Canada’s Liberals Take Losses but Win Enough to Form Minority Government – CBC News

After a tight campaign that saw the two leading parties struggle to break out of the pack, the Liberals under Justin Trudeau have held on to just enough seats in Atlantic Canada, Quebec and Ontario to secure a minority government.

Chinese Vice Foreign Minister Says Progress Made in Trade Talks – Reuters

China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said, and any problem could be resolved as long as both sides respected each other.

Boris Johnson Finally Gets to Put His Brexit Deal to the Vote – Bloomberg

Prime Minister Boris Johnson will find out Tuesday evening whether he has any chance of getting his Brexit deal through Parliament — and whether he can do it ahead of his Oct. 31 deadline.

Global Growth Downgrade Masks Underlying Economic Strength – Financial Times

The IMF has sharply downgraded its forecast for global economic growth to its lowest level since the great recession of 2008-09 — but fears of another contraction are overblown, most data suggest.

JPMorgan Warns US Money-Market Stress to Get Much Worse – Bloomberg

JPMorgan Chase & Co. says the money-market stress that sent short-term borrowing rates surging last month is likely to get much worse despite the Federal Reserve’s attempts to inject billions of dollars into the financial system.

China Asks WTO for $2.4 Billion Sanctions Against US in Latest Clash – Reuters

China is seeking $2.4 billion in retaliatory sanctions against the United States for failing to comply with a World Trade Organization ruling in a case that highlights White House complaints about the global trade body.

Lagarde Says US Is at Risk of Losing Global Leader Role – Wall Street Journal

Christine Lagarde, former head of the International Monetary Fund who takes the helm of the European Central Bank next month, said in an interview that the U.S. risks diminishing its role as a global leader and warned of dire consequences of its trade war with China.

Japanification’ Stalks the US and Europe – Financial Times

When the global financial crisis struck in 2008, the US and Europe had a ready model for how not to respond: Japan.

South Korea’s Moon Says Economy Faces ‘Grave’ Situation – Bloomberg

South Korea’s export-dependent economy is facing a “grave situation” as the U.S.-China trade war and the spread of trade protectionism heap pressure on the global economy, President Moon Jae-in said in a parliament speech Tuesday.

Regulatory News

ISDA Publishes Post-Consultation Benchmark Fallback Paper – Profit & Loss

The International Swaps and Derivatives Association has published a report that summarises responses to a consultation on pre-cessation issues for Libor and certain other interbank offered rates.

BoE Reform Needed to Boost Firepower for Downturns: Think Tank – Reuters

The Bank of England should be given more power to steer lending in Britain’s economy and influence government spending during a downturn, a think tank said

London Investment Bankers Charged in Insider-Trading Ring – Bloomberg

Two London investment bankers were charged in the U.S. with selling information about pending deals as part of a “large-scale, international insider-trading ring” that, prosecutors claim, generated tens of millions of dollars in illicit profits.

Banks Detect Daylight Between EC and EBA on Op Risk Capital – Risk

Bank sources are seeing questions from the European Commission about the ‘cliff effects’ of Basel III operational risk capital requirements as a sign that it favours waiving historical loss-based assessments – potentially putting daylight between it and the European Banking Authority on the issue.

OCC Ramps Up Regulatory Oversight After $20m Fine – FOW

The systemically important OCC is to establish a board-level regulatory committee following CFTC and SEC penalty last month.

Crypto News

Facebook’s Libra is Wake-Up Call for Central Banks – Financial Times

As a commercial project, Facebook’s digital currency proposal is flailing, having lost partners and failed to charm regulators. But at the IMF’s annual meeting in Washington last week it was clear that Libra has already notched up one success: it has spooked central bankers. 

Bitcoin Volatility Set for Comeback After Trading Turned Boring – Bloomberg

Volatility could soon be back in vogue for Bitcoin.

Banks May Cut Ties with Facebook on Libra Concerns, ING Warns – Financial Times

Banks might have to cut ties with Facebook if the social media giant launches its Libra digital currency without fully addressing financial regulators’ money laundering fears, the chief executive of ING has warned.

Jump Taps Cahill for Digital Asset Sales – Profit & Loss

Michael Cahill has joined Jump Trading in a digital asset sales role.

How Bitcoin Sidechains Could Destroy Altcoins – NewsBTC

Early cryptocurrency developer and British cryptography expert Adam Back has been speaking at the Transylvania Crypto Conference about Bitcoin sidechains. The basic premise is that this additional functionality could render many of the altcoins simply unnecessary.

Company News

Market Making Giant Virtu Attacks Exchange Dominance – Australian Financial Review

The head of Nasdaq-listed market making firm Virtu Financial accused incumbent exchange operators of monopolistic behaviour and says he and other brokers are prepared to build their own exchanges to lower trading costs.

All About Data: LSE Bids Show Exchanges’ New Priorities – Financial Times

For the market structure industry –  the exchanges, clearing houses and data providers that operate the daily trading machinery for the world’s financial markets – the vaulting ambition to unite markets across continents brought to mind another deal from another era: the merger of the New York Stock Exchange and Euronext in 2006.

Banks Must Reinvent Themselves Before Next Downturn: McKinsey – Reuters

A third of banks globally are unlikely to survive a serious economic downturn and must radically revamp their business models, management consultancy McKinsey said in a report on the industry.

Argentine Bondholders Braced for Steep Losses – Financial Times

Argentina’s bondholders are braced for steep losses when the government attempts to tackle its $101bn debt burden after downbeat meetings with IMF officials and associates of Alberto Fernández, the presidential frontrunner, in Washington last week.

UBS Profits Slide as Investment Bank Struggles – Financial Times

UBS reported a drop in third-quarter profits, as income from its investment banking business more than halved even as its wealth management business proved resilient.

Market Savvy

The World Economy Is Stumbling Toward Disaster – Bloomberg

If a new recession strikes, the Trump administration will get — and deserve — much of the blame.

Argentina is Caught Between Politics and Economic Reality – Financial Times

Argentina once again finds itself trapped between economic reality and domestic politics: an urgent need to restructure debts amid a likely return to power of the Peronist party. 

Trade Hopes Buttress Dollar – Reuters

Hopes the United States and China were making progress to resolve their trade dispute supported the dollar and trade-exposed Asian currencies on Tuesday, while the Canadian dollar rose as the ruling Liberal Party looked to have won a national election.

Riksbank to Cling to Hiking Plan in Bet Recession Will Be Dodged – Bloomberg

Swedish central bank policy makers are intent on leaving negative interest rates behind after almost half a decade.

Investors Start to Ponder ‘QE Infinity’ from the ECB – Financial Times

As the European Central Bank limbers up to restart its debt-buying programme, one question looms large for investors: how long can the purchases continue before the bank runs out of bonds to buy?