First Impressions
Boca Bits & Pieces
Sarah Rudolph – JLN
This is the 40th anniversary of the FIA Boca conference, and befitting such a nice round number, it was also the most highly attended ever, with somewhere around 1130 attendees. This year, pins were given out to those participants who had been attending the conference for 5, 10, and 20 years.
Other highlights for the FIA this year include a newly designed web site at FIA.org, and a newly branded magazine: Futures Industry Magazine, which will now be called “Marketvoice.” The magazine and website now have expanded features, a global reach, and a digital platform, Walt Lukken, the FIA CEO and president, told the crowd.
Read the rest of the column on JohnLothianNews.com – http://jlne.ws/1FaxhOe
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New Frontier: TT’s new platform debuts with European Energy Exchange
JohnLothianNews.com
Independent Software Vendors are always looking for new markets and new opportunities. Trading Technologies says it has found both with a new deal with the European Energy Exchange to provide its new TT trading platform its market participants.
Rick Lane, CEO of TT, spoke with John Lothian News about what it means for TT and EEX, and where the ISVs are heading. The announcement marks the debut of TT’s latest technology, simply branded as TT. The new platform is a major shift for the firm, which has been moving toward a software as a service model for its new technology.
Watch the video »
Quote of the Day
“The only thing that may be more difficult than designing, developing and implementing the CAT will be the project and relationship management skills needed to get the approximately 1,800 market data providers on board and compliant within the SEC Rule 613 timelines.”
TABB Group technology research analyst Shagun Bali in the story, “TABB Examines The Consolidated Audit Trail’s Six Critical Problems And Pitfalls, Beginning With ‘Who Foots The Bill?'”
Lead Stories
U.S. Fed slashes dividend plans of large Wall Street banks
Reuters
Three major U.S. Wall Street banks had to scale back planned investor payouts after an annual check-up by the Federal Reserve, and two foreign banks failed the test altogether, a sign the Fed is keeping a tight lid on Wall Street.
Goldman Sachs (GS.N), Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N), all with large and risky trading operations, lowered their ambitions for dividends and share buybacks, the Fed said on Wednesday, to keep them robust enough to withstand a hypothetical financial crisis. The revised plans allowed them to pass the Fed’s simulation of a severe recession.
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Bond Trading Just Keeps Getting Worse as Treasury Prices Swing
Bloomberg
It’s taking less and less these days to make the $12.5 trillion U.S. Treasury market jump.
And it’s been jumping a lot lately: The bonds gained 2.9 percent in January, then plunged 1.7 percent the following month, according to Bank of America Merrill Lynch’s U.S. Treasury index. That 4.6 percentage-point swing in returns was the biggest to start any year since at least 1978.
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Wall Street Bonuses Rose Just 2% Last Year
Dealbook – NY Times
Wall Street bonuses just aren’t what they used to be.
As the industry’s profits declined, the average bonus for Wall Street employees grew just 2 percent in 2014, to $172,860, according to a report on Wednesday by Thomas P. DiNapoli, the New York State comptroller. Although still large by many standards, these bonuses grew far more slowly than in the previous two years.
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Who’s Afraid of Higher U.S. Interest Rates? Not CFOs
Bloomberg
Federal Reserve officials and investors may want to take notice: Companies couldn’t care less that the central bank is about to raise interest rates for the first time since 2006. In fact, higher borrowing costs aren’t even on the list of the top 10 concerns for American companies.
jlne.ws/1wvhXtF
Federal Reserve Rejects 2 Banks’ Capital Plans in Annual ‘Stress Tests’
WSJ
Twenty-eight of 31 large banks received Federal Reserve approval to return capital to investors on Wednesday but only after some of the biggest Wall Street firms came perilously close to failing the regulator’s annual “stress test.”
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Banks May Want to Consider Expiration Date for Top Job
Dealbook – NY Times
Staying power in the corner suite isn’t always what it’s cracked up to be.
Brady W. Dougan’s departure from Credit Suisse leaves JPMorgan Chase, Goldman Sachs and Wells Fargo as the three United States mega-banks with pre-2008 bosses. Jamie Dimon, Lloyd C. Blankfein and John G. Stumpf have overcome all manner of challenges but are also approaching a decade at the helm. One lesson from the crisis was the danger of sticking around too long.
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Lloyd’s of London targets foreign investors for new business
Reuters
Lloyd’s of London [SOYLD.UL] wants to encourage more foreign investment to bring in business, its chief executive told Reuters on Wednesday, as the insurance market undergoes rapid consolidation.
“The market is going through a phase where it’s difficult to see too much growth if you’re an established player and therefore you will see this consolidation happening,” said Inga Beale in an interview in Dubai.
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TABB Examines The Consolidated Audit Trail’s Six Critical Problems And Pitfalls, Beginning With ‘Who Foots The Bill?’
Press Release
Characterizing the Consolidated Audit Trail as merely a “big project” understates the technological and project management challenges that come with building the largest, most complicated data storage project in the history of the US capital markets.
When operational, the CAT will house an estimated 30 petabytes of sensitive market-related data that will enable the self-regulating organizations (SROs) and market regulators to understand on a microscopic level the day-to-day impacts, operations and activities of all of the US equity and US options participants.
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R.J. O’Brien to Acquire The Kyte Group from GFI Group
Press Release
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, and GFI Group (NYSE: GFIG), a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, today announced that RJO’s affiliate, R.J. O’Brien Europe Limited (RJO Europe), will acquire GFI’s subsidiary, The Kyte Group Limited (Kyte). Terms of the transaction were not disclosed. The UK Financial Conduct Authority (FCA) has approved the transaction, which is expected to close no later than March 17. After closing of the transaction, Kyte will operate under the name “R.J. O’Brien Limited”.
jlne.ws/1KVoHYu
U.S. Judge Recommends No Goldman Gender-Bias Class Action
Reuters
A federal judge on Tuesday recommended against certifying a class-action lawsuit in which current and former female employees at Goldman Sachs Group Inc accused the Wall Street bank of gender-based bias in pay and promotions.
jlne.ws/1wvf4sP
U.S. executives lay out regulatory vision for venture exchanges
BY SARAH N. LYNCH, Reuters
Two top stock exchanges will lay out their vision on Tuesday for how they believe U.S. regulators should craft rules to foster the creation of “venture exchanges” that list small-cap companies.
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Citigroup’s Roaring Revival on Wall Street
By PETER EAVIS, NY Times
Citigroup’s Wall Street operations took the bank to the brink seven years ago. But now, in a little-noticed revival, Citigroup’s traders and investment bankers have come roaring back.
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A Crusader Against the Common View of the Financial Crisis
Dealbook – NY Times
Peter J. Wallison, the 73-year-old conservative Republican, former White House counsel under President Ronald Reagan and current fellow at the American Enterprise Institute, is determined to change the understanding of the cause of the 2008 financial crisis. It’s an uphill battle.
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Credit Suisse new boss could ax 2,900 investment bank jobs: analyst
Reuters
Credit Suisse’s (CSGN.VX) new boss Tidjane Thiam could cut almost 3,000 jobs from its investment bank, or 15 percent of staff, as part of a shift of capital away from trading desks to private banking in Asia, analysts said.
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UBS poaches Bank of Montreal oil banking team – sources
BY MIKE STONE, Reuters
UBS AG (UBSN.S) has poached a U.S. team of 15 oil and gas investment bankers from Canada’s fourth largest bank, Bank of Montreal (BMO) (BMO.TO), marking a shift in power in the energy banking market, according to people familiar with the matter.
jlne.ws/1FafVRw
Central Banks
Federal Reserve Approves Citigroup’s Capital Plan
WSJ
The Federal Reserve approved Citigroup Inc.’s capital plan in the regulator’s annual “stress test” released on Wednesday, a much-needed vote of confidence for the bank after the Fed rejected its request last year.
jlne.ws/1wviVpC
Fed Leans Toward Removing ‘Patient’ Promise on Rates
WSJ
The Federal Reserve is strongly considering removing a barrier to raising short-term interest rates as early as June by dropping its promise to be “patient” before acting.
Discussions about interest-rate guidance and an uncertain inflation outlook are likely to take center stage at the Fed’s next meeting March 17-18. Fed officials on Tuesday began their self-imposed premeeting blackout period, in which they stop making public comments on the economy or policy.
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E.C.B. Bond-Buying Program Is ‘Pointing in the Right Direction,’ Draghi Says
NY Times
The president of the European Central Bank defended its fledgling asset purchase program before a skeptical audience on Wednesday, saying the benefits were filtering down to consumers and businesses while protecting the rest of the eurozone from the political turmoil in Greece.
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The Bank Of England’s Supervision Of Financial Market Infrastructures
Press Release
The Bank of England’s annual report into its supervision of financial market infrastructures is published today.
As part of its mission to promote the good of the people of the United Kingdom by maintaining monetary and financial stability, the Bank supervises UK central counterparties (CCPs), recognised payment systems and securities settlement systems. These financial market infrastructures (FMIs) sit at the heart of the UK economy and financial system, and their importance is only set to increase in light of global regulatory initiatives such as the mandatory use of CCPs for certain derivatives contracts. Recognising this, the Bank has intensified its focus on them as part of its Strategic Plan which was launched in March 2014.
jlne.ws/1wvemvI
Federal Reserve Under Fire For Secret Leak Investigation
Huffington Post
Senate Finance Committee Chairman Orrin Hatch (R-Utah) sent scathing letters to Federal Reserve Chair Janet Yellen and the central bank’s top independent investigator on Wednesday, demanding information about a secret investigation into the leak of a major monetary policy decision.
The letters come one day after The Huffington Post reported that the Fed’s inspector general didn’t inform the public or Congress of its investigation.
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Currencies
ECB’s Nowotny Says Central Banks Aren’t Engaged in a Currency War
WSJ
European Central Bank governing council member Ewald Nowotny on Wednesday played down concerns that central banks are trying to weaken their exchange rates to boost exports and inflation, saying currency markets don’t play a dominant role in the global economy.
“It would be wrong to assume that what is happening right now is a currency war,” Mr. Nowotny said at a conference of economists and central bankers at Goethe University.
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Delight or Dread as Euro Falls
David Jolly – NY Times
For Hervé Montjotin, chief executive of the French trucking and logistics group Norbert Dentressangle, the euro’s steep plunge against the dollar could not be more welcome.
In the months since his company bought Jacobson, an American contract logistics company, the currency’s decline — down about 23 percent over the past year — has meant a windfall when dollars earned in the United States are translated back into euros.
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Former JPMorgan Executive Blythe Masters Joins Bitcoin-Related Start-Up
Dealbook – NY Times
A prominent former executive at JPMorgan Chase has left the world of commodity trading for the virtual world of digital transactions.
Blythe Masters, who until last year was the head of JPMorgan’s giant commodities unit, is joining Digital Asset Holdings, a Bitcoin-related start-up that is looking to use Bitcoin’s underlying technology to streamline financial transactions.
jlne.ws/1wvd0Ba
SGX expands FX footprint with new Asian currency futures
FTSE Global Markets
Singapore Exchange (SGX) will add new Asian currency futures contracts on the Taiwanese dollar (TWD/USD) and Renminbi crosses (SGD/CNH, CNY/SGD, EUR/CNH) to expand its current suite of foreign exchange (FX) futures in the third quarter of 2015, subject to regulatory approval.
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Indexes & Index Products
CME Group and TAIFEX Sign Letter of Intent for Greater Collaboration
VPO Press Release
CME Group, the world’s leading and most diverse derivatives marketplace, and the Taiwan Futures Exchange (TAIFEX) today signed a Letter of Intent (LOI) regarding the potential listing on TAIFEX of U.S. equity index-based contracts, and the exploration of cross-border collaboration opportunities and models, and forge greater collaboration between both exchanges.
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What If Apple Had Entered Dow in 2008?
Bloomberg
In February 2008, Apple Inc. had Steve Jobs, a market value of $100 billion and a year’s worth of iPhone sales. What would’ve happened if it had gone into the Dow Jones Industrial Average then? It didn’t, of course: Bank of America Corp. was added to the 118-year-old gauge that month, only to be kicked out five years later. The CHART OF THE DAY shows a theoretical estimate of how choosing Apple instead would have affected the Dow’s trajectory.
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Will Apple break Dow Jones jinx?
Economic Times
It has been observed that technology & telecom stocks tend to underperform after their inclusion in the US broader market benchmark, the Dow Jones Index. Intel, Microsoft, and Verizon are some of the stocks that failed to live up to the expectation after entering the index.
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Column: Wells Fargo next to join Dow?
The Charlotte Observer
Following last week’s announcement that Apple will join the Dow Jones Industrial Average, a column in financial magazine Barron’s speculates that Wells Fargo could be the next company added to the more-than-100-year-old blue-chip index.
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BSE revamps indices system
Business Standard News
BSE is all set to launch a new set of indices with the introduction of 16 equity indices representing a higher number of shares as compared to the previous indices family. The new family of indices will be introduced in the second quarter of 2015, said a release from the exchange.
jlne.ws/1GCvT8O
Thomson Reuters Launches Monthly IPSOS Global Primary Consumer Sentiment Index
Reuters
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the launch of the Thomson Reuters/Ipsos Monthly Global Primary Consumer Sentiment Index (PCSI). The Thomson Reuters/Ipsos PCSI, measures 11 key indicators of consumer confidence and outlook as perceived by consumers in 24 countries. In depth analysis will be available for 12 countries including, the United States, Canada, Great Britain, China, Russia, Brazil, Japan, Mexico, France, Germany, Italy, and Australia.
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Markit Buys Lloyds’ Halifax Housing Index
Waterstechnology.com
Vendor will use the index to create financial products based on the UK housing market, officials say. UK-based data vendor Markit has acquired the Halifax House Price Index from Lloyds Banking Group for an undisclosed sum.
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Gold
Gold price ‘will rise as Apple Watch boosts demand’
The Week UK
Although the gold price fell sharply today, some analysts are predicting that it could soon be on the rise again as Apple stokes demand for the metal with its new gold smartwatch.
The quantity of gold required to build the Apple Watch could have a noticeable impact on global prices, they say.
jlne.ws/1Mua9MM
Venezuela discussing gold swap with Wall Street banks: sources
Reuters
Venezuela’s central bank is in talks with Wall Street banks to create a gold swap that would allow it to monetize some $1.5 billion of the metal held as international reserves, according to government sources familiar with the operation.
The move would help the government of President Nicolas Maduro boost its hard currency position as the OPEC nation struggles with soaring consumer prices, chronic product shortages and a shrinking economy caused by low oil prices.
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Barrick, Newmont gold mines paying $591,000 in combined fines for mercury discharges in Nevada
Star Tribune
The world’s two largest gold-mining companies have agreed to pay nearly $600,000 in combined penalties in a deal with U.S. and Nevada environmental regulators that signals more stringent enforcement of pollution laws in the state that leads the nation in gold production.
Newmont USA is paying $395,000 and Barrick Goldstrike Mines $196,000 as part of an agreement with the state and U.S. Environmental Protection Agency to settle allegations they violated hazardous waste laws with mercury releases recorded during inspections at two huge open-pit mines in northeast Nevada dating to 2007.
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READ MORE: JLN Financials: U.S. Fed slashes dividend plans of large Wall Street banks; Bond Trading Just Keeps Getting Worse as Treasury Prices Swing; Wall Street Bonuses Rose Just 2% Last Year.