| January 10, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Analysis: With banks' results on tap, options traders prepare for volatility
Saqib Iqbal Ahmed - Reuters
Options traders are bracing for volatility in U.S. bank shares days ahead of an earnings season many believe will bring lower profits and reflect worries over an expected recession.
Current market positioning signals a gloomy outlook: The one-month moving average of open puts on the Financial Select Sector SPDR Fund (XLF.P), the largest financials ETF with nearly $33 billions in assets, outnumbers call options, 1.8-to-1, the most defensive this measure has been since late October.
/jlne.ws/3W0jjJB
JPMorgan's Trading Desk Sees CPI Bolstering Bear-Market Rally
Lu Wang - Bloomberg
Thursday's widely watched US inflation data are likely to come in cooler than expected, helping stocks extend a bear-market rally, according to JPMorgan Chase & Co.'s sales and trading desk.
While consensus expects December's consumer price index to slide to a 6.5% annualized pace, the bank's team including Andrew Tyler sees an almost two-in-three chance for the data to arrive within 10 basis points of the estimate, with a bias to the soft side. Since investors are largely defensively positioned, they argue, any evidence that the Federal Reserve's inflation-fighting campaign is working will spark a rush to unwind bearish positions. In that case, they see the S&P 500 rising 1.5% to 2% over the session.
/jlne.ws/3GSpyec
Bank of England criticises UK banks' risk management systems
Owen Walker, Laura Noonan and Ian Smith - Financial Times
The Bank of England has sharply criticised UK lenders for failing to tackle the risk management blind spots exposed by the collapse of a multibillion-dollar hedge fund, the energy price shock and other crises that have rocked financial markets in recent years.
The rebuke, delivered in letters to bank chiefs, highlights the BoE's growing discomfort about the exposure of traditional financial institutions to the hedge funds, pensions and other non-banking financial institutions that are expected to be ground zero for the next financial crisis.
/jlne.ws/3X2oUQK
Europe Stocks Fall as Fed Officials Dash Pivot Bets Before CPI
Sagarika Jaisinghani - Bloomberg
European stocks dropped after hitting their highest level in over eight months as hawkish comments from Federal Reserve officials dulled optimism around a pivot in central bank policy ahead of key inflation data.
The Stoxx 600 Index closed 0.6% lower with retailers and miners among the top decliners, while insurers and autos outperformed.
/jlne.ws/3XiAU0n
| | | | | | Exchanges | | | Meet Our COO, Dan Busby
OCC
23 years at OCC Previously served as OCC's Chief Administrative Officer and Chief Clearing and Settlement Services Officer. Held numerous leadership roles during his OCC tenure including in investor relations and business operations. Education: MBA in Marketing and Strategy from Loyola University's Quinlan School of Business Bachelor of Science in Accounting from Fairfield University Graduated from SIA's Securities Industry Institute at the Wharton School of the University of Pennsylvania. Quick Facts: Member of OCC's Operations Roundtable Represents OCC on the SIFMA Listed Options Committee.
/jlne.ws/3X2toqy
Cboe Europe Equities Yearly Recap and Look Ahead
Cboe
Despite the wider market challenges, 2022 was a fantastic year for Cboe's businesses in Europe:
/jlne.ws/3CzYIow
Taiwan Futures Exchange to launch FLEX Options, expand 'kill switch' in 2023
Sophia Yang - Taiwan News
The Taiwan Futures Exchange (TAIFEX) reported another good year on Monday (Jan. 9) and announced a plan to launch flexible exchange options to keep its growth momentum as well as to make the "kill switch" applicable to brokers, in addition to futures dealers, to avoid future trading debacles. In Monday's press conference, TAIFEX Chairman Wu Tzu-hsin (???) said the exchange executed 384 million contracts in 2022, representing a 2% drop from the previous record year despite a struggling stock market. He expected another positive year in 2023 as more new services are introduced.
/jlne.ws/3Qp9Avj
LME Nickel Review Recommends Tighter Rules on Market Distortions
Jack Farchy and Mark Burton - Bloomberg
The London Metal Exchange should tighten its rules and enforcement processes to prevent risks of market distortions, according to an independent review of the events surrounding March's nickel crisis.
The LME, which is also facing regulatory investigations from the UK's Bank of England and Financial Conduct Authority, appointed Oliver Wyman to conduct the review last year.
/jlne.ws/3ZtPt3d
Miami International Holdings Reports Trading Results for December and Full-Year 2022; MIAX Exchanges Set Multiple Volume and Market Share Records
MIAX
Miami International Holdings, Inc. today reported December and full-year 2022 trading results for its U.S. exchange subsidiaries - MIAX , MIAX Pearl and MIAX Emerald (together, the MIAX Exchange Group), and Minneapolis Grain Exchange (MGEXâ¢).
/jlne.ws/2K3gU18
SGX Group reports market statistics for December 2022; DDAV rises in December, record volumes across multiple products in 2022; SDAV up in December as STI led advanced economy benchmarks in 2022
SGX Group
Singapore Exchange (SGX Group) today released its market statistics for December 2022. Continued rise in risk management activities drove derivatives volume growth in FX and Commodities, as global markets responded to another round of rate hikes by major central banks and China's surprise reopening. Derivatives daily average volume (DDAV) in December rose 8% year-on-year (y-o-y), capping the October-to-December quarter with a 19% rise to 1.1 million contracts. Total derivatives traded volume for the quarter across equity, foreign exchange and commodities grew 18% y-o-y to 65.5 million contracts.
/jlne.ws/3vPgvUW
TMX Group Equity Financing Statistics - December 2022
TMX Group
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for December 2022. TSX welcomed two new issuers in December 2022, compared with 12 in the previous month and nine in December 2021. The new listings were one financial services company and one mining company. Total financings raised in December 2022 increased 521% compared to the previous month, and were up 27% compared to December 2021. The total number of financings in December 2022 was 25, compared with 36 the previous month and 56 in December 2021.
/jlne.ws/3W2hagt
| | | | | | Regulation & Enforcement | | | 2022 Year in Review
FIA
We seem to say this a lot lately, but the last year was full of extraordinary challenges. Chief concerns in global derivatives markets this time around included Russia's invasion of Ukraine that disrupted global commodity markets, a sudden and alarming increase in inflation, and the collapse of FTX that has prompted an urgent call for oversight of crypto markets.
As our industry rose to face these new challenges in 2022, the past year also reinforced long-standing truths about the strength of our markets. Namely: that when uncertainty is all around us, risk management and price discovery are more important than ever.
/jlne.ws/3GSehdI
Where regulators could reform Wall Street in 2023
Dennis Kelleher - Financial Times
This year looks to be both busy and consequential for the development of better protection for investors and markets in the US. The ongoing crypto carnage is the latest reminder of how important that is.
In 2022, we saw the best of US financial regulators in tackling that task along with some of the worst. The Securities and Exchange Commission returned to its core mission â to "protect investors; maintain fair, orderly and efficient markets; and facilitate capital formation". This was despite sustained pressure from entrenched incumbent firms on Wall Street with their lobbyists and allies in Congress.
/jlne.ws/3GVsNl2
| | | | | | Strategy | | | Earnings Season Approaching
Cboe (Video)
Tim Biggam @Delta_Desk talks about the market's lack of volatility as we head into earnings season in today's #Vol411. $SPX $VIX
/jlne.ws/3VZdTP6
Stocks rise slightly as investors look to next inflation report, earnings season
Alex Harring and Tanaya Macheel - CNBC
Stocks advanced Tuesday as investors continued building on the new year's early rally while awaiting economic data and corporate earnings coming later in the week.
The Dow Jones Industrial Average gained 70 points, or 0.2%. The S&P 500 also traded up 0.3%, while the Nasdaq Composite added 0.5%.
/jlne.ws/3vUIwdI
Why The VIX Could Predict A Bitcoin And Crypto Rally
newsbtc.com
Thomas Lee, managing partner and head of research at Fundstrat Global Advisors, outlined in a recent CNBC interview why the VIX - a real-time volatility index from the Chicago Board Options Exchange (CBOE) - will become an important indicator for equity markets and possibly Bitcoin in the coming months.
/jlne.ws/3QuOETy
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
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