Random Market News, 20 June
"Bank of England to probe banks’ exposure to climate change.
Bank in ‘ground-breaking’ move over financial threats posed by global warming."
"Credit rating agency Moody's has downgraded a dozen Australian banks, including the big four, citing increased risks in the nation's increasingly indebted households."
"Wall St. falls on oil tumble, consumer sector and Fed worries."
"In a widely anticipated move, the FOMC raised interest rates by 25 basis points last week, the third consecutive change and fourth hike this cycle. The hike occurred despite some recent weakness in economic data, notably inflation, which missed estimates in May for the third month in a row.
Fed also outlined an explicit path of balance sheet reduction.
It was not specified when implementation would begin, except to say that it would occur "this year," though Chair Yellen’s press conference comments suggest a start as early as September."
"Brazil's federal police say they have evidence President Michel Temer received bribes."
"U.S. index provider MSCI said on Tuesday it would add mainland Chinese stocks to one of its key benchmarks, but shocked many emerging market investors by failing to upgrade Argentina from the frontier market category where it has languished in recent years."
"The Salvation of Barclays Comes Back to Haunt It.
Criminal charges stemming from raising money in 2008 are brought against a former CEO and three other senior managers."
"Asset management roundup.
Kempen absorbs research costs in response to MIFID II.
Private equity demand pushes down fundraising periods."
"Brokers May Be Giving Away Investors’ Best Ideas.
Brokers may be leaking their best trade ideas from clients to other institutional investors, according to a paper from the National Bureau of Economic Research.
After a major broker executes a well-informed trade for one client, a significantly higher volume of other institutional investors execute similar trades through the same broker, authors Marco Di Maggio, Francesco Franzoni, Amir Kermani and Carlo Sommavilla said in a paper this month."
"Apple Inc. disclosed Tuesday that it has sold $1 billion in debt, adding to a growing debt load that it uses for shareholder return while keeping more than 90% of its $256 billion in cash overseas to avoid repatriation taxes. Apple consummated the issuance and sales of 10-year notes with a 3% rate Tuesday, according to a filing with the Securities and Exchange Commission. Apple has raised its debt load from zero in 2012 to nearly $85 billion by the end of the last quarter..."
"IFC to invest up to $25m in North Haven Thai Private Equity."
"The International Finance Corporation, the private sector arm of the World Bank Group, has built up a portfolio of investments in emerging market private equity funds representing a commitment of over $3 billion in about 180 funds.
It also seeks managers who add commercial value to the companies in which they invest, rather than just supplying capital."
Implied rate hike probability on July 26th ~2.5%, September 20th ~12.8%; 0% probability of rate cut through June 13th, 2018.
VIX ~10.86. 10-yr treasury vol (TYVIX) ~4.16.
"US Stocks Close Lower Amid Bear Oil Market
Wall Street closed moderately in the red on Tuesday, as oil and gas companies fell more than 1.4 percent as crude oil slid into a bear market to trade at $43.3 per barrel (WTI), falling 2 percent in the session. The Dow Jones lost 62 points or 0.3 percent to 21467. The S&P 500 retreated 16 points or 0.7 percent to 2437. The Nasdaq dropped 51 points or 0.8 percent to 6188.
Brazil Shares Plunge 2.0% On Tuesday
Brazil’s iBovespa lost 1248 points or 2.0 percent to 60766 on Tuesday, as a Senate committee rejected President Temer's labor reform bill, questioning its odds of being approved as it now heads to a second and third committee before heading to the floor for a full vote. Estacio (-7.1%), JBS (-5.4%), and BR Malls (-4.0%) led declines. Among other stock markets in America, Colombia’s COLCAP retreated 14 points or 1.0 percent to 1451, as the economy continues to face recession threats. Canada’s TSX declined 116 points or 0.8 percent to 15150. Chile’s IPSA dipped 29 points or 0.6 percent to 4796. Mexico’s IPC declined 137 points or 0.3 percent to 49033.
Mexican Peso Dips 1.5% Ahead Of Banxico Meeting
The Mexican peso slipped from a 13-month peak last week to MXN 18.1 against the US dollar on Tuesday to trade at 18.22 per USD, or down 1.5 percent in the session, after New York Fed President William Dudley suggested on Monday an interest-rate increase later this year is still on the table despite slowing inflation. Also, investors await Banco de México's monetary policy decision on Thursday where it is expected to hike interest rates by 25bps and to give further details on its rate-raising path.
Pound Hits 2-Month Low
The pound has extended its losses and hit a two-month low of $1.2619 around 3:30 PM London time on Tuesday, after the Governor of the Bank of England Mark Carney said that now is not the time to raise interest rates while S&P Global warned it could downgrade the UK's credit rating again before Brexit terms are known.
Oil Prices Slump On Tuesday
Oil prices were down more than 2% on Tuesday amid concerns over global supply glut on rising output from the US, Libya and Nigeria. The US crude oil traded at around $42.9 a barrel, the lowest since August and Brent crude was at $45.7 a barrel, the lowest since November, erasing gains made since December when OPEC agreed to cut output.
Russia Retail Sales Rise The Most Since 2014
Retail sales in Russia increased 0.7 year-on-year in May of 2017, following an upwardly revised 0.1 percent gain in the previous month and above market expectations of a 0.5 percent rise. It was the strongest increase in retail sales since December of 2014. Sales of non-food rose 1.8 percent (1 percent in April) while food, beverages, and tobacco one went down 0.4 percent (-0.9 percent in April). On a monthly basis, sales jumped 1.8 percent.
Poland Retail Sales Rise 8.4% YoY In May
Retail sales in Poland increased 8.4 percent year-on-year in May of 2017, following a 8.1 percent rise in the previous month while missing market expectations of 9 percent gain. Sales rose at a faster pace for textiles, clothing, and footwear (14.1 percent vs 6.4 percent in April); furniture and household appliances (9.7 percent vs 7.1 percent); newspapers, books and stationery (15.6 percent vs 5.2 percent); motor vehicles, motorcycles, and parts declined (3.5 percent vs -7.6 percent). In contrast, sales slowed for fuel (14.8 percent vs 20.2 percent) and pharmaceuticals, cosmetics, and orthopedic equipment advanced (12.1 percent vs 12.9 percent). On a monthly basis, retail sales decreased 0.2 percent.
Botswana Holds Key Interest Rate At 5.5%
The Bank of Botswana held its benchmark interest rate at 5.5 percent on June 20th, saying inflation is expected to remain within its target range in the medium term. Annual inflation rate stood at 3.5 percent in May, way below the upper-limit of official target range of 6 percent.
Taiwan Export Orders Rise More Than Expected In May
Export orders from Taiwan jumped 9.1 percent
year-on-year to USD 36.8 billion in May of 2017, following a 7.4 percent rise
in April and above market expectations of a 6.85 percent gain. Orders increased
for basic metals and articles thereof (14.2 percent); machinery (12.4 percent);
electrical machinery (12 percent); information and communication products (8.2
percent); electronics (4.5 percent); plastics and rubber (20.3 percent);
optical, photographic, cinematographic apparatus (25.1 percent) and mineral
products (9.5 percent). Export orders rose from Europe (15.3 percent), followed
by those to China (14.5 percent), Japan (19.2 percent) and the US (10.2
"Striking truck drivers slow traffic at LA, Long Beach ports.
Backed by the International Brotherhood Teamsters and Local 848, representing about 500 port drivers, those on the picket lines are calling for several port trucking companies to end the practice of hiring drivers as independent contractors. The union is pushing for full-time status for the drivers, including overtime and options for medical and other benefits.
Protests targeted Connecticut-based XPO Logisitics Inc. on Monday, but the strike will expand over the coming days to include more drivers at other trucking companies and will last until the end of the week."
"MPC Container Ships seeks 50-vessel fleet and US listing in short order."
"Truckload spot market volumes in May reached their highest level since September 2015, increasing by 7.3 percent over April and 63 percent year over year, load board provider and consultancy DAT Solutions said today."
"All ship boardings halted at mouth of Mississippi ahead of storm.
All pilot boardings were suspended Tuesday at the mouth of the Mississippi River due to deteriorating weather conditions resulting from a tropical disturbance in the Gulf of Mexico, a dispatcher with the Bar Pilots Association confirmed."
"BlackRock Takes Stake in European Robo-Adviser.
Asset management giant BlackRock announced it is taking a minority equity stake in European digital advice service Scalable Capital, the second investment the U.S. firm has made in the fast-growing robo-advisory marketplace. Scalable, launched 16 months ago, has €250 million ($279 million) in assets from 6,000 retail investors."
"New York-based fitness startup ClassPass has secured $70 million in a Series C funding round led by Singapore’s state investment fund Temasek Holdings."
Repost from before, but nice article about SWF and tech investments.
"Blue Apron and Delivery Hero price IPOs following Amazon’s big buy."
"Toshiba to pick government-led Japan-U.S.-Korea group to buy chips unit-source."
"Minitel: The Online World France Built Before the Web.
A decade before the Internet went mainstream, French citizens were interacting via Minitel, a computer network open to anyone with a telephone."
Random Place of the day.
"Historic Mosque City of Bagerhat.
Situated in the suburbs of Bagerhat, at the meeting-point of the Ganges and Brahmaputra rivers, this ancient city, formerly known as Khalifatabad, was founded by the Turkish general Ulugh Khan Jahan in the 15th century. The city’s infrastructure reveals considerable technical skill and an exceptional number of mosques and early Islamic monuments, many built of brick, can be seen there."
"Cat domestication: From farms to sofas."
Japan JP: All Industry Index, 12:30 AM ET
Great Britain GB: Public Sector Finances, 4:30 AM ET
USA US: MBA Mortgage Applications, 7:00 AM ET
USA US: Existing Home Sales, 10:00 AM ET
USA US: EIA Petroleum Status Report, 10:30 AM ET
New Zealand NZ: RBNZ Announcement, 5:00 PM ET