June, 2018

• 25 June

  ECB bond change pulls the rug from long end

  

  It certainly appears dovish that the European Central Bank (ECB) expects to reinvest even more of its maturing holdings next year, as Bloomberg News reported. It’s even more so if, as President Mario Draghi has suggested, officials relax the rules on how much time they can take to make reinvestments — more flexibility here gives them room to smooth ructions ...

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• 25 June

  Greece’s deal leaves too much to chance

  The government must be ecstatic, and the prime minister’s tailor even happier. Greece has secured a much more generous than expected deal that should allow it to put its bailout behind it and let Alexis Tsipras put on the tie he promised to forgo until the country’s debt woes were over. But there remains one sticking point: whether the country ...

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• 25 June

  Business should brace for the worst kind of Brexit

  

  When European Union (EU) heads meet at the end of this month, they are likely to issue a warning to bureaucracies and firms to step up preparations for a no-deal Brexit, also known as a ‘hard’ or ‘cliff-edge’ Brexit, because that’s where things appear to be heading in the talks between the EU and the UK. At this point, it’s ...

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• 25 June

  Cash-rich Japan Inc. offers a haven from US zombies

  

  There are few places for investors to hide when a global trade war is about to erupt and the US Treasury yield curve threatens to invert. Japan may be one. The nation’s stock market has been relatively calm this year, with the Topix index down less than 2 percent in dollar terms. This is noteworthy considering a third of revenue ...

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• 25 June

  Shale’s suffering indigestion, not a heart attack

  

  The Permian basin is the center of shale’s world, whether it fascinates investors or, as today, repels them. The recent selloff has obscured that. The Permian’s denizens are currently victims of their own success. Production of oil and gas has outrun the pipeline capacity to get it all to market, leading to steep discounts being taken on some of it. ...

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• 25 June

  Flash payments raise credit risk fears for Norway’s banks

  

  Bloomberg The speed of the instant payment highway has regulators in Norway thinking about the guardrails. The central bank is stepping up efforts to improve the country’s banking infrastructure as the spreading use of instant payments drives credit risk higher at banks. The problem lies in the fact that customers get their money before it’s actually transferred to their banks. ...

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• 25 June

  Morgan Stanley sees yield peak in split with Pimco, JPMorgan

  

  Bloomberg Investors have seen the peak of the US 10-year Treasury yield this year as brewing trade tensions and a stronger dollar curb its advance, according to Morgan Stanley. “3.12 percent was it,” Morgan Stanley global head of interest-rate strategy Matthew Hornbach wrote in a note to clients. “We suggest investors buy 10-year Treasury notes outright,” he said, with the ...

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• 25 June

  Commonwealth bank CEO overhauls ‘lender’

  

  Bloomberg The Commonwealth Bank of Australia’s new Chief Executive Officer Matt Comyn has embarked on a massive overhaul of the scandal-plagued lender, announcing plans to spin off its wealth management and mortgage-broking businesses. The asset management, wealth advisory and Aussie Home Loans units will be placed into a new company known as CFS Group to be listed on the Australian ...

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• 25 June

  PBOC: Reserve cut not aimed at helping housing market

  

  Bloomberg When China allowed banks to use 700 billion yuan ($108 billion) more of their deposits, they were very clear on where the money should go. One sector not mentioned was the overheating property market. Money freed up from previous cuts may have ended up flowing into the housing market, and the design of this new policy seems aimed at ...

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• 25 June

  Central banks told not to be afraid of shaking markets a little

  

  Bloomberg Central banks should accept that reversing crisis-era monetary policy will be “bumpy” and shouldn’t delay doing so just for fear of upsetting financial markets, according to the Bank for International Settlements. Claudio Borio, who heads the institution’s economics department, urged policy makers to press ahead, both to address financial stability risks and to insulate their economies against the next ...

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