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☆ FASB Extends Accounting Relief as Companies Switch From Libor
▼ + stars: | 2022-10-05 | by ( Mark Maurer | ) www.wsj.com time to read: +4 min

The Financial Accounting Standards Board allowed companies to continue ignoring certain rules around modifying loan contracts and accounting for hedges of interest-rate risks as they move away from the London interbank offered rate. Libor and other benchmarks underpin trillions of dollars of financial contracts, including corporate loans, mortgages and interest-rate derivatives. PREVIEWThe FASB initially gave companies relief in March 2020, in an effort to help them work through the large volumes of financial contracts they needed to update or renegotiate as part of their preparations to abandon Libor. U.S. banks stopped issuing new financial contracts using Libor at the end of last year. Companies are considering which version of SOFR to switch to from Libor.

"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," the BoE warned. One source at the Treasury said Kwarteng would not resign, and the government would not reverse its policy. A second person familiar with the situation said Truss still backed Kwarteng and they would announce further economic reforms soon. One source at the meeting said Kwarteng had asked the assembled finance bosses what they could do to calm markets. U.S. bond giant PIMCO said it would have less confidence in sterling than it did before last Friday's announcement.

"There will be impacts, there’s correlations ... some market volatility, and then how it weighs in the global growth picture," said Paul Malloy, head of municipals at Vanguard. The wild swings in the pound have ricocheted across currency markets, where volatility was already climbing. According to the widely watched Deutsche Bank Currency Volatility Index , volatility across currencies on Wednesday hit its highest level since the March 2020 COVID-19- induced market meltdown, jumping more than 20% from levels last week. Closely followed indicators of financial stress remain contained. U.S. stock market volatility as measured by the "fear index," the VIX (.VIX), has also climbed in recent days but remains below its 2022 highs.

☆ Nasdaq divides business into three units to streamline operations
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +2 min

The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, U.S., December 3, 2021. It said Market Platforms, Capital Access Platforms and Anti-Financial Crime will be the new units that will focus on digital assets, carbon markets, providing investment intelligence apart from U.S. equities. Register now for FREE unlimited access to Reuters.com RegisterNasdaq's efforts to streamline its operations come after the sector, which largely catered to stocks and derivatives, underwent an upgrade as cryptocurrencies gained popularity. Last week, Nasdaq launched a digital assets business that places it in a direct competition with crypto exchanges Binance and Coinbase Inc (COIN.O). Register now for FREE unlimited access to Reuters.com RegisterReporting by Mehnaz Yasmin in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.

☆ UK Pensions Regulator monitoring markets, welcomes BoE bond buying
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +1 min

LONDON, Sept 28 (Reuters) - Britain's Pensions Regulator is monitoring financial markets closely for their impact on the funding of defined benefit, or final salary, pension schemes, a spokesperson said on Wednesday. Pensions schemes have been heavily selling gilts in recent days after market falls caused by UK tax cut concerns triggered calls for collateral payments on the schemes' gilt derivatives positions, analysts and pensions advisers said. read more"We welcome steps announced by the Bank of England to restore orderly conditions through temporary purchases of long-dated UK government bonds," the Pensions Regulator spokesperson added. The regulator reiterated comments this week that the schemes and their advisers should review the resilience and liquidity of their investments, risk management and funding arrangements. read moreRegister now for FREE unlimited access to Reuters.com RegisterReporting by Carolyn Cohn Editing by Gareth JonesOur Standards: The Thomson Reuters Trust Principles.

☆ Investors should still be underweight equities, says JPMorgan's Gabriela Santos
▼ + stars: | 2022-09-28 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInvestors should still be underweight equities, says JPMorgan's Gabriela SantosAmy Wu Silverman, head of derivatives strategy at RBC Capital Markets, and Gabriela Santos, global market strategist at JPMorgan Asset Management, join CNBC's 'Squawk Box' to lay out their market strategies ahead of the open.

☆ Explainer: Why are Britain's pension schemes dumping gilts?
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +4 min

WHAT ARE DEFINED BENEFIT PENSION SCHEMES? Defined benefit (DB) pension schemes pay pensioners a fixed annual amount, often a proportion of the final salary they earned as employees. Register now for FREE unlimited access to Reuters.com RegisterThe pension schemes invest typically more than half of their assets in bonds, in order to pay pension liabilities decades into the future. To avoid being exposed to market volatility, the schemes typically hedge their positions through gilt derivatives managed by so-called liability-driven investment (LDI) funds. LDI funds also sold index-linked gilts to shore up the cash in their funds.

☆ Britain's pensions trustees should check cash flow positions for market stress - regulator
▼ + stars: | 2022-09-27 | by ( ) www.reuters.com time to read: +1 min

LONDON, Sept 27 (Reuters) - Britain's pension scheme trustees should review their cash flow positions and assess if they can cope with further market stresses, following a sharp rise in gilt yields in recent days, The Pensions Regulator's policy director said on Tuesday. Register now for FREE unlimited access to Reuters.com RegisterThis may require them to set aside cash or sell more liquid assets to meet those collateral demands, the advisers add. Trustees and their advisers should look at the resilience of their investments, risk management and funding arrangements "in more detail", Fairs said. He added the regulator expected trustees to "understand the source of those cash flows and how their availability might be affected by the ability to liquidate assets held and by the collateral requirements in a variety of markets, including one under greater stress." Register now for FREE unlimited access to Reuters.com RegisterReporting by Carolyn Cohn Editing by Louise Heavens and Mark PotterOur Standards: The Thomson Reuters Trust Principles.

☆ Bankrupt crypto lender Voyager to sell assets to Sam Bankman-Fried's FTX for $1.4 billion
▼ + stars: | 2022-09-27 | by ( Ryan Browne | ) www.cnbc.com time to read: +2 min

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022. Customers of beleaguered cryptocurrency lender Voyager Digital may find some solace in the news that FTX, the bitcoin exchange founded by billionaire Sam Bankman-Fried, is set to take on the company's assets after winning a bankruptcy auction. After several rounds of bidding, FTX's U.S. subsidiary was selected as the highest bidder for Voyager's assets, the companies said in a statement late Monday. The bid was valued at roughly $1.4 billion, a figure that includes $1.3 billion for the fair market value of Voyager's digital assets, plus a $111 million "additional consideration" in anticipated incremental value. The sale of Voyager's assets to FTX U.S. is dependent on a vote by creditors, as well as "other customary closing conditions," according to the statement.

☆ Options activity hints U.S. stock market has not reached bottom- Barclays
▼ + stars: | 2022-09-27 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +2 min

Trading in put contracts - typically used to protect against market losses - has surged, with a record 33.93 million put contracts changing hands on Friday alone. "Contrary to popular belief, equity investors did not hastily pile into protection buying," Barclays equity derivatives strategist Stefano Pascale said in a note on Tuesday. But while the trading activity suggests there is still fear in the market, it has not risen to levels associated with past market bottoms. "We don't see evidence of record equity protection buying when selling activity is also properly accounted for," Pascale said. For instance, in options on ETFs, puts selling reached a four-year record, according a Barclays analysis, signaling peak fear is still distant.

☆ Crypto exchange FTX is replacing its U.S. president
▼ + stars: | 2022-09-27 | by ( Ashley Capoot | ) www.cnbc.com time to read: +2 min

Brett Harrison, the U.S. president of the crypto exchange FTX, announced his resignation on Tuesday, with the company in the midst of a massive expansion effort. "I have deep gratitude for my experiences at FTX in the last year and a half," he wrote in a tweet. Harrison joined FTX, whose parent company is based in the Bahamas, in May 2021 after spending close to two years at Citadel Securities. In addition to Voyager Digital, FTX has been seeking out distressed crypto assets in the U.S. as it tries to expand its market share during the so-called crypto winter. "We really didn't mean to mislead anyone, and we didn't suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance," Harrison wrote on Twitter at the time.

☆ China’s Central Bank Moves Further to Bolster the Yuan
▼ + stars: | 2022-09-26 | by ( Rebecca Feng | ) www.wsj.com time to read: 1 min

China’s central bank took another step to shore up the yuan, making it more expensive for traders and institutions to bet against the currency after it weakened rapidly against the dollar. The People’s Bank of China said on Monday that financial institutions selling foreign-exchange forward contracts will be subject to a 20% risk-reserve ratio, up from zero currently. The change, which will kick in on Sept. 28, will make it costlier for banks—and correspondingly, their clients—to sell yuan to buy dollars in the derivatives markets.

☆ From the Fed to Europe's currency crisis, here's what's behind this selloff in financial markets
▼ + stars: | 2022-09-23 | by ( Patti Domm | In | ) www.cnbc.com time to read: +4 min

"It's clear the economy is slowing yet inflation is ramping and the central bank is compelled to address it. Fed Chairman Jerome Powell steadfastly warned the Fed will do what it needs to do to crush inflation. Arone said around the globe, the common threads are slowing economies and high inflation with central banks engaged to curb high prices. Strategists say the U.S. central bank particularly rattled markets by forecasting a new higher interest rate forecast, for the level where it believes it will stop hiking. The Fed's projected 4.6% high water rate for next year is considered to be its "terminal rate," or end rate.

☆ EU watchdog proposes emergency brake on energy markets
▼ + stars: | 2022-09-22 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

REUTERS/Fabian BimmerLONDON, Sept 22 (Reuters) - A temporary brake on gas and electricity derivatives when prices spike could improve the overall functioning of the energy market, the European Union's securities watchdog proposed on Thursday. "It would, therefore, appear useful to consider implementing, on a temporary basis and for energy derivative markets only, a new type of trading halt mechanism," ESMA said in a statement. Such a mechanism would need to be implemented as part of emergency measures tackling the current energy crisis, it added. Energy firms sell their output using derivatives markets, requiring them to post "margin" in the form of cash, in practice, to cover positions at clearing houses in case they turn sour. ESMA said such conditions include a time limit on their use, such as for the winter period when stresses in energy markets are expected to continue.

☆ Silverman: We are beginning to move out of the pandemic era in terms of market volatility
▼ + stars: | 2022-09-22 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailSilverman: We are beginning to move out of the pandemic era in terms of market volatilityAmy Wu Silverman, Head of Derivatives Strategy at RBC Capital Markets, joins Worldwide Exchange to discuss her expectations for volatility in the markets for the remainder of the year.

☆ A 35-year market veteran shares how he perfected a strategy to hedge against higher interest rates as the Federal Reserve works to stop inflation
▼ + stars: | 2022-09-22 | by ( James Faris | ) www.businessinsider.com time to read: +5 min

Hedging against higher interest rates has been a winning strategy as the inflation fight continues. At his new firm, the market veteran used his background in options trading and started the Simplify Interest Rate Hedge ETF (PFIX). Bassman's strategy is simply to hedge against interest rates, which have risen dramatically this year as inflation runs rampant. "What I wanted to do was to find a product to offer people direct access to rising interest rates," Bassman told Insider. "The idea that rates go down and you buy this insurance policy — truth be told — is a better strategy," Bassman said.

☆ Explainer: What's inside China's toolbox to rein in excess yuan weakness?
▼ + stars: | 2022-09-21 | by ( ) www.reuters.com time to read: +4 min

The local currency also looks set for the biggest annual loss since 1994, when China unified official and market exchange rates. The rapid yuan declines prompted the People's Bank of China (PBOC) to lower the amount of foreign exchange financial institutions must hold as reserves to rein in weakness. The PBOC has been setting firmer-than-expected daily yuan midpoint fixings since late August to prevent excess yuan weakness, as the onshore spot yuan can only trade in a 2% narrow range around the midpoint. The central bank adjusted the methodology a few times before suspending it in October 2020. "The yuan exchange rate level itself is not the most important, the nature of the issue is whether China's cross-border capital flows remain stable," said Zhong Zhengsheng, chief economist at Ping An Securities.

☆ Analysis: Rally in U.S. consumer stocks teeters with Fed, inflation in focus
▼ + stars: | 2022-09-21 | by ( David Randall | ) www.reuters.com time to read: +5 min

read moreRegister now for FREE unlimited access to Reuters.com RegisterThe gains in the consumer discretionary sector may prove fleeting. read moreStill, some investors believe inflation and growth woes may already be largely reflected in many consumer discretionary shares. "But we're seeing a lot of consumer stocks that we think will hold up and come out of this in a better position." Consumer stocks are rallying despite looming Fed hikes. Global fund managers have remained bearish on consumer discretionary stocks despite recent gains, with nearly 25% of those surveyed by BofA Global Research this month underweight the sector - the most of any group.

☆ Goldman sees this options trade as attractive heading into the Fed decision
▼ + stars: | 2022-09-21 | by ( Jesse Pound | ) www.cnbc.com time to read: +2 min

That can create an opportunity for options investors, according to Goldman Sachs. "Among stocks, options in CMA , ZION and STT screen as most attractive relative to historical one-day moves on FOMC days," the note said. Here's a look at some of the bank stocks on Goldman's list and their average moves on Fed decision days in recent years, led by Comerica. The options market was pricing in lower-than-average volatility in these stocks, creating an opportunity for investors, Goldman said. Bank stocks can be particularly sensitive to Fed decisions because their business models are closely tied to interest rates and the state of the economy.

Market players typically borrow to build short positions in the futures market, with 85-90% coming from banks. Any such drop in the number of players reduces market liquidity, which can in turn lead to even more volatility and sharper spikes in prices that can hurt even major players. read moreNorwegian state-owned firm Equinor, Europe's top gas trader, said this month that European energy companies, excluding in Britain, need at least 1.5 trillion euros ($1.5 trillion) to cover the cost of exposure to soaring gas prices. Doing this, sources familiar with talks said, would help bring participants back into the market and increase liquidity. The banks have hit or are close to hitting their liquidity risk and counterparty risk levels," a senior banking source involved in commodities finance said.

☆ 'Fear gauge' futures close to signaling U.S. stock selling crescendo
▼ + stars: | 2022-09-21 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +2 min

Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew KellyNEW YORK, Sept 21 (Reuters) - Futures tied to Wall Street’s fear gauge are close to sending a signal of growing fear that has sometimes preceded past stock market rebounds. ,VIX futures, which plot volatility expectations for several months ahead, normally remain upward sloping, with near-term futures relatively less pricey than those that target coming months. The two nearest VIX futures last inverted in June, amid a bout of intense selling that drove the S&P 500 to its bear market low. For instance the two front month VIX futures remained inverted for a month - from mid-February through mid-March - before the stock market selloff in the first quarter took a breather.

☆ Turkey adjusts banks' risk metrics in derivatives market
▼ + stars: | 2022-09-20 | by ( ) www.reuters.com time to read: +1 min

ISTANBUL, Sept 20 (Reuters) - Turkey amended the risk parameters used in the transaction collateral calculations for banks' underlying assets in the derivatives market, the clearance institution Takasbank said on Tuesday. Takasbank said the new parameters, which are set taking into account current market conditions, will take effect as of Sept. 21. The move came after a decline in Borsa Istanbul led by banking shares (.XBANK) over the last week, following a sharp rise since July. "Shares in public banks, which had been on the rise for two weeks, started to decline. Analysts said an extraordinary meeting between regulators and brokerages took place late on Monday, following the extraordinary move in shares.

☆ First Boston deserves a selective revival
▼ + stars: | 2022-09-20 | by ( John Foley | ) www.reuters.com time to read: +4 min

The logo of Swiss bank Credit Suisse is seen at an office building in Zurich, Switzerland September 2, 2022. By 2006, Credit Suisse First Boston was once again just Credit Suisse. Register now for FREE unlimited access to Reuters.com RegisterFor today’s Credit Suisse, anything that conveys renewed ambition is worth a try. First Boston was a U.S. investment bank in which Credit Suisse first bought a stake in 1978. The Swiss bank took full control in 1990 after First Boston incurred large losses on loans it had made to clients.

☆ The world is staring down a brutal winter of soaring energy prices, rolling blackouts, and freezing homes. But there's a clear solution to the crisis — if we aren't too scared to use it.
▼ + stars: | 2022-09-20 | by ( Kartik Menon | ) www.businessinsider.com time to read: +11 min

Confronted with energy shortfalls into the colder months and years of potential energy uncertainty, one solution has gained traction around the globe: nuclear energy. Many nations, including the United Kingdom, Netherlands, France, and Japan, have begun or reconsidered massive sovereign investment into nuclear power. Reliable, low-cost, and carbon-free, nuclear energy allows these nations to arrest the economic decline from higher energy prices and make progress toward net-zero goals. Compared to other sources of energy, nuclear power is relatively safe — the number of deaths per terawatt hour produced is comparable to wind and solar energy. These are encouraging steps toward getting the West off of Russian energy and helping consumers weather the tough times ahead.

☆ ECB wants banks to review capital plans given downturn, Enria says
▼ + stars: | 2022-09-19 | by ( ) www.reuters.com time to read: +1 min

Andrea Enria, chairperson of the European Banking Authority, speaks at Reuters Summit interview in London, Britain, September 25, 2017. REUTERS/Afolabi SotundeFRANKFURT, Sept 19 (Reuters) - The euro zone banking sector is robust ahead of a possible recession but the European Central Bank is still asking lenders to review capital projections given what is likely to be a difficult winter, ECB supervisor Andrea Enria said on Monday. Register now for FREE unlimited access to Reuters.com Register"So, we are asking banks to review their capital projections under severe, adverse scenarios and we will engage in a dialogue with them." "Then there is also the issue of exposures to energy derivatives clearing that we've seen as an issue in the recent times," Enria said. Register now for FREE unlimited access to Reuters.com RegisterReporting by Balazs Koranyi; Editing by Andrew Cawthorne, Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

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