As widely expected, the European Central Bank said it would hold interest rates steady and continue its ambitious stimulus scheme. Most economists responding to a Reuters poll say they expect the policy to remain in place until June, when a slight change in approach might be possible.
This month, global authorities plan to provide national regulators guidelines for the stress testing of derivatives clearinghouses, said Benoit Coeure, head of the Committee on Payments and Market Infrastructures. The "more granular" instructions should help regulators determine whether to impose standards on central counterparties more demanding than those required by international standards, he said.
R3 CEV, which leads a large bank blockchain consortium, confirmed that JPMorgan Chase has left the group. "JPMorgan parted ways with R3 to pursue a very distinct technology path which is at odds with the one chosen by the global financial-services industry, represented by our 80-plus members," said Charley Cooper of R3.
European government bonds' average daily volumes have fallen 7% since 2015, partly due to an increasing number of banks quitting their role as primary dealers, according to AFME figures. However, a lobbying group for nonbank liquidity providers, also known as principal trading firms, has expressed eagerness to assume the role and says it would be a practical way to ease liquidity problems.
Japan's Nomura Holdings announced a fourth-quarter profit of 16.7 billion yen on its overseas operations, compared with a loss of 16.6 billion yen a year earlier, its first gain in seven years. Increased bond trading is thought to be the driving factor behind Nomura's turnaround, which also reported profit in its retail and wholesale businesses.
Sales in India of high-yield investment bonds have reached $2.98 billion this year, compared with $2.22 billion in the whole of 2016, according to Dealogic. Market participants say the conditions are right for this sector to continue expanding.
FPA Capital Fund managers have issued a warning about the effects of exchange-traded funds on market structure and the potential for a major market selloff. "When the world decides that there is no need for fundamental research and investors can just blindly purchase index funds and ETFs without any regard to valuation, we say the time to be fearful is now," note Arik Ahitov and Dennis Bryan, who run the fund.
The Basel Committee on Banking Supervision's proposal to allow local regulators to decide how to handle identifying and measuring risks posed by shadow banking entities is receiving mixed reviews. "There could be a lot of variation across jurisdictions and I think it will depend on two things: one is how important the jurisdiction thinks this is ... [and] how much residual step-in risk remains after you take into account all of the regulations," says Sullivan & Cromwell's Andrea Tokheim.
The Swedish central bank said it will hold interest rates steady at -0.50% until at least mid-2018. However, it intends to expand its bond-buying scheme by 15 billion Swedish crowns to encourage inflation toward 2%.
China's regulatory crackdown will aid the long-term development of the country's capital markets and could provide a buying opportunity, analysts say. "If we see the market go down further, it could be an attractive level to buy as the [financial clampdown] measures will not change the fundamentals of the companies we like nor the broader economic landscape," said Catherine Yeung of Fidelity International.
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