HKEX Drops £32bn Bid for LSE After Charm Offensive Fails – Financial Times

Hong Kong Exchanges and Clearing said it would drop a £32bn offer for the London Stock Exchange Group, ending its attempt to create a global capital markets operator with a dominant position in Europe and Asia.

World Bank Joins Warning About Dimming Global Growth Prospects – Bloomberg

World Bank President David Malpass said the global economic outlook is deteriorating amid Brexit-related uncertainty, trade tensions and a downturn in Europe.

Johnson Steps Up Election Preparations as Hopes Fade for Brexit – Financial Times

Boris Johnson has stepped up preparations for a general election as concern mounts in Downing Street that the prime minister’s attempt to engineer a Brexit deal is heading for failure.

Hopes for a Deal Dim as US-China Trade Talks Get Underway in Tense Atmosphere – Reuters

Prospects for progress in US-China trade talks dimmed after Washington blacklisted Chinese companies over Beijing’s treatment of predominantly Muslim ethnic minorities, and President Donald Trump said a quick trade deal was unlikely.

Trump says US Economy Entitled to ‘Substantial’ Interest Rate Cut – Reuters

President Donald Trump said he wanted to see the US Federal Reserve enact a “substantial” cut in interest rates because of the lack of inflation in the United States.

Ireland to Prepare for the Worst with ‘No Deal Brexit’ Budget – Reuters

Ireland’s finance minister will present a “no deal” Brexit budget for 2020, detailing how he will keep firms afloat and allow the state’s finances to return to deficit if Britain leaves the European Union in a chaotic manner.

Report Envisages Erosion of USD Global Reserve Status – Profit & Loss

A new report from Vontobel and Eurasia Group suggests that there could be an erosion of the US dollar’s reserve currency status as geopolitical tensions between America and China continue.

Trump Threatens Turkey with ‘Extremely Decimated Economy’ Over Syria – Reuters

President Donald Trump on Monday launched a harsh attack on NATO ally Turkey, threatening to destroy its economy if Ankara takes a planned military strike in Syria too far, even though the U.S. leader himself has opened the door for a Turkish incursion.

Hong Kong v Shanghai: the Battle Over China’s Capital Markets – Financial Times

The battle over the future of the London Stock Exchange Group is also a fight for the future of the world’s financial markets.

Regulatory News

Wild Swings in Repo Rates Raise Concerns About Bond Market’s Liquidity – Wall Street Journal

Some investors are concerned that recent turmoil in a key short-term cash market where banks borrow to fund operations could exacerbate difficulties trading bonds.

On CCP Oversight, US and EU May Be Closer Than They Appear – Risk

For the better part of two years, regulators in the US and Europe have been embroiled in an unusually acrimonious dispute over the supervision of foreign clearing houses.

Central Bankers’ Committee Defends Unconventional Crisis-Fighting Tools – Reuters

A report from a central bank-led global committee has defended the use of crisis-fighting tools such as negative interest rates and large-scale asset purchases, saying the benefits have outweighed the side effects.

EC Official: Supervisors Must Manage Brexit Trading Disruption – Risk

A European Commission official has put the onus on supervisors to deal with any trading disruptions in the event of a no-deal Brexit – shutting down hopes of a legislative fix. 

The End of Libor: the Biggest Banking Challenge You’ve Never Heard Of – Reuters

On June 30, British bank NatWest sent out an arcane-sounding press release – bus operator National Express had become the first company to take out a loan based on Sonia, a replacement for scandal-hit interest rate benchmark Libor.  

Crypto News

Bitcoin Slumps as Launch of Bakkt Futures Market Disappoints – Wall Street Journal

Bitcoin’s latest white knight hasn’t slain the dragon. Bakkt, a bitcoin-futures platform created by Intercontinental Exchange, went live two weeks ago. It is a high-profile bet that Wall Street and institutional investors would embrace cryptocurrencies.

Major Exchanges Urge UK Regulator to Not Restrict Crypto Derivatives – Coin Telegraph

The World Federation of Exchanges, a global trade association of publicly regulated exchanges, has urged the United Kingdom’s Financial Conduct Authority not to restrict cryptocurrency derivatives for retail investors.

EU to Regulate Crypto Currencies such as Facebook’s Libra: Dombrovskis – Reuters

The nominee to become the European Union’s next finance commissioner pledged on Tuesday to propose new rules to regulate crypto currencies such as Facebook’s Libra.

From Cardano to Ethereum, 2020 Could Be Deciding Year for Proof-of-Stake – Coin Desk

2020 will be the year proof-of-stake (PoS) blockchains finally break out. Maybe.

Tether Slammed as “Part-Fraud, Part-Pump-and-Dump, and Part-Money Laundering” – Financial Times

Class action lawsuit filed against Tether and Bitfinex by the same lawyers who sued Craig Wright.

Can Blockchain Solve Brexit’s Border Puzzle? – Reuters

A team of experts has come up with a plan to use blockchain tracking for trade between Northern Ireland and the Republic of Ireland to avoid the re-imposition of a hard border after Britain leaves the European Union.

Company News

HSBC Not Going Far Enough with Job Cuts – Australian Financial Review

Considering the bank’s global headcount, the figure of 10,000 seems small. More layoffs should be focused on the global banking and markets division.

CTAs End Run of Good Performance in September – Profit & Loss

CTAs gave back some of August’s gains in September, closing the month down 3.21%, according to data from Societe Generale.

Hedge Funds Post the Best Performance This Year Since 2013 – Bloomberg

Hedge funds are kicking into a higher gear. They gained 4.9% on average in the first three quarters of 2019, the best performance in this span since 2013, according to a report Monday from Hedge Fund Research. Equity strategies are leading the gains, followed by event-driven on an asset-weighted basis.

Fenics Launches New Market Data Package – Profit & Loss

Fenics Market Data has launched a new FX data package, FMD FX, which it claims will be one of the most comprehensive data packages commercially available for FX pricing.

Market Savvy

Where the US-Japan Trade Deal Falls Short of Trans-Pacific Pact Abandoned by Trump – Reuters

US President Donald Trump has called his new trade deal with Japan a “phenomenal” victory for US farmers. but don’t expect America’s Land O’Lakes butter to knock New Zealand’s Anchor or France’s President brands off store shelves in Japan, the world’s third largest economy.

China’s Central Bank Continues to Load Up On Gold – Financial Times

Reserves managers around the world are trying to trim exposure to the US dollar.

Krona Extends Fall Against the Euro as Trade Tensions Bite – Financial Times

The Swedish krona tumbled once again, falling to its weakest level against the euro since the wake of the financial crisis as global trade tensions continued to take a toll.

Goldman Sachs Advises Buying Pound vs. Dollar, Sees Low Odds of No-Deal Brexit – Reuters

Goldman Sachs has recommended clients go long sterling against the dollar, with a target of $1.30 compared with the pound’s current spot value of around $1.23, citing relatively low odds of a no-deal exit from the European Union.

Weak Auction Shakes Japan’s Bond Market from its Slumber – Financial Times

Demand lowest in three years as investors prepare for policy shift from central bank.