Trump Hits China with More Tariffs, Sharply Escalating Trade Dispute

Trump Hits China with More Tariffs, Sharply Escalating Trade Dispute – Reuters

US President Donald Trump vowed to impose a 10% tariff on $300 billion of Chinese imports from Sept. 1, sharply escalating a bruising trade war between the world’s largest economies and jolting financial markets.

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Refinitiv Shareholders Approve Acquisition by LSEG

Refinitiv Shareholders Approve Acquisition by LSEG – Profit & Loss

Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, today announces that its shareholders have agreed definitive terms with the London Stock Exchange Group plc (LSEG) under which LSEG will acquire Refinitiv in an all share transaction for a total enterprise value of approximately US$27 billion. 

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Johnson Issues Ultimatum to EU Over Brexit Talks

Johnson Issues Ultimatum to EU Over Brexit Talks – Bloomberg

Prime Minister Boris Johnson will not start talks with European Union leaders over Brexit unless they first agree to his demand to reopen the divorce deal they struck with his predecessor, Theresa May.

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Powell Prepares to Launch Pivotal Interest Rate Cut

Powell Prepares to Launch Pivotal Interest Rate Cut – Financial Times

Jay Powell is this week widely expected to announce the first cut in US interest rates for more than a decade, as the Federal Reserve chairman seeks an insurance policy against a weakening global outlook and rising trade tensions.

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ECB Pledges More Easing and Ponders Inflation Goal Review

ECB Pledges More Easing and Ponders Inflation Goal Review – Reuters

European Central Bank President Mario Draghi all but pledged to ease policy further as the growth outlook deteriorates and even hinted on Thursday at a reinterpretation of the ECB’s inflation target, the cornerstone of its entire policy framework.

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Interest Rate Risk Helps Steady FX Volumes

Interest Rate Risk Helps Steady FX Volumes – Profit & Loss

Although spot FX markets have been characterised as existing in a very low volatility and volume environment, the same cannot be said for the interest rate space, and that has enabled FX volumes to remain steady over the past year according to data from six regional FX committees.

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China Opens Up Finance Sector to More Foreign Investment

China Opens Up Finance Sector to More Foreign Investment – Agence France-Presse
China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the United States.

UK Chancellor Hammond plans to quit if Johnson becomes PM – BBC

Philip Hammond has told the BBC he intends to resign as chancellor if Boris Johnson becomes the UK’s next PM.

Sink-or-Swim Showdown Beckons for Italy’s Fractious Coalition – Reuters

Italy’s fractious coalition partners are gearing up for a showdown this week that is likely to determine if the government will collapse, triggering autumn elections, or survive to the end of the year.

Federal Reserve Sets Sights on Quarter-Point Rate Cut – Financial Times

Chairman Jay Powell treads cautiously in supporting US economy.

Central Banks are in Sync on Need for Fresh Stimulus – Wall Street Journal

Central banks world-wide are poised to unleash some of the most aggressive monetary stimulus since the financial crisis a decade ago.

Abe’s Coalition Victorious, but Pro-Revision Forces Suffer Setback in Drive to Amend Constitution – Japan Times

Prime Minister Shinzo Abe’s ruling Liberal Democratic Party and allied forces fell short of a critical two-thirds majority of the 245-seat Upper House in Sunday’s election, according to final media tallies — a significant setback in their bid to revise the nation’s postwar Constitution.

Defining a True Measure of Liquidity in FX Markets (opinion) – Profit & Loss

Technology has been a huge enabler for the FX industry but it has brought challenges – one such being what can only be described as a false picture of liquidity in the market at any given time.

What Trump Got Wrong About China’s Economic Slowdown – South China Morning Post

China’s second-quarter GDP slowdown has more to do with the government’s debt crackdown than the US president’s efforts. Given China’s huge contribution to global GDP growth, any decline will adversely affect all economies.

Swiss Policymakers Caught in Crossfire over Franc – Financial Times

The adage in financial markets is ‘do not fight the central bank’. But can central banks fight the US president? The Swiss National Bank may be about to find out.

Regulatory News

In the FICC of It (podcast) – Profit & Loss

In this week’s podcast the Congressional hearings on Facebook’s cryptocurrency, FX turnover and unfair dismissals are firmly in focus.

Who Sees the Trade? The Effect of Information on Liquidity in Inter-Dealer Markets – FRBNY Staff Paper

Dealers, who strategically supply liquidity to traders, are subject to both liquidity and adverse selection costs. While liquidity costs can be mitigated through inter-dealer trading, individual dealers’ private motives to acquire information compromise inter-dealer market liquidity.

Federal Court Fines Over a Social Media-Based Forex Fraud Scheme – CFTC

The Commodity Futures Trading Commission has announced that US District Court for the Southern District of Texas entered judgment against defendant Kelvin Ramirez  in a CFTC enforcement action that found that he had fraudulently solicited and misappropriated funds from clients in a forex trading scheme.

The FCA and its Labyrinthine Rulebook Need a Serious Shake-Up (opinion) – Financial Times

Slow, inefficient and high-handed are all epithets flung at the UK financial watchdog.

SEC to Extend Mifid Exemption for US Brokers’ Research – Financial Times

The Securities and Exchange Commission is expected to extend an exemption that allows US brokers to sell research to European fund managers under the EU’s Mifid II regime that came into force last year.

Crypto News

St. Louis Fed Chief Pessimistic on Crypto as Non-Uniform Currency – Coin Telegraph

St. Louis Fed Chief James Bullard reportedly views cryptocurrencies as part of a global currency competition that is ultimately unhealthy. 

Could Cryptos Be the Next Fiat Currency? – ETF Trends

In an ongoing issue of cryptocurrency safety due to its lack of regulation, St. Louis Fed President James Bullard raised concerns Friday about the rise of cryptocurrencies, uniting with other key economic and political officials who have questioned the fledgling platforms as Facebook prepares to launch its “Libra” digital token.

European Central Bank Exec: Libra Won’t Launch Until Regulators Are Satisfied – Coin Telegraph

Benoit Coeure, a board member of the European Central Bank, said that Facebook’s Libra coin will not launch until global regulators are satisfied. 

MPs to Scrutinise Facebook’s New Cryptocurrency – Financial News

Chair of the House of Commons’ Digital, Culture, Media and Sport Committee is worried about the launch of Libra.

Company News

Caplin Adds Crypto to Trading Platform – Profit & Loss

Technology provider Caplin has announced the addition of cryptocurrencies to its range of technology components for multi-asset trading. 

Market Bounce Catches Bridgewater Fund Off-Guard – Financial Times

Bridgewater’s flagship fund suffered one of its worst first-half performances in two decades this year after being wrong-footed by rebounding markets.

Hyundai Motor Logs Biggest Profit Gain in Seven Years on Currency, New Models – Reuters

South Korea’s Hyundai Motor Co on Monday posted its steepest quarterly net profit gain in over seven years, as a weaker local currency helped lift US income, while new models boosted domestic sales.

Tradeweb: A Short-Term Gain, But Long-Term Pain for Wall Street? – Financial News

The bond trading platform’s April IPO lifted banks in Q2 — but its long-term success raises questions about their place in fixed income markets.

Market Savvy

Will the ECB Live Up to Investor Expectations? – Financial Times

When Mario Draghi speaks on Thursday, the market will be hanging on his every word.

Market Braces for Mexico’s Annual Oil Hedge, Trading Surges – Reuters

Trading in crude oil options and futures surged last week as market participants prepared for Mexico’s annual oil hedging program, in which the country buys as much as $1 billion in contracts to protect its oil revenues.

With Brexit, Iran Tensions and Likely Global Financial Instability, the Dollar is Far from Down and Out – South China Morning Post

While the trade war, political uncertainties in the US and lower interest rates have hit sentiment surrounding the US dollar, risks in Europe and the prospect of higher oil prices could trigger a flight to the US currency.

Sterling Weakens as Traders Protect Themselves Against More Falls – Reuters

The pound edged lower on Monday, with investors holding on to their hedges against further weakness ahead of the result of the Conservative party’s leadership election on Tuesday, which will decide Britain’s next prime minister.