| May 28, 2019 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The Spread - Death, Records and Regulation
JohnLothianNews.com
In this episode of The Spread, discussion centers around three letter acronyms (TLAs), a new record, and regulatory challenges to exchanges' revenues.
Watch the video »
| | | | | | Lead Stories | | | Low-Volatility and 'Buffer' ETFs Draw Billions Amid Jitters Over Market Swings
Asjylyn Loder - WSJ (SUBSCRIPTION)
With every bout of stock-market volatility, nervous investors start snapping up products meant to protect them in a downturn.
This round of swings is no exception: In the first four months of the year, funds that try to mitigate risk raised almost $10 billion, boosting assets to a record $77 billion, according to Morningstar Inc.
/on.wsj.com/2QrPVvI
Calm Returns to China's Stock Market After $1.3 Trillion Rout
Bloomberg (SUBSCRIPTION)
Investors are taking a breather from the recent market rout that has wiped out almost $1.3 trillion from China's stock market.
The CSI 300 Index hasn't moved more than 2% in either direction in the past seven sessions, the longest streak of calm since February. The index closed 1% higher Tuesday. Volatility has dropped too, with a 10-day measure on the gauge -- which comprises some of the largest listings on the Shanghai and Shenzhen stock exchanges -- falling from a seven-month high this month.
/bloom.bg/2Wseb6o
Hedge funds build bets on shorter-dated Treasuries
Laurence Fletcher - Financial Times (SUBSCRIPTION)
Hedge funds expecting the Federal Reserve's pivot on monetary policy to lead to a rate cut have spied an opportunity in short-term US government debt. Two-year Treasury debt now yields 2.15 per cent  not far from the 2.31 per cent on offer from 10-year notes and without the volatility that afflicts the longer-dated paper.
Long positioning in the short-term debt by speculative investors has more than doubled this year, far outpacing a rise in short positioning, according to US Commodity Futures Trading Commission data from Bloomberg. Long and short positions are now almost equal for the first time since last summer.
/on.ft.com/2QrQbuA
Sales of risky equity products boom despite recent bank losses
Christopher Whittall - Reuters
Sales of structured products are booming again in a key region for these complex, equity-linked securities, just months after banks reported hefty losses from this kind of activity when markets slumped in late 2018.
/reut.rs/2I8tyrw
****JB: Options do figure in this story.
Economist Komileva Views U.S. 10-Year Yield as the 'New VIX'
Bloomberg (VIDEO)
Lena Komileva, chief economist and managing director at G Plus Economics, discusses market signals from the declining U.S. 10-Year yield. She speaks with Bloomberg's Vonnie Quinn on "Bloomberg Markets."
/bloom.bg/2I3EJ4u
| | | | | | Exchanges and Clearing | | | SGX launches options on global pricing benchmark for natural rubber
SGX
Singapore Exchange (SGX) today launched the industry's first options contract on TSR 20 rubber, the global benchmark grade, offering market participants a new risk-management tool.
The SGX SICOM TSR 20 Rubber Options contract is based on the SGX SICOM TSR 20 (FOB) Futures contract, which has grown in liquidity amid China's internationalisation and rising global demand for hedging. The options contract expires into futures positions, offering users the choice of physical delivery to settle their positions.
bit.ly/2QtmtW7
Intercontinental Exchange Announces Record Open Interest in Global Energy Futures
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced record open interest of over 29 million contracts in its global energy futures complex, on May 23, 2019. The record level of open interest held by market participants is being driven by ICE's global oil and European natural gas futures business.
bit.ly/2VQOUOJ
| | | | | | Strategy | | | The Overhead VIX Zone That Could Spark Heavy Selling for Stocks
Bernie Schaeffer - Schaeffer's Investment Research
Volatility as an asset class has been through the wringer in 2019. The benchmark Cboe Volatility Index (VIX - 15.85) is down 37.6% year-to-date, as of this writing, contra the 12.7% rise in the S&P 500 Index (SPX). Looking even worse for the wear is that infamous VIX futures derivative, the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) -- which, thanks to the aggravating effects of contango-related losses, is off more than 39% on a calendar-year basis.
bit.ly/2HZaE6c
Funds buy record chunk of CBOT corn amid U.S. sowing troubles
Karen Braun - Reuters
The slow, rain-plagued U.S. corn and soybean planting season finally irked speculators last week as they bought a record amount of Chicago-traded corn with no real ease to the sowing delays in sight. Commodity funds had built an unprecedentedly large bearish corn position that peaked a month ago, and they remained historically short in the weeks since as they awaited a break in the rains and some decent planting progress.
/reut.rs/2WsUCe6
| | | | | | Miscellaneous | | | Worth reading: How the climate change will affect the banking sector
Eurex Exchange
It is safe to say that global warming and its impact on the world, the people and the economy is currently one of the most discussed topics.
"Banking in a changing climate - preparing for what lies ahead" is the title of an article published in the European Central Bank Newsletter in May 2019. The authors describe the affects the banking sector will face and what banks do to be prepared for the challenges ahead. What risks are implied and how can one
ensure sustainable development? The article also features the initiatives started in this field.
bit.ly/2QvJYOj
****JB: Not options but, as the title says, worth reading.
New York Overtakes London As World's Financial Hub
MarketsMedia
In a year dominated by Brexit, trade wars and global financial volatility, Duff & Phelps' latest Global Regulatory Outlook (GRO) report found that London is no longer perceived as the world's preeminent financial centre by financial sector professionals. New York has taken back the title according to the seventh annual GRO report released by Duff & Phelps, the global adviser that protects, restores and maximizes value for clients, which surveys senior professionals in financial institutions around the world.
bit.ly/2Igun1x
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