The European Central Bank has indicated that it has no plans yet to start tapering its bond-buying scheme, with President Mario Draghi saying it will be discussed in the fall. Other central banks such as the Bank of Japan have made similar decisions, as inflation continues to remain low despite a generally brightening economic outlook.
ExxonMobil has responded to a $2 million fine from the US Treasury Department by suing the government, calling the fine for a joint venture with Russia's Rosneft unlawful and capricious. The Treasury says Exxon exhibited "reckless disregard" for US sanctions in dealings with Russia three years ago, when Secretary of State Rex Tillerson was CEO.
Historical models are not adequate gauges of post-crisis economies, Bill Gross of Janus Henderson Investors warned global policymakers. Normalization of short-term interest rates could spell recession for overleveraged economies, which include the US, Gross said.
A Liquidnet survey of asset managers found that more than half of them have seen a rise in electronic fixed-income trading over the past 12 months. Additionally, 86% of European managers say Europe's revised Markets in Financial Instruments Directive, which takes effect in January, is the main driver behind the move, compared with 39% of US traders.
The CEOs at Citigroup and Deutsche Bank have told staff that they plan to relocate substantial parts of their operations to Frankfurt, Germany, moves that could affect hundreds of jobs. Morgan Stanley made a similar announcement this week, adding to a growing list of major banks choosing Frankfurt as their post-Brexit base.
Saudi Aramco's upcoming initial public offering will provide a test of fund managers' skills, with close scrutiny of their decisions on whether to buy or pass on the issued stocks.
A report by The UK in a Changing Europe think tank refuted Prime Minister Theresa May's assertion that "no deal is better than a bad deal" as Britain withdraws from the EU. Failed Brexit negotiations could result in "a further significant fall in the exchange rate, a consequent rise in inflation, a fall in wages and consumer demand and a fall in business confidence, leading to a slowdown in investment", the report says.
A number of market-risk executives at smaller Asian banks say they might be prevented from using the reduced sensitivities-based method of risk calculation, which is designed to offer a simpler alternative to the sensitivities-based approach outlined in the Fundamental Review of the Trading Book. The method appears to be unavailable for use across the board by banks with overseas subsidiaries, a common set-up for many Asian entities.
The People's Bank of China injected 510 billion yuan into the financial system this week, the most in six months. The bank will continue to actively manage liquidity as it works to deleverage the economy, market observers say.
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