Global Stocks Routed, Oil Sinks as Bond Markets Flash Recession Warning – Reuters
Global stocks crumbled and oil prices extended a punishing sell-off on Thursday as an inverted US bond yield curve intensified fears about a world recession.
- As Global Order Crumbles, Risks of Recession Grow – Wall Street Journal
- US Curve Inverts for First Time in 12 Years; 30-Year Yield Tumbles – Reuters
China Says Won’t Devalue Currency, But Market Will Anyway – Forbes
China’s government pledged not to devalue the yuan to make up for extra tariffs coming next month, but that doesn’t matter. The market will devalue it anyway. The People’s Bank of China probably won’t stop it.
Sino-US Trade Dispute Risks Self-Fulfilling Downturn: RBA – Reuters
The Sino-US trade dispute is causing businesses worldwide to put off investment decisions, crimping economic activity and risking a self-fulfilling global downturn, a top Australian central banker warned on Thursday.
UK Tory Suggests Johnson Could Execute Surprise August Brexit – Bloomberg
A senior U.K. Conservative suggested Boris Johnson could take Britain out of the European Union in the next 10 days – without a deal – as a surprise maneuver to outflank his opponents in parliament.
China Curbs Gold Imports as Trade War Heats Up – Reuters
China has severely restricted imports of gold since May, bullion industry sources with direct knowledge of the matter told Reuters, in a move that could be aimed at curbing outflows of dollars and bolstering its yuan currency as economic growth slows.
Hong Kong Braces for More Protests as World Leaders Urge Calm, Talks – Reuters
Hong Kong is bracing for more mass demonstrations through the weekend, with the weeks-long crisis escalating after pro-democracy protests forced the cancellation of nearly 1,000 flights this week and world leaders urging calm.
Italy’s Rival Parties Look to Block Salvini’s Bid for Power – Wall Street Journal
The bid for power by Italian nativist politician Matteo Salvini has hit an unexpected obstacle: His populist and establishment rivals are trying to overcome their enmity to stop him from seizing control of one of the European Union’s most important, and economically fragile, countries.
Argentina’s Peso Falls Again as Macri Tries to Shore Up Support – Financial Times
Argentina’s peso resumed its slide on Wednesday as President Mauricio Macri announced a raft of emergency measures aimed at providing relief to a population suffering from the impact of a sharp devaluation following his stunning defeat in primary elections.
Regulatory News
ASIC Warns on Retail FX; Provides Observations on FX Global Code –Profit & Loss
In a speech delivered at an ACI Australia event in Sydney this week, Commissioner Cathie Armour of the Australian Securities and Investment Commission observed that the regulator “continues to respond to a high incidence of misconduct in the retail OTC derivatives sector and to see large sums of client losses”.
IBA Mulls RFQ Data and Sonia Spinoff to Bolster Swap Rate – Risk
Benchmark administrator consults on plan to reduce non-publication and prepare for transition to RFRs.
Uniform? Op Risk Capital Rules Go Their Own Ways – Risk
Europe and Canada set to include historical losses in new standardised approach; Australia probably not.
Crypto News
China’s Digital Currency is Unlikely to be a Cryptocurrency – Forbes
China’s announcement of its own digital currency may bring excitement and momentum for cryptocurrency in general including bitcoin and Ethereum, but the new digital currency will have many traits that make it more akin to a centralised digital currency then a true cryptocurrency.
Even Cryptocurrencies are Now Getting Clobbered in This Market – Bloomberg
Bitcoin is quickly losing the refuge designation bestowed by some advocates in recent weeks as the largest cryptocurrency joins the global slide in riskier assets.
Will Egypt Launch its Own Official Digital Currency? – AL-Monitor
As Facebook said July 31 that major difficulties are impeding the launch of its digital currency known as Libra, several countries, including Egypt, felt the urge to find a way to deal with cryptocurrencies.
Tumbling Renminbi Helps Push Chinese into Bitcoin, Say Traders – Financial Times
A recent run-up in the price of bitcoin has been attributed to many factors: aggressive monetary easing by central banks, plans by Facebook to develop its own digital tokens, and market manipulation via Tether, another crypto asset. But another force may be giving bitcoin a lift: demand from Chinese investors.
Barclays Ends Partnership with Cryptocurrency Exchange Coinbase – Reuters
Barclays is no longer providing banking services to major cryptocurrency exchange Coinbase, sources familiar with the matter told Reuters, ending a relationship that started in March last year as the exchange expanded in Europe.
Company News
Star Fund Manager Hasenstab Lost $1.8bn in a Single Day – Financial Times
Funds run by Michael Hasenstab, one of the fixed income market’s biggest investors, lost nearly $1.8bn in a single day during the stampede out of Argentine assets that followed the drubbing of President Mauricio Macri in the weekend primary elections.
Analyst to MD: How Pay and Bonuses Compare at US and European Banks – Financial News
The most senior City bankers working for European companies earn nearly 9% less than those at their Wall Street rivals, according to new figures that underscore the growing dominance of US institutions in Europe.
Rethinking Bank Profitability – Financial Times
The ECB has an article out on bank profits. It serves as a reminder of an easily-forgettable point: that financial profitability is a state of affairs that regulators, as well as shareholders, have a deep interest in achieving.
Market Savvy
Trump Hits Fed Over ‘Crazy Inverted Yield Curve’ as Stocks Fall – Bloomberg
President Donald Trump called Federal Reserve Chairman Jerome Powell “clueless” and blamed his policies for signs in the bond markets that a recession is looming. The president tried to deflect criticism that his trade war with China is harming the economic outlook, as stock markets tumble and bond yields show signs of an impending global slowdown.
South Korea’s Won Faces Further Hit from Japan Trade War – Financial Times
South Korea’s won has dropped 8 per cent against the US dollar this year, making it the worst performer in Asia as the country’s economy has been buffeted by slower global growth, a downturn in semiconductor demand and a weaker Chinese currency.
Negative yields: Sweden Leads the World Below Zero – Financial Times
Central bank argues that the policy has been a success but others are unconvinced.
Shrinking German Economy ‘On Edge of Recession’ as Exports Stutter – Reuters
Slumping exports sent Germany’s economy into reverse in the second quarter, with prospects of an early recovery slim as its manufacturers struggle at the sharp end of a global slowdown amplified by tariff conflicts and fallout from Brexit.