Morning Coffee: European FX traders find themselves at an ill-timed party. Hedge fund assistant's $100k gifting budget
If you're an FX trader working the European markets (or even the cable/dollar markets), yesterday was probably not the time to be swanning around Amsterdam listening to people opine about the future of the FX markets before kicking back at a 1920s themed party, sipping Martini and listening to jazz.
Unfortunately, however, and not withstanding last minute cancellations, this is what around 300 of the great and good in European FX circles are supposed to have been up to. It's TradeTechFX, the annual schindig pitched at 'leading heads of FX trading and portfolio management' and one of the largest conferences in the FX sector.
This year's guest list includes FX luminaries from the US and the UK, from the buy-side and the sell-side, including senior people from Goldman Sachs and Bank of America. Before the Martinis yesterday they were supposed to be talking about liquidity provision, crypto and trading platforms. Their agenda for today includes an apt panel on monetary policy divergence and geopolitical events.
Outside, there is money to be made in the gyrations of the pound. Some corners of the British press are replete with a theory that Kwasi Kwarteng, the ex-JPMorgan, ex-Odey Asset Management purposefully crashed the currency as a favour to his friends and donors in the hedge fund industry. The story appears to have originated from an anonymous comment in the Sunday Times stating that at a hedge fund managers' party a week ago, “They were all supporters of Truss and every one of them was shorting the pound.”
If the buy-side attendees at TradeTech FX were indeed shorting the pound, they will presumably have had much to celebrate yesterday. But the Financial Times cautions that for most hedge funds, this wasn't actually the case. While some will have had a "very good day Friday" (and Monday too), the FT observes that analysis from UBS shows that most hedge funds were in fact long sterling before Kwarteng's mini-budget. This was why they panicked about getting out.
The pound performed a bit better in overnight Asian trading, but it's conceivable that many of TradeTech's attendees have decided that now is not the time for fraternizing and that today's sessions will be thinly attended. For those who do go, there's a hangover cure refreshment break at 11.20. After yesterday, it may be sorely needed.
Separately, if you're wondering what to buy to console a hedge fund employee caught on the wrong side of sterling, or are looking for a frippery to ingratiate yourself in the fallow gifting period preceding Christmas, "Sukie" an executive assistant to a New York hedge fund MD has the ideal shopping list.
NYMag sniffed out Sukie, who has a "gifting budget" of $100k a year for the fund's 150 employees, and who spends it on items to "celebrate promotions, career milestones, and departures." During the pandemic, Sukie was also spending on self-care items.
What are these things? Sukie is a fan of Tiffany coffee cups, luxury candles, Stella McCartney duffle bags and wicker picnic baskets containing champagne. When employees leave the company, they might get a voucher for a spa including a "holistic ritual", which sounds interesting and is possibly better than a card signed by ex-colleagues followed by a few drinks in a pub.
Meanwhile...
Kwasi has a meeting with British bankers this morning. They were supposed to be impressed by his scrapping of the bonus cap and the end of the 45% tax rate. It's all become a bit more complicated. (Bloomberg)
Paul Donovan, the chief economist of UBS Global Wealth Management isn't keen on the Truss government: "Investors seem inclined to regard the UK Conservative Party as a doomsday cult.” (Marketwatch)
Malcolm Barr and Allan Monks, of JPMorgan’s economics and policy team, have sent a bombastic note to bank clients that reads more like a call to arms directed at Conservative Central Office: "“The bottom line is that policy decisions appear to be increasingly experimental and unconstrained in the short term, and without a clear evidence that a political majority can be found for any kind of systematic approach in the medium term.” (Alphaville)
Traders are sitting on trillions of cash. "I don’t think it’s time to be a hero. The reason I have as much cash as I do is because I just want to survive and end the year up. This is going to be a tricky environment for a while.” (Bloomberg)
The S&P 500 is down 8% this month. (Bloomberg)
Vincent Prieur left Citadel Securities for Portofino Technologies. Now he's been hit with a lawsuit alleging that he broke his Citadel Securities non-compete. Prieur was subject to a 15-month non-compete period, under which Citadel Securities would provide a monthly payout of $15k to $18k if he complied. He left Citadel in March 2022 and joined Portofino in September. (Institutional Investor)
Jagruti Rajput, a compliance officer in the London office of Commerzbank was accused of an "unhealthy obsession with work" after dialling into a call during maternity leave. A court found this was not the case. (Bloomberg)
54-year-old Andrew Bednar is the new chief executive of Perella Weinberg Partners. He met Peter Weinberg while he was a VP at Goldman Sachs. (Bloomberg)
Abrdn cut 30 jobs in Edinburgh and shunted them to India. There were tears. (Scotsman)
At Softbank, Mayoshi Son hired Yoshimitsu Goto, head of his finance division, because he had nice eyes. (Financial Times)
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