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Time flies and compliance rules improve, but problems remain the same, especially in the stock market.

Sixty seconds before the release of the U.S. consumer price growth data, there was a spike in trading activity. According to Bloomberg, futures jumped more than 1 percent and Treasury yields fell just before the data release. Either someone got a magic ball, or a leak of insider information took place.

There is also a third possibility. The suspicious movements are nothing but a manipulation carried out with the help of robot traders. The tactic of high-frequency trading (a strategy known as “spoofing”) allows one to “move the quotes” just before the publication of the report, by placing fake orders.

If that was really the case, investors should be very careful with upcoming macroeconomic events. In this sense, it is worth mentioning that on Thursday, US GDP and initial jobless claims will be released, followed on Friday by the Personal Consumption Expenditure (PCE) benchmark price index.

Now what? As in the case of the meme-stocks rally, it is unlikely that the Securities and Exchange Commission will leave this incident unattended. The problem is that the process of gathering evidence and the regulator’s final verdict could take months.

 

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