Random Market News, 18 September 2017

 

Market Info. 1

Logistics. 3

Tech. 4

Random.. 6

Events on 9/19 (ET) 6

 

 

Market Info

 

"Stocks in Asia Mixed Ahead of Fed as Yuan Retreats: Markets Wrap.

Asian investors deferred taking any major positions ahead of the Federal Reserve’s policy meeting that’s expected to focus on unwinding stimulus efforts. Stocks in the region diverged, while China’s yuan slipped as the dollar maintained gains."

https://www.bloomberg.com/news/articles/2017-09-18/yen-steady-after-two-day-loss-stock-futures-rise-markets-wrap

 

"The 20 largest derivatives dealers posted $1.41 trillion of collateral for cleared and non-cleared derivatives trades, according to research.

Of the $1.4 trillion, initial margin posted by clearing participants to CCPs for cleared derivatives trades totalled $173.4 billion and $107.1 billion for non-cleared trades.

For variation margin, dealers posted a total of $1.13 trillion, with $260.8 billion for cleared and $870.4 billion for non- cleared.

ISDA explained its analysis reflects the changes to collateral practices seen in non-cleared derivatives markets over recent years, and the surge in collateral posted to CCPs has been driven by growth in clearing activity since the financial crisis."

https://www.globalcustodian.com/Market-Infrastructure/Over-$1-4-trillion-in-collateral-posted-by-top-swaps-dealers/

 

"T+2 transition went smoothly in Canada.

The reduction of the trade settlement cycle to trade plus two days, or T+2, in Canada went as smoothly as it did in the U.S."

http://www.pionline.com/article/20170918/ONLINE/170919848/t2-transition-went-smoothly-in-canada

 

"Now that T+2 is here, some ready for even shorter cycle.

The move to T+2 resulted in an estimated 25%, or $1.36 billion, reduction in capital requirements for settlements, according to clearinghouse and settlement provider Depository Trust & Clearing Corp. That same amount of savings could be realized by reducing the cycle by another day, said John Abel, DTCC executive director, settlement and asset servicing, New York, though he cautioned it would come at a much higher compliance cost for industry participants than T+2.

However, the use of legacy trading systems among industry participants still dominates, which is why the transition to T+2 in the U.S. took at least six years."

http://www.pionline.com/article/20170918/PRINT/170919849/now-that-t2-is-here-some-ready-for-even-shorter-cycle

 

"Trump nominates full Ex-Im Bank board slate.

President Trump on Sept. 15 announced three more nominations to serve as U.S. Export-Import Bank board members, which along with two previously submitted nominations would bring the bank to a full complement of five board members if approved by the Senate.

For nearly two years, Ex-Im Bank has operated without a quorum of at least three board members, meaning that it cannot approve any financial transactions above $10 million. Many U.S. exporters—large and small—have complained that they have been left unable to compete with other overseas companies for significant export deals, particularly in developing countries."

http://www.americanshipper.com/main/news/trump-nominates-full-exim-bank-board-slate-69044.aspx

It is still only reauthorized to September 2019.

 

"Global Debt May Be Understated by $13 Trillion-BIS.

Global debt may be under-reported by around $13 trillion (9.57 trillion pounds) because traditional accounting practices exclude foreign exchange derivatives used to hedge international trade and foreign currency bonds, the BIS said on Sunday.

Bank for International Settlements researchers said it was hard to assess the risk this "missing" debt poses, but that the main worry was a liquidity crunch like the one that seized FX swap and forwards markets during the financial crisis."

https://www.nytimes.com/reuters/2017/09/17/business/17reuters-bis-debt-currencies.html?mcubz=3

http://www.bis.org/publ/qtrpdf/r_qt1709e.htm

 

"Risk modelling firm AIR Worldwide has reduced its estimate of insurance and reinsurance industry losses caused by hurricane Irma, narrowing the range and dropping the upper end to now forecast somewhere between $32 billion and $50 billion of losses across the U.S. and Caribbean."

http://www.artemis.bm/blog/2017/09/18/air-lowers-hurricane-irma-industry-loss-estimate-to-32-50-billion/

 

"HCI Group said that its principal operating subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., estimates a loss related to Hurricane Irma in the range of $100 to $300 million. With a retention of just $16 million on its reinsurance program the majority of the claims will fall to private reinsurers.

HCI Group’s reinsurance panel includes such names as Endurance (now Sompo International), MS Amlin AG, AXIS Specialty, Renaissance Re, Chubb Tempest Re, Arch Re, Everest Re, a number of Lloyd’s syndicates and Berkshire Hathaway subsidiary National Liability & Fire Insurance Company.

Of those names, some could be fronting for their third-party capital units and affiliated ILS fund managers."

http://www.artemis.bm/blog/2017/09/18/hci-expects-up-to-300m-hurricane-irma-loss-reinsurers-take-majority/

 

"Hurricane Maria strengthening, Jose nearing. U.S. on watch."

http://www.artemis.bm/blog/2017/09/18/hurricane-maria-strengthening-jose-nearing-u-s-on-watch/

 

"DNB: 'Well-informed herd behaviour stabilises bond markets'.

Herd behaviour of large investors like pension funds has a stabilising impact on government bond markets, a survey by Dutch supervisor De Nederlandsche Bank (DNB) has suggested.

The survey focused on monthly transactions by the 67 largest Dutch pension funds related to government bonds of 109 countries during the past six years, comprising 67,000 pieces of data in total."

https://www.ipe.com/countries/netherlands/dnb-well-informed-herd-behaviour-stabilises-bond-markets/10020698.article

 

Data dump.

 

VIX ~10.15. 10-yr treasury volatility (TYVIX) ~4.01.

http://www.cboe.com/products/vix-index-volatility/volatility-on-interest-rates

 

MEETING DATE

0-25

25-50

50-75

75-100

100-125

125-150

150-175

175-200

200-225

225-250

250-275

275-300

300-325

325-350

350-375

375-400

400-425

425-450

450-475

475-500

500-525

9/20/2017

0.0%

1.4%

98.6%

0.0%

0.0%

11/1/2017

0.0%

0.0%

0.0%

1.3%

96.7%

2.0%

0.0%

0.0%

0.0%

12/13/2017

0.0%

0.0%

0.0%

0.6%

42.5%

55.8%

1.1%

0.0%

0.0%

0.0%

0.0%

1/31/2018

0.0%

0.0%

0.0%

0.6%

40.8%

55.3%

3.4%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

3/21/2018

0.0%

0.0%

0.0%

0.4%

32.8%

52.4%

13.6%

0.7%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

5/2/2018

0.0%

0.0%

0.0%

0.4%

32.2%

52.0%

14.4%

1.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

6/13/2018

0.0%

0.0%

0.0%

0.3%

23.4%

46.5%

24.7%

4.7%

0.3%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

8/1/2018

0.0%

0.0%

0.0%

0.3%

23.2%

46.3%

25.0%

4.9%

0.3%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/

 

10yr Sovereigns.

https://www.investing.com/rates-bonds/government-bond-spreads

https://tradingeconomics.com/bonds

 

FX.

https://www.investing.com/currencies/streaming-forex-rates-majors

https://tradingeconomics.com/currencies

 

Equity.

https://www.investing.com/indices/major-indices

https://tradingeconomics.com/stocks

 

Commodities.

https://www.investing.com/commodities/real-time-futures

https://tradingeconomics.com/commodities

 

News feed.

https://tradingeconomics.com/stream

http://www.marketwatch.com/newsviewer#

https://global.handelsblatt.com/

 

Logistics

 

"Hospitals could save about $10 million a year in supply chain, study finds.

Supply chain represents 30 percent of hospital operations, ranking second only to labor in cost.

Pharmaceuticals, which are the single largest supply item, remain an elusive target for savings. Drugs represent 5 to 10 percent of the total 30 percent budget."

"You don't have a lot of control over the pricing of drugs," said Rob Austin, associate director of Navigant. "The way you can control pharmaceutical expense is through formularies."

Ninety-six percent of all health systems use a group purchasing organization and the prices are comparable and competitive."

http://www.healthcarefinancenews.com/news/hospitals-could-save-about-10-million-year-supply-chain-study-finds

 

"The Alliance establishes $50m rainy day fund.

Contingency fund to act as first line of defence against insolvency by one of the members.

The US Federal Maritime Commission has approved a proposal by members of The Alliance to establish a $50m contingency trust fund. The intention is to use the fund as a first line of defence in case a member falls into financial distress or even becomes insolvent.

The five member carriers of The Alliance, Hapag-Lloyd, K Line, MOL, NYK and Yang Ming, will each contribute $10m. Of that amount, $1m will be initially paid in cash, followed by a further $9m in additional funds or through a letter of credit."

http://www.lloydsloadinglist.com/freight-directory/news/The-Alliance-establishes-50m-rainy-day-fund/70345.htm

 

"UK freight forwarders soon to get updated standard trading conditions.

The new edition of the British International Freight Association (BIFA)’s Standard Trading Conditions (STC) will be launched on 1 October 2017, including clauses relating to new container weighing rules and the option of arbitration rather than litigation for dispute resolution."

http://www.lloydsloadinglist.com/freight-directory/news/UK-freight-forwarders-soon-to-get-updated-standard-trading-conditions/70346.htm

 

"DoorDash acquires delivery and logistics startup Rickshaw.

DoorDash is announcing the acquisition of Rickshaw, a Y Combinator-incubated startup that helps businesses offer same-day delivery by connecting them to a courier network and managing the logistics."

https://techcrunch.com/2017/09/14/doordash-acquires-rickshaw/

 

"Turnover Surges in Second Quarter.

Biggest Quarterly Increase in Driver Churn at Large Fleets Since 2010, ATA Data Shows.

Turnover at large carriers jumped 16 percentage points to an annualized rate of 90% in the three months ended June 30, which is the highest level since the fourth quarter of 2015 and the biggest quarterly increase since the final quarter of 2010. Turnover at small carriers with annual revenue of less than $30 million rose at an even faster pace, to 85% in the second quarter from 66% in the first quarter."

http://www.ttnews.com/articles/turnover-surges-second-quarter

 

"McLeod: Tangle of trends is changing trucking.

Shifts in freight patterns due to e-commerce and non-compliance with ELD mandate are two big near-term issues, says founder of McLeod Software."

http://fleetowner.com/driver-logs/mcleod-tangle-trends-changing-trucking

 

Tech

 

"Blockchain Prototype Is Credit Positive for P&C Insurers and Reinsurers.

On 10 September, the Blockchain Insurance Industry Initiative (B3i) unveiled a prototype application that streamlines contracts between insurers and reinsurers using blockchain technology. Once the technology becomes mainstream, which we think is likely, we expect that it will significantly reduce policy management expenses and speed up claims settlement for insurers and reinsurers, a credit positive.

B3i’s application gives insurers, reinsurers and brokers a shared view of policy data and documentation in real time.

PricewaterhouseCoopers estimates that blockchain technology will reduce reinsurer non-commission expenses by 15%-25%, including data processing efficiencies and reduced chance of overpayment because of data errors.

B3i launched in October 2016 with five original members, including Aegon N.V. (A3 negative), Allianz SE (financial strength Aa3 stable), Munich Reinsurance Company (financial strength Aa3 stable), Swiss Reinsurance Company Ltd. (financial strength Aa3 stable) and Zurich Insurance Company Ltd. (financial strength Aa3 stable). It now has 15 members. Beta testing for B3i’s program is scheduled for October and is open to any insurers, reinsurers or brokers that wish to pilot the technology, regardless of their membership status in the consortium."

https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_197373

 

"ICOs aren’t just about raising lots of money, say founders who raised lots of money from ICOs."

https://techcrunch.com/2017/09/18/icos-arent-just-about-raising-lots-of-money/

 

"Metacert to launch cryptocurrency wallet phishing protection for Slack.

Security bot Metacert, which protects against cryptocurrency phishing in chat apps like Slack, will soon be able to scan for, and flag, malicious cryptocurrency wallet addresses"

https://venturebeat.com/2017/09/18/metacert-to-launch-cryptocurrency-wallet-phishing-protection-for-slack/

 

"Solar-to-fuel system recycles CO2 to make ethanol and ethylene.

Scientists at the Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab) have harnessed the power of photosynthesis to convert carbon dioxide into fuels and alcohols at efficiencies far greater than plants. The achievement marks a significant milestone in the effort to move toward sustainable sources of fuel.

Among the new components developed by the researchers are a copper-silver nanocoral cathode, which reduces the carbon dioxide to hydrocarbons and oxygenates, and an iridium oxide nanotube anode, which oxidizes the water and creates oxygen.

"The nice feature of the nanocoral is that, like plants, it can make the target products over a wide range of conditions, and it is very stable," said Ager."

https://phys.org/news/2017-09-solar-to-fuel-recycles-co2-ethanol-ethylene.html

 

"Stretchy, Waterproof Solar Cells to Power Wearables.

Now Someya and his colleagues have developed stretchy, flexible organic solar cells with a high energy conversion efficiency of 7.9 percent, generating 7.86 milliwatts of power per square centimeter under simulated sunlight of 100 milliwatts per square centimeter.

The cells were made of a material called PNTz4T that the researchers developed in earlier work."

https://spectrum.ieee.org/energywise/energy/renewables/stretchy-waterproof-solar-cells-to-power-wearables

 

"AI Used to Help Prevent, Minimize Electric Grid Failures.

A project led by the Department of Energy’s SLAC National Accelerator Laboratory will combine artificial intelligence with massive amounts of data and industry experience from a dozen U.S. partners to identify places where the electric grid is vulnerable to disruption, reinforce those spots in advance and recover faster when failures do occur."

https://www.laboratoryequipment.com/news/2017/09/ai-used-help-prevent-minimize-electric-grid-failures

 

"Blood testing via sound waves may replace some tissue biopsies.

Cells secrete nanoscale packets called exosomes that carry important messages from one part of the body to another. Scientists from MIT and other institutions have now devised a way to intercept these messages, which could be used to diagnose problems such as cancer or fetal abnormalities.

Their new device uses a combination of microfluidics and sound waves to isolate these exosomes from blood. The researchers hope to incorporate this technology into a portable device that could analyze patient blood samples for rapid diagnosis, without involving the cumbersome and time-consuming ultracentrifugation method commonly used today."

https://phys.org/news/2017-09-blood-tissue-biopsies.html

 

"Could we store carbon dioxide as liquid lakes under the sea?

[O]nce the carbon dioxide reaches a depth of about 3000 metres, its density exceeds that of water – so it will naturally sink to the bottom and stay there."

https://www.newscientist.com/article/2147803-could-we-store-carbon-dioxide-as-liquid-lakes-under-the-sea/

 

"The tendency of dogs to seek contact with their owners is associated with genetic variations in sensitivity for the hormone oxytocin, according to a new study from Linköping University, Sweden. The results have been published in the scientific journal Hormones and Behavior and contribute to our knowledge of how dogs have changed during their development from wolf to household pet.

It is well known that oxytocin plays a role in social relationships between individuals, in both humans and animals. The effect of oxytocin depends on the function of the structure that it binds to, the receptor, in the cell."

https://www.laboratoryequipment.com/news/2017/09/dogs-social-skills-linked-oxytocin-sensitivity

 

Startup/SME of the Day.

 

"Shippo.

Multi-Carrier Shipping API and Dashboard.

Shipping for Platforms, Marketplaces and Ecommerce."

https://goshippo.com/

 

Random

 

"U.S. National Prototype Kilogram.

The official starting point for all national weight calibrations sits protected in a giant Faraday cage in an underground lab. 

The National Institute of Standards and Technology (NIST) is the official custodian of the Kilogram Prototype, a 128-year-old glistening platinum iridium cylinder that serves as the theoretical starting point for all derivative weight calibrations in the United States.

Despite the safeguards in place, international kilogram standards have started to minutely drift away from each other as little specs are polished off during cleaning, or molecules are absorbed by the cylinders (it’s difficult to say which is occurring). The scientific community is currently redefining the kilogram, a change that will move the weight definition away from a “golf-ball-sized artifact at one location, and basing it instead on a constant of nature.” In 2018 it will be tied to the Planck Constant."

http://www.atlasobscura.com/places/us-national-prototype-kilogram

A perfectly round silicon ball was another proposed alternative.

 

Events on 9/19 (ET)


USA  US: FOMC Meeting Begins 

Germany  DE: ZEW Survey, 5:00 AM ET

USA  US: Housing Starts, 8:30 AM ET

Canada  CA: Manufacturing Sales, 8:30 AM ET

USA  US: Current Account, 8:30 AM ET

USA  US: Import and Export Prices, 8:30 AM ET

USA  US: Redbook, 8:55 AM ET

Japan  JP: Merchandise Trade, 7:50 PM ET

 

Sept. 19-21: The U.N. General Assembly will convene in New York.

Sept. 24: Germany will hold parliamentary elections.

 

http://online.wsj.com/mdc/public/page/2_3063-globalEconomicCalendar.html

https://tradingeconomics.com/calendar (More complete listing, including consensus)

https://worldview.stratfor.com/article/geopolitical-calendar-week-sept-18-2017