Top Headlines

UK Financial Regulation Faces Post-Brexit Equivalence Dilemma – Profit & Loss

Financial regulations, particularly for benchmarks, are likely to be materially aligned in the UK and rest of Europe by the time Brexit is completed, however obtaining “equivalence” status for the UK might not be quite as straightforward, a number of sources close to the matter told Profit & Loss in recent weeks, with political reasons potentially playing a role in slowing down the process.

IEA Sees Oil Demand Easing as Economic Outlook Dims – WSJ (subscription)

The International Energy Agency on Thursday trimmed its forecast for the rise in global oil demand next year on a dimmer economic outlook, warning that the “massive” stock overhang is keeping a lid on crude oil prices.

U.K. Home Sales Slump – Bloomberg

Brexit is hitting the housing market. Sales dropped the most since the financial crisis in 2008, according to data from the Royal Institution of Chartered Surveyors. Prices rose at the slowest pace in three years in July and new sales declined.

Now We Know Why Germany Inc. Won’t Invest – Bloomberg

Germany’s high savings rate. A damaged euro zone banking system. Elevated sovereign-debt ratios in southern Europe.

From Budget Shock to Surplus: Sweden’s Handling the Refugee Boom – Bloomberg

Sweden is doing well: gross domestic product is expanding twice as fast as the euro zone’s and its budget deficit is shrinking more rapidly than expected.

Regulatory News

Valeant Is Reported to Be in Criminal Probe Over Pharmacy – Bloomberg

Valeant Pharmaceuticals International Inc. is the subject of a criminal probe by federal prosecutors, who are investigating whether the drugmaker defrauded insurers by hiding its ties to a mail-order pharmacy, the Wall Street Journal reported Wednesday.

Former NFL Player, Business Partner Accused of Defrauding Investors – WSJ (subscription)

A former National Football League linebacker and his business partner have been charged with defrauding investors, including coaches the player knew from his time at Fork Union Military Academy and the University of Virginia.

Company News

R3 Completes FX-Focused Distributed Ledger Prototype – Profit & Loss

R3 and 15 member banks of its consortium have completed two distributed ledger prototypes that it claims prove the usefulness of the technology in addressing USD FX trading issues.

Zurich Insurance Profit Falls on Restructuring, Catastrophes – Bloomberg

Zurich Insurance Group AG said second-quarter profit fell 12 percent on higher restructuring charges and claims from natural catastrophes as Chief Executive Officer Mario Greco overhauls the company’s biggest unit.

Thyssenkrupp Profit Down 34% on Steel Prices – WSJ (subscription)

German industrial conglomerate Thyssenkrupp AG  reported a 34% slide in net profit for the third quarter of its fiscal 2016, weighed down by drops in global steel and material prices from a year ago.

Market Savvy

Treasuries Auction Shows Limit to Losses in Negative-Yield World – Bloomberg

At an auction of benchmark 10-year Treasuries on Wednesday, global investors sent a clear message to the $13.4 trillion market: They’re still interested.

Crude Below $42 Keeps Stock Bulls at Bay; Kiwi Jumps, Won Slides – Bloomberg

An air of caution was evident in financial markets as oil retreated for a third day amid signs of a glut.

Why China’s Bond Market Rally Is Risky Business – WSJ (subscription)

Like much of the sovereign-debt universe, China’s bonds are rallying too. And that’s where the similarities end. Despite a rising number of defaults on corporate and state-backed debt, yields on 10-year Chinese government bonds dropped to their lowest in seven years this week, touching 2.71%.

ECB Negative Rates at Limit, Should Focus on Asset Buys, IMF Economists Say – Reuters

Economists from the International Monetary Fund have urged the European Central Bank to concentrate on asset purchases rather than cutting its already negative interest rates again, if it needs to stimulate the euro zone economy again.