China Lowers Expectations for US Trade Talks After Blacklist: Officials – Reuters
Surprised and upset by the US blacklisting of Chinese companies, China has lowered expectations for significant progress from this week’s trade talks with the United States, Chinese government officials told Reuters, even as President Donald Trump on Wednesday expressed fresh optimism.
- US and China Make No Progress in Two Days of Deputy-Level Talks: Sources – South China Morning Post
- US Weighing Currency Pact With China as Part of Partial Deal – Bloomberg
- US Tariffs on China are Working, says US Secretary of Commerce – Reuters
Currencies Whipsaw on Mixed Trade Signals, Yuan Rebounds – Reuters
Currencies whipsawed on Thursday as news suggesting division, then detente in Sino-US trade talks sparked volatility, with riskier Asian currencies ultimately rallying over a sinking dollar.
Federal Reserve Policymakers Increasingly Divided on Way Ahead, Minutes Show – Reuters
Most Federal Reserve policymakers supported the need for an interest rate cut in September, minutes of the central bank’s last policy meeting showed, but they remained divided on the path ahead for monetary policy.
ECB’s Draghi Ignored In-House Advice on Decision to Restart QE – Financial Times
The European Central Bank decided to restart its bond-buying programme last month over the objections of its own officials, a further sign of how the move has reopened divisions within the institution.
More Hong Kong Protests Planned as Metro Limps Back to Business – Reuters
Hong Kong’s metro rail system will shut early again on Thursday to allow time to repair damaged facilities, its operator said as the city braced for more anti-government demonstrations after a string of violent protests in the Asian financial hub.
No Brexit Extension Without New Referendum or an Election, EU Insists – Daily Telegraph
Britain will only be granted a Brexit extension by the EU if it agrees to hold a general election or a second referendum, it has emerged.
- Five Charts That Suggest Brexit Won’t Go Boris Johnson’s Way – Bloomberg
- Sterling Wobbles Highlight Enduring Brexit Risks – Financial Times
- UK’s Corbyn Says ‘Ready and Champing at the Bit’ for Election – Bloomberg
Sweden Needs to ‘Borrow Like Crazy’ to Ease the Economic Pain – Bloomberg
Sweden needs to toss its budget surplus regime out the window and “borrow like crazy” to ease the pain of an economic slowdown and to prevent political upheaval.
World Bank says 2019 Asia-Pacific Growth to Slow to 5.8% on Trade Tensions – Reuters
Asia Pacific growth is expected to slow to 5.8% in 2019, down from 6.3% in 2018, due to uncertainty around the ongoing U.S.-China trade tensions, a World Bank report said.
Greece, Once in Crisis, Joins Negative-Rates Club – Wall Street Journal
Greece sold debt offering less than 0% for the first time on Wednesday in the latest sign of how far investors will go in a hunt for returns amid a global slump in yields.
Regulatory News
Powell: Fed’s ‘Significant’ Political Protection Makes Public Outreach an ‘Obligation’ – Reuters
The “significant” protection the US Federal Reserve has from short-term political pressures also gives it an obligation to “clearly explain” monetary policy, Federal Reserve chairman Jerome Powell said on Wednesday.
Federal Reserve Drops Toughening Liquidity Rules on Foreign Banks – Financial Times
US banking regulators have dropped a proposal to subject local branches of foreign banks to tough new liquidity rules, in a move which will benefit the troubled Deutsche Bank more than any other.
BIS Report Sets Out Governance of Key OTC Derivatives Data Elements – Profit & Loss
A new report published by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO), identifies key criteria, functions and bodies for the governance arrangements for a set of critical data elements for OTC derivative transactions reported to trade repositories, excluding the Unique Transaction Identifier and the Unique Product Identifier.
Large Korean Hedge Fund Halts Investor Withdrawals Amid Probe – Bloomberg
One of South Korea’s largest hedge funds suspended withdrawals from some funds, saying the firm has been unable to liquidate assets fast enough to meet demands from investors for their money back.
FCA Official: Stick with Overnight Rates for All New Contracts – Risk
The UK’s Financial Conduct Authority has urged banks to use backward-looking versions of overnight rates in all new contracts referencing risk-free rates (RFRs), rather than relying on the build-out of new forward-looking term rates to replace Libor.
Crypto News
Facebook’s Zuckerberg to Testify in House on Currency Plans – Bloomberg
Facebook Inc. Chief Executive Officer Mark Zuckerberg will testify before a key congressional committee that deals with the finance industry later this month, the latest sign of rising opposition to the social media giant’s plans to create a cryptocurrency.
Cryptocurrency Investors Get New IRS Income-Reporting Rules – Bloomberg
Cryptocurrency holders know more about what the Internal Revenue Service expects to see on their tax returns, thanks to new guidance from the agency.
US SEC Rejects Bitwise Bitcoin ETF Proposal – Coin Telegraph
The United States Securities and Exchange Commission (SEC) has rejected a proposal to list a Bitcoin exchange-traded fund.
Crypto Exchange Bitstamp Taps BitGo for Custodial Services – Coin Desk
BitGo has been tapped to provide custodial services for Europe’s largest exchange by trading volume.
Company News
Should the Primary FX Venues Follow Equities Markets in Going Brokerage Free – Profit & Loss
The major US equity brokerages have all dropped brokerage fees to allow their clients to trade for free, could the same idea work in FX markets and if so, who should lead the way?
No Deal: Why Buying the London Stock Exchange Is Hard to Do – Wall Street Journal
London Stock Exchange Group PLC’s dismissal of the Hong Kong exchange’s almost $37 billion takeover attempt underscores the challenges global exchanges face trying to complete cross-border deals amid geopolitical upheaval.
One Global Investment Bank Has Cracked Australia’s Wealth Industry – Bloomberg
When Rachel Farrell took charge of JPMorgan Chase & Co.’s asset management unit in Australia in 2017, it was a minnow swimming in the world’s fourth-largest pool of pension savings.
Aggregation Putting ECNs on the Spot: Greenwich Survey – Profit & Loss
A new report from Greenwich Associates says that FX market participants are spurning anonymous trading on ECNs in favour of disclosed, bilateral trades executed through a variety of channels – as well as a growing share of business done through so-called “API aggregators” that could eventually emerge as a challenger to the market’s biggest execution venues.
Market Savvy
Why Dollar Strength Poses Risks to the Global Economy – Financial Times
The recent strength of the US dollar has triggered two very different reactions among economists and market participants. Some see it as contributing to better global economic performance down the road. Others fear that it will create disruption. Both cannot be right.
Decreasing US Job Openings Point to Cooling Labour Market – Reuters
US job openings fell to a 1-1/2-year low in August and hiring declined, suggesting employment growth was slowing largely because of ebbing demand for labour as the economy loses momentum.
Japan’s Latest Bold – and Desperate – Experiment in Monetary Policy – Bloomberg Businessweek
Japan, a nation often bound by tradition, has been wildly unconventional when it comes to monetary policy.
Aussie, Kiwi Dollars ‘to Languish in FX Purgatory’: TD – Australian Financial Review
There’s little reason to expect that either the Australian or the New Zealand dollar will appreciate anytime soon, according to TD Securities senior FX strategist Mazen Issa.
The Downside of Negative Interest Rates – Financial Times
Investors and consumers can be spooked by unconventional monetary policy.