling investment advice via the Telegram messaging app without the requisite registration with the regulator. As part of the settlement, P R Sundar, his wife, and their jointly controlled firm agreed to a one-year ban on buying or selling securities, without admitting or denying that they had broken any laws.
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| | | | | | Strategy | | | As bonds stumble to start September, BlackRock's fixed-income ETF using options strategy is outperforming this year
Christine Idzelis - MarketWatch
The U.S. bond market has kicked September off with broad losses, extending its summer slide as investors hunt for income strategies in a volatile environment for yield.
After four straight months of declines, the iShares Core U.S. Aggregate Bond ETF AGG has lost around 1% so far in September for a total return this year of just 0.5% through Tuesday, according to FactSet data.
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Inflationary Pressures Continue
Cboe (Video)
In #Vol411, Joe Tigay @JoeTigay lets us know that there's economic data that's stronger than expected this morning, inflationary pressure continues, #volatility seems to not be showing much movement and more.
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| | | | | | Education | | | Zeroing In on 0DTE Options Trading? Learn the Basics
Brian Dolan - The Ticker Tape
By midyear 2023, zero-days-to-expiration (0DTE) options strategies had grown to more than 40% of all options trades tied to the S&P 500 index (SPX), according to a midyear 2023 report by Bloomberg. That explosive growth came less than a year after daily expiration trading began in the SPX and other major indexes. However, 0DTE trading has drawn scrutiny from some who believe it's making underlying assets and markets in general more volatile.
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| | | | | | Miscellaneous | | | Leaders in Trading 2023: Algorithmic Trading Awards shortlists unveiled; Winners of this year's Algorithmic Trading Awards across nine categories will be announced during The TRADE's flagship Leaders in Trading awards ceremony on 8 November.
Editors - The Trade
The TRADE is delighted to announce the shortlisted nominees for this year's Algorithmic Trading Awards. The winners of the Algorithmic Trading Awards will be based on performance in The TRADE's Algorithmic Trading Survey 2023, which was conducted earlier in the year.
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'It was like, wow, you could never short a stock again.' Hedge-fund executive recalls when GameStop's stock went parabolic.
Steve Goldstein - MarketWatch
GameStop reports results after the close on Wednesday, and of course that brings to mind the huge surge in its stock price in January, 2021, when the Reddit WallStreetBets message board help to fuel a frenzy, before an abrupt end when brokers restricted trading.
That episode was recalled in a podcast that Will England, chief executive of the hedge fund Walleye Capital, did with Patrick O'Shaughnessy, himself a fund manager. Essentially, England represents what many see to be the villains of this story, the hedge funds that are out there shorting securities, betting on the price to decline. One high-profile hedge fund, Melvin Capital, did shut down as a result of its bets against GameStop.
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