White House Casts Doubt on G20 Deal to Resolve China Trade War – Financial Times (subscription)
The White House’s top economic adviser cast doubt over the prospect of a ceasefire in the escalating trade war with China, saying negotiations in the run-up to a high-stakes summit this week had made no progress and a new round of tariffs was likely.
Germany Pushes Down Debt Below EU Ceiling One Year Earlier Than Planned – Reuters
German public sector debt has fallen below 60 percent of gross domestic product already this year, Finance Minister Olaf Scholz said, bringing it below the European Union’s jointly agreed debt ceiling for the first time since 2002.
Trump and Xi to Meet for Dinner Saturday in Pivotal Moment for Trade War – Bloomberg
President Donald Trump and China’s Xi Jinping will meet over dinner Saturday evening in Buenos Aires marking a pivotal moment in the escalating trade war between the world’s two largest economies.
Fed Shifts to a Less-Predictable Approach to Policy Making – Wall Street Journal (subscription)
Federal Reserve officials are moving into a more unpredictable phase of policy-making after two years of removing economic stimulus in regular, quarterly intervals.
A dollar slump is on the horizon in 2019, and it could last for years. That’s according to JPMorgan Asset Management, which anticipates the greenback may start falling by the end of next year amid a cooling US economy and a potential pause in the Federal Reserve’s hiking cycle, likely in the second half of 2019.
President Trump placed responsibility for recent stock market declines and this week’s General Motors plant closures and layoffs on the Federal Reserve during an interview Tuesday, shirking any personal responsibility for cracks in the economy and declaring that he is “not even a little bit happy” with his hand-selected central bank chairman.
Regulatory News
ISDA Publishes Responses to Benchmark Consultation – Profit & Loss
The International Swaps and Derivatives Association has published a statement summarising the preliminary results of a consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates.
Slackening US Bank Regulation in the Line of Fire for Democrats – Financial Times (subscription)
As the Democrats prepare to take control of the House of Representatives following this month’s midterm elections, senior members say they plan to subject the financial services industry to far greater scrutiny than it has faced in the past two years.
All Banks But Morgan Stanley Escape Aussie Benchmark Suit – Law360 (subscription)A New York federal judge dismissed the bulk of claims against all defendants except Morgan Stanley in a proposed class action against 15 major banks and two brokers for allegedly manipulating the price of derivatives based on an Australian benchmark interest rate.
Crypto News
Wall Streeters Who Rushed to Crypto Create Sheriff for Wild West – Bloomberg
Cryptocurrency players including DRW’s Cumberland trading juggernaut and Mike Novogratz’s Galaxy Digital merchant bank have banded together to draft a set of best practices, the latest attempt to clean up an industry frequently marred by scandal.
Bitcoin’s Crash Looks Like a Real Currency Crisis – Bloomberg
In a virtual world without a central bank, who is the buyer of last resort?
Cryptocurrencies to survive sell-off: Allianz’s El-Erian – Reuters
Cryptocurrencies are here to stay despite a prolonged slump this year, and will gain wider acceptance after the recent entry of more institutional investors in the space, Mohamed El-Erian, chief economic adviser at Allianz, said on Tuesday.
Goldman Still Can’t Hold Clients’ Crypto Assets – Bloomberg
Goldman Sachs Group Inc. isn’t any closer to offering one the key services sought by clients still intrigued by cryptocurrencies amid this year’s collapse in digital-asset prices.
Little Known to Many Investors, Cryptocurrency Reviews Are For Sale – Reuters
When cryptocurrency issuers want positive coverage for their virtual coins, they buy it. Self-proclaimed social media personalities charge thousands of dollars for video reviews. Research houses accept payments in the cryptocurrencies they are analyzing. Rating “experts” will grade anything positively, for a price.
All this is common, according to more than two dozen people in the cryptocurrency market and documents reviewed by Reuters.
Company News
CLS Goes Live with DLT Netting Service – Profit & Loss
CLS’s new payment netting service based on distributed ledger technology, CLSNet, has gone live with Goldman Sachs and Morgan Stanley.
Shterenberg Joins Barclays – Profit & Loss
Barclays has appointed Alex Shterenberg as global head of G10 and EM e-FX trading, based in New York.
Hedge fund Ascend Capital LLC is effectively shutting down, with plans to return client money and turn into a family office, according to a client letter.
Citi Raises $7 Million in Latest Education Campaign – Profit & Loss
Citi says it has raised a record $7 million through the 2018 edition of its annual e for Education campaign.
Market Savvy
Is The US Dollar’s Long Climb About to End? – South China Morning Post
Neal Kimberley says market watchers are on the alert for a slide in the US dollar, and Asian currencies may be the ones to benefit when the time comes, although that may not be before 2019.
Fed Vice-Chair says Monetary Policy Must Account for Changing Data – Financial Times (subscription)
The Federal Reserve will need to be especially attuned to fluctuations in economic data as it gauges how much further to lift short-term interest rates, a senior US central banker has said.
ECB’s Corporate Exit Leaves Bond Investors on Edge – Financial Times (subscription)
Loss of central bank safety net will add more anxiety amid turn in credit cycle.