US spurns EU demand for Iran sanctions exemptions | LNG exports might affect US prices, CFTC says | CFTC, state regulators to share enforcement information
May 24, 2018
Commodities Insight SmartBrief
Regulatory insight and top news for commodities markets
Regulatory & Compliance
US spurns EU demand for Iran sanctions exemptions
Stressing sanctions as a necessary part of Washington's Iran strategy, US Secretary of State Mike Pompeo said no carve-outs would be forthcoming as requested by US allies. The measures are to take effect in November.
Argus Media (5/21) 
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LNG exports might affect US prices, CFTC says
US liquefied natural gas exports could cause domestic prices to increase as much as 20%, according to a Commodity Futures Trading Commission report. Estimating how much LNG exports affect domestic prices is difficult, the CFTC says, but "generally these estimates suggest that there is a potential for US domestic natural gas markets to be influenced by global supply-demand factors."
Natural Gas Intelligence (tiered subscription model) (5/17),  BloombergQuint (India) (5/18) 
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CFTC, state regulators to share enforcement information
The Commodity Futures Trading Commission has signed an agreement with a group representing state securities regulators to share information needed for enforcement of the Commodity Exchange Act. The agreement ensures "the rapidly evolving financial-technology space has the appropriate oversight to pursue bad actors, protect market participants and allow for market-enhancing innovation," CFTC Chairman J. Christopher Giancarlo says.
Finance Magnates (5/22) 
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CFTC pursues firms that don't flag suspected spoofing
Commodity Futures Trading Commission member Rostin Behnam says the agency can pursue spoofing cases against firms that fail to adequately supervise employees, referencing a 2017 case on US Treasury futures involving Citigroup traders. "To identify infractions by means of technology but not to follow up on them with human interaction, that raises a lot of concerns," Behnam says.
Risk (subscription required) (5/16) 
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CFTC proceeds with margin changes for uncleared swaps
The Commodity Futures Trading Commission has approved changes to margin requirements for uncleared swaps to better align the rules with those from other regulators. The changes eliminate "unnecessary red tape that hinders job creation, economic growth and innovation," Chairman J. Christopher Giancarlo says.
Futures & Options World (subscription required) (5/18) 
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EU considers tougher post-Brexit clearing rules
A key committee in the European Parliament has approved a proposal to strengthen regulators' power over foreign clearinghouses. The proposal would give the European Securities and Markets Authority power to decide what derivatives-clearing business must happen in the EU.
Reuters (5/16),  The Telegraph (London) (tiered subscription model) (5/16),  Financial Times (subscription required) (5/16) 
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Swinburne calls EU clearing plan illogical
Swinburne calls EU clearing plan illogical
Swinburne (Matthew Horwood/Getty Images)
Kay Swinburne, a European Parliament member from the UK, is pushing back against a parliamentary vote to give the European Securities and Markets Authority more power to ban non-EU clearinghouses from clearing euro-denominated instruments. "It is illogical to try to force market infrastructure and activity away from proven, highly trained supervisors and place them with a body that has no experience of supervision in this field," Swinburne says.
Financial News (UK) (tiered subscription model) (5/17) 
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Hot Topics
This Week in Commodities
How commodities will benefit from US-China trade truce
The trade truce between the US and China stands to benefit commodities. Some, however, are likely to see bigger gains than others, including soybeans, ethanol and cotton.
Bloomberg Professional Services (5/22) 
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US farmers whipsawed by US-China trade relations
US grain belt farmers are torn between different crops and decisions on whether to let fields lie fallow amid alternately rising and easing trade tensions between Washington and Beijing. At issue is what China will ultimately decide in terms of volume of US agricultural imports.
Reuters (5/23) 
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Trade war truce boosts soybeans, grains
Corn approached a two-year high, and other grains and soybeans received a lift after talks yielded an apparent trade truce between the US and China.
Financial Times (subscription required) (5/21) 
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What to look for in a changing world of commodities
Three of Australia's leading commodities experts offer views on markets that are changing in a world in which sustainability is a top priority and battery technology plays a vital role. The experts also look at increasing quality-based bifurcation in iron ore.
The Australian Financial Review (free content) (5/22) 
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Goldman sees more upside in commodities
Goldman Sachs has bumped up the 12-month forecast for its Commodities Index, predicting a further 8% gain rather than 5%. "The rally likely has room to run, particularly from a returns perspective. Oil fundamentals are now more bullish as robust demand faces supply disappointments," Goldman's global head of commodities, Jeffrey Currie, wrote.
CNBC (5/18) 
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US oil squeezed by range of factors
Multiple factors are holding down US oil prices and contributing to a widening spread between WTI and Brent, write Bloomberg Intelligence analysts Peter Pulikkan and Fernando Valle. The phenomenon can be attributed to strong shale output, tapped-out refining capacity and export growth that's not quite fast enough to keep up, they write.
Bloomberg Professional Services (5/21) 
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Danger seen in overinvestment in gas-fired power plants
Measures aimed at sustainability and conservation could jeopardize billions of dollars of US investments in gas-fired power plants, the Rocky Mountain Institute predicts.
Financial Times (subscription required) (5/21) 
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Why copper isn't sharing in general markets recovery
Copper prices are down nearly 5% this year in seeming defiance of recoveries in other markets. The lull, however, comes after a speculative high last year, current fears of trade troubles as well as uncertain economic signs in Japan and Europe.
The Wall Street Journal (tiered subscription model) (5/22) 
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CME Group Insights
US oil surge creates a more transparent market
Robust exports along with strong domestic production and infrastructure are turning the US oil grades market from a regional into a global affair. This, plus solid growth in spread trading activity based on the WTI Cushing benchmark, is bringing about better price discovery setting the basis differential for grades.
CME Group (5/16) 
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