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TraderEvolution Breaks New Ground with Borsa Istanbul Integration

June 30, 2020, 11:53 am UTC.

TraderEvolution Breaks New Ground with Borsa Istanbul Integration

Multi-market online trading platform provider TraderEvolution continues to make strides with its flagship product. The company is now offering connectivity to Borsa İstanbul, a key exchange in one of the biggest emerging markets worldwide.

TraderEvolution is now officially enabling access to all equities and derivatives traded on Borsa Istanbul. The link to Borsa İstanbul underpins the trading software company’s commitment to creating a product that is suitable for different financial marketplaces.

The multi-market offering delivered by TraderEvolution has integrated both market data and order routing with Borsa Istanbul. The integration across different asset classes and support for unique customisations enable the software company to continuously innovate.

Commenting on the news, the CEO of TraderEvolution, Roman Nalivayko said: “We are very proud to have successfully integrated our trading platform with Borsa Istanbul. This milestone underpins our commitment to deliver a true multi-market platform to the online trading industry.”

“Every customer using the trading platform who wants to get connected to the Istanbul stock exchange can with our platform get instant access to market data and trade delivery. There is no need for the development or integration of any APIs as our product is ready to connect out of the box,” Nalivayko elaborated.

“Positioning itself as a regional hub for investment in the effort of creating financial center in İstanbul, Borsa İstanbul invests heavily to improve its technology and accessibility of its markets. To reach this goal, Borsa İstanbul is not only expanding its colocation area to facilitate greater number of customers but also is trying to make Borsa İstanbul’s market available to end-client platforms to reach more investors worldwide.

Trader Evolution’s integration helps our existing and potential investors to access to our market and data secure and easy way.” said Alpogan Sabri Erdogan, Executive Vice President at Borsa İstanbul.

About TraderEvolution

TraderEvolution is a multi-market trading platform provider offering modular, tailored solutions that include a back end with established connectivities to dozens of markets across the globe and a complex front-end suite with web, mobile and desktop applications. The company serves banks and brokers from around the world, empowering them with an independent and liquidity-neutral solution to facilitate core brokerage operations or to complement their existing solutions.

About Borsa Istanbul

Borsa İstanbul, with historical roots going back to 1873, is the sole provider in Turkey of trading, settlement, custody and registry services for a wide range of products such as equities, debt securities, repo, sukuk, warrants, options, futures, certificates, and exchange traded funds (ETFs). Through its markets, Borsa İstanbul offers corporates, investors and traders in the region a broad range of financial products suited to their needs, and efficient access to extensive capital markets. Post trade and depository services are offered by its majority-owned subsidiaries of Takasbank (Istanbul Settlement and Custody Bank) and MKK (The Central Securities Depository).

April 27, 2020, 3:07 pm UTC.

IS Prime Releases Revolutionary UK & US Oil Index Rebased at 100

Award-winning Prime of Prime and Liquidity Provider, IS Prime has become the first Tier 1 Prime of Prime to provide a solution to combat the huge risk associated with the spot oil price potentially going negative again.

On Friday, April 17th , for the first time in history, Oil prices fell below zero due to a combination of lack of demand and lack of storage capacity. This event led to significant losses by some of the largest retail brokers in the space due, in part, to their systems stopping clients out at 0 and hedging in the futures market at a negative rate.

Many brokers’ trading systems are unable to accept negative rates and, to combat this, IS Prime has rapidly developed two new proprietary products – the US Oil Index and the UK Oil Index. These products are rebased at $100, effectively meaning that should IS Prime’s proprietary spot price fall to, say $-5USD, the pricing will reflect this at $95 – this has the effect of preventing stop outs whilst still reflecting the market moves and the full underlying volatility of Oil.

To assist with the transition to these products, IS Prime can move positions in its existing US and UK spot indices into the new products for current clients.

Jonathan Brewer, Managing Partner at IS Prime said:

“Many brokers have not recognised the truly catastrophic effect that negative rates can have on them. Individual retail brokers could face losses in the hundreds of millions of dollars due to stop outs at 0 and subsequent hedges at a negative rate.

Our new fully proprietary Oil Index allows brokers to offer pricing and execution in these products to their clients even if the market drops below 0 again, which is highly probable coming into the next futures expiry. There will be other providers attempting to develop a solution through third party pricing but, as the market has come to expect from IS Prime, our products are carefully thought out and well-engineered.

“We are very pleased to be able to offer continuity of service to new and existing clients and to have delivered a new product in a very short timeframe when it is most needed.”

IS Prime provides institutional clients with customised pricing primarily sourced from Tier 1 institutions, together with multi-asset Prime of Prime and Agency Brokerage services, and comprehensive front to back technology solutions. The London-headquartered, FCA regulated firm is part of the ISAM Capital Markets Group, which also includes IS Prime Hong Kong and IS Risk Analytics. For more information about IS Prime, please visit www.isprimefx.com

April 20, 2020, 9:47 am UTC.

Market Outlook: Poor optics ahead as Covid-19 continues to dominate market attention

By Stephen Innes, Chief Global Market Strategist, AxiTrader

Week Ahead
 
With the coronavirus continuing to dominate market attention, the focus this week will turn to the preliminary PMIs for April as investors try to gauge the extent of the economic disruption caused by the virus. But I must caution that the nature of this stay at home environment means survey-based economics have been less reliable, given the full range of forecaster expectations. However, the prints could still provide poor optics.

As usual, initial weekly jobless claims from the US will be a focal point, along with the Ifo business climate indicator from Germany. US job losses have looked a little worse than most expected, but it’s too soon to tell whether losses happened earlier than anticipated or really are worse. 

Company earnings will be competing for headlines too, with 88 S&P 500 companies reporting next week, although the poor messaging from corporate America so far has failed to dent sentiment and there’s nothing to suggest the next week will be any different.

On the political side, EU leaders will be meeting via webcam as they discuss their response to the pandemic, while negotiations between the UK and the EU continue. 

Across the pond (in Europe), the preliminary PMIs for April on Thursday will be in focus. If you thought the March readings were terrible, buckle in as there’s the distinct possibility that the numbers will get even worse in April as many economies hadn’t fully locked down when the March surveys were taken; for example, in Italy, where the lockdown covered the entire March survey, the services PMI fell to a horrifically low 17.4, which gives you an indication of how far things can fall given the current conditions.

But the US PMI may be the key as their PMI numbers held up comparatively well relative to Europe in March. Their composite PMI only fell to 40.9, which was some way above the Euro Area’s composite reading of 29.7.

The question will be whether the US data will converge to the low end of the spectrum as US states issued stay-at-home orders in late March and early April, the effects of which will be picked up by this month’s surveys. 

In Asia, like the rest of the world, market participants will continue to pay close attention to the Covid-19 curves. At the same time, the focus will probably fall on two vital economic prints. 

Analysts expect South Korea’s GDP growth to fall to 0.4%yoy in Q1, from 2.2% in Q4. On a QoQ basis, the economy probably contracted by 2.3%, led by a contraction in domestic demand amid the Covid-19 outbreak. It’s widely expected that Thailand’s exports will drop further, by 5.5% in March, vs. a 4.5% contraction in February.

Trading outlook 

The debate over the “shape” of the US’ recovery – “L”, “U”, “V” or “W” – is a total distraction given this is a policy-driven not economically induced recession and is nothing like we’ve seen before. Let’s just stop the nonsense and concede that the recovery would probably be a mix of these letters and will likely be as consistent as a bowl of alphabet soup.

Still, I can’t grasp the constant references to previous bear markets and “experts” on why buying stocks is a bad idea. This slowdown is unlike anything before and is irrefutably and structurally different than any bear market on record. Imbalances in the world economy did not cause this mess. This meltdown was a deliberate policy-induced slowdown, so the pattern of recovery will be nothing like before and probably a lot more explosive at times. However, there will be numerous air-pockets to navigate.

The one sector of the economy that we should all be concerned about is the Airline industry to which we could deconstruct a perfect parallel to the aftermath of 9-11 when the industry was left in tatters. Ok, a virus is not a terrorist attack, but it shares similar characteristics. Passengers may be willing to get back on a plane quicker than after 9-11, but businesses have now invested in webcam technology and everyone seems very comfortable with it, so there could be a huge drop off in business travel.

Currency Markets

If truth be told when it comes to calling the currency markets these days, I feel more like a weather forecaster; sure, it’s straightforward to predict the next few days, but the accuracy falls off significantly after five. 

Australian Dollar 

My basic strategy right now is to back the corona divergence trade proxies piggybacking the China recovery.

The Australian dollar continues to stand out as a non-consensus view as it could gain a lot on a China recovery as the demand for Australia’s critical export iron ore increases. But what I also like is that positioning is very short due to CTA involvement that has all 12 strategies running 95 % short, and the first watch target is at.6450. If these stop losses get triggered, AUDUSD could ride the express elevator higher. 

But the thorn in the commodity block side is oil prices, and for the Aussie specifically it’s the yo-yo risk sentiment since the AUD has a high beta correlation to the S&P 500 that made things testy.

Ultimately, I think oil will be much less of a driver in market psychology as people get used to NYMEX trading at $20, which should eventually leave the Aussie tethered to risk sentiment and the China rebound. When lights turn on in China, and if the SPX500 moves back to 3000 (which I firmly expect it to) you may look back at AUDUSD in the 63’s handle with nostalgic longing. 

Trading S&P futures via Forex

I’ve been doing this off and on over the past two weeks, strictly on an algorithmic basis with decent results. It’s not a new strategy by any means, but let me shed some light using CFDN on both to illustrate and draw data.  

Oil Markets

It took mere days for the market to recognize that the OPEC+ deal will not, in its present form, be enough to balance oil markets. Brent had recovered slightly from this week’s lows but is still down about 15% relative to last Thursday’s close and about 22% from the highs last Friday when OPEC+/G-20 optimism was at its peak.

On the surface and over time, the deal should prove to be more important as a signal of the end of the Saudi/Russia price war and the free market experiment for reducing oil supply, and we already see a willingness to go above and beyond the terms agreed to stabilize the oil price which are holding the bears at bay.

Energy Ministers of Russia and Saudi Arabia have released a joint statement hinting at further production cuts to come. And while it’s probably a day late and a barrel short of offsetting the massive imbalance expected in 2Q, additional cuts could quicken the narrowing of supply and demand into H2. This will do little to reduce the downside risk near term. 

Still, there are signs of coordinated action that could mean a brighter look in heading into Q3, but holding long term oil positions are expensive due to the steep contango, which is merely a reflection of the enormous cost to store oil. So, for the next little while oil trading will be mostly a whippy intraday affair; be careful to leave stops tight to the market’s ATRs so you don’t get caught offside on any headline risk.

Gold Markets 

Gold lost some support by the release of the US plan for exiting lockdown measures combined with news of progress in finding a treatment for Covid-19. In turn, the lack of fresh buying encouraged profit-taking and gold was on the defensive for the rest of Friday.

As we indicated in Friday’s Asia Morning Note, institutional gold bids are pulling back to the $1650-75 oz levels on a more optimistic near-term economic outlook taking hold after President Trump introduced a workable roadmap to recovery. And while there was some intermittent support once stops at $1700 were triggered, gold fell to the $1680 level – just above those chunky strategic gold buyer bids.

The prospect of an end to the lockdowns in the US is impressing risk markets and triggering modest liquidation on gold. Equity traders are sprinting to their “America First” playbook. The MSCI USA Index is trading near a record two-decade high versus the rest of the world. If US equity markets continue to push higher, and the SPX500 puts in some headroom above 2900, gold may tumble below $1650 as a hefty position built above 1675 could head for the exits.

Find out more about AxiTrader here

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

April 3, 2020, 1:28 pm UTC.

What it means to be a homeowner in Millennial America – Guest Editorial

By Kristina Marshall, a renowned lifestyle and financial blogger focusing on trends and tips for financial independence within American households.

The face of homeownership has drastically changed in the last 50 years. What was once the ultimate American dream for our parents and grandparents is now just an option for many millennials. Here are some significant trends we’re going to see from millennials when it comes to homeownership.

  1. Delayed homeownership

Unlike the previous generation, millennials are less likely to form independent households. In this economy, it’s hard to build enough wealth for a home. As a result, millennials delay homeownership and instead, live under their parents’ roof. The rise of 25  to 34-year-olds who live with their parents are continuing to go up. Those with lower educational attainment were even more likely to live with their parents.

Here are other reasons why millennials are delaying homeownership:

  • Many millennials saw their parents lose their homes. This is often enough to put them off buying a home until they are absolutely sure.
  • Millennials get married much later in life. This affects their decision to buy a home. Those who were married or have been married were more likely to own a home than those who stay single.
  • Access to higher credit is hard. After the housing market collapse, lending standards have only become stricter. This makes it hard for adults with poor or no credit to secure a mortgage.
  • The combination of low income and high student debt makes it hard to save enough money to buy a home.
  1. Downtown living

Millennials also have a preference for living in downtown areas where there’s easy access to high paying jobs. These are expensive areas to live in which makes homeownership difficult. As a result, millennials rent the spaces they live in instead of buying it.

And because rent can be expensive, millennials may opt to live with roommates as a way to cut down on costs. Landowners are paying attention too as there are more communal spaces cropping up in these areas.

  1. Renters forever

Many millennials are content to rent forever than buy a home. Renting allows them to be flexible with the areas they live in. When you have a home, you are forced to live in one place for many decades. In an age where travel is more accessible than ever, the last thing millennials want is to be tied down.

The good news is that renters can still enjoy some stability in their home especially if they own semi-permanent appliances and fixtures. When renting a home, millennials can ask the landlord if they have a home warranty. This is what you need to have protection for everything in your home. The rent may be higher but it’s worth the price knowing there’s no need to pay for repairing the damages.

  1. Mobile shopping

For millennials who do decide to buy a home, they’re doing it much differently than previous generations. Back then, homeowners found their homes by chance or through personal referrals. Today, millennials have a host of services that make it easy to find the ideal home. We now have mobile apps that match you to real estate agents. There’s also less need to go to open houses since all details such as photos, measurements, amenities, etc. can be found online.

  1. Small, optimal spaces

Millennials prefer to live in a space that’s big enough to accommodate their lifestyle. They don’t want large, elaborate houses that require a lot of maintenance. They’re also less likely to get a starter home. By the time they decide to buy a home, millennials want one that is ready to be moved in. This means an optimized home that caters to their needs like say, a meditation space, an expansive kitchen, a multi-use cabinet, etc.

Which of these homeownership trends are true to you? Share your thoughts in the comments below.

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

December 4, 2018, 1:13 pm UTC.

Saxo Bank’s 10 Outrageous Predictions for 2019

Saxo Bank, the leading Fintech specialist focused on multi-asset trading and investment, has today released its 10 ‘Outrageous Predictions’ for 2019. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets.

While these predictions do not constitute Saxo’s official market forecasts for 2019, they represent a warning of a potential misallocation of risk among investors who typically see just a one percent likelihood to these events materialising.

The Outrageous Predictions for 2019 are:

  • EU announces a debt jubilee
  • Apple “secures funding” for Tesla at $520/share
  • Trump tells Powell “you’re fired”
  • Prime Minister Corbyn sends GBPUSD to parity
  • Corporate credit crunch pushes Netflix into GE’s vortex
  • Australian central bank launches QE on housing bust Down Under
  • Germany enters recession
  • X-Class solar flare creates chaos and inflicts $2 trillion of damage
  • Global Transportation Tax (GTT) enacted as climate panic spreads
  • IMF and World Bank announce intent to stop measuring GDP, focus instead on productivity

Commenting on the Outrageous Predictions, Chief Economist at Saxo Bank, Steen Jakobsen said:

“We have been publishing Outrageous Predictions for more than a decade and think this year’s list is both fascinating and shocking while encouraging investors to think outside the consensus box. It is important to underline that the Outrageous Predictions should not be considered Saxo’s official market outlook, it is instead the events and market moves deemed outliers with huge potential for upsetting consensus views.

“This year’s edition has a unifying theme of “enough is enough”. A world running on empty will have to wake up and start creating reforms, not because it wants to but because it has to. The signs are everywhere. We think 2019 will mark a profound pivot away from this mentality as we are reaching the end of the road in piling on new debt and next year will see us all beginning to pay the piper for our errant ways. The great credit cycle is already showing signs of strain in late 2018 and will rip through developed markets next year as central banks are sent back to the drawing board. After all, their money printing efforts since 2008 have only dug a deeper debt hole, and it has now grown beyond their mandate to manage.

“If some of these outrageous predictions see the light of day, we might finally see a healthy shift toward a less leveraged society, with less focus on short-term gains and growth, and a new focus on productivity and new economic revolution back toward globalisation with a fairer playing field after the immediate moment of crisis. On the negative side, we could see considerable worsening of central bank independence, a credit crunch, and big losses in the asset where everyone is too long: real estate.” The Outrageous Predictions 2019 publication is available here and the full list of Saxo Bank’s Outrageous Predictions for 2019 reads:

  • 1. EU announces a debt jubilee

In 2019, the unsustainable level of public debt, a populist revolt, rising interest rates from European Central Bank tapering/lower liquidity, and sluggish growth reopened the European debate on how to get ahead of a new crisis. Italian contagion sickens Europe’s banks as the EU lurches into recession. The ECB resorts to new TLTRO and forward guidance to limit the carnage, but it’s not enough and when contagion spreads to France, policymakers understand that the EU faces the abyss. Germany and the rest of core Europe, which refuses to let the Eurozone fall apart, have no other choice than to back monetisation. The Economic and Monetary Union extends a debt monetisation mandate to the ECB for all debt levels over 50% of GDP and guarantees the rest via a Eurobond scheme while moving the controversial Growth and Stability goalposts. A new fiscal rule allowing the first 3% of GDP in deficits to be mutualised in 2020 is adopted by EMU countries, with everything beyond subject to a periodic review by the European Commission linked to the state of the EU economy.

  • 2. Apple “secures funding” for Tesla at $520/share

Apple realises that if it wants to deepen its reach into the lives of its user base, the next frontier is the automobile as cars become more digitally connected. After all, the late Steve Jobs showed that a company needs to bet big and bet wild to avoid complacency and irrelevance. Acknowledging that Tesla needs more financial power and Apple needs to expand its ecosystem to the car in a more profound way than that represented by the current Apple CarPlay software, Apple goes after Tesla. It secures funding for the deal at a 40% premium of $520 dollars a share – acquiring the company at $100/share more than Elon Musk’s errant “funding secured” tweet.

  • 3. Trump tells Powell “you’re fired”

At the December 2018 Federal Open Market Committee meeting, Federal Reserve chair Jerome Powell signs on with a slim majority of voters in favour of a rate hike – one too many and the US economy and US equities promptly drop off a cliff in Q1 2019. By the summer, with equities in a deep funk and the US yield curve having moved to outright inversion, an incensed President Trump fires Powell and appoints Minnesota Fed President Neel Kashkari in his stead. The ambitious Kashkari was the most consistent Fed dove and critic of tightening US monetary policy. He is less resistant to the idea of the Fed serving at the government’s pleasure and is soon dubbed ‘The Great Enabler’, setting President Trump up for a successful run at a second term in 2020 by promising a $5 trillion credit line to buy Treasury Secretary Mnuchin’s new zero-coupon perpetual bonds to fund Trump’s “beautiful” new infrastructure projects and force nominal US GDP back on the path it lost after the Great Financial Crisis. Inflation reaches 6%, is reported at 3%, and the Fed policy is stuck at 1%. That’s deleveraging you can believe in via financial repression to the great detriment of savers.

  • 4. Prime Minister Corbyn sends GBPUSD to parity

Labour sweeps to a resounding victory and names Jeremy Corbyn as prime minister on the promise of comprehensive progressive reform and a second referendum on a “to-be defined” Brexit deal. With a popular mandate and strong majority in Parliament, the Corbyn Labour government embarks on a mid-20th century-style socialist scorched earth campaign to even out the UK’s gross inequalities. New tax revenue streams are tapped into as Corbyn brings the UK’s first steeply progressive property tax into being to soak the wealthy and demands the Bank of England help finance a new “People’s quantitative easing”, or universal basic income. Utilities and the rail networks are re-nationalised and fiscal expansion sees deficits yawn wider to the tune of 5% of GDP. Inflation rises steeply, business investment languishes, and non-domiciled foreign residents run for cover, taking their vast wealth with them. Sterling is crushed on the double trouble of ugly twin deficits and lack of business investment on the still-unresolved Brexit issue. Cable goes from the 1.30 area where it spent most of the second half of 2018 and all the way down to parity at 1.00, a move of over 20% – with one dollar being equal to one pound for the first time ever.

  • 5. Corporate credit crunch pushes Netflix into GE’s vortex

2019 proves the year of credit dominos toppling in the US corporate bond market. It starts with General Electric losing further credibility in credit markets, pushing the credit default price above 600 basis points as investors panic over GE’s $100 billion in liabilities rolling over in the coming years at the same time as the firm sees deteriorating cash flow generation. The carnage even spreads as far as Netflix where investors suddenly fret the firm’s fearsome leverage, with a net debt to EBIDTA after CAPEX ratio of 3.4 and over $10bn in debt on the balance sheet. Netflix’s funding costs double, slamming the brakes on content growth and gutting the share price. To make things worse, Disney’s 2019 entrance into the video streaming industry trims Netflix growth further still. The negative chain reaction in corporate bonds sets off massive uncertainty in high-yield bonds leading to a Black Tuesday for exchange-traded funds tracking the US high-yield bond market where ETF market makers are unable to set meaningful spreads, forcing a complete withdrawal from the market during a tumultuous trading session. The fallout in the ETF market becomes the first warning shot of passive investment vehicles and their negative impact on markets during turmoil.

  • 6. Australian central bank launches QE on housing bust Down Under

In 2019, the curtains close on Australia’s property binge in a catastrophic shutdown driven most prominently by plummeting credit growth. In the aftermath of the Royal Commission, all that is left of the banks is a frozen lending business and an overleveraged, overvalued mortgage-backed property ledger and banks are forced to further tighten the screws on lending. Australia falls into recession for the first time in 27 years as the plunge in property prices destroys household wealth and consumer spending. The bust also contributes to a sharp decline in residential investment. GDP tumbles. The blowout in bad debt squeezes margins and craters profits. The banks’ exposure is too great for them to cover independently and bailout would be required from the RBA, perhaps recapitalising and securitising mortgages onto the RBA’s balance sheet.

  • 7. Germany enters recession

A global leader for decades, Germany is struggling to upgrade its leveraging of modern technology. The crown jewel of the German economy, representing a cool 14% of GDP, is its car industry. The German car industry was supposed to be a growth juggernaut, registering 100 million sold cars in 2018. In the end, it only managed to unload 81 million cars, a mere 2% more than 2017 and well down from the 5-10% yearly growth rates from 2000s and forward. By 2040, 55% of all new global car sales and 33% of the stock will be EVs. But Germany is only just starting the transformation to EV and is years behind, and stiffer US tariffs won’t make things any better for German supply chains or exports. 2019 will be the peak of anti-globalisation sentiment and will create a laser-like focus on costs, domestic markets and production, and the further use of big data and reduced pollution footprint – the exact opposite of the trends that have benefitted Germany since the 1980s. As such, we see a recession arriving as early as Q3 2019.

  • 8. X-Class solar flare creates chaos and inflicts $2 trillion of damage

All life on earth exists thanks to the stable bounty of energy hurled our way by the sun, but Sol is not always a serene and beneficent ball of burning hydrogen. As solar astronomers are well aware, the sun is also a seething cauldron of activity capable of producing incredible violence in the form of solar flares, the worst of which see the sun vomiting actual matter and radiation in the form of Coronal Mass Ejections, or CMEs. In 2019, as solar cycle 25 kicks into gear, the earth isn’t so lucky and a solar storm strikes the Western hemisphere, taking down most satellites on the wrong side of the earth at the time and unleashing untold chaos on GPS-reliant air and surface travel/logistics and electric power infrastructure. The bill? Around $2 trillion, which is actually some 20% less than the worst-case scenario estimated by a Lloyds-sponsored study on the potential financial risks from solar storms back in 2013.

  • 9. Global Transportation Tax (GTT) enacted as climate panic spreads

The world suffers another year of wild weather with Europe again experiencing an extremely hot summer, setting off panic alarms in capitals around the world. With the international aviation and shipping industry enjoying substantial tax privileges, they become the targets of a new Global Transportation Tax (GTT) that introduces a global ticket tax on aviation and a capital “tonnage” tax on shipping with the price linked to carbon emission footprints. The new tax charge is set to $50/ton of CO2 emissions which is twice previous proposed levels and significantly above the 2018 average of €15/ton under the European Union’s Emissions Trading System. The new GTT pushes up air travel ticket prices and maritime freight, increasing the general price level as the new tax is passed on to consumers. The US and China have previously contested fuel taxes on aviation, citing the 1944 Chicago Convention on International Civil Aviation, but China changes its stance as a natural progression of its fight against pollution. This forces the US to reluctantly join forces in a global transportation tax on aviation and shipping. Stocks in the tourism, airline, and shipping industries plunge on increased uncertainty and lower growth.

  • 10. IMF and World Bank announce intent to stop measuring GDP, focus instead on productivity

In a surprising move at the International Monetary Fund and World Bank spring meetings, chief economists Pinelopi Goldberg and Gita Gopinath announce their intent to stop measuring GDP. They argue that GDP has failed to capture the real impact of low-cost, technology-based services and has been unable to account for environmental issues, as attested by the gruesome effects from pollution on human health and the environment in India and elsewhere around the world. Productivity is certainly one of the most popular, and yet least understood, terms in economics. Simply defined, it refers to output per hour worked. In the real world, however, productivity is a much more complex notion. In fact, it can be considered as the greatest determinant of the standard of living over time. If a country is looking to improve people’s happiness and health, it needs to produce more per worker than it did in the past. This unprecedented decision by the IMF and the World Bank also symbolises the transition away from the central bank-dominated era that has been associated with the collapse in global productivity since the global financial crisis.

To access the full publication of Outrageous Predictions for 2019 click here.

October 31, 2018, 2:11 pm UTC.

Advanced Markets launches UK company

Advanced Markets, an institutional foreign exchange liquidity and prime-of-prime service provider, has launched Advanced Markets (UK) Limited (AM (UK)), an FCA-regulated company. The entity includes new trading servers in Equinix’s LD4 and LD5 data centers as well as a new London office headed by industry veteran Nina Baksh.

“The launch of our comprehensive London operation is an important step in the company’s global strategy,” said Anthony Brocco, Founder and CEO, Advanced Markets. “It enables us to better serve our institutional broker and fund manager clients in the UK and Europe, by providing a regional matching engine, which is fully cross connected with our bank and non-bank liquidity providers.”

Under the terms of its FCA registration, AM (UK) may act only as a Matched Principal Broker, meaning it is required to match every client trade with an offsetting transaction with a liquidity provider. This model not only limits the firm’s market risk, it also aligns the firm’s interests with those of its clients.

AM (UK) is further limited to dealing with qualified professional counterparties only, matching the company’s global policy.

Advanced Markets’ Direct Market Access (DMA/STP) liquidity model, which the firm pioneered upon its launch in 2006, enables FX market participants to trade anonymously on prices streamed by leading liquidity providers in a fully transparent, anonymous market structure. The combination of the firm’s DMA/STP model and robust low latency trading infrastructure has driven participation from leading brokers, fund managers and other institutions.

October 23, 2018, 1:14 pm UTC.

LEANWORK to host Traders Fair on October 26 in Singapore

Traders Fair is organized by FINEXPO, the largest financial and trading events, fairs, expos and shows organizer worldwide. This trade show is going to cover the following countries: Singapore, Vietnam, Thailand, Malaysia and Philippines. The first B2B exhibition will be held on 26th Oct 2018 in Singapore, including two exhibition halls: FX and digital assets.

Traders Fair has connected with a lot of financial companies and brokers/ traders from Forex, stock, option and digital asset markets from all around the world.

LEANWORK, being a competitive Fin-tech company based in Asia, will take the pleasure to be part of the Traders Fair in Singapore.

Subject to the tightening regulation and supervision of the international financial markets, contraction of the retail industries, plus the institutionalization of Europe and North America markets, it makes Asia become a very potential retail market. The Asia market has been growing under a lot of attention.

The Asia-Pacific region comprised more than 55% of the global population, the large proportion of young labor associated with a substantial demographic dividend. Asia area also has massive of Internet user, 49 out of 100 Internet users come from Asia, countries/cities with favorable foreign-exchange reserves such as China, Japan, Saudi Arabia, Hong Kong, India etc.

The globalization in Asia market and the growth of Foreign Direct Investment increased the demand for investment tools like FOREX and DIGICCY in Asia, especially emerging markets like China, India, Indonesia, Malaysia, Thailand, Philippines.

Whether you are a reputed broker firm from the U.K., Australia, Cyprus, Russia or a start-up firm in Asia, the recent trend is to explore the market in Asia. The Asian market offers a large demographic dividend, together with the massive demand in the market and the rapidly growth of online transactions, a lot of securities dealers are expecting to “share the pie”.

LEAN WORK is a well-established Fin-tech company in Asia, aiming at growing with the market trends. Combining the experiences and researches, in order to provide a professional, reliable and efficient system that covers CRM, IB management, trading account management, risk management, mobile trading portal and all kinds of API with different solutions, fully suffice the needs of all kinds operation.

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October 17, 2018, 1:02 pm UTC.

Saxo Q4 Outlook: A new easing cycle based on ugly realities

Online trading and investment specialist Saxo Bank has today published its Q4 2018 Quarterly Outlook for global markets, including trading ideas covering equities, FX, currencies, commodities, and bonds, as well as a range of macro themes impacting client portfolios.

“We are clearly at a crossroads on many fronts: globalisation, geopolitics and economics”, says Steen Jakobsen, Chief Economist and CIO, Saxo Bank.

“The next quarter will either see dampening of volatility by a less aggressive Fed, more active easing in China, and a compromise on the European Union budget… or a further escalation in tensions between all three areas. I would not bet against the latter into Q4, but I remain confident that we stand only a few months away from the beginning of a new easing cycle based on ugly realities, not the hope expressed by politicians and often market consensus.

”For now, we estimate that the US economy has peaked – the powerful expansionary cocktail of unfinanced tax cuts, repatriation of capital, and fiscal spending ramped up growth in the US, but these one-off effects will peter out as the year ends. Already the US housing market is showing signs of strain as the higher marginal cost of capital (the higher yield on mortgages, more specifically) is starting to have a material impact on future growth.

”As certain as we are about the US having peaked, we are less certain as to how soon China will reach the bottom of its deleveraging process and begin to expand more forcefully again.”

Against this uncertain backdrop, Saxo’s main trading ideas for Q4 include:

  • Equities – Setting the stage for a comeback in value stocks

Throughout 2018, Saxo has constantly said that investors should be defensive on equities and avoid the semiconductor and automobile industries due to the escalating trade war between the US and China. Valuations – especially in US equities, which are half of the global equities index – have reached levels where the risk-reward ratio is too low.

Meanwhile, the Federal Reserve continues to normalise the Fed funds rate, communicating that rates are far from neutral. As the most important discount rate is lifted, it changes the dynamics, making growth stocks vulnerable and maybe setting the stage for a comeback in value stocks.

Peter Garnry, Head of Equity Strategy, said: ”The likelihood is quite high that US equities will achieve just 0-1% in annualised real return over the next 10 years. If inflation exceeds expectations, the outcome could be considerably worse. Making things worse for US equities, there are finally attractive alternatives due to the Fed’s recent rate hikes.”

  • FX – Nothing will end a strong USD faster than a strong USD

The reaction of the US dollar to developments in US yields has been an on-again, off-again affair, but a sharp rise in US yields in late Q3, after strong wage inflation data were reported for August, resulted in a weaker dollar for much of September. From here, whether rising US yields continue to squeeze global USD liquidity and especially emerging markets, could depend on China’s intentions for the renminbi.

Regardless, if US rates and the USD both rise further, the first would quickly break US markets and eventually the US economy, and together would likely break the global economy, particularly the emerging markets that most indulged in USD-denominated borrowing via the Fed’s zero interest-rate policy years after the global financial crisis.

John Hardy, Head of FX Strategy, said: “The direction of the US dollar remains the key driver of action as we go from a late US monetary policy cycle to potentially the end of that cycle in a more concentrated and immediate timeframe than the market or the Fed anticipates. The US dollar and US rates can only rise so far from here before something – or rather more things – break.

“US long yields have crossed the Rubicon in technical terms, and a further aggravated rise in yields cannot be excluded in Q4. But higher rates will eventually put the brakes on the US recovery, something that may already be happening as Q4 gets under way. Q4 may be the quarter in which the USD finds a local top, if it hasn’t already, and then is toppled into reverse as the market figures that the Fed has taken things too far. Timing is the chief risk as we must deal in probabilities and the risk that we are a quarter or more too early.”

  • Macro – China opens the credit taps

Since last May, when the trade war intensified, there has been a shift towards looser policy and stimulus efforts. Chinese markets have been flooded with cheap central bank liquidity when the Shibor plunged, leading to a pick-up in credit growth.

So far, the most significant impact of monetary easing is that it has contributed to push the credit impulse – the “change in the change” in credit and a key driver of economic growth – back into positive territory. The magnitude of the impulse is still very limited, but it should increase in coming months and be sufficient to sustain local investment and expansion.

Christopher Dembik, Head of Macroeconomic Analysis, said: “China’s global importance is likely to increase further as the US economy is succumbing to the siren song of protectionism and central bank liquidity injections are falling. In previous periods of lower liquidity or slowing growth, China acted as an adjustment variable by pushing credit upwards as in 2012-13, thereby mitigating the effects of the Fed’s tapering. It seems that China is willing to step in to restimulate the economy once again. The current divergence of monetary policy between China and the rest of the world may still represent a chance for the global economy.”

Eleanor Creagh, Market Strategist, added: “The US-China trade war continues to escalate along with Washington’s shifting perception of China. There remains some hope of keeping these powers aligned, however, as US president Trump and Chinese president Xi Jinping meet in late November at the G-20 summit. Although a deal may be struck, the probability of this outcome seems low given the marked deterioration in diplomatic dialogue and the increasing probability of a new “cold war” fought via technological supremacy.

“Given the likelihood of a trade war escalation over the next few months, the Chinese equity market could experience another leg down. For longer-term investors, short-term market noise should not detract from the fundamental opportunity. The attractive valuations are indicative of the potential for future returns once the extremely negative sentiment mean reverts.”

  • Commodities – Trump, sanctions and tariffs

The direction of many major commodities will continue to be influenced by the decisions taken in Washington during the past six months. Apart from the weather, which has delivered challenges as well as opportunities across the agriculture sector, President Donald Trump’s trade war with China and sanctions against Iran will keep setting the tone for the rest of the year.

Ole Hansen, Head of Commodity Strategy, said: “The trade war, especially with China, shows no signs of easing. At least not before the November midterm elections, with Democrats generally favouring Trump’s tough stance towards China. Accepting this fact, China has shown little interest in trying to find a solution before the US elections. While growth and demand-dependent commodities, such as industrial metals, have been left reeling, energy prices have risen sharply in response to the November introduction of US sanctions on Iran’s oil trade.

”With the risk of a prolonged trade war and rising oil prices due to sanctions, the global economy may struggle to maintain its long-held positive momentum. The combination of rising energy prices and the hitherto strong dollar, not least against many emerging market currencies, will act as an unwelcome tax on consumers. ”

  • Fixed Income – Preparing for the slowdown

The fragility and contradictions of the financial market are starting to surface, and although credit spreads will be put under considerable stress in the fourth quarter, we do not expect to see an overwhelming sell-off until the US economy slows and gradually turns into a recession. This should give investors plenty of time to assess their risks and position themselves for a possible downturn in 2019-20. The current market still provides opportunities, especially in the short part of the curve, and investors can use episodes of volatility to enter solid assets at a better price.

From the financial crisis of 2008 until today, emerging markets have taken advantage of low interest rates and yield-deprived investors to issue more and more debt in hard currencies, the majority of which is in US dollars.

Althea Spinozzi, Bonds Specialist, added: ”We believe that Q4 will see the performance of European sovereigns put at risk by the demands of the Italian government to the European Commission, which will not only be confined to discussion of the 2019 budget but could even see an escalation of tensions as Italy makes it clear that it is not willing to abide by Brussels’ rules.

”Although the Italian government will be a tough cookie to deal with, we believe an ‘Italexit’ is not possible. The Italian economy is highly dependent on the euro area economy, and the single European currency complicates things regarding a possible exit. This makes it impossible for the parties to pursue this without losing the bulk of their voters, who would find themselves in a weaker position than they had while in the EU.”

  • Macro – Young demographics cannot be ignored

Since the tail end of 2017, Saxo believes that emerging market central banks were skewed towards hawkish surprises – whether they liked it or not. The two key standouts against this tide were Russia and Brazil, which were cutting rates to combat domestic problems. They have since stopped, and in Q3 the Russian central bank surprised everyone with a rate hike.

Kay Van-Petersen, Global Macro Strategist, said: ”The only thing Brazilian investors have to smile about is that at least they have fared better than investors in Turkey and Argentina whose currencies were down 29% and 44% respectively by the end of Q3, when the BRL was down 15%.

”With inflation ticking up over the summer, we could see a more hawkish Central Bank of Brazil being forced to move despite the country’s lacklustre growth and unknown fiscal policies of the future government.

”It will be crucial to see whether or not China steps up the stimulus, which so far has not been significant enough to stop the pressures on EM (for example, August’s new loan figures were worse than expected and PMIs, while still in expansion mode, are trailing down towards 50). The official line from the People’s Bank of China will be that it is not interested in a weaker renminbi. Unofficially it is dampening the tariffs from Team Trump, and the degree of combativeness from the US will be symmetrical to the eventual weakness in CNH.

”The most interesting and profitable aspect of the trade tariffs between the US and China is their unintended consequences in the long term. Washington wanted to curb China’s 2025 plans, but the result is likely to be that Beijing moves those plans forward to 2022 or, in some cases, 2020.”

To access Saxo Bank’s full Q4 2018 outlook, with more in-depth pieces from Saxo’s analysts and strategists, please, visit this page.

July 20, 2018, 1:25 pm UTC.

MOEX commits to FX Global Code

Moscow Exchange (MOEX:MOEX) announces it has signed a statement of commitment to the FX Global Code, pledging to support robust, fair, liquid, open and transparent foreign exchange markets.

The FX Global Code (Global Code) is a set of global principles of good practice in the foreign exchange market, developed to provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. It was developed by a partnership between central banks and market participants from 16 jurisdictions around the globe.

“We endorse the FX Global Code and are committed to the highest levels of fairness and transparency,” said Igor Marich, a member of MOEX’s Executive Board and Head of the Money and Derivatives Markets.

“As the world’s largest liquidity center for the ruble, Moscow Exchange has a special responsibility to operate an open, resilient and trustworthy FX trading platform. By committing to the Global Code, we are ensuring our practices are aligned with leading international standards and our infrastructure will remain robust and reliable.”

Moscow Exchange joins more than 100 other market participants in confirming its commitment to the Global Code, including central banks, banks including Barclays, Citi, Deutsche Bank and JPMorgan Chase & Co and electronic trading platforms such as Bloomberg and Thomson Reuters. Moscow Exchange is the first Russian financial institution to commit to the Code.

Moscow Exchange is the global center of liquidity for the ruble and hosts trading in 10 currency pairs including its most traded Russian Ruble/US Dollar pair. In the first half of 2018 the average daily trading volume (ADTV) on Moscow Exchange’s FX Market across all currency pairs was equivalent to USD 23.6 billion. Though today the most diversified exchange globally – offering trading in stocks, bonds, futures & options, FX, money market products and commodities as well as clearing and depositary services – Moscow Exchange was founded in 1992 as the Moscow Interbank Currency Exchange (MICEX) and in its early years was exclusively a currency trading venue.

Moscow Exchange first announced its intention to join the Global Code in January 2018.

July 4, 2018, 11:09 am UTC.

Saxo Bank publishes Q3 Outlook

Saxo Bank, the leading Fintech specialist focused on multi-asset trading and investment, has today published its Quarterly Outlook for global markets and key trading ideas for Q3 2018 with focus on waning global growth, falling credit impulses globally, and massive complacency on the risks of a trade war as we enter one of the most dangerous periods for the global economy since the Berlin Wall fell in 1989.

Talk of ‘trade wars’ is widespread and Saxo points to the short-sightedness of the world’s governments as escalating trade tensions ahead of the November 6 US mid-term elections, where President Trump must prove he is getting the US ’a better deal’, are potentially leading to a more severe crisis.

Saxo’s Q3 Outlook covers the bank’s main asset classes: FX, equities, currencies, commodities, and bonds, as well as a range of central macro themes.

Commenting on this quarter’s outlook, Steen Jakobsen, Chief Economist and CIO, Saxo Bank, said:

“There are no winners in a trade war, and the trend is pointing in the wrong direction as nationalist agendas erode the status of global institutional frameworks. History teaches us that this can end badly. If the loser is a big economy or a strong political power, they may impose restrictions – tariffs, for example – to counter the competitive disadvantage.”

“What makes trade issues more challenging today is that currencies no longer follow the paths that current account dynamics imply they should. A country running a current account surplus is supposed to see a strong/higher currency, but in today’s world, the big current account surplus economies all seek to avoid currency strength versus the global dollar standard to maintain competitiveness and avoid the risk of deflation.”

“It’s not just about Trump, either – it also has a lot to do with China’s move to raise its global profile along every axis. China’s chief approach to this vision is so far a mercantile one via its commitment to the One Belt, One Road plan. Beijing may have already given up on the US as a long-term export market – the longer it keeps its market share, the better. The US, of course, is now actively breaking down the very international organisations that have supported growth and globalisation since the end of World War II and after the fall of the Berlin Wall.”

“Consensus still holds that an outright trade war will be avoided, but this ignores the mid-term election in the US.”

  • Equities – Technology is a unique sector

While global equities have experienced trouble this year, the technology sector continues to print solid returns for investors, thereby enhancing its attractiveness even more. An interesting feature of technology companies is their low debt leverage (net debt is minus 0 .62 for the MSCI World Information Technology index), which makes the sector the least sensitive to changes in monetary policy.

Peter Garnry, Head of Equity Strategy, said:

“The technology sector has the highest return on invested capital and uses less capital expenditure compared to others. The combination of these factors has pushed the valuation premium over global equities to 27%, which is a fair aggregate premium to pay for the only sector that delivers on growth every earnings season.

“Information technology is by far the most dominant sector in the US equity market but globally the sector is still second to financials with a market cap weight of 15.8%. Measured as industry groups, the group Software & Services is very close to overtaking Banks (9.9%) as the most important industry group in the world. The technology sector has changed from being dominated by hardware to being dominated by software which has much more attractive features for shareholders. We recommend investors stay overweight software.

“The biggest risks to the technology sector are regulation and global semiconductor disruption from an escalating trade war. At this point, the probabilities for both scenarios having major impacts on the technology sector in the short term are low.”

  • FX – A US dollar-negative trade war

The Trump administration’s aggressive stance on trade could prove a significant USD-negative as trade disruptions will also reduce the recycling of reserves into the greenback as US trade partners look to avoid adding to US dollar reserves or seek to avoid the currency entirely. The latter is particularly the case for China, which clearly has a long-term strategy aimed at raising the profile of its currency in its trade relationships.

John Hardy, Head of FX Strategy, said:

“As China’s energy import volumes mount steeply, the launch of the yuan-denominated oil contract in Q1 is arguably a gambit to eventually supplant the petrodollar with a petroyuan. As well, let’s recall that Trump’s picking of trade fights has been as frequent with traditional geopolitical allies like those within NAFTA and the EU as it has with those further afield.

“Trump focusing on Bank of Japan or European Central Bank policies and their implicit aim to keep the JPY and EUR weak could suddenly turn the tide in USDJPY and EURUSD. Admittedly, the flip-side risk is actually one of CNY weakness and USD strength versus Asian EM currencies if China chooses to abandon its strong yuan policy.”

  • Macro – Only China can save us

So far, China has only responded to the US measures by using the same tools, and without seeking escalation. If China really wanted a full-blown trade war, the most efficient method would be to send sanitary inspectors to local companies key to the US production chain and shut them down for a few weeks or months. The impact would certainly be much more devastating for US companies than any rise in tariffs decided by Beijing.

Christopher Dembik, Head of Macroeconomic Analysis, said:

“China seems inclined to play the appeasement card and be ready to support the global economy. On the back of weaker economic data and higher trade tensions, China has decided to ease its monetary policy for the third time this year. The country is doing what is has always done in instances of economic slowdown: it is stepping in to strengthen the economy and push credit impulse back into positive territory. China credit impulse is still in contraction, evolving at minus 1.9% of GDP, but it is slowly rising from its lowest point since 2010 and might be back above zero sooner than we think if the Chinese authorities consider that it is time to further support the economy against the trade war.

“China has still many options to counter the impact of trade tensions. It can resort either to more accommodative monetary policy through the RRR or scope for fiscal stimulus. Rising credit impulse should offset at least part of the effect of US tariffs on Chinese imports and is also expected to provide support to declining economic sectors, such as Chinese real estate, from 2019. It is complicated at this stage to second-guess the evolution of US trade policy but it is almost certain that China will do its best to avoid a full-blown trade war and related volatility because financial and monetary stability are crucial to its future economic development.”

  • Currency – The AUD will prolong its struggle in an environment with trade tensions

Australia has a deep relationship with China. Over 36% of the country’s shipments last year went to China, accounting for 8% of GDP. Rising tensions between the US and China are a concern for Australia as the economy is heavily reliant on exports of coal, iron ore, and education to China. But it is also a longstanding ally of the US. Chinese demand is not just for base metals – services exports to China from Australia have been rising on average 15% annually over the last decade. Additionally, tourism is on the move – last year there were 1.4 million Chinese tourists with Chinese visitors accounting for about 25% of total visitor spending. Consumer goods like wine, vitamins and other quality Australian food produce have also seen significant growth in value of exports of approximately 40% per year.

Eleanor Creagh, Market Strategist, said:

“Australia is well known for quality produce and some producers stand to gain as they could find that their products become more competitive for export to China. The agriculture sector has underperformed against almost all other asset classes for several years. We are in the midst of the second-longest economic expansion in history and the US has a growing twin deficit, household savings are low, and liquidity is contracting, which could pose problems in the long run. Given worries about the outlook for global growth and inflation potentially not meeting expectations, the sector could present an opportunity, particularly in Australia. In fact, commodities have never been so cheap relative to US stocks and commodities tend to rally later in the business cycle prior to a recession.

“Chinese tariffs on US agricultural products could provide an opening for Australian exporters to fill and for Australia to expand its economic imprint. If 25% tariffs are imposed on US suppliers to China, Australian beef exporters would offer a far more competitive price with Australia having an advantage of maritime trade routes through the APAC region.”

  • Commodities – Challenged commodities await outcome from developing trade war

Following a strong start to the year, the outlook for commodities has become increasingly challenged as multiple headwinds have started to emerge. In crude oil, a multi-month rally ran out of steam after the Opec+ group of oil-producing nations agreed to increase production to stabilise the price. Precious and semi-precious metals, meanwhile, were challenged by continued dollar strength and the diverging direction of central bank rates. Industrial metals wobbled on emerging signs that some of the world’s biggest growth engines, not least China, showed signs of slowing.

Ole Hansen, Head of Commodity Strategy, said:

“The second half of 2018 could see crude oil initially supported by strong demand as well as continued geopolitical risks related to supply concerns from Venezuela and Iran as the deadline for the implementation of US sanctions approaches. These concerns may, however, eventually be replaced by a shifting focus towards demand growth which could begin to slow down among emerging market economies.

“Gold’s performance turned sharply lower during June as the yellow metal struggled to find a defence against the stronger dollar and Fed chair Powell’s hawkish stance on continued normalisation of US rates. Three quarters of gains were reversed after traders grew frustrated following the yellow metal’s inability to break key resistance above $1,360/oz on multiple occasions. The deteriorating outlook during June has challenged but not destroyed our positive outlook for gold. Gold’s negative correlation to the dollar remains a key challenge in the short term, but given the short-to- medium-term dollar-negative outlook, we believe this headwind will fade over the coming quarter.

“Silver remains stuck within a narrowing trading range that has been in place for the past 18+ months. Two attempts during the past quarter to break above its 200-day moving average helped trigger two major corrections. Sentiment on that basis remains challenged into Q3, especially if the latest signs of economic slowdown begin to translate into further weakness among industrial metals. Gold, however, holds the ultimate key to silver’s direction and given our views on the yellow metal, we see silver continuing to challenge resistance before eventually moving higher.”

  • Bonds – With fear and volatility comes opportunity

Q3 will be a transitional period where there will be a continuous worsening of credit spreads that will ultimately lead to an inversion of the yield curve by the end of this year or the beginning of 2019. Although an inverted yield curve does not cause a recession in and of itself, Saxo believes that the combination of an increasingly hawkish Federal Reserve and an overheated economy may accelerate the path towards recession.

Althea Spinozzi, Bonds Specialist, said:

“Positioning in riskier assets will continue to be light; investors will steer away from so-called supply chain economies and sectors sensitive to tariffs such as information technology and energy so long as there is no clarity regarding the rumbling trade war. Political noise in the EU area will also be monitored closely with a particular focus on Italy as we get closer to October, when the 2019 budget will be presented.

”At the same time, a volatile environment such as the current one still offers good opportunities. The sell-off that we have seen in the previous two quarters led to a progressive widening of credit spreads, hence value can be found in US investment grade bonds and selective high yield corporates. However, it is important to keep an eye on diversification and stay short on duration as credit spreads continue to be under more stress amid uncertainties and central bank policies.”

  • Average citizens are the real losers during trade war altercations

Trade tariffs set by Trump have primarily been used primarily to affect China’s exports with additional products and possibly countries in the pipeline under the current administration. China is the number one trade partner globally for the United States, accounting for an average 45% of the US trade deficit since 2009 and 36% since 2001, when China joined the WTO.

To access Saxo Bank’s full Q3 2018 outlook, with more in-depth pieces from our analysts and strategists, please go to www.home.saxo/insights/news-and-research/publications/quarterly-outlook.

July 2, 2018, 11:04 am UTC.

ASIC accepts court enforceable undertaking from Goldman Sachs Australia to improve controls

ASIC has accepted a court enforceable undertaking from Goldman Sachs Australia Pty Ltd (GS Australia) to improve controls relating to bookbuild messaging in certain equity capital market transactions lead managed by GS Australia. A bookbuild is the process of generating, recording and capturing demand from potential investors for a capital raising transaction.

Following an investigation into a block trade transaction undertaken by GS Australia in relation to shares in Healthscope Limited on 23 November 2015, ASIC had concerns about certain representations made by GS Australia to potential investors about the minimum fixed demand.

GS Australia has implemented changes to its controls and processes including to require:

  • legal or compliance approval of all bookbuild messages to be provided to potential investors in certain equity capital market transactions; and
  • compliance attendance at any sales calls at the launch of certain equity capital market transactions to provide oversight of messaging to potential investors.

Under the enforceable undertaking, GS Australia will conduct an internal review of policies, procedures, systems, controls, training, guidance and the monitoring and supervision of employees engaged in equity capital market transactions lead managed by GS Australia and which involve a bookbuild or underwriting process, and implement changes to address any deficiencies identified.

Following those changes, GS Australia will provide an attestation from a senior executive to ASIC that the controls are adequate and appropriate to address ASICs concerns.

GS Australia will also make a community benefit payment of $500,000.

ASIC Commissioner Cathie Armour said “This court enforceable undertaking reinforces our focus on intermediary conduct and standards in capital raising transactions. Investors need to have confidence that they are being provided with accurate information in the course of a bookbuild or underwriting process.”

June 6, 2018, 3:49 pm UTC.

A Cruel Summer for Forex Brokers – Guest Editorial

Summer! The perfect time to sit back, relax and watch the flowers grow – right? Well, not if you’re a forex broker. This year has been a rather tough ride for the forex sector so far and with regulatory bodies on high alert, it seems the warmer season could be just as turbulent.

So what’s been going on and how can you make the most of the following months? Let’s recap a few of the issues that have been keeping many awake at night.

  • MiFID II – welcoming 2018 with a regulatory bang

The year got off to a panic-induced start with the implementation of MiFID II, which came into force on 3 January 2018. The wide-reaching and unforgiving set of rules designed to govern investment intermediaries and the trading of financial instruments in the European Union affected brokers in many ways. From increased transparency to ‘data unbundling’ which prevented brokers from sending out research for free – MiFID II had a large effect on customer handling and marketing in particular.

Sure, we’ve all had time to get used to the regulations by now but it doesn’t mean this first year will be at all easy as companies grapple with the finer details and get used to new practices.

  • Crypto, ICO related ad bans – a spanner in the works

One minute you’re using Google Adwords and posting to social media. The next, you’re staring finance-related ad bans in the face from social giants such as Facebook, Instagram, Google, Twitter, Snapchat, MailChimp and more. As more and more companies jumped on the regulation bandwagon in a bid to prevent unlawful advertising from ICO scammers and such like, it’s fair to say that forex brokers were left in a bit of a muddle as they struggled to revamp their marketing plans.

  • GDPR – because you didn’t have enough to think about

Everyone knows about GDPR! Why? Well, because inboxes across the globe have been filling up with ‘data permission’ and ‘usage requests’ from companies desperate to keep their clientele on mailing lists. As a broker, you’ve probably spent the past few months contacting those who use your services to inform them of the new ‘data transparency’ rules. You’ve probably also realised that tactics such as retargeting fake email lists on Facebook are now a big no-no.

There certainly has been (and still is) a lot to think about, but as the summer months arrive, let’s turn away from any negatives and think about how the forex sector can use the summer months affectively.

  • What can be done? A whole lot!

The regulatory changes all seemed to come at once, so it’s no wonder that the finance sector is wondering how to progress. The good news is, despite the restrictions, there’s still plenty that can be done and growing your brand, improving your online reputation and avoiding the wrath of formidable regulators all comes down to generating superb content. Indeed, content is no longer King but Emperor.

  • The need for authenticity amid fake news

Having discussed this in depth on the speaker’s panel at the recent iFX EXPO in Limassol Cyprus, we can’t reinforce enough the need for authentic content amid fake news. So much of what we read is untrue, fabricated and ridiculous and the finance sector have undoubtedly contributed to this wave of falsities – think fake profiles, fake testimonials, made-up quotes, PR material that is not genuine.

Therefore, it’s more important than ever to cleanse the industry and to work hard to improve the authenticity of your brand. This can be done by:

Going Live! Live video is a great way to give consumers a behind-the-scenes look at your company and to introduce key players such as CEOs, CTOs and other team leaders. The more you put a face to your brand, the more you can build trust amid an audience who may be somewhat fretful or fearful of certain financial products amidst negative stories, scams or fake news.

Focusing on video marketing. You don’t always have to go live. Video marketing is an excellent way to go back to basics and describe more complex products in a clear and concise way. Indeed, research has shown that a well-scripted video can not only increase leads by 66% and brand awareness by 54% but it can also boost sales and reduce consumer confusion. Producing high quality video can help launch your brand if you’re a start-up and ramp things up a notch if you’re established.

Marketing real USPs. Consumers are becoming more and more suspicious and rightly so. They don’t want to read a bunch of fake USPs only to discover you can’t deliver specific services or promises. For this reason, it’s crucial to focus on what you’re good at and what sets you apart from the competition.

  • And what about those ad bans?

There’s really no need to panic. Sure, you can’t go around using buzzwords like ICOs and cryptocurrencies on social sites any more, but as only ads are banned you can still use fabulous content to attract your audience. It’s all about thinking outside of the box by:

Interacting on social sites like Reddit and Telegram where large crypto and ICO communities are formed. It’s perfectly possible to build a social presence without being overly promotional.

Becoming a thought-leader and posting high-quality content to social platforms like LinkedIn.

Embracing the art of storytelling. It’s not all about sales, sales and more sales. Taking people on a journey and giving them a reason to believe in your business is a great way to strengthen your brand’s identity and to gain a loyal following.

Keeping GDPR at the forefront of your mind. Since the Cambridge Analytica scandal, people are very aware that their data has been misused. Therefore, making all your policies clear will again make your content and business mission authentic.

If you’re looking to implement a marketing strategy that’s fully compliant and does wonders for your reputation, contact the Contentworks team today. Our writers are fully clued up on all the latest regulatory changes and will help you to navigate the red tape in style.

April 13, 2018, 9:51 am UTC.

London Stock Exchange Group appoints David Schwimmer as CEO

London Stock Exchange Group plc (“LSEG”) is pleased to announce today the appointment of David Schwimmer as Chief Executive Officer. He will join the Group on 1 August 2018 and will be a member of the Board of Directors, LSEG plc (“the Board”). David Warren, Interim CEO and Group CFO, will continue as Group CFO and a member of the Board.

David Schwimmer, 49, joins LSEG after a twenty year career at Goldman Sachs. Most recently, he was Global Head of Market Structure and Global Head of Metals and Mining in Investment Banking. He began his career at Goldman Sachs in the Financial Institutions Group, focusing on Market Structure, Brokerage and Trading. He also served as Chief of Staff to then President and COO, Lloyd Blankfein, and spent three years in Moscow as Co-Head of Goldman Sachs’ business for Russia/CIS.

David Schwimmer brings a strategic perspective on the drivers of growth and innovation in financial markets infrastructure. He has extensive experience leading diverse and high performing teams in dynamic markets. He also brings deep experience in capital markets, having advised blue-chip corporate clients across sectors and regions on mergers and acquisitions, initial public offerings and other transactions.

Donald Brydon, Chairman, London Stock Exchange Group, said: “I am delighted to announce David Schwimmer’s appointment after what has been a comprehensive global search conducted by the Board. David is a leader with great experience in the financial market infrastructure sector, which he has been closely involved in throughout his investment banking career, as well as capital markets experience in both developed and emerging markets. He is well known for his robust intellect and partnership approach with clients and colleagues alike.”

David Schwimmer said, “It is an honour and privilege to be asked to lead London Stock Exchange Group. It is both an iconic institution and a great business. Having worked with exchanges and other market infrastructure companies for much of the past 20 years, I have been impressed by its strong track record of partnering with customers to deliver innovative solutions. LSEG has multiple opportunities for further attractive growth across its market leading capital formation, information services and post trade businesses. I look forward to working alongside the Group’s highly capable management team to continue to deliver value for its customers, employees and shareholders.”

The CEO’s remuneration package will include:

  • Annual salary of £775,000;
  • Bonus opportunity of 225% of salary, pro-rated for 2018 based on joining date with mandatory deferral of 50% of bonus into shares for a three year period;
  • A 2018 LTIP grant of 300% of salary, which will only vest based on performance over a three year period as assessed by the Remuneration Committee against a range of financial targets and actual TSR performance. The award will also be subject to a 2 year post-vesting holding period, resulting in a total 5 year holding period from the date of LTIP grant;
  • A requirement to reach the Minimum Shareholding Requirement (“MSR”) of 300% salary, within a 5 year period of appointment
  • A cash allowance of 15% of salary in lieu of pension and standard UK benefits;
  • Relocation support for a fixed period, including housing allowance; and
  • A one-off payment of £1,050k to be made in March 2019 to compensate for the forfeiture of cash compensation for 2018 from his previous employer. There are no other buy-outs.

The terms of the remuneration package reflect the enhancements made to LSE’s Remuneration Policy published with the 2017 Annual Report.

January 9, 2017, 9:10 am UTC.

Nicolas Shamtanis Bullet Report: Straight to the Point!

By Nicolas Shamtanis, easyMarkets

The financial calendar is thin today and the market will be affected mostly by FED member’s speeches after Friday’s very important NFP report which rose 156k in December versus 204k in November.

Notable improvement is the rise in average wage earnings which is at the strongest level since 2009. What this means is that if workers earn more money, then inflation is likely to rise in the future as these workers will have more money to spend on goods and services. A spike in prices (inflation) gives ground to the FED or any other Central Bank to raise interest rates which should strengthen the Dollar further.

In the UK, weekend comments by the PM Theresa May, weighed on the Sterling.

Currencies:

The Dollar ended the week on a strong foot, after the release of the details from Friday’s NFP Report. As mentioned, the pickup in wages is an important factor why traders bought the USD after the release, as the inflationary expectations that rise from wage growth, give support to the FED raising rates in 2017 numerous times (At least 2).

 

On the other hand, GBPUSD opened the week on a very weak note, by comments from UK PM as she emphasized in a televised interview that Brexit is about “getting the right relationship, not about keeping bits of membership.” And she noted that the right relationship is about being “have control of our borders, control of our laws” while having the “best possible deal” for trading with EU.

The comments indicated that control of immigration and law prevail access to the single markets. GBPUSD dropped as low as 1.2169 today from 1.2430 highest level on Friday.

Stocks:

U.S. stocks ended at record highs, fueled by optimism over Trump’s plans to stimulate the economy with lower taxes and increased infrastructure spending. Both the Nasdaq and the S&P 500 ended at record highs. European equities opened the week on a mixed start with UK +0.30%, the DAX -0.23% and CAC -0.2%.

Oil and Gold:

Oil prices edged lower, thanks to a stronger dollar and growing concern whether OPEC producers would stick to an agreement to cut output. Brent crude futures were down 0.3% in early trade.

Gold prices fell on Friday, retreating from the previous sessions one-month highs as the dollar strengthened against a currency basket after U.S. jobs data showed a slowdown in hiring in December but a pickup in wage growth. The price has stabilized now around $1175 per ounce.

July 1, 2016, 7:49 am UTC.

FINRA: FINRA Fines Deutsche Bank Securities Inc. $6 Million

WASHINGTON – The Financial Industry Regulatory Authority (FINRA) today announced it has fined Deutsche Bank Securities Inc. $6 million for failing to provide complete and accurate trade data in an automated format in a timely manner when requested by FINRA and the Securities and Exchange Commission (SEC). As part of the settlement, Deutsche Bank has agreed to retain an independent consultant to improve its policies, systems and procedures related to blue sheet submissions.

FINRA and the SEC regularly request certain trade data, also known as “blue sheets,” to assist in the investigation of market manipulation and insider trading. Federal securities laws and FINRA rules require firms to provide this information to FINRA and other regulators electronically upon request. Blue sheets provide regulators with critical detailed information about securities transactions, including the security, trade date, price, share quantity, customer name, and whether it was a buy, sale or short sale. This information is essential to regulators’ ability to discharge their enforcement and regulatory mandates.

Cameron Funkhouser, Executive Vice President and Head of FINRA’s Office of Fraud Detection and Market Intelligence, said, “Firms are expected to provide complete, accurate and timely blue sheet data in response to regulatory requests. Incomplete and inaccurate blue sheet data compromises our ability to identify individuals engaging in insider trading schemes and other fraudulent activity. Firms must invest the resources necessary to ensure that they are providing complete and accurate blue sheet data whenever requested – without exception.”

FINRA found that from at least 2008 through at least 2015, Deutsche Bank experienced significant failures with its blue sheet systems used to compile and produce blue sheet data, including programming errors in system logic and the firm’s failure to implement enhancements to meet regulatory reporting requirements. These failures caused the firm to submit thousands of blue sheets to regulators that misreported or omitted critical information on over 1 million trades.

Additionally, FINRA found a significant number of Deutsche Bank’s blue sheet submissions did not meet regulatory deadlines. Firms typically have 10 business days to respond to a blue sheet request. Between January 2014 and August 2015, approximately 40 percent of Deutsche Bank’s blue sheets were filed past the regulatory deadline; and likewise, from July to August 2015, more than 90 percent of Deutsche Bank’s blue sheets were not submitted to FINRA on a timely basis.

In settling this matter, Deutsche Bank neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

FINRA’s investigation was conducted by the Office of Fraud Detection and Market Intelligence, and the Department of Enforcement.

Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA’s BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2015, members of the public used this service to conduct 71 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA’s Disciplinary Actions Online database. Investors can also call FINRA’s Securities Helpline for Seniors at (844) 57-HELPS for assistance or to raise concerns about issues they have with their brokerage accounts and investments.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.

For Release: Wednesday, June 29, 2016

Contact(s): Michelle Ong (202) 728-8464, Nancy Condon (202) 728-8379