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January 14th - A growing number of options traders are ruling out a 2026 Federal Reserve rate cut and instead betting that the Fed will keep rates unchanged throughout the year. This trend can be traced back to at least last Friday, when US employment data showed an unexpected drop in the unemployment rate. Market pricing suggests this virtually eliminated the possibility of a Fed rate cut this month, prompting more traders to postpone their expectations for rate cuts in the coming months. David Robin, interest rate strategist at TJM Institutional Services, noted, "From a data perspective, the probability of the Fed keeping rates unchanged until at least March has increased, and the likelihood of stable rates increases with each meeting." Recent options flows for the covered overnight funding rate, which is closely linked to the Feds short-term benchmark rate, have sent a more hawkish signal. New options positions are primarily concentrated in March and June contracts to hedge against a continued delay in the Feds next rate cut. Other positions targeting longer-term contracts are expected to profit from the Feds stance of keeping rates unchanged throughout the year. Robin stated that regardless of whether the market believes the Fed will hold rates steady, these trades are low-cost, and as a prudent risk manager, you would want to hold these positions.On January 14th, according to futures market news: 1. WTI crude oil futures trading volume was 1,698,750 lots, an increase of 633,450 lots from the previous trading day. Open interest was 2,018,272 lots, an increase of 19,747 lots from the previous trading day. 2. Brent crude oil futures trading volume was 322,400 lots, an increase of 118,072 lots from the previous trading day. Open interest was 231,565 lots, an increase of 869 lots from the previous trading day. 3. Natural gas futures trading volume was 620,866 lots, a decrease of 256,129 lots from the previous trading day. Open interest was 1,635,714 lots, a decrease of 7,021 lots from the previous trading day.ECB Governing Council member Kazak: The uncertainty and risks of nonlinear shocks remain high, and the outlook faces risks from two aspects.ECB Governing Council member Kazak: The ECB is currently in a good position.ECB Governing Council member Kazak: The Fed’s actions are worrying.

Wells Fargo basically wins two cases over mortgage losses

Charlie Brooks

Jul 13, 2022 10:51

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Wells Fargo & Co (NYSE:WFC) won the dismissal of one lawsuit and a portion of another claiming the fourth-largest bank neglected to monitor toxic mortgage-backed securities, which were a primary cause of the 2008 global financial crisis.


In a 68-page order, U.S. District Judge Katherine Polk Failla of the Southern District of New York rejected a complaint filed by investors led by Ireland's Phoenix Light SF Ltd, noting that the legal problems addressed had previously been handled in past action.


The judge also found that Commerzbank AG (OTC:CRZBY) was prevented from pursuing certain claims against Wells Fargo in San Francisco because the German lender lacked standing or filed too late.


Commerzbank (ETR:CBKG) was given permission to sue Wells Fargo after revealing that servicers for 17 trusts had liquidated 3,377 loans using defective documentation rather than letting sellers acquire them. Other claims were also retained.


Plaintiffs' counsel did not immediately react to queries for comment. Wells Fargo did not react immediately to comparable questions.


The lawsuits claimed hundreds of millions of dollars in damages in connection with Wells Fargo's function as loan trustee.


They are part of a series of cases brought over the preceding decade and a half to hold lenders and trustees liable for the collapsing value of once-safe residential mortgage-backed securities.


Trustees were commonly sued for failing to push sellers to buy back troubled loans, failing to alert investors of defaults, and failing to exercise reasonable standards of care.


Wells Fargo previously paid two investor class actions and a National Credit Union Administration lawsuit over illegal mortgages.


It agreed to pay a $2.09 billion civil judgment in August 2018 to settle US Department of Justice claims that it knowingly produced and promoted residential mortgage loans that misrepresented income and were of lesser quality than it had indicated.


Phoenix Light SF Ltd et al v Wells Fargo Bank NA, U.S. District Court, Southern District of New York, No. 14-10102; and Commerzbank AG v Wells Fargo Bank NA, U.S. District Court, Southern District of New York, No. 15-10033.


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