As Brexit Talks Loom, Shock UK Election Leaves May Hanging by a Thread

As Brexit Talks Loom, Shock UK Election Leaves May Hanging by a Thread – Reuters
Prime Minister Theresa May was fighting to hold on to her job on Friday as British voters dealt her a punishing blow, denying her the stronger mandate she had sought to conduct Brexit talks and instead weakening her party’s grip on power.

• The UK Is Heading for a Hung Parliament. What Happens Now? – Bloomberg
• Theresa May’s Gamble Backfires – Wall Street Journal (subscription)

FX Markets Stable as UK Heads for Hung Parliament – Profit & Loss
After an initial 1.7% drop when the exit poll was released in the UK predicting a surprise hung parliament after the UK general election, FX markets have stabilised with Cable ranging around 1.2750 and EUR/GBP around 0.8780.

• Pound Slumps as Hung Parliament Seen in Shock U.K. Election – Bloomberg
• Softer Brexit, Stronger Sterling? – Financial Times (subscription)
• Dollar Cleans Up as UK Election Shock Stuns Sterling – Reuters

Comey Says Trump Fired Him to Undermine FBI Russia Investigation – Reuters
Former FBI Director James Comey accused President Donald Trump on Thursday of firing him to try to undermine the agency’s investigation of possible collusion by Trump’s campaign with Russia’s alleged efforts to influence the 2016 presidential election.

• Comey, Trump Accuse Each Other of Lying in Wake of Hearing – Bloomberg

Kuroda Says Japan Still a ‘Long Way’ From Meeting Inflation Goal – Bloomberg
Bank of Japan Governor Haruhiko Kuroda said the country had escaped from deflation but still had more progress to make before reaching its goal for 2 percent inflation.

The Beginning of the End of the QE Era Challenges Fed and Treasury – Financial Times (subscription)
Unwinding stimulus without market mishaps will test both institutions.

Euro weakens after ECB policy meeting – Financial Times (subscription)
A lack of big surprises from the European Central Bank or former FBI director James Comey helped keep global markets on an even keel, as “Super Thursday” offered little in the way of market fireworks — before the results of the UK election, at least.

Qatar C.Bank Asks for FX Data as Capital Outflows Pressure Riyal – Reuters
Qatar’s central bank has asked commercial banks to provide it with detailed information on foreign exchange trading, banking sources told Reuters on Thursday as Doha’s diplomatic rift with other Gulf states put its currency under pressure.

Parallel Market Emerges in Nigeria’s Currency-Trading World – Bloomberg
A kind of parallel universe is taking shape in Nigeria’s foreign-exchange market.
The African country’s traditional forwards market is facing competition from an upstart based on the new exchange-rate window policy makers opened six weeks ago.

Regulatory News

Republicans Take Knife to Post-Crisis Wall Street Reforms – Reuters Republicans in the U.S. House of Representatives voted on Thursday to replace the 2010 Dodd-Frank Wall Street reform law, a move that is expected to die in the Senate but open the door to revamping or eliminating regulations that came out of the 2007-09 financial crisis.

• Bill to Erase Some Dodd-Frank Banking Rules Passes in House – The New York Times
• House Passes Choice Act That Would Gut Dodd-Frank Banking Reforms – CNBC

EU Vows to Centralise Market Regulation in Paris – Financial News (subscription)
Review of capital markets initiative sets out plans for EU’s top regulator to check up on, and perhaps take powers from, national watchdogs

Testimony of CFTC Acting-Chair Giancarlo – CFTC.com
Testimony of J. Christopher Giancarlo Acting-Chairman, Commodity Futures Trading Commission before the U.S. House of Representatives Committee on Appropriations Subcommittee on Agriculture, Rural Development and Related Agencies

Nomura Said to Find It Breached Japan Securities Law After Probe – Bloomberg
Nomura Holdings Inc. has determined that it breached securities laws in its handling of nonpublic information about a company the firm took public last year and plans to report the issue to Japanese regulators, people with knowledge of the matter said.

Company News

Matt Zames Departure Shines Spotlight on JP Morgan Succession – Financial Times (subscription)
Chief operating officer is latest candidate seen as Jamie Dimon replacement to have left.

• Behind Jamie Dimon, J.P.Morgan’s Bench Remains Deep – Bloomberg

Survival of US Profitability Miracle Depends on Wages – Financial Times (subscription)
Current US administration of bankers unlikely to reverse corporate power over labour.

Geller Steps Down as TradAir CEO – Profit & Loss
TradAir co-founder, Illit Geller, has stepped down as CEO of the firm.

Market Savvy

Sterling Sharply Lower on Exit Polls – Profit & Loss
Sterling has dropped sharply in early Asian trading as the exit poll from the UK election indicates the ruling Conservative government will win the most seats but will fall short of a majority.

Mexico Peso Fiesta Lifts Currency to 10-Month High – Financial Times (subscription)
Who’s afraid of Donald Trump? Not Mexico. Not anymore….

Singapore’s Economic Rebound Isn’t as Good as it Seems – Bloomberg
Singapore’s economy may be picking up, but consumers aren’t feeling it.

China’s Easing Factory Gate Prices Hint at Broader Economic Slowdown – Reuters
China’s producer price inflation eased for the third straight month in May on tumbling prices of raw materials, signaling a broader cooling in economic activity as profits are squeezed by slackening domestic demand and rising financing costs.

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