Morning Coffee: Veteran UBS banker prepares to subsist on an hour's sleep. Where the FICC traders feel special
Remember the night of the 'Brexit referendum'? If you're a trader, it's probably etched indelibly onto your eyelids: Barclays provided its traders with sleeping bags so they could stay in the office as the poll results came in. The leave vote was called at 4.45am, by which time the pound had already plummeted 8%; prime minister David Cameron resigned at 8.20am and in the hours that followed UBS said it processed an unprecedented volume of currency trades as the pound crashed. Brexit night is worth remembering, because traders are reportedly bracing for something similar as U.S. election results come in during the early hours of Wednesday morning.
The Times is reporting that both Barclays and HSBC are planning to keep their trading desks open all night on Tuesday. They're not alone. Bloomberg reports that ICAP's customer support desk will be double staffed as the broker-dealer prepares for high volumes of trading on its electronic platform. Julian Emanuel, a veteran U.S. equity derivatives strategist at UBS on Wall Street says he's expecting a repeat of his EU referendum experience, when he had an hour's sleep: "We know that customers want to trade, whether picking up the phone or electronically, so we need to be ready.”
Results to the U.S. election will be clear by 23.00 Eastern Time and by 04.00 GMT on Tuesday/Wednesday. If it's Clinton, markets will likely heave a sigh of relief. If it's Trump, all hell will be let loose. "We have a game plan," promises Emanuel.
Separately, HSBC might be expecting its traders to stay up all night, but it values them sufficiently to give them extra toys to play with. After a strong performance in the third quarter, HSBC's chief executive Stuart Gulliver told the Financial Times he'll be happy to allocate extra risk weighted assets (RWAs) to his traders again. Gulliver's promise comes as most other banks are committed to clipping traders' wings and cutting RWAs. Deutsche Bank, for example, has been using reductions in RWAs to escape the need to raise additional capital.
Drink Rockstar Zero and you'll be up all night. (Wall Street Oasis)
In some unusual timing, Goldman Sachs will announce its partner list on Wednesday, just after the U.S. election results are out. (Business Insider)
German and French regulators are becoming chummy, ostracizing the UK. (Integrity Research)
M&A bankers are moving to Frankfurt, but it's not really related to Brexit: German M&A activity is rising amidst a surge in Chinese investment. (Reuters)
David Davis (Brexit minister) and Philip Hammond (chancellor) are said by leading bankers to have settled differences and are working together to defend the City of London’s European interests. (Financial Times)
How to get into Pimco now: specialize in real estate, hedge funds or alternative investments. (Wall Street Journal)
There's a lot more money in ETFs than hedge funds. (Financial Times)
Credit Suisse hired a former technology portfolio manager at D.E. Shaw turned executive in a technology corporate as a software-focused investment banker. (Reuters)
ECM bonuses to fall 20%. (NY Times)
How to change someone’s mind. (Psychology Today)
The banker-in-London to hipster-in-Berlin trade is so over. (Bloomberg)