| October 04, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | The volatility virus strikes again
Eric Lonergan - Financial Times
Whatever one's view of the UK government's so called "mini-Budget", the bond market crash last week exaggerated its significance. It is true that the Bank of England may need to raise interest rates more than it would have otherwise, although even this is highly uncertain.
But what is clear is that the current government will be fortunate to survive another two years, not 30. So how can one explain market expectations for interest rates over 30 years rising from 2.5 per cent in August to in excess of 5 per cent last week?
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The S&P 500's Recent Surge Is Hurting Short Sellers
Lu Wang - Bloomberg
After raising bearish wagers in one of the longest stretches in years, short sellers are being forced to fold during the best two-day equity rally since April 2020.
The S&P 500 has climbed more than 2.5% for a second straight session as speculation builds that global central banks could soften their aggressive policies to avoid a serious financial fallout. At the center of the rally are most-shorted stocks, as tracked by Goldman Sachs Group Inc., which jumped almost 6% as a group on Tuesday, handing losses for those who had placed bet against them.
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'This is not healthy': The latest advance for stocks could signal more pain ahead for markets. Here's why
Joseph Adinolfi - MarketWatch
U.S. stocks kicked off the fourth quarter with sharp gains as the Dow Jones Industrial Average appears headed for its biggest two-day rally in more than 2½ years.
But as tempting as it might be to call a bottom in stocks, Nicholas Colas, co-founder of DataTrek Research, said Tuesday that investors should brace for more carnage in the near term as several reliable historical signs of a durable bottom are still missing from markets.
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Wall Street Capitulation Calls Get Ever Harder as Stocks Bounce
Lu Wang - Bloomberg
After a furious spate of retail selling unseen since December 2018 and beaten-down risk appetite, all the ingredients were in place heading into the big stock rebound Monday.
With almost everyone cashing out lately, it didn't take much to drive the 2.6% gain in the S&P 500 in an everything-rally attributed to hopes of a less-hawkish Federal Reserve and the fading UK market crisis.
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Eight Charts That Show Just How Much Markets Have Changed This Year
Tracy Alloway and Joe Weisenthal - Bloomberg
"Ch-ch-ch-changes! Turn and face the strange," the iconic David Bowie once crooned.
Investors surveying the market in 2022 might relate. As central banks ramped up their policy tightening efforts around the world, a number of historic relationships and previously winning trades have been turned on their head. That's making for tricky risk management for big financial institutions like asset managers and investment banks who have been used to years of low interest rates and sluggish volatility.
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Oil Traders Are Cashing In On Volatile Markets
Markets Insider
The world's commodity and oil traders are playing a crucial role in securing supplies amid a global energy crisis and disrupted trade flows following Russia's invasion of Ukraine. Last week, the world's biggest oil and gas traders met in Singapore for one of their industry's top conferences. The war in Ukraine has been a double-edged sword for these traders who historically have been leading shippers of Russian oil. On one hand, they have benefited from being able to buy Russian oil at a big discount but on the other hand, the viability of their long-term investments in the country has been brought into question due to western sanctions against Russia.
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| | | | | | Exchanges | | | OCC September 2022 Total Volume Up 12% Year-Over-Year, Third Highest Month on Record
OCC
OCC, the world's largest equity derivatives clearing organization, announced today that year-to-date average daily volume through September 2022 was 40.8 million contracts, up 5.1 percent compared to year-to-date average daily volume through September 2021. Total volume was 915.2 million contracts, up 12.0 percent compared to September 2021 and the third highest month in OCC's history. September 2022 volume surpassed the previous third highest month, August 2022, by 0.3 percent.
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CME Group Reports 36% ADV Growth in September 2022 and 26% Rise in Q3; All-time record monthly ADV for Equities and FX; Record SOFR futures and options ADV, OI in September and Q3
CME
CME Group, the world's leading derivatives marketplace, today reported its September and Q3 2022 market statistics, showing average daily volume (ADV) increased 36% to 25.7 million contracts in September, representing the company's highest September ADV on record. Q3 ADV increased 26% to 22.4 million contracts, the company's fourth-highest quarterly volume ever.
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Farmer sentiment drifts lower, rising interest rates contribute to uneasiness
CME Group
The Purdue University/CME Group Ag Economy Barometer farmer sentiment index declined 5 points to a reading of 112 in September. The decline in farmer sentiment was primarily the result of producers' weakened perception of current conditions, as the Current Conditions Index declined 9 points to 109. The Index of Future Expectations also weakened slightly, declining 3 points from a month earlier to a reading of 113. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey. This month's survey was conducted between September 19-23.
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Cboe Global Markets Announces Date of Third-Quarter 2022 Earnings Release and Conference Call
CBOE
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today said it will announce its financial results for the third quarter of 2022 before the market opens on Friday, November 4, 2022. A conference call with remarks by the company's senior management will begin at 7:30 a.m. Central Time (CT), 8:30 a.m. Eastern Time (ET).
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Global Capital names Eurex "European Derivatives Exchange of the Year"
Eurex
Once again, the Global Capital Award team has invested months of work and market consultations to identify the best players in the derivatives market. We are all the more proud and honored to have been named "European Derivatives Exchange of the Year" by these experts for the second year in a row. This was in recognition not only of our product innovations, which build on our world-leading position in index products, but also of our strong and continuous innovations to help our clients overcome their market challenges.
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| | | | | | Regulation & Enforcement | | | OCC Response to CPMI-IOSCO Discussion Paper on Central Counterparty Practices to Address Non-default Losses
OCC
The Options Clearing Corporation (OCC) appreciates the opportunity to comment on the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions (CPMI-IOSCO) Discussion Paper on Central Counterparty Practices to address Non-default Losses (Discussion Paper). Preparing for and addressing non-default losses (NDLs) is an important risk management function of a central counterparty (CCP) and OCC appreciates the ongoing work of international policymakers and standard setting bodies to promote sharing effective NDL practices. Sharing NDL practices, allows for CCPs to learn from each other and is important for ensuring that all CCPs have the proper risk management frameworks in place to fulfill their role of promoting stability in the broader financial system.
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FIA joins other trade associations in industry response to second Basel consultation on cryptoassets
FIA
The Futures Industry Association, the Global Financial Markets Association, the Institute of International Finance, the International Swaps and Derivatives Association, the International Securities Lending Association, the Bank Policy Institute, the International Capital Markets Association, and the Financial Services Forum have responded to the Basel Committee on Banking Supervision's (BCBS) second consultation on the prudential treatment of crypto-assets exposures. This broad group encompasses many sectors across the industry, offering a comprehensive, global response grounded on a broad scope of expertise to the consultation.
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| | | | | | Strategy | | | Bear Bounce or Something Big? Surging Stocks Excite Chartist Set
Vildana Hajric - Bloomberg
As ever, a fast market rebound has unleashed a deluge of views on whether the move will last. Chart analysts, cognizant that no rally has survived this year's downdraft, are generally optimistic this one has room left to run.
Monday's 2.6% surge in the S&P 500 was broad-based: 486 of its members gained. This is a metric Eric Johnston, head of equity derivatives and cross asset at Cantor Fitzgerald, likes to track because of its significance for future market performance.
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| | | | | | Events | | | The Options Industry Council (OIC) Proudly Supports World Investor Week 2022
The Options Industry Council (OIC)
World Investor Week (WIW) is a week-long, global campaign promoted by the International Organization of Securities Commissions (IOSCO) to raise awareness about the importance of investor education and financial protection.
Starting October 3, OCC and The Options Industry Council (OIC)SM will join organizations across the globe in support of this important initiative. Check out the World Investor Week website for details on events and other ways to get involved.
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The FIA is holding an FIA Forum in Milan on October 19 to discuss regional issues and developments affecting listed and cleared derivatives. The FIA's Bruce Savage will start the day with an introductory statement and will be followed by Euronext Group's Fabrizio Testa, CEO of Borsa Italiana.
| | | | | | Miscellaneous | | | Credit Suisse's Options Worsen as Markets Mayhem Takes Toll
Marion Halftermeyer and Myriam Balezou - Bloomberg
Dixit Joshi won't forget his first day as Credit Suisse Group AG's chief financial officer in a hurry. And yet the experience won't have been entirely unfamiliar for the former Deutsche Bank AG high flier.
/jlne.ws/3fHGNnl
Cboe's Tim Carey Suits Up to Fight Domestic Violence
Cboe
Tim Carey never considered himself a runner.
"I wasn't fast, so I thought I was bad at it," says Tim, Project Manager. "I later realized running is something you get better at the more you do it. It also turns out I'm not a sprinter, but I'm a great distance runner."
In the last 10 years, Tim has run 12 marathons. He ran his twelfth in Berlin in September and is preparing to run his thirteenth in Chicago on October 9. This time, in honor of his friend Jenny.
/jlne.ws/3Een60K
Wall Street Bikes for Autism Research in Rain-Soaked Ride
Katherine Doherty - Bloomberg
It took two bicycles to get the New York Stock Exchange's chief operating officer across the finish line of the trading industry's fall ride for autism research.
"I came in dead last, but was still greeted with smiles," said Michael Blaugrund, whose chain snapped on his first bike at mile seven, prompting the event to send a "rescue vehicle" that brought him to a replacement. "Even in the face of a torrential downpour, the Wall Street community came out to support people in need," he said.
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