FirstFT: Citadel Securities plans to enter eurozone debt market in 2024

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We have an exclusive report today on Citadel Securities, which is planning to start market making in eurozone sovereign bonds next year in a challenge to investment banks’ dominance of the €10tn market.

The market-making business started by Ken Griffin, billionaire founder of the hedge fund Citadel, hopes to capitalise on the steady shift to electronic trading in Europe and the most active market for trading the continent’s sovereign debt in almost a decade.

Citadel Securities, which has commanding positions in US stocks, Treasuries and swaps trading, has been at the vanguard of a group of ultrafast firms that have stepped into sovereign debt markets as tougher rules on leverage force banks to curb market-making.

“We have built a leading global franchise in US rates products, and Euro rates is a logical next step,” Peng Zhao, chief executive of Citadel Securities, told the Financial Times on the sidelines of an investment conference in Hong Kong this week.

“Client feedback has been overwhelmingly positive and we expect to enter the market next year,” he added. Hudson Lockett has the full story.

Here’s what else I’m keeping tabs on today and over the weekend:

• UK politics: Pressure is mounting on Prime Minister Rishi Sunak to sack home secretary Suella Braverman over her provocative remarks published in the Times. For more on British politics, sign up for our Inside Politics newsletter by Stephen Bush.

• Economy: The UK reports preliminary third-quarter gross domestic product today, and the EU’s Economic and Financial Affairs Council meets to discuss the bloc’s budget for next year.

• City of London: Michael Mainelli takes office today as the new Lord Mayor. In an interview with the FT, the economist and former accountant promised to reach out to Europe and said the UK’s capital had focused too much on marketing itself as a financial services hub.

• Armistice Day: France will commemorate the end of the first world war in a ceremony at the Arc de Triomphe in Paris tomorrow, among other locations. On the same day, Poland will celebrate National Independence Day and the US observes Veterans Day. The UK marks Remembrance Sunday the following day.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. The US Treasury market was disrupted by a ransomware attack on China’s largest bank, forcing clients of the Industrial and Commercial Bank of China to reroute trades, market participants said yesterday. Such attacks paralyse computer systems unless a payment is made. The bank later said it had contained the incident and was investigating it. Read the full story.

• More cyber attacks: London “magic circle” law firm Allen & Overy was also hit by a ransomware attack, with posts on X claiming that LockBit — which hacked Royal Mail this year — was behind it.

2. Demand for global flights has dropped due to the Israel-Hamas war, with data showing a significant hit to air travel in the Middle East. Global flight bookings made in the three weeks after Hamas’s attack on Israel on October 7 were 20 per cent below 2019 levels, reversing a post-pandemic recovery. Here’s more on the weakening demand for flights.

• Humanitarian pause: The US and Israeli spy chiefs met in Qatar yesterday to discuss a potential three-day pause that would allow as many as 20 hostages to be released by Hamas and more aid to enter Gaza.

• Antisemitism in Europe: French prosecutors are investigating possible Russian links to recent incidents in which more than 200 Stars of David were spray painted on buildings in Paris.

3. The UK is a “leading enabler” of central Asian kleptocracies, according to a report by MPs. Britain’s failure to clamp down on Russian evasion schemes in the region represent “a real and significant threat” to the west’s economic sanctions against Moscow following the invasion of Ukraine, a cross-party parliamentary committee said. Here are more details from their report.

4. Portugal will hold a snap general election in March after Prime Minister António Costa’s shock resignation. President Marcelo Rebelo de Sousa announced the March 10 date after Costa quit this week, hours after public prosecutors executed a number of arrest warrants and raids as part of a corruption investigation. Here’s what the election could mean for the ruling Socialists.

5. Jay Powell has warned the US central bank against the risk of being “misled” by good data on prices, saying the mission to return inflation to its 2 per cent target had a “long way to go”. At an IMF event yesterday, the Federal Reserve chair said officials were “gratified” by the retreat in price pressures but would not hesitate to tighten policy further if appropriate.

• European Central Bank: The bank’s chief economist Philip Lane has said it must avoid shrinking its balance sheet too much, warning this could impair lending and threaten financial stability.

• Bank of Japan: Unwinding the central bank’s ultra-loose monetary policy will be a “serious challenge”, its governor Kazuo Ueda told an FT event yesterday, adding that the bank would proceed carefully with raising interest rates to avoid bond market volatility.

Our newest newsletter, Central Banks by Chris Giles, provides weekly insights on rate-setters’ battle against inflation. Sign up here if you’re a premium subscriber or upgrade your subscription.

News in-depth

JPMorgan Chase once boasted that Jamie Dimon had “not sold a single share” of the bank’s common stock, reflecting the “blood oath” of his mentor Sandy Weill, who dominated Wall Street and forbade his management team from selling shares until they left. But next year, Dimon will break his holding streak when he starts unloading $1.2bn of stock, topping a table of incumbent US bank executives who have cashed in some of their holdings.

We’re also reading . . . 

• Carlsberg’s Russian saga: The brewer’s success in the market made it a target for seizure by the Kremlin. Its loss is part of a transfer that could constitute the biggest shift of wealth since the 1990s.

• ‘We can’t go south’: Circumstances have forced hundreds of thousands of Palestinians to remain in northern Gaza amid dire conditions despite Israel’s order to evacuate.

• Collective trauma: For many in Israel, resuming normal life is a desecration, an abandonment of the hostages and those killed by Hamas on October 7, writes Israeli author and psychologist Ayelet Gundar-Goshen.

• Paris Olympics: France’s capital is building a 700-metre tunnel and a giant tank to clean up the Seine for swimming and triathlon events.

Chart of the day

There is a false sense of security that automation is something that happens to other people’s jobs, never our own, writes the FT’s chief data reporter John Burn-Murdoch. But a recent study shows the fear that artificial intelligence will take white-collar jobs is already a reality for some.

Take a break from the news

Not caring is the biggest perk of middle age — or so it would seem, writes the FT’s Emma Jacobs. As she waits for the day when she no longer gives a damn, Jacobs dives into whether this enlightened state really does arrive for those in their mid-life.

Additional contributions from Benjamin Wilhelm and Gordon Smith