Brexit Offers U.K. Office-Buying Boon, $95 Billion Fund Says

Bankers may be leaving London, but Britain’s exit from the European Union could still offer opportunities to buy U.K. commercial real estate with the market in flux, according to Australia’s largest pension fund.

AustralianSuper Pty., which has A$120 billion ($95 billion) in assets, is looking to invest more overseas, with real estate and infrastructure in the U.K., Europe and the U.S. of particular interest, Melbourne-based Chief Investment Officer Mark Delaney said.

“Brexit may present an opportunity for us, but we will need to be patient,” Delaney said in an interview Aug. 24. “There are likely to be some good quality assets that become available that will be worth looking at.”


U.A.E. Media Jump on Qatar Over Report It Plans to Bolt GCC

Chatter that Qatar wants to quit the Gulf Cooperation Council for not backing it against a Saudi-led embargo has unleashed a torrent of vitriol.

Newspapers in the United Arab Emirates, one of the boycotting nations, jumped on a report in Iran’s Jaam-e-Jam daily that cited a former Iranian ambassador to Qatar as saying the emir is fed up with the GCC. In pages upon pages of copy on Wednesday, they accused the gas-rich emirate of plotting to serve Iran by destroying the six-nation bloc from within.

“Qatar’s treason’’ and “Qatar commits suicide,’’ the newspapers screamed. “Doha’s rulers are a source of danger to the security and stability of Gulf countries,” Abu Dhabi’s state-owned Alittihad proclaimed, while warning in a different article of a “Qatari-Iranian conspiracy to destroy the GCC.’’


IMF Expects Moderate Qatar Slowdown From Gulf Trade Disruption

Qatar’s non-oil economic growth will slow this year as the gas-rich nation cuts spending and after a Saudi-led alliance imposed sanctions that hurt trade, the International Monetary Fund said.

The non-hydrocarbon sector will expand 4.6 percent, the Washington-based lender said in an emailed statement on Wednesday, compared with 5.6 percent in 2016 and a 4 percent prediction in a Bloomberg survey of economists.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut ties with Qatar on June 5, accusing the nation of 2.7 million people of destabilizing the region through its ties to Islamist extremists -- a charge Qatar has repeatedly denied. The bloc’s measures have exacerbated a broader slowdown in Qatar triggered by lower energy prices, with economists expecting gross domestic product to expand at the slowest pace since 1995 this year.


Galaxy Profit Soars Most Since 2012 as VIPs Drive Growth

Galaxy Entertainment Group Ltd. posted its biggest quarterly earnings gain in almost five years as high-stakes gamblers helped to boost profit in the world’s largest casino hub.

The Macau casino operator’s adjusted earnings before interest, taxes, depreciation and amortization climbed 45 percent to about HK$3.29 billion ($420 million) in the second quarter, according to Bloomberg calculations based on Galaxy data released Thursday. That’s the steepest increase since the third quarter of 2012, and tops the median estimate of HK$3.2 billion from eight analysts surveyed by Bloomberg.

Shares of Galaxy rose 0.7 percent to $48.60 as of 9:59 a.m. in Hong Kong, after jumping as much as 1.1 percent at the start of trading Thursday. The stock has advanced about 43 percent this year, and is trading near the highest levels since 2014.


Initial Coin Offerings Draw Fraud Warning From China Trade Group

The rise of initial coin offerings in China has disrupted the social economic order and poses a financial risk, a domestic trade group said.

Institutions have misled investors to raise funds through ICOs, the National Internet Finance Association of China, an organization endorsed by the State Council and top finance and banking watchdogs, said in a statement on Wednesday. Unauthorized by regulators, some of the ICOs are suspected of fraud, illegal equity offerings and fundraising, the group said in a statement.

“ICO projects have unclear assets, no investor suitability standards and gravely lack information disclosure and therefore have relatively high risks,” the association said. “Investors should keep a clear mind, stay on high alert for frauds and report any wrongdoings to the police department.”


Markets

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Currencies

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USD-JPY
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GBP-USD
1.2913 -0.0012 -0.09%
AUD-USD
0.7910 +0.0005 +0.06%
USD-CAD
1.2639 +0.0018 +0.14%
USD-CHF
0.9640 +0.0004 +0.04%
EUR-GBP
0.9200 +0.0005 +0.06%
USD-HKD
7.8253 +0.0001 0.00%
EUR-CHF
1.1451 -0.0001 -0.01%

May Seeks to Reassure Japan and Tease Out Post-Brexit Trade Deal

Prime Minister Theresa May flies to Japan with a lofty goal: convince the world’s third-biggest economy to use its trade deal with the European Union as a basis for a future agreement with the U.K.

With North Korea souring the mood next door, things may not go as planned. May will sit down with Prime Minister Shinzo Abe, Emperor Akihito and military and business officials and need to offer a key Asian ally and trade partner the kind of reassurances her top diplomat failed to do when he visited last month.

Japan is in the final stages of brokering a free-trade agreement with the world’s largest trading bloc, from which the U.K. is breaking away. That puts May in a difficult position, as her own predecessor hailed it as a landmark that would add an annual 5 billion pounds ($6.5 billion) to the U.K. economy.


Iran Warns U.S. Against Any Violation of 2015 Nuclear Accord

Iran’s President Hassan Rouhani warned that while his country won’t be the first to violate the terms of the 2015 nuclear accord with world powers, it won’t stand by and allow the U.S. to disregard its own obligations.

Rouhani, who was inaugurated to serve a second term earlier this month, said on Tuesday that the U.S. lacked any backing from the other signatories for its hostile stance toward the deal, and that the Trump administration faced “the most difficult circumstances” in trying to upend it.

“Of course, any violations of the commitments carried out by the U.S. we will respond and answer them, but even so, the U.S. faces the most difficult conditions and we are in the best position,” Rouhani said in an interview broadcast on Iranian state television. “We will not be the ones to initiate a violation of the nuclear deal, not ever, but neither will we sit idly by in the face of violations of the deal by others.”


Kim Jong Un Says Latest Missile Test Was 'Prelude' to Containing Guam

North Korean leader Kim Jong Un said the test-firing of a missile over Japan on Tuesday was a "meaningful prelude" to containing the American territory of Guam, adding he will continue to watch the response of the U.S. before deciding on further action.

Kim guided the firing of the intermediate-range strategic ballistic rocket and urged his military to conduct more such launches into the Pacific Ocean in the future, according to a statement from the official Korean Central News Agency.

The missile firing was part of "muscle-flexing" to protest annual military exercises being held between the U.S. and South Korea, KCNA said. North Korea had threatened earlier this month to launch missiles over Japan toward Guam, which prompted warnings of retaliation from American military officials.


Chinese Property Tycoon Is Now Asia's Second-Richest Person

A $9 billion surge in the past seven days has made Chinese property tycoon Hui Ka Yan Asia’s second-richest person.

Hui, chairman of China Evergrande Group, has added more wealth than any person on the Bloomberg Billionaires Index this year, a 360.6 percent rise that’s added $26.7 billion to his fortune. The 59-year-old Hui, who has a net worth of $34.1 billion, surpassed India’s Mukesh Ambani to become Asia’s second-richest person as Evergrande shares jumped amid soaring property sales and the company’s shift to a low-debt strategy.

Hui’s ascent follows a boom in the value of Chinese real estate assets that’s added $43.8 billion to the fortunes of the country’s property tycoons this year, a collective gain of 85 percent. Yang Huiyan, vice chairman and controlling shareholder of Country Garden Holdings Co., has added $8.2 billion since the start of the year while Sunac China Holdings Ltd. Chairman Sun Hongbin, who is a U.S. citizen, is up $4.2 billion.


Iron Ore's Kings Are Spending Again

The biggest iron ore producers in Australia are spending as much as $10 billion on mines so they can keep pumping out shipments to China as demand in their biggest customer shows little sign of easing.

Led by Rio Tinto Group, the nation’s top three exporters plan to add about 170 million metric tons of capacity to replace exhausted mines and are studying investments in infrastructure and equipment to boost export capacity to their long-term targeted rates. Output will rise 9 percent to 843 million tons in 2022, according to Deutsche Bank AG estimates.

Forecasts of a slowdown in China’s steel industry are proving to be misplaced with BHP Billiton Ltd. saying production hasn’t yet peaked and likely won’t do so until the middle of next decade, while steel-making raw materials will continue performing well over the coming 12 months. Iron ore prices are trading near a four-month high.


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Currencies

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1.1982 +0.0010 +0.08%
USD-JPY
109.7400 +0.0300 +0.03%
GBP-USD
1.2934 +0.0016 +0.12%
AUD-USD
0.7994 +0.0043 +0.54%
USD-CAD
1.2504 -0.0008 -0.06%
USD-CHF
0.9553 -0.0005 -0.05%
EUR-GBP
0.9264 -0.0003 -0.03%
USD-HKD
7.8249 +0.0001 0.00%
EUR-CHF
1.1447 +0.0006 +0.06%

Get Serious on Brexit: EU Airs Growing Frustration With Britain

The gloves came off in the latest round of Brexit talks, with the European Union asking the U.K. to come clean on the money it owes and British negotiators exasperated at what they see as the EU’s stubbornness.

The stage was set for an intense round of talks in Brussels as the EU’s chief negotiator Michel Barnier and Brexit Secretary David Davis met for the first time since mid-July and candidly aired their views.

A plea for the EU to show flexibility and hurry talks along was immediately snubbed by Barnier, who accused Britain of a lack of clarity. The U.K. camp believes negotiations could progress if Barnier’s team didn’t follow its mandate to the letter.


Qatar Cut to AA- by Fitch With No End in Sight to Gulf Dispute

Qatar’s sovereign rating was cut to AA- by Fitch Ratings, which cited little progress toward ending a Saudi Arabia-led embargo of the emirate. Fitch lowered the Gulf state’s sovereign long-term debt rating by one notch, putting it on par with Belgium and South Korea. The outlook is negative, the New York-based firm said in a statement Monday.

“International mediation efforts are still ongoing but are not showing significant progress,” Fitch analysts Krisjanis Krustins and Jan Friederich said. “In our view, the negotiating positions of Qatar and the boycotting countries remain far apart.”

Qatar, the world’s largest exporter of liquefied natural gas, was put on a negative rating watch in June after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic ties and transport routes with the country. The four countries accuse Qatar of destabilizing the region through support of Islamist movements, a charge it denies. The Gulf nation’s economy will expand this year at the slowest pace since 1995, according to economists surveyed by Bloomberg this month.


Lawyer Says He Discussed Moscow Tower Plan With Trump Three Times

Donald Trump discussed a proposal to build a hotel and condominium tower in Moscow on three occasions with his company’s lawyer, who emailed the press secretary for Russian President Vladimir Putin to ask for assistance on the project.

The Trump Organization weighed the “Trump Tower Moscow” proposal from September 2015 to January 2016, attorney Michael Cohen told the House intelligence committee. Several congressional committees and special counsel Robert Mueller are investigating possible collusion between the Trump campaign and Russia during his successful run for the White House last year.

Cohen said the Trump Organization signed a non-binding letter of intent in October 2015 with Moscow-based I.C. Expert Investment Company. The company solicited building designs from architects and engaged in preliminary financing discussions. But the project ultimately fizzled, and Trump wasn’t involved in the decision to abandon the project, Cohen said.


North Korea Fires Missile Over Japan in 'Unprecedented' Act

North Korea fired an unidentified ballistic missile over Japan on Tuesday, reigniting tensions after a war of words earlier this month between Pyongyang and U.S. President Donald Trump.

The missile landed about 1,200 kilometers (745 miles) off Hokkaido in the Pacific Ocean, Chief Cabinet Secretary Yoshihide Suga told reporters, adding there were no reports of damage. Japan’s government said it didn’t try to shoot it down.

“A missile passing over Japan is an unprecedented, grave and serious threat,” Prime Minister Shinzo Abe told reporters in Tokyo. Japan has asked the United Nations Security Council to hold an emergency meeting.


Singapore’s Home Sales Recovery Is Down to the Locals

After years of declines, Singapore’s home sales are on a roll, even as purchases by foreign buyers have remained muted.

Stringent stamp duties levied by the government have had the intended effect of damping speculative foreign demand, with foreign buyers accounting for just 6 percent of purchases in the first half, data from Cushman & Wakefield show. That compares with 9 percent as recently as 2013, when mortgage rules were tightened.

Developers sold 7,147 private homes in the first seven months of the year, 50 percent higher than in the same period a year earlier. So who’s buying all these homes? It’s local Singaporeans.


Markets

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2,444.24 +1.19 +0.05%
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27,736.80 -126.45 -0.45%

Currencies

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1.1968 -0.0011 -0.09%
USD-JPY
108.8300 -0.4200 -0.38%
GBP-USD
1.2937 +0.0004 +0.03%
AUD-USD
0.7926 -0.0037 -0.46%
USD-CAD
1.2508 0.0000 0.00%
USD-CHF
0.9522 -0.0031 -0.32%
EUR-GBP
0.9251 -0.0012 -0.13%
USD-HKD
7.8236 -0.0001 0.00%
EUR-CHF
1.1396 -0.0048 -0.42%

Merkel Opens Door to Diesel Lawsuits as Election Rival Attacks

Chancellor Angela Merkel cracked open the door to collective lawsuits against Germany’s auto industry over excessively polluting diesel engines, sharpening her tone after her main election challenger accused her of blocking the option.

In an interview with national broadcaster ZDF, Merkel said Germany allows plaintiffs to bundle lawsuits against financial companies and the same rights could be offered to car buyers if done right. Her comments open the possibility that legislation could be put forward after Germany’s election on Sept. 24 and the formation of the next government, which Merkel wants to head.

“Yes in principle,” the chancellor said Sunday when asked about a demand by her main opponent, Social Democratic leader Martin Schulz to allow car owners to collate complaints against carmakers. “But it has to be properly designed.”


Lebanese Private-Equity Firm Chases Diaspora in Africa for Deals

EuroMena Funds, a Beirut-based private-equity firm that has raised $350 million since 2006, plans to almost double assets as it seeks investments in Lebanese-owned companies operating abroad while also backing smaller businesses in its home regions.

After a decade of deploying most of its capital in Lebanon, Jordan and Egypt, EuroMena’s latest fund has spent $55 million for stakes in a toilet-paper manufacturer in Nigeria, a Tunisia-based operator of clothing stores, and the Moroccan franchisee of French retailer Carrefour SA, said Giles de Clerck, the firm’s executive partner. Two more acquisitions are expected to be completed this year, he said.

A debut debt fund primarily targeting Africa, with a target of $200 million, is in the works, Managing Partner Romen Mathieu said. The firm also plans a $100 million private-equity fund that will invest a maximum $10 million per company in enterprises based in the Levant that generate as much as $50 million in annual revenue, he said. Both funds are expected to close in 2018.


`Tragedy of Epic Proportions' Hits Houston as Floods Stop City

Houston’s work week will begin underwater as Tropical Storm Harvey unleashes heavy rains on the heart of U.S. energy production. There’s no telling how long it will be until things get back to normal.

The storm has led to record flooding across a city that’s dealt with deluges before. Elected officials, meteorologists and emergency managers all say there has never been anything like this there, and the downpour could last for days.

“Houston has another 100 hours of this,” said Todd Crawford, chief meteorologist at The Weather Company in Andover, Massachusetts. “Words really can’t express the impacts this will have, when all is said and done. There is no historical comparison. It is simply a tragedy of epic proportions.”


Kuroda Cautions That Japan Can't Keep Current Growth Rate

Bank of Japan Governor Haruhiko Kuroda pledged to forge on with very accommodative monetary policy as he warned that his inflation target remains distant and the current pace of growth in the world’s third-largest economy looks unsustainable.

Speaking in an interview with Bloomberg in Jackson Hole, Wyoming, Kuroda also said the BOJ’s yield-curve control program has been working quite well and that he doesn’t see a need to adjust it at present. He added that the BOJ may be able to control rates while buying fewer Japanese government bonds and that the market is still "functioning quite well."

The BOJ chief, who joined Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi at the mountain retreat for an annual gathering of monetary policy makers, is grappling with an economy that’s in its longest run of expansion in more than a decade but is still failing to generate significant wage gains and a healthy level of inflation.


CBS Squeezes Out Murdoch to Snap Up Ailing Australia Network

CBS Corp. agreed to buy struggling Australian broadcaster Ten Network Holdings Ltd., gaining an overseas platform for its video-on-demand service and squeezing out a potential bid by News Corp. Co-Chairman Lachlan Murdoch.

The deal saves Ten Network from collapse, after the New York-based media giant pledged immediate financial support to keep it running. The most-watched U.S. network enters a crowded market for streaming services in Australia, where it will face competition from Netflix Inc. and several local platforms.

Ten had crumbled under the cost of buying programs from the U.S. as advertising revenue plunged. The Sydney-based broadcaster was valued at just A$59 million ($47 million) before its stock was suspended from trading in June, and was also in the sights of Murdoch and local media mogul Bruce Gordon. No value for the deal with CBS was provided.


Markets

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FTSE 100 INDEX
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28,028.60 +180.48 +0.65%

Currencies

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1.1925 +0.0001 +0.01%
USD-JPY
109.1500 -0.2100 -0.19%
GBP-USD
1.2885 +0.0003 +0.02%
AUD-USD
0.7938 +0.0006 +0.08%
USD-CAD
1.2477 -0.0004 -0.03%
USD-CHF
0.9559 -0.0011 -0.11%
EUR-GBP
0.9254 0.0000 -0.01%
USD-HKD
7.8222 +0.0039 +0.05%
EUR-CHF
1.1399 +0.0005 +0.05%

U.K. Keeps Mum on the Brexit Bill It Must Pay for Trade Deal

The U.K. spent the summer publishing an avalanche of documents on Brexit but stayed silent on the one topic most likely to derail a deal: how much money it will pay the European Union.

Investors have noticed. The U.K. made concessions to the EU in some of its position papers, yet sterling still fell on Wednesday to its weakest level against the euro since October. Ignore that month’s so-called flash crash and the pound was at its lowest in eight years.

“The thing that worries us is that it looks as if the negotiations over the bill are going to take a little bit longer,” said Mike Amey, a money manager at Pacific Investment Management Co. in London, told Bloomberg Television. “If we can’t agree the bill then we don’t even get through to the next round.”


One OPEC State Muddles Through Oil Slump as History Deters Debt

The new realities of global oil markets are yet to convince economic policy makers in Algeria that it’s time for a radical rethink.

Unlike the rest of OPEC’s members -- with the exceptions of war-torn Libya and sanctioned Iran -- Algeria has steered clear of tapping global debt markets three years into the oil-price slump. Neither will it overhaul laws to attract more foreign investors. A cabal of aging leaders sitting at the top of the party that delivered independence more than half a century ago is united in its opposition to “mortgaging” the country’s future.

Instead, the North African nation has run through almost half of the foreign reserves it accumulated during the oil boom in order to avoid cutting welfare benefits as a sensitive political transition looms. President Abdelaziz Bouteflika, 80 and who has rarely been seen in public since suffering a stroke in 2013, has no clear successor, meaning a period of jockeying is already under way.


How the Debt Ceiling Debate Could Affect America’s Credit Rating

Ratings companies expect Treasury Secretary Steven Mnuchin will resort to prioritizing U.S. debt payments if Congress fails to raise his borrowing authority in time. Yet the firms are in stark disagreement over what that would mean for the nation’s credit.

Moody’s Investors Service said Thursday that if Treasury exhausts the measures it’s using to fund itself and turns to prioritizing debt service over other obligations, the U.S.’s top rating would be safe. On the other hand, Fitch Ratings said Wednesday that such a move might jeopardize the country’s AAA rank.

With two of the biggest judges of sovereign creditworthiness voicing diverging views about the fate of the nation’s sterling rating, the onus is on investors to decide. The debate is only gaining in urgency, with little more than a month before the “critical” deadline Mnuchin has laid out for addressing the debt limit. And the political brinkmanship continues to grow, stoked by President Donald Trump’s remarks this week on the prospect of a government shutdown.


Thailand on Edge Ahead of Verdict Against Former Prime Minister

A top court in Thailand will rule Friday on charges of negligence against former Prime Minister Yingluck Shinawatra, a verdict that risks rekindling political tensions in Southeast Asia’s second-biggest economy.

Yingluck, whose government was ousted in a 2014 coup, faces up to a decade in jail if convicted of failing to curb losses from her government’s $26 billion rice-purchasing program for poor farmers. She has denied the charges and says the two-year trial is politically motivated.

The verdict threatens to reopen fissures in Thai society that have triggered violent clashes over the past decade between urban royalists and rural backers of exiled former leader Thaksin Shinawatra, Yingluck’s brother. Allies of Thaksin have won the past five elections, only to be unseated by the courts or military.


The World’s Longest Flight Is Coming

Pretty much everyone prefers a nonstop flight—business people, especially. And they are more likely than most to be in a position to afford the premium. But right now, all the money in the world won’t get you from Sydney to the Big Apple or U.K. without a pit stop, because commercial planes just don’t have that kind of range.

That may soon change. For many years, executives at Australian carrier Qantas Airways Ltd. have coveted a nonstop offering from Sydney and Melbourne to London. Now, as technology has matured, Qantas executives finally see the potential to realize that dream. Two new models planned by Airbus SE and Boeing Co., they hope, will be able to make the nonstop trip to London—20 hours and 20 minutes—from Sydney. This new model would also jet across the Pacific Ocean to New York in about 18 hours.

On Friday, Qantas Chief Executive Officer Alan Joyce issued a public “challenge” to the companies to extend the range of Boeing’s new 777X, which is slated for 2020, and the planned “Ultra-Long Range” version of Airbus’s A350, which rolls out next year. Qantas hopes to take delivery of such a plane and begin its Sydney to London service in 2022, the company said as part of its full-year income results.


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Currencies

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USD-JPY
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GBP-USD
1.2805 +0.0004 +0.03%
AUD-USD
0.7890 -0.0015 -0.19%
USD-CAD
1.2517 -0.0003 -0.02%
USD-CHF
0.9651 -0.0004 -0.04%
EUR-GBP
0.9210 -0.0008 -0.09%
USD-HKD
7.8238 +0.0010 +0.01%
EUR-CHF
1.1381 -0.0010 -0.09%

U.K. Progress on Brexit Questioned as Key Point Still Unresolved

Brexit watchers doubt whether the U.K. has done enough to convince the European Union to allow trade talks to start as soon as October.

Despite a swathe of policy documents, with a new one on data protection scheduled for release on Thursday, analysts say Prime Minister Theresa May’s government is still hazy on where it matters most to the bloc.

“It remains unlikely that enough progress can be made to move on to the future EU-U.K. relationship anytime soon,” said Carsten Nickel, director of research at Teneo Intelligence. “Despite the position papers, the U.K.’s preferences for the future relationship remain vague, and progress on key divorce items has been limited.”


Egypt Slams U.S. for Withholding Aid as Kushner Visits Cairo

Egypt ripped into the U.S. for withholding almost $300 million in military and economic aid, a decision that soured the atmosphere as senior White House adviser Jared Kushner met with Egyptian officials to discuss restarting Israeli-Palestinian peace efforts.

Egypt’s Foreign Ministry said the U.S. move -- taken Tuesday to prod Egypt to improve its human rights record -- “is a misjudgment of the nature of the strategic relations that binds the two countries over decades, and reflects the lack of understanding of the importance of supporting the stability and success of Egypt.”

The decision was a surprise given comments by President Donald Trump, who said during President Abdel-Fattah El-Sisi’s visit to Washington in April that the Egyptian leader had done “a fantastic job in a very difficult situation.” Trump also told El-Sisi he had a “great friend and ally in the United States and me.”


Haley Conveys Concern Over Iran Nuclear Deal to IAEA

President Donald Trump’s envoy to the United Nations met with the nuclear inspectors charged with verifying a deal between Iran and world powers to convey the White House’s concerns.

UN Ambassador Nikki Haley met International Atomic Energy Agency Director General Yukiya Amano on Wednesday over the July 2015 agreement that rolled back Iranian nuclear capabilities in exchange for sanctions relief. Haley entered IAEA headquarters in Vienna at about 1:30 p.m. local time without comment.

IAEA inspectors use site visits, remote monitoring and satellite imagery to verify that Iran stays withing nuclear production and capacity limits agreed with diplomats from China, the European Union, Russia and the U.S. They’ve produced seven reports since January 2016 showing Iran to be in broad compliance with the accord, called the JCPOA.


Jay Y. Who? Samsung Verdict May Not Matter to Family Businesses

During the months-long corruption trial of Jay Y. Lee, the billionaire heir to Samsung Group and his former deputies testified that he wasn’t really involved in making decisions at South Korea’s biggest conglomerate.

That may help him prove he’s not a criminal, but could also hurt his reputation as a manager for the family-run business that helped rebuild the nation in the aftermath of war.

Since Lee was arrested in February, the crown jewel -- Samsung Electronics Co. -- posted record net income and released the Galaxy S8 smartphone to critical and commercial success. Semiconductor sales are booming, shares reached an all-time high and it has just unveiled the new Note 8 device. So does it really matter to the company if a judge convicts Lee on Friday and sends him to prison for as many as 12 years?


Asia's Top Stock Market Is Suddenly Drawing a Crowd of Skeptics

Even as Hong Kong shares are holding on to their eighth straight monthly gain, recent derivatives activity shows investors are getting jittery about Asia’s best-performing market this year.

Bearish options volume on the Hang Seng Index is heading for its highest level since August 2011 this month, with the ratio of outstanding puts versus bullish calls near a 10-year peak. The hedging is happening as the benchmark gauge surged 25 percent since January, reaching a more than two-year high Aug. 8.

While a stabilizing Chinese economy and brighter earnings prospects have helped lift the Hang Seng Index, gains concentrated in some heavy-weight stocks such as Tencent Holdings Ltd. are raising concerns they may turn to pitfalls. And recently, the growing tension surrounding North Korea and worries over the impact of U.S. President Donald Trump’s administration on Asian shares have prompted investors to hedge, according to Hao Hong, chief strategist at Bocom International Holdings Co.


Markets

DOW JONES INDUS. AVG
21,812.10 -87.80 -0.40%
S&P 500 INDEX
2,444.04 -8.47 -0.35%
NASDAQ COMPOSITE INDEX
6,278.41 -19.07 -0.30%
FTSE 100 INDEX
7,382.65 +0.91 +0.01%
DAX INDEX
12,174.30 -55.04 -0.45%
CAC 40 INDEX
5,115.39 -16.47 -0.32%
IBEX 35 INDEX
10,338.10 -71.70 -0.69%
NIKKEI 225
19,408.80 -25.84 -0.13%
HANG SENG INDEX
27,524.40 +122.76 +0.45%

Currencies

EUR-USD
1.1803 -0.0004 -0.03%
USD-JPY
109.1700 +0.1300 +0.12%
GBP-USD
1.2788 -0.0012 -0.09%
AUD-USD
0.7903 -0.0001 -0.01%
USD-CAD
1.2545 -0.0009 -0.07%
USD-CHF
0.9663 +0.0011 +0.11%
EUR-GBP
0.9230 +0.0006 +0.07%
USD-HKD
7.8254 0.0000 0.00%
EUR-CHF
1.1405 +0.0007 +0.06%

Theresa May Compromises on EU Court to Speed Up Brexit Talks

Prime Minister Theresa May conceded that European Union law will influence the U.K. long after Brexit, a climbdown aimed at accelerating divorce talks but which opens her to attack from euroskeptics.

Seven months after May declared the U.K. would "take back control of our laws and bring an end to the jurisdiction” of the European Court of Justice, her government will on Wednesday say it’s now seeking to escape the body’s "direct jurisdiction."

The diluting of a onetime "red line" paves the way to EU judges having some say in the U.K. following Brexit, though perhaps not in a binding way. The test will be if EU officials accept the shift as enough to speed up sluggish negotiations resuming next week.


Trump Calls Out Pakistan Even as Security Situation Improves

When U.S. President Donald Trump accused Pakistan on Monday of continuing to provide a “safe haven to agents of chaos, violence and terror” it evoked memories of general lawlessness across the country in the years after 9/11 that drove investors from South Asia’s second-largest economy.

While militants the U.S. identifies as terrorists find refuge in Pakistan, safety within the nation has improved dramatically after it launched a costly, now four-year long military crackdown on domestic insurgent and criminal groups, driving recent economic optimism. In the last fiscal year, foreign investment rose to $2.4 billion, the highest since 2009, while the stock market’s benchmark index has increased 130 percent in four years.

It’s a far cry from a few years ago at the height of a gang war in the infamous Karachi neighborhood of Lyari, when criminals armed with rocket launchers fired on a police patrol of two armored vehicles. One rocket ripped into the lead vehicle, blowing up and disabling the engine, as gunmen sprayed the police officers with bullets.


U.A.E. Excise Tax Starts in October in Drive to Boost Revenue

The United Arab Emirates will start imposing a tax on selected goods starting Oct. 1 as Gulf Arab nations seek to deepen government revenue to counter the drop in oil prices.

A levy on designated goods -- tobacco, energy drinks and soft drinks -- will include those sold at airports and free zones, Younis Al Khoori, undersecretary at Ministry of Finance, told the state-run WAM news agency. Products purchased at airports by travelers taking the goods abroad will be exempt, he said.

The move is one of the measures taken by the six-member Gulf Cooperation Council work to bolster non-oil revenue and is a milestone for a region that has attracted companies and workers largely through the promise of tax-free living. The bloc is also moving to implement value-added taxation though governments say they have no plans to introduce income tax.


Philippines, Indonesia and India Have Got a Fed Problem

The populist leaders of India, Indonesia and the Philippines won office with promises of massive spending to upgrade their nation’s roads, railways and ports. Doing so, the thinking goes, would supercharge economic growth and emulate China’s success.

India’s Prime Minister Narendra Modi intends to spend a record $60 billion on infrastructure this fiscal year. Philippine President Rodrigo Duterte set an infrastructure spending goal of 7 percent of gross domestic product, while Indonesian leader Joko Widodo has added 7,000 kilometers of new roads and four new airports and last week vowed more.

In a global landscape starved of yield, foreign investment has poured in to help fund the ambitions, lured by young populations and some of the world’s fastest rates of economic growth. As a sign of their resilience, the trio have even shaken off interest rate hikes by the Federal Reserve, something that has tripped up many a developing nation in the past.


Tillerson Cites North Korea's ‘Restraint’ as a Step Toward Talks

U.S. Secretary of State Rex Tillerson went out of his way Tuesday to note that North Korea hadn’t carried out “provocative acts” since the UN Security Council imposed new sanctions on the country, saying that restraint might lead to negotiations over its nuclear arsenal.

“I am pleased to see that the regime in Pyongyang has certainly demonstrated some level of restraint that we have not seen in the past,” Tillerson told reporters at the State Department. “Perhaps we are seeing our pathway to sometime in the near future having some dialogue.”

Tillerson volunteered the remarks on North Korea without prompting at a briefing Tuesday that was arranged to discuss the Trump administration’s new approach to Afghanistan. That suggested his intent was to give Kim Jong Un’s regime an opening and a signal. North Korea hasn’t conducted a missile launch since the United Nations action.


Markets

DOW JONES INDUS. AVG
21,899.90 +196.14 +0.90%
S&P 500 INDEX
2,452.51 +24.14 +0.99%
NASDAQ COMPOSITE INDEX
6,297.48 +84.35 +1.36%
FTSE 100 INDEX
7,381.74 +62.86 +0.86%
DAX INDEX
12,229.30 +163.35 +1.35%
CAC 40 INDEX
5,131.86 +44.27 +0.87%
IBEX 35 INDEX
10,409.80 +49.60 +0.48%
NIKKEI 225
19,487.20 +103.41 +0.53%
HANG SENG INDEX
27,401.70 +246.99 +0.91%

Currencies

EUR-USD
1.1757 -0.0005 -0.04%
USD-JPY
109.6400 +0.0700 +0.06%
GBP-USD
1.2819 -0.0005 -0.04%
AUD-USD
0.7895 -0.0016 -0.20%
USD-CAD
1.2580 +0.0015 +0.12%
USD-CHF
0.9688 +0.0007 +0.07%
EUR-GBP
0.9172 0.0000 0.00%
USD-HKD
7.8263 +0.0001 0.00%
EUR-CHF
1.1391 +0.0004 +0.03%

U.K.'s Brexit Trade Stance Leaves Irish PM Confused and Puzzled

Irish Prime Minister Leo Varadkar said he remains “confused and puzzled” about the U.K.’s global trading plans after Brexit, as the clock ticks down in talks on the terms of Britain’s exit from the European Union.

The U.K. government seems to be suggesting it wants all the advantages of being in the EU, but none of the responsibilities and costs, Varadkar said in an interview Monday with Bloomberg Television in Toronto.

“That’s not a realistic position,” Varadkar said in the interview. “What trade agreement does the U.K. want with the EU? At the moment, they have the best trade deal imaginable. What are these better deals the U.K. really wants from Europe and other countries? Some more clarity would be helpful.”


These Billions in Deals Can Help Iran Counter Trump

It hasn’t been the investment bonanza Iran hoped for, but the billions of dollars unlocked by its 2015 nuclear deal with world powers might help cushion the impact of any future U.S. assault on the accord.

The mood has shifted since this time last year, when following the January 2016 lifting of sanctions trade delegations crammed Tehran’s hotels as investor interest peaked. Now, with President Donald Trump adding new sanctions and expressing frustration that his administration continues to find the Islamic Republic in compliance with the accord, the talk is of whether it can survive. Of critical importance will be the support flowing from other parties -- China, Russia, France, Germany and the U.K. -- whose companies have put up much of the money invested in Iran so far.

“There is pressure coming from the business establishment in these countries to maintain access to the Iranian market,” said Sanam Vakil, an associate fellow at Chatham House’s Middle East & North Africa Program in London. At the same time, most of their governments “recognize that marginalizing and isolating Iran is not in their interest,” she said.


Gold's Rally Against Oil Is Just Beginning

Even as some analysts decry that gold is looking expensive, the rally may be just getting going. In the midst of a tumultuous month in U.S. politics and global security, traders have pushed gold futures to near a nine-month high. But if the history of gold’s relationship with oil is any guide, that surge may last longer than the flare-up in geopolitical tension.

The precious metal has rallied 11 percent in 2017 to trade at $1,294.40, compared to a 10 percent slump in crude. That divergence in price may still be going, meaning gold should continue to outperform oil before the 34-month cycle ends, according to a study of past trading patterns for the two assets.

“Gold has rallied during the recent market setback and is now testing its key resistance level of $1,300,” Matt Maley, an equity strategist at Miller Tabak & Co., wrote in a note to clients. “That is the level that stopped rallies in both April and June, so if it can finally break above the level in any significant way, it’s going to be very positive for the yellow metal.”


Trade War Tops List of Worries for Singapore's Foreign Minister

Singapore’s Foreign Minister Vivian Balakrishnan called on the U.S. and China to avoid a trade war while urging nations to stop trying to protect obsolete jobs. “I’m most worried about a trade war,” Balakrishnan said in an interview with Bloomberg Television’s Haslinda Amin on Tuesday. “I want to make this point: don’t blame trade. The real game in town is the digital revolution.”

Singapore is one of the world’s most trade-reliant economies, with exports more than double the size of its gross domestic product. The government has cited rising trade protectionism as one of the key risks to its economic outlook.

China and the U.S. were intertwined like never before in terms of trade and investment, Balakrishnan said, making the current tensions incomparable with the Cold War rivalry between Washington and Moscow.


Citizenship Chaos Threatens Australian Government

Prime Minister Malcolm Turnbull’s government could collapse if a court rules that three of his lawmakers with dual citizenship are ineligible to hold office. Even if they stay, his handling of the constitutional crisis gripping Australia’s parliament may have already sealed its fate.

The High Court will begin hearings on Thursday to interpret a 117-year-old law that bars dual nationals from sitting in parliament. Deputy Prime Minister Barnaby Joyce and two other Cabinet ministers are among seven lawmakers caught up in the fiasco that’s sparked incredulity even in a nation that’s grown used to political turmoil.

Instead of quelling the crisis, the government seems to have exacerbated it. By allowing Joyce and Fiona Nash, the rural health minister, to remain in the Cabinet, even after Resources Minister Matt Canavan stepped aside, Turnbull has opened himself to charges of double standards. Meanwhile his Foreign Minister Julie Bishop risked a diplomatic spat with close ally New Zealand, by accusing the main opposition party there of conspiring to bring down the government by helping reveal Joyce’s ancestry.


Markets

DOW JONES INDUS. AVG
21,703.80 +29.24 +0.13%
S&P 500 INDEX
2,428.37 +2.82 +0.12%
NASDAQ COMPOSITE INDEX
6,213.13 -3.40 -0.05%
FTSE 100 INDEX
7,318.88 -5.10 -0.07%
DAX INDEX
12,066.00 -99.20 -0.82%
CAC 40 INDEX
5,087.59 -26.56 -0.52%
IBEX 35 INDEX
10,360.20 -25.50 -0.25%
NIKKEI 225
19,402.20 +9.09 +0.05%
HANG SENG INDEX
27,406.90 +252.25 +0.93%

Currencies

EUR-USD
1.1809 -0.0006 -0.05%
USD-JPY
109.2300 +0.2500 +0.23%
GBP-USD
1.2893 -0.0007 -0.05%
AUD-USD
0.7935 -0.0004 -0.05%
USD-CAD
1.2563 +0.0005 +0.04%
USD-CHF
0.9629 +0.0010 +0.10%
EUR-GBP
0.9159 -0.0001 -0.01%
USD-HKD
7.8241 +0.0003 0.00%
EUR-CHF
1.1371 +0.0008 +0.07%

U.K. Steps Up Pressure on EU Over Brexit Talks

Britain returned to a provocative posture a week before Brexit talks with the European Union resume in a bid to pivot discussions toward a trade deal.

Prime Minister Theresa May’s government will publish five new position papers this week after declaring on Sunday that it’s “stepping up pressure” on the bloc to shift the negotiations away from the terms of separation. The use of fighting words in the past have not budged the EU, which has time on its side.

With the clock ticking down to the U.K.’s March 2019 departure, and the two sides still at odds on many key issues, Brexit Secretary David Davis seems bent on reviving a debate over whether discussions should run in parallel rather than in the strict order the EU has laid out.


Little-Known Qatari Sheikh Embraced by Saudi in Surprise Move

A little-known Qatari sheikh has been thrust into the limelight as a Saudi Arabia-led bloc tries to wring concessions from his nation to end the political feud dividing the Persian Gulf.

Sheikh Abdullah Bin Ali Al-Thani, a descendant of Qatar’s founder, was welcomed warmly in Saudi Arabia by Crown Prince Mohammed bin Salman, then jetted off to Morocco, where Saudi King Salman hosted him at his vacation spot in Tangier. And while the Qatari government said the sheikh was on a personal visit, some media outlets close to the alliance portrayed his meetings as a triumphant diplomatic effort.

Sheikh Abdullah said King Salman and his son agreed to open Qatar’s only land border, snapped shut on June 5, to allow Muslim pilgrims to travel to the holy city of Mecca. The king even offered to dispatch planes at his own expense to fly in others and set up an operations center under the sheikh’s command to help Qataris entangled in the crisis.


Trump Will Address Path Forward on Afghanistan

Camp Morehead, Afghanistan (AP) -- Signaling that the U.S. military expects its mission to continue, the top U.S. commander in Afghanistan on Sunday hailed the launch of the Afghan Army's new special operations corps, declaring that "we are with you and we will stay with you."

Gen. John Nicholson's exhortation of continued support for the Afghans suggested the Pentagon may have won its argument that America's military must stay engaged in the conflict in order to insure terrorists don't once again threaten the U.S. from safe havens in Afghanistan.

The White House announced that President Donald Trump would address the nation's troops and the American people Monday night to update the path forward in Afghanistan and South Asia.


Malaysia's $62 Billion State Fund Wants to Hold Less Cash

Malaysia’s largest state-owned fund manager is looking to hold less cash even as it struggles to make acquisitions that would generate attractive returns.

A fifth of Permodalan Nasional Bhd.’s 266 billion ringgit ($62 billion) of assets under management is in cash and money markets, and Chairman Abdul Wahid Omar said in an interview that the fund could reduce such holdings by at least 5 percentage points. That would free up about 13.3 billion ringgit, according to Bloomberg calculations.

“Whilst we need to maintain a certain level of cash, it doesn’t have to be 20 percent,” said Wahid, a former cabinet minister who joined PNB a year ago. “We can easily go down to 15 percent and below.”


Citi to Move 1,200 Workers in Tokyo Office Shift

Citigroup Inc. will move its Japan headquarters and about 1,200 employees to a new building in Tokyo by the end of the third quarter, according to people familiar with the matter.

The New York-based firm will officially move the location of its main Japan office to the Otemachi Park Building from the Shin-Marunouchi Building on Aug. 28, said the people, who asked not to be identified as the details haven’t been announced yet. Employee relocations will start then and the workers -- including bankers, analysts, sales and traders -- are scheduled to be in the 9th, 10th and 11th floors of the new building by Sept. 30, they said.

Bloomberg reported plans for the office move last year. The shift will bring Citigroup’s Japanese brokerage and banking operations together, helping to strengthen the businesses after the bank closed down its consumer-banking and card divisions in late 2015. The firm has hired about 20 bankers, analysts, economists, sales staff and traders in Japan in the past year.


Markets

DOW JONES INDUS. AVG
21,674.50 -76.22 -0.35%
S&P 500 INDEX
2,425.55 -4.46 -0.18%
NASDAQ COMPOSITE INDEX
6,216.53 -5.39 -0.09%
FTSE 100 INDEX
7,323.98 -63.89 -0.86%
DAX INDEX
12,165.20 -38.27 -0.31%
CAC 40 INDEX
5,114.15 -32.70 -0.64%
IBEX 35 INDEX
10,385.70 -58.10 -0.56%
NIKKEI 225
19,384.60 -85.77 -0.44%
HANG SENG INDEX
27,111.10 +63.50 +0.23%

Currencies

EUR-USD
1.1753 -0.0008 -0.07%
USD-JPY
109.2400 +0.0600 +0.05%
GBP-USD
1.2875 +0.0005 +0.04%
AUD-USD
0.7928 -0.0001 -0.01%
USD-CAD
1.2589 +0.0004 +0.03%
USD-CHF
0.9655 +0.0009 +0.09%
EUR-GBP
0.9129 -0.0006 -0.07%
USD-HKD
7.8226 -0.0011 -0.01%
EUR-CHF
1.1348 +0.0002 +0.02%

U.K. Is Said to Set Out More Detailed Brexit Vision Next Week

The U.K. is preparing to give further details of its approach to Brexit next week when it lays out positions in at least three different areas that it wants to negotiate with the European Union.

Prime Minister Theresa May’s government will publish two papers on Monday with more expected in the following days, as Britain and the EU gear up for a fresh round of divorce talks at the end of the month, according to three people familiar with the plans.

Publication of the positions follows accusations by the EU and critics in the U.K. that the government hadn’t presented a clear idea of what it wants from the Brexit talks. Five months since the two-year process of Britain’s withdrawal was formally triggered, the U.K. is trying to inject fresh impetus in order to be able to convince European leaders in October that they should start talks on a future trading relationship.


Qatar to Tell Banks to Seek Overseas Funding as Gulf Spat Drags On

Qatar is telling its banks to tap international investors to raise financing, instead of mainly relying on government funding, people familiar with the matter said, as the impact of the ongoing Saudi-led boycott puts pressure on liquidity.

The central bank is holding regular meetings with lenders to gauge how the standoff is affecting liquidity, and is encouraging banks to borrow internationally through bonds and loans to avoid further depletion of foreign reserves and credit rating downgrades, said the people, asking not to be identified because the matter is private. Banks have been told they should ask for government funding as a last resort, they said.

Some banks and government-related entities are planning fundraising deals to help with tightening liquidity, the people said. Most borrowers plan to target investors in Asia to fill the gap left by Gulf lenders, they said. Qatar Islamic Bank SAQ recently raised financing in Yen and Australian dollars through private placements, one of the people said. The central bank couldn’t immediately comment.


Four Suspected Terrorists Shot Dead Hours After Barcelona Attack

Four suspected terrorists were shot dead by police and six civilians were injured in a town south of Barcelona, hours after 13 people were killed when a van rampaged down the city’s iconic Las Ramblas avenue.

One Catalan police officer and one suspected terrorist were also injured in the incident in the town of Cambrils, a press officer for the regional government said by message. Two of the injured civilians were seriously hurt, the government said. Investigators were inspecting belts the suspects were wearing to determine whether they held explosives.

Earlier, at least 100 more people were injured when an assailant drove a white van down a section of the iconic Las Ramblas avenue just before 5 p.m. local time on Thursday. Witnesses said it hit a speed of about 80 kilometers (50 miles) per hour, throwing people into the air.


Markets Roiled on Trump Stance Tensions: Markets Wrap

A sense of growing unease gripped financial markets as President Donald Trump exacerbated the controversy sparked by a racist rally in Virginia and terrorists struck a crowded street in Barcelona.

U.S. stocks retreated, with the S&P 500 Index posting its second biggest one-day decline of the year, and a measure of market volatility spiked higher. Treasuries rose with the yen as investors sought havens. Gold jumped.

Stocks began the day lower on speculation that Trump’s policy agenda was increasingly imperiled after he disbanded two advisory councils staffed by CEOs and slammed Republican members of Congress who were critical of his remarks on race. Rumors that former Goldman Sachs President Gary Cohn would resign as head of the national economic council added to the selling until reports that he’d opted to stay momentarily buoyed the market. Cohn has been leading the president’s efforts on tax reform.


Military Drills Emerge as Key Obstacle to U.S.-North Korea Talks

Tens of thousands of troops from the U.S., South Korea and several other countries will conduct drills over the next few weeks to prepare for a possible war with Kim Jong Un’s regime.

The annual Ulchi-Freedom Guardian military exercises starting Monday routinely spark condemnation from North Korea, and this year is no different. The state-run Korean Central News Agency this week called them “reckless saber-rattling” and warned that they could spark an accidental war.

The drills are important for another reason: China has called on the U.S. to halt them in order to start talks with North Korea, part of its freeze-for-freeze proposal that would also require Kim to suspend nuclear and missile tests. The U.S. rejects this outright, and scaling down the drills now would make President Donald Trump look weak so soon after his warnings of “fire and fury.”


Markets

DOW JONES INDUS. AVG
21,750.70 -274.14 -1.24%
S&P 500 INDEX
2,430.01 -38.10 -1.54%
NASDAQ COMPOSITE INDEX
6,221.91 -123.19 -1.94%
FTSE 100 INDEX
7,387.87 -45.16 -0.61%
DAX INDEX
12,203.50 -60.40 -0.49%
CAC 40 INDEX
5,146.85 -29.76 -0.57%
IBEX 35 INDEX
10,443.80 -100.50 -0.95%
NIKKEI 225
19,510.40 -192.20 -0.98%
HANG SENG INDEX
27,027.80 -316.37 -1.16%

Currencies

EUR-USD
1.1732 +0.0009 +0.08%
USD-JPY
109.4500 -0.1200 -0.11%
GBP-USD
1.2878 +0.0010 +0.08%
AUD-USD
0.7898 +0.0013 +0.16%
USD-CAD
1.2667 -0.0015 -0.12%
USD-CHF
0.9622 -0.0008 -0.08%
EUR-GBP
0.9111 +0.0001 +0.01%
USD-HKD
7.8243 +0.0007 +0.01%
EUR-CHF
1.1290 0.0000 0.00%

Britain's EU Exit Will Lead to a Worse Customs Deal

Britain’s exit from the European Union will result in a worse customs deal than it has now, an independent think tank warned on Thursday.

The only way for the U.K. to avoid customs checks and extra costs would be to stay in the single market and customs union, the London-based Institute for Government said in a report. Other options include staying in the customs union while leaving the single market or negotiating a free-trade agreement, but these would cause disruption to supply chains and would require trade-offs with the EU, the institute said.

“The government’s position papers show it grasps the potential for disruption to trade when we leave the EU,” Jill Rutter, the institute’s Brexit program director, said in an email. “Until we see plans for the future relationship with the Single Market, particularly for agriculture and fisheries, we will not know the scale of likely border checks and additional compliance costs.”


Qatari Sovereign Wealth Fund Reduces Stake in Credit Suisse

The Qatar Investment Authority has reduced its direct shareholding in Credit Suisse Group AG to 4.94 percent in one of the sovereign wealth fund’s rare sales of the Swiss bank’s stock.

The QIA previously held 5.01 percent in voting rights and is reporting a sale of shares for the first time since 2008. Qatar’s overall holding -- including bonds which convert into equity if capital levels fall below a certain threshold -- declined to 15.91 percent from 17.98 percent after a rise in the number of outstanding Credit Suisse shares because of its capital increase.

Credit Suisse, halfway through a three-year strategy revamp, raised about 4.1 billion francs ($4.21 billion) in June after tapping shareholders for a second time since Chief Executive Officer Tidjane Thiam took over in mid-2015. The fresh funding will increase its common equity Tier 1 capital to 13.4 percent of risk-weighted assets, up from 11.7 percent in the first quarter.


Trump Says Amazon Does ‘Great Damage’ to Retailers

U.S. President Donald Trump once again unloaded on Amazon.com Inc., tweeting that the company is hurting other retailers and implying that it’s killing industry jobs across the U.S.

Amazon is causing "great damage to tax paying retailers," Trump said in a Twitter post Wednesday, causing shares in the online retailer to fall. “Towns, cities and states throughout the U.S. are being hurt - many jobs being lost!” Trump said in the tweet.

Trump’s reference to “great damage” echoes chatter in Washington and academic circles that Amazon and other technology companies may have become too big and powerful. Apple Inc. Alphabet Inc., Microsoft Corp., Facebook Inc. and Amazon are the biggest companies in the world by market cap and dominate many facets of everyday life. Some critics have even suggested that they should be broken up.


Bannon Says He Fights Mnuchin, Cohn Daily for Tough China Policy

White House chief strategist Steve Bannon took public his long-simmering feud with some of President Donald Trump’s top economic advisers, saying in an interview with The American Prospect that he battles them often, especially over his determination to take a tougher position on China.

“That’s a fight I fight every day here,” Bannon is quoted as saying in the interview published Wednesday. He pointed to Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, both alumni of Goldman Sachs Group, Inc. who are pushing for a softer stance on trade with China. "We’re still fighting. There’s Treasury and Gary Cohn and Goldman Sachs lobbying.”

The interview was conducted Tuesday by the magazine’s co-editor Robert Kuttner, who said Bannon told him he reached out because he agreed with Kuttner’s past writings on China. Bannon rarely speaks with reporters on the record, let alone a liberal-leaning magazine.


The Yuan Is Hong Kong's New Darling as Investors Chase Higher Yields

The big ball of money in Hong Kong is rolling to the yuan, and the local dollar is suffering.

After years of underperforming, the offshore yuan is near its highest level versus the city’s currency in more than 12 months. Yuan deposits in the former British colony have stabilized after halving in the past two years, while buying mainland bonds is more lucrative: benchmark 10-year China government debt yields more than twice as much as its counterpart in Hong Kong.

“The market is trying to look for opportunities for carry using yuan as the long currency because of its higher yield compared to Hong Kong dollar or U.S. dollar products provided in the city,” said Iris Pang, an economist at ING Groep NV. If the yuan’s advance continues, there will be “a lot of such carry activities” across the border in the coming year, she said.


Markets

DOW JONES INDUS. AVG
22,024.90 +25.88 +0.12%
S&P 500 INDEX
2,468.11 +3.50 +0.14%
NASDAQ COMPOSITE INDEX
6,345.11 +12.10 +0.19%
FTSE 100 INDEX
7,433.03 +49.18 +0.67%
DAX INDEX
12,263.90 +86.82 +0.71%
CAC 40 INDEX
5,176.61 +36.36 +0.71%
IBEX 35 INDEX
10,544.30 +62.80 +0.60%
NIKKEI 225
19,713.60 -15.66 -0.08%
HANG SENG INDEX
27,391.60 -17.49 -0.06%

Currencies

EUR-USD
1.1782 +0.0015 +0.13%
USD-JPY
109.8300 -0.3600 -0.33%
GBP-USD
1.2902 +0.0011 +0.09%
AUD-USD
0.7933 +0.0008 +0.10%
USD-CAD
1.2611 -0.0007 -0.06%
USD-CHF
0.9646 -0.0012 -0.12%
EUR-GBP
0.9133 +0.0005 +0.05%
USD-HKD
7.8216 0.0000 0.00%
EUR-CHF
1.1365 +0.0002 +0.01%

Merkel Vows Brexit Won't Harm German Fishers in Campaign Pledge

German Chancellor Angela Merkel pledged to protect fishermen in the U.K.’s talks to leave the European Union, tailoring her election message to a local crowd on the North Sea coast as she seeks to rally her Christian Democratic Union’s base.

“I can tell those involved in fisheries: we will push for fair conditions for the deep-sea fishers,” Merkel told a crowd of supporters in the port city of Cuxhaven on Tuesday. Fishing is a major issue in Brexit negotiations, with Prime Minister Theresa May’s government vowing to “take back control” of British waters used by foreign fleets.

As Merkel’s Social Democratic opponent renewed his attack on her handling of Germany’s diesel scandal, Merkel also used her campaign appearance in a safe CDU district to offer standard pledges -- cutting debt, expanding broad-band coverage -- and a bit of folksy banter about her cooking.


OPEC's Oil-Glut Fight Could Last Years

When OPEC and Russia first embarked on their strategy to clear a global oil glut, it was expected to succeed within six months. It now looks like the battle could last for years.

The Organization of Petroleum Exporting Countries and its partners plan to wrap up their production cuts next spring, already nine months later than originally expected. Yet oil prices are faltering again as data from the International Energy Agency show world inventories could remain oversupplied even after the end of 2018. ESAI Energy LLC predicts that, rather than months, draining the surplus may take years.

“They’re going to have to dig in for the long haul,” Neil Atkinson, head of the IEA’s oil markets and industry division, said in a Bloomberg television interview. “Re-balancing is a stubborn process.”


Trump Rips CEOs Quitting Panels as AFL-CIO Joins Defectors’ List

President Donald Trump said the CEOs quitting his advisory council aren’t taking their jobs seriously, again taking aim at some of America’s most visible business leaders as the fallout from a weekend of racially charged violence in Virginia mounts.

“They’re not taking their job seriously as it pertains to this country,” the president said of the executives at a press conference at Trump Tower in New York Tuesday afternoon. “If you look at some of those people that you’re talking about, they’re outside of the country, they’re having a lot of their product made outside, if you look at Merck as an example.”

The president also doubled down on his earlier statement that both white supremacists who marched in Charlottesville to protest the removal a statue of Confederate General Robert E. Lee and counter-demonstrators were to blame for the mayhem that included the death of one woman. Trump said he saw “blame on both sides.”


China Reclaims Spot as World's Biggest Holder of Treasuries

China reclaimed its position as the top foreign owner of U.S. Treasuries after increasing its holdings for the fifth straight month. China’s holdings of U.S. bonds, notes and bills rose to $1.15 trillion in June, up $44.3 billion from a month earlier, according to Treasury Department data released Tuesday in Washington. Japan owned $1.09 trillion, a decrease of $20.5 billion from its total in May. Japan had overtaken China in October as the largest holder of American government bonds, the figures showed.

The two countries account for more than a third of all foreign ownership of Treasuries, which gained by $47.7 billion in June to $6.17 trillion, the figures showed.

China’s foreign-exchange reserves rose for sixth straight month to $3.08 trillion in July as the yuan strengthened and economic growth remained strong. Stricter capital controls and a stabilizing currency this year have eased outflow pressures as policy makers encourage foreign investors to channel more money into the country. The yuan has climbed nearly 4 percent against the dollar this year, after declining about 7 percent in 2016.


Bank of America Warns of an ‘Ominous’ Sign for Stocks

Money managers who’ve watched the surge in corporate profits take U.S. equities to records are starting to fret about earnings growth, and that’s an “ominous” sign, Bank of America says. Just 33 percent of managers in the bank’s latest survey say corporate profits profits will improve, down from 58 percent at the start of the year.

The drop represents a “warning sign for equities over bonds, high yield over investment grade, and cyclical sectors over defensive ones,” chief investment strategist Michael Hartnett wrote in a note Tuesday. “Further deterioration is likely to cause risk-off trades.”

At the same time, a record 46 percent said equity markets are overvalued. Still, positioning by managers is “pro-risk” despite persistently high cash levels. The S&P 500 trades just above 21 times trailing 12-month earnings after touching above 22 in March, about 23 percent higher than the 10-year average.


Markets

DOW JONES INDUS. AVG
21,999.00 +5.28 +0.02%
S&P 500 INDEX
2,464.61 -1.23 -0.05%
NASDAQ COMPOSITE INDEX
6,333.01 -7.22 -0.11%
FTSE 100 INDEX
7,383.85 +29.96 +0.41%
DAX INDEX
12,177.00 +11.92 +0.10%
CAC 40 INDEX
5,140.25 +18.58 +0.36%
IBEX 35 INDEX
10,481.50 +20.30 +0.19%
NIKKEI 225
19,744.30 -8.99 -0.05%
HANG SENG INDEX
27,284.60 +109.65 +0.40%

Currencies

EUR-USD
1.1740 +0.0005 +0.04%
USD-JPY
110.6800 +0.0100 +0.01%
GBP-USD
1.2868 -0.0001 -0.01%
AUD-USD
0.7833 +0.0012 +0.15%
USD-CAD
1.2757 0.0000 0.00%
USD-CHF
0.9730 +0.0005 +0.05%
EUR-GBP
0.9123 +0.0005 +0.05%
USD-HKD
7.8237 -0.0001 0.00%
EUR-CHF
1.1423 +0.0012 +0.10%

U.K. Seeks Interim Customs Union With EU to Smooth Brexit

The U.K. government said it wants to maintain tariff-free, bureaucracy-light trade with the European Union for a period after Brexit and perhaps permanently, a proposal likely to raise eyebrows on the continent but which was cheered by British businesses.

Ahead of the publication Tuesday of the first of a series of new papers aimed at fleshing out its ambitions for future relations with the EU, Britain said it will seek to negotiate a "close association" with the bloc’s customs union for an unspecified amount of time after it leaves in March 2019.

Industry lobby groups expressed relief having repeatedly warned against the potential for duties, border controls and regulatory uncertainty on commerce with the U.K.’s biggest market the day after Brexit.


Iran Military Boost Signals Resolve to Resist U.S. Pressure

Iranian lawmakers voted to raise spending on the nation’s missile program and elite forces, bolstering twin pillars of the security establishment that are at the center of a growing dispute with the U.S.

Parliament on Sunday overwhelmingly approved a bill sanctioning an additional 20 trillion rials ($609 million) for Iran’s missile program and the Qods Force arm of the Revolutionary Guards. The legislation cited “hostile” U.S. policies against Iran and American “adventurism in the region,” according to Tasnim news agency. President Donald Trump has expanded sanctions on Iran and swung behind its Gulf rivals since taking office, amid signs he might attempt to sink the 2015 nuclear accord that opened the Islamic Republic for business.

The extra funding -- on top of two years of increased defense spending -- serves as a “multifaceted” message, according to Ariane Tabatabai, a senior associate with the Proliferation Prevention Program at the Washington-based Center for Strategic and International Studies.


Saudi Arabia's Budget Deficit Narrows as Crude Revenue Rises

Saudi Arabia’s second-quarter budget gap narrowed to 46.5 billion riyals ($12.4 billion) after income from oil advanced.

Total revenue climbed 6 percent in the second quarter to 163.9 billion riyals after income from crude jumped 28 percent, the finance ministry said in a statement. That helped narrow the deficit from 58.4 billion riyals in the same period last year, even though revenue from non-oil sources fell by 17 percent. Spending dropped 1.3 percent, to 210.4 billion riyals.

“It’s really a story of stronger oil revenue and ongoing fiscal restraint,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “Much of the narrowing in the deficit seen in the first half of 2017 is due to higher oil revenue, versus in 2016.”


Gates Makes Largest Donation Since 2000 With $4.6 Billion Pledge

Bill Gates made his largest gift since the turn of the century, giving away Microsoft Corp. shares that accounted for 5 percent of his fortune, the world’s biggest.

The billionaire donated 64 million of the software maker’s shares valued at $4.6 billion on June 6, according to a Securities & Exchange Commission filing released Monday. While the recipient of the gift wasn’t specified, Gates has made the majority of his donations to the Bill & Melinda Gates Foundation, the charity he and his wife use to direct their philanthropic efforts.

It’s the largest gift of Microsoft shares that Gates has made since 2000. The 61-year-old gave away $16 billion worth of Microsoft shares in 1999 and $5.1 billion a year later, according to calculations by Bloomberg.


It's 'Game on' for War If North Korea Strikes Guam, Mattis Warns

Defense Secretary Jim Mattis warned it would be “game on” for war if North Korea fired missiles that hit the U.S. or its territories, including the Pacific island of Guam.

“It could escalate into war very quickly -- yes, that’s called war,” Mattis told reporters Monday at the Pentagon. “If they shoot at the United States, I’m assuming they hit the United States -- if they do that, then it’s ‘game on’.” Asked if he considers Guam part of the U.S., he said, “Yeah, it sure is.”

About 7,000 U.S. military personnel and their families are on Guam, an unincorporated U.S. territory with a total population of 170,000. The strategic outpost is about 2,100 miles (3,400 kilometers) southeast of Pyongyang. After President Donald Trump warned the U.S. would unleash "fire and fury” if Kim Jong Un’s regime continued to threaten nuclear war, North Korea outlined a plan to fire four intermediate-range ballistic missiles to land near Guam.


Markets

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2,465.84 +24.52 +1.00%
NASDAQ COMPOSITE INDEX
6,340.23 +83.68 +1.34%
FTSE 100 INDEX
7,353.89 +43.93 +0.60%
DAX INDEX
12,165.10 +151.06 +1.26%
CAC 40 INDEX
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HANG SENG INDEX
27,422.70 +172.43 +0.63%

Currencies

EUR-USD
1.1786 +0.0006 +0.05%
USD-JPY
110.1600 +0.5300 +0.48%
GBP-USD
1.2964 0.0000 0.00%
AUD-USD
0.7867 +0.0015 +0.19%
USD-CAD
1.2723 +0.0001 +0.01%
USD-CHF
0.9734 +0.0014 +0.14%
EUR-GBP
0.9091 +0.0005 +0.05%
USD-HKD
7.8212 -0.0001 0.00%
EUR-CHF
1.1472 +0.0024 +0.21%

U.K. Seeks Brexit Momentum With EU as Key Ministers End Dispute

The U.K. will this week seek to regain momentum in the Brexit talks by publishing outlines of its negotiating positions, after two key ministers ended their disagreement over a post-European Union transition period.

The government plans to issue three discussion papers ahead of the next round of discussions, scheduled to start Aug. 28 in Brussels, Brexit Secretary David Davis’s office said in a statement on Sunday.

The documents -- setting out proposals for Northern Ireland and the border with Ireland, continuity on the availability of goods, and confidentiality and access to official documents after Brexit -- will seek to prove the U.K. is ready for talks to advance to the next stage, according to the statement.


Saudi Arabia's Budget Deficit Narrows as Crude Revenue Rises

Saudi Arabia’s second-quarter budget gap narrowed to 46.5 billion riyals ($12.4 billion) from the same period last year after income from oil advanced, while non-oil revenue fell.

Total revenue climbed 6 percent in the second quarter to 163.9 billion riyals after income from crude jumped 28 percent, the finance ministry said in a statement. That helped narrow the deficit from 58.4 billion riyals in the same period last year, even though revenue from non-oil sources fell by 17 percent. Spending dropped 1.3 percent, to 210.4 billion riyals.

“It’s really a story of stronger oil revenue and ongoing fiscal restraint,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “Much of the narrowing in the deficit seen in the first half of 2017 is due to higher oil revenue, versus in 2016,”


Trump Criticized for Not Denouncing White Nationalists at Rally

Donald Trump faced a second day of criticism after failing to personally denounce white nationalists, neo-Nazis and others who held a rally in Virginia that ended with a deadly car-ramming attack on pedestrians.

Following an uproar from lawmakers in both parties and many civil rights groups, the White House released a statement Sunday saying that the president condemns “all forms of violence, bigotry and hatred, and of course that includes white Supremacists, KKK, neo-Nazi and all extremist groups.” Vice President Mike Pence made similar remarks at a press conference Sunday in Cartagena, Colombia, after arriving on the first stop of a Latin American trip.

The president’s daughter and senior adviser, Ivanka Trump, tweeted Sunday that “there should be no place in society for racism, white supremacy and neo-Nazis,” while National Security Advisor H.R. McMaster called the ramming incident domestic terrorism.


Australia's Biggest Bank Says CEO Will Retire Amid Money-Laundering Scandal

Commonwealth Bank of Australia Chief Executive Officer Ian Narev will step down by the end of June 2018 as the nation’s largest lender seeks to mitigate the fallout from a money-laundering scandal.

The exact timing of Narev’s departure will depend on the search for a successor, with the board looking at both internal and external candidates, Chairman Catherine Livingstone said in a statement Monday. The board was detailing the succession plan to “provide certainty for the business,” she said.

Pressure is building on Commonwealth Bank amid allegations by the nation’s financial crimes agency that drug syndicates used its network of deposit machines to launder cash, despite warnings from police. The nation’s securities regulator opened its own inquiry last week and the governor of the central bank called for accountability in the banking industry, which is beset by a string of scandals.


Taming of Asia's Most Volatile Currencies Creates New Danger

Policy makers in Indonesia and Malaysia have been so successful in quashing currency volatility that this is breeding a new danger: complacency.

Traders are being deprived of the experience to cope when fluctuations inevitably return, according to PT Bank OCBC NISP in Jakarta. At the same time, companies may cut back on hedging, exposing themselves to potential losses, says PT Sinarmas Sekuritas.

Three-month historical volatility for Indonesia’s rupiah has slumped for four straight quarters, falling to a four-year low of 2.53 percent in May from as high as 16 percent in 2013. Ringgit volatility has shrunk by two thirds this year to 2.95 percent. The two currencies were previously the most volatile in Asia -- now they are the least after China’s yuan.


Markets

DOW JONES INDUS. AVG
21,858.30 +14.31 +0.07%
S&P 500 INDEX
2,441.32 +3.11 +0.13%
NASDAQ COMPOSITE INDEX
6,256.56 +39.68 +0.64%
FTSE 100 INDEX
7,309.96 -79.98 -1.08%
DAX INDEX
12,014.10 -0.24 0.00%
CAC 40 INDEX
5,060.92 -54.31 -1.06%
IBEX 35 INDEX
10,282.90 -167.10 -1.60%
NIKKEI 225
19,553.20 -176.52 -0.89%
HANG SENG INDEX
27,158.30 +274.79 +1.02%

Currencies

EUR-USD
1.1829 +0.0008 +0.07%
USD-JPY
109.3800 +0.1900 +0.17%
GBP-USD
1.3018 +0.0004 +0.03%
AUD-USD
0.7905 +0.0011 +0.14%
USD-CAD
1.2680 +0.0003 +0.02%
USD-CHF
0.9637 +0.0019 +0.20%
EUR-GBP
0.9087 +0.0002 +0.02%
USD-HKD
7.8192 +0.0008 +0.01%
EUR-CHF
1.1400 +0.0031 +0.27%

May Sticks to Two-Year Brexit Deal Goal Amid Cabinet Doubts

Theresa May still aims to broker a trade deal with the European Union before Britain leaves in 2019, even as members of her own cabinet express doubts over the likelihood of doing so.

The timetable remains as the prime minister set out in her Lancaster House speech, her spokesman, James Slack, said on Thursday.

Slack was referring to the January address in which May, laying out her vision for Brexit, set a goal of reaching an agreement within the two-year Brexit timetable. That target clashes with a growing consensus among senior Tory ministers, who have signaled skepticism that a comprehensive trade deal can be brokered before the scheduled departure date of March 2019.


Saudi, Iraq Oil Ministers Agree to Stronger Oil-Cuts Commitment

OPEC’s two biggest producers agreed to strengthen their commitment to production cuts and maintain balance in world crude markets, Saudi Energy Minister Khalid Al-Falih said after talks with his Iraqi counterpart Jabbar al-Luaibi, according to the kingdom’s state news agency SPA.

The two ministers also agreed to ensure coordination of their nations’ oil policies, Saudi Press Agency reported Thursday, citing comments by Al-Falih after their meeting in the Red Sea city of Jeddah.

Saudi Arabia, the largest member of the Organization of Petroleum Exporting Countries, has borne the brunt of output cuts aimed at ending a global oversupply weighing on prices. Compliance by Iraq, OPEC’s second-biggest producer, slumped to 29 percent in June, its lowest since the output limits took effect in January, according to data from the International Energy Agency. OPEC and allied suppliers agreed to extend their cuts through next March.


Almost Half of Qatar's Traditional Investor Base Has Cut Ties With the Country

Banks in the world’s wealthiest nation will need to offer more yield if they tap the market as almost half of their traditional investor base has cut ties with the country.

Qatar National Bank QPSC, Commercial Bank QSC and Doha Bank QSC are considering funding options that include loans, private placements or dollar bonds, people familiar with the plans said. But investors and analysts say the lenders will have to pay more to compensate for the region’s political risk to drum up interest.

Saudi Arabia and other Arab nations severed relations with Qatar two months ago accusing it of supporting extremist groups, a charge it denies. That led to a drop in foreign deposits in June, the steepest in almost two years, and a record jump in the three-month Qatar Interbank Offer Rate.


Trump Intensifies Warnings to North Korea on Missile Threat

President Donald Trump stepped up his campaign of pressure on North Korea, warning the regime not to follow through with a missile test near Guam and promising massive response to any strike against the U.S. or its allies.

“They should be very nervous, because things will happen to them like they never thought possible, OK?” Trump told reporters Thursday in Bedminster, New Jersey. “He’s been pushing the world around for a long time,” referring to North Korean leader Kim Jong Un.

Trump stood by his threat Aug. 8 to bring down “fire and fury” on North Korea, saying that the statement maybe “wasn’t tough enough.” He declined to rule out a preemptive strike on Pyongyang, saying, “We’ll see what happens.”


Singapore GDP Growth Beats Forecasts on Strong Trade Rebound

As one of Asia’s most trade-dependent countries, Singapore has benefited from a recovery in global trade since late last year, led by strong Chinese demand for electronics and other manufactured goods. The economy is likely to grow 2.5 percent in 2017, Prime Minister Lee Hsien Loong said on Tuesday, a projection reiterated by the Ministry of Trade and Industry on Friday.

While export-led industries are expanding strongly, there are mounting risks. Consumer-focused industries such as retail remain weak in the face of job cuts and rising debt. There are also doubts over whether China can sustain its growth as the government tries to curb a credit bubble.

The MTI cited three main risks to the global economy -- trade protectionist threats, faster-than-expected interest-rate increases in the U.S. and a pullback in credit demand in China -- but said the potential for these to have a significant impact on growth has eased compared to three months ago.


Markets

DOW JONES INDUS. AVG
21,844.00 -204.69 -0.93%
S&P 500 INDEX
2,438.21 -35.81 -1.45%
NASDAQ COMPOSITE INDEX
6,216.87 -135.46 -2.13%
FTSE 100 INDEX
7,389.94 -108.12 -1.44%
DAX INDEX
12,014.30 -139.70 -1.15%
CAC 40 INDEX
5,115.23 -30.47 -0.59%
IBEX 35 INDEX
10,450.00 -146.00 -1.38%
NIKKEI 225
19,729.70 -8.97 -0.05%
HANG SENG INDEX
27,058.00 -386.04 -1.41%

Currencies

EUR-USD
1.1763 -0.0009 -0.08%
USD-JPY
109.0600 -0.1400 -0.13%
GBP-USD
1.2975 -0.0002 -0.02%
AUD-USD
0.7843 -0.0032 -0.41%
USD-CAD
1.2752 +0.0008 +0.06%
USD-CHF
0.9620 -0.0006 -0.06%
EUR-GBP
0.9066 -0.0006 -0.06%
USD-HKD
7.8181 +0.0005 +0.01%
EUR-CHF
1.1315 -0.0017 -0.15%

U.K., Scotland Fail to Reach Agreement on Post-Brexit Powers

Prime Minister Theresa May’s government failed to reach an agreement with Scotland’s administration over repatriation of powers after Britain leaves the EU, as Scottish lawmakers said they would continue to reject the Brexit bill in its current form.

Scotland Secretary David Mundell and Prime Minister Theresa May’s deputy, Damian Green, met Scottish government ministers John Swinney and Michael Russell in Edinburgh on Wednesday, as they accused the London-based government of an “attempted power grab.” While the talks were “useful," Russell said an accord had not been reached and further meetings have been scheduled in the next few weeks.

May’s flagship legislation to transpose all EU laws into British statute "is a blatant power grab which would take existing competence over a wide range of devolved policy areas, including aspects of things like agriculture and fishing, away from Holyrood," Russell said in a statement following the meeting. “That means that unless there are serious and significant changes to the proposed legislation, the strong likelihood is that the Scottish Parliament will vote against the repeal bill."


Qatar Air Targets Other U.S. Investments After American Spat

Qatar Airways hasn’t given up on investing in the U.S. after scrapping plans to buy a stake in American Airlines Group Inc. amid opposition from the Fort Worth, Texas-based company.

“We have other opportunities, both in America and North America, which we will consider,” Akbar Al Baker, the Persian Gulf carrier’s chief executive officer, said Wednesday in Doha, the Qatari capital. “I have some things in mind. The U.S. is an important market for us.”

Qatar Airways ended its interest in American on Aug. 2 after the U.S. company’s chief, Doug Parker, said he wasn’t keen on having the Gulf carrier as a shareholder. While the airlines are partners in the Oneworld alliance, the approach came as a surprise since American had publicly opposed the growth of Mideast airlines in the U.S., claiming they’ve benefited from $50 billion in illegal aid.


Trump Goes With His Gut to Shake Up Strategy Toward North Korea

President Donald Trump is turning to one of the few non-military tools at his disposal to confront the escalating threats posed by North Korea: his instinct for verbal combat.

Frustrated with decades of unsuccessful U.S. efforts to rein in North Korea’s nuclear weapons program, Trump fired back at the isolated regime with a bluntness that surprised both markets and governments, seeming to take his own Cabinet officers and aides by surprise. Even Secretary of State Rex Tillerson, in the middle of a tour of Southeast Asia to discuss North Korea with allies, wasn’t consulted in advance, his spokeswoman said.

The tone of Trump’s comments Tuesday -- promising “fire and fury” if North Korea keeps threatening the U.S. -- appeared to come right out of Kim Jong Un’s playbook for over-the-top taunts. White House aides said the unsuccessful policies of previous administrations are forcing the president to re-think U.S. strategy.


Hong Kong's Crowded Currency Trade Enters Dangerous Territory

One of the world’s most reliable currency bets is suddenly looking like less of a sure thing.

The Hong Kong dollar carry trade, which has produced steady returns for seven straight months, suffered a rare setback on Wednesday as the currency abruptly strengthened the most since February 2016. Its 0.1 percent gain against the U.S. dollar may have been tiny by global standards, but it jolted investors who had positioned for declines by borrowing in Hong Kong to invest in higher-yielding American assets.

The trade had been a consistent winner this year after interest rates in the U.S. rose and those in the former British colony held near rock-bottom levels. But now the tightly-managed exchange rate is turning more volatile as it approaches the weak end of a trading band imposed by the city’s de facto central bank.


Chinese Stock That Rallied 4,555% Could Get the Boot From the Nasdaq

Wins Finance Holdings Inc., the Chinese loan guarantor that couldn’t explain a 4,555 percent surge in its stock, is set to be delisted from the Nasdaq Stock Market, which cited violations of exchange rules related to its shareholder base.

Nasdaq said Wins doesn’t meet regulations requiring it to have at least 300 shareholders who own 100 shares. The exchange’s decision was also based on "the making of alleged misrepresentations by the company relating to the 300 round-lot shareholder requirement," as well as public interest concerns, Wins said in a statement Wednesday.

Wins plans to request a hearing to appeal the decision. At one point, the stock had soared as much as 4,555 percent from its debut on Nasdaq in 2015. Its market value surpassed $9 billion in February, about four times as much as LendingClub Corp., an online lender that had 50 times the revenue as of March.


Markets

DOW JONES INDUS. AVG
22,048.70 -36.64 -0.17%
S&P 500 INDEX
2,474.02 -0.90 -0.04%
NASDAQ COMPOSITE INDEX
6,352.33 -18.13 -0.28%
FTSE 100 INDEX
7,498.06 -44.67 -0.59%
DAX INDEX
12,154.00 -138.05 -1.12%
CAC 40 INDEX
5,145.70 -73.19 -1.40%
IBEX 35 INDEX
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HANG SENG INDEX
27,791.40 +34.27 +0.12%

Currencies

EUR-USD
1.1754 -0.0005 -0.04%
USD-JPY
110.0800 +0.0100 +0.01%
GBP-USD
1.3006 +0.0002 +0.02%
AUD-USD
0.7904 +0.0016 +0.20%
USD-CAD
1.2701 +0.0001 +0.01%
USD-CHF
0.9646 +0.0009 +0.09%
EUR-GBP
0.9038 -0.0005 -0.06%
USD-HKD
7.8168 +0.0017 +0.02%
EUR-CHF
1.1338 +0.0007 +0.06%

Bankers Hold Off on Dublin Decisions, Hoping for a Softer Brexit

Irish authorities have seen a drop in the level and intensity of inquiries from finance firms seeking to set up shop in Dublin after Britain’s June election led to the prospect of a softer Brexit, according to a person familiar with the matter.

U.K. Prime Minister Theresa May lost her majority in the June 8 vote, prompting some banks, insurers and asset managers to scale back planning in favor a wait-and-see approach, according to the person, who asked not to be identified as the information is private.

Some executives viewed the election outcome as raising the chances that the U.K. could stay in the single market, allowing London-based firms to continue selling financial services into the European Union, the person said. A “high level of ambiguity regarding the final level of Brexit bank applications” exists, according to minutes of a June meeting of the central bank commission, which oversees the organization.


Top Oil Buyers Go on Light Crude Diet to Satisfy Diesel Craving

Captain Tsitrelis Ioannis and the 26-strong crew of the Malibu arrived at Ulsan in early August after sailing almost 9,000 nautical miles to deliver a million barrels of Kazakh CPC crude from the Black Sea to South Korea, one of the key buyers in the world’s biggest oil market.

Another cargo of light oil, which is less sulfurous than heavier grades, is set to arrive in a couple of months at Ulsan from even farther away -- the U.S. -- to be processed by SK Innovation Co., South Korea’s top refiner. The two shipments are part of a stream of similar varieties flowing to Asia as companies look to process the kind of crude that yields more diesel to capitalize on surging demand for the fuel.

Last month, profit margins from making diesel in Asia touched the highest since November 2015, contrary to expectations for a typical seasonal drop in demand during this time of the year due to monsoon rains. The unusual gains have been driven by higher imports of cleaner diesel by India after the government imposed new quality standards and as China uses more to feed the expansion of its construction and industrial sectors.


Trump Vows ‘Fire and Fury’ If North Korea Keeps Threatening U.S.

President Donald Trump ratcheted up his rhetoric against North Korea to an unprecedented level Tuesday, warning Kim Jong Un’s regime will face a devastating military strike if it continues threatening the U.S.

“North Korea best not make any more threats to the United States,” Trump told reporters in Bedminster, New Jersey. “They will be met with fire, fury and, frankly, power the likes of which this world has never seen before.”

Trump’s comment came as North Korea, reacting to new UN sanctions against its rapidly developing nuclear weapons program, warned the U.S. it would “pay dearly” for its crimes and said it was examining its plans to strike the American military base of Guam with a missile. It also followed a report in the Washington Post, citing a Defense Intelligence Agency analysis, that Pyongyang successfully developed a nuclear warhead that could fit onto its missiles.


India Builds Highway to Thailand to Counter China's Silk Road

When Prime Minister Narendra Modi’s government approved $256 million to upgrade a section of a remote border road last month, few took notice.

Yet India’s decision to revive plans for the trilateral highway, part of an ambitious 1,360-kilometer (845 mile) crossing to link northeastern India with markets in Thailand and beyond, marks the next phase in the jostle between New Delhi and Beijing for economic and strategic influence in the region.

In the last two years alone, India has assigned more than $4.7 billion in contracts for the development of its border roads, according to government figures, including the highway which will run from Moreh in Manipur through Tamu in Myanmar to Mae-Sot in Thailand.


China Is Taking on the ‘Original Sin’ of Its Mountain of Debt

China’s much-vaunted campaign to tackle its leverage problem has captured headlines this year. But to understand why they’re taking on the challenge -- and the threat it could pose to the world’s second-largest economy -- you need to dig into the mountain.

Characterized in state media as the “original sin” of China’s financial system, leverage has swelled over the past decade -- partly because policy makers were trying to cushion a slowdown in growth from the old normal of 10 percent plus. What’s fueled the leverage has been a rapid expansion in household and corporate wealth looking for higher returns in a system where bank interest rates have been held down.

The unprecedented stimulus unleashed since 2008 effectively brought to life the “monster” China’s leadership is now trying to tackle, says Andrew Collier, managing director of Orient Capital Research Ltd. in Hong Kong and author of “Shadow Banking and the Rise of Capitalism in China.”


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FTSE 100 INDEX
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DAX INDEX
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27,673.50 -181.39 -0.65%

Currencies

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1.1730 -0.0022 -0.19%
USD-JPY
109.9000 -0.4200 -0.38%
GBP-USD
1.2983 -0.0009 -0.07%
AUD-USD
0.7874 -0.0040 -0.51%
USD-CAD
1.2692 +0.0025 +0.20%
USD-CHF
0.9701 -0.0041 -0.42%
EUR-GBP
0.9035 -0.0010 -0.11%
USD-HKD
7.8260 +0.0026 +0.03%
EUR-CHF
1.1381 -0.0068 -0.59%

U.K.'s Booming Jobs Market Leaves Firms Struggling to Fill Posts

Britain’s job market is booming, but concern is increasing about where companies are going to keep finding workers.

The number of permanent jobs grew at the fastest rate in more than two years in July, while the availability of workers fell sharply, according to a report by the Recruitment and Employment Confederation published Tuesday. It said that helped boost a measure of starting salaries to the highest in 20 months.

The pace of hiring in recent years has pushed U.K. employment to a record and sent the jobless rate to the lowest since the 1970s. Kevin Green, chief executive officer of REC, which compiles the report with IHS Markit, said that while the jobs market “continues to confound expectations,” a shrinking pool of workers means that employers are “having to work even harder to fill jobs.”


Saudi Arabia Builds Cities in the Sand to Move Beyond Oil

After relying on oil to fuel its economy for more than half a century, Saudi Arabia is turning to its other abundant natural resource to take it beyond the oil age -- desert. The kingdom is converting thousands of square kilometers of sand into new cities as it seeks to diversify away from crude, create jobs and boost investment.

In the past month alone, the world’s biggest oil exporter has announced two major developments -- one covering an area bigger than Belgium and another almost the size of Moscow. That’s on top of plans to build a series of so-called economic cities -- special zones in logistics, tourism, industry and finance, an entertainment city and a $10 billion financial district.


“The overall progress with the economic cities has been very slow, even before the collapse of the oil price,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC. “Since then, the pace of development has moderated even further with a number of projects being placed on hold.”


Buffett Nears a Milestone He Doesn't Want: $100 Billion in Cash

It’s a milestone Warren Buffett probably wishes he weren’t approaching. Berkshire Hathaway Inc., the conglomerate he’s run for more than five decades, reported Friday that it held just shy of $100 billion in cash at the end of the second quarter.

While that figure highlights the staggering money-making ability of the businesses he’s collected over the years, it’s also a burden. Because Berkshire doesn’t pay a dividend and rarely buys back its own stock, Buffett is on the hook to find ways to invest those funds.

“To put that money to work would be great,” said David Rolfe, chief investment officer at Wedgewood Partners, a money manager overseeing about $6 billion including Berkshire stock. But the “list of companies that he would like to own is very, very small.”


China Export Growth Pulls Back as Imports Reverse Major Gains

China’s export growth moderated as stable global demand helped offset the risk of a trade war with the U.S. Exports rose 11.2 percent in July in yuan terms, the customs administration said Tuesday. Imports increased 14.7 percent to leave a trade surplus of 321.2 billion yuan ($47.9 billion). Exports and imports both fell short of economist projections in a Bloomberg survey.

Demand for Chinese products has proven resilient as growth in major trading partners continued to recover. At home, stronger-than-expected output has also supported robust import demand.

The world’s largest exporter is confronting more uncertainty, as U.S. President Trump continues sporadic tough talk on China. The White House may be considering an investigation into alleged intellectual property violations, which could risk igniting broader trade conflict. Citic Securities Co. said in a research report that rising U.S. protectionism coupled with anti-globalization sentiment in Europe will take its toll on China’s exports.


Samsung's Lee Shown ‘No Mercy’

The South Korean prosecutor dubbed the “Chaebol Grim Reaper” is living up to that moniker, demanding that Samsung Group’s Jay Y. Lee spend 12 years in prison for his alleged role in a bribery scandal that toppled the nation’s president.

The recommendation by special prosecutor Park Young-soo marks the harshest criminal sentence ever sought against a major conglomerate leader -- including Lee’s father, who built Samsung Electronics Co. into a global powerhouse and was convicted twice. That severity may mark a turning point in the way Koreans view the conglomerates that helped rebuild the country in the aftermath of war.

“The prosecution spared him no mercy,” said Chung Sun-sup, chief executive officer of Chaebul.com, a website that tracks corporate practices. “This is a milestone in Korea’s corporate history, which is laced with tolerance for chaebol leaders.”


Markets

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2,480.91 +4.08 +0.16%
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27,654.10 -36.26 -0.13%

Currencies

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1.1812 +0.0017 +0.14%
USD-JPY
110.6400 -0.1100 -0.10%
GBP-USD
1.3046 +0.0011 +0.08%
AUD-USD
0.7926 +0.0014 +0.18%
USD-CAD
1.2667 -0.0013 -0.10%
USD-CHF
0.9731 +0.0001 +0.01%
EUR-GBP
0.9054 +0.0004 +0.05%
USD-HKD
7.8241 +0.0043 +0.05%
EUR-CHF
1.1494 +0.0016 +0.14%

May's Brexit Plan Starts to Take Shape

The U.K. is starting to get specific on its Brexit plan.

For the first time, a figure has surfaced of what Prime Minister Theresa May is willing to pay to settle the so-called divorce bill, as details also emerge of the kind of transitional arrangements the government will seek ahead of a third round of talks with European Union negotiators later this month.

The Sunday Telegraph cited three government officials it didn’t identify as saying Britain would put 36 billion pounds ($47 billion) on the table in a bid to push the discussion toward a future trade deal. Even though Brexit Secretary David Davis told the Sunday Times that the report was “news to me,” the story details a degree of behind-the-scenes bartering, with 40 billion euros seen as a compromise between what the EU wants and the U.K.’s starting position.


Saudi Arabia Builds Cities in the Sand to Take Economy Past Oil

After relying on oil to fuel its economy for more than half a century, Saudi Arabia is turning to its other abundant natural resource to take it beyond the oil age -- desert. The kingdom is converting thousands of square kilometers of sand into new cities as it seeks to diversify away from crude, create jobs and boost investment.

In the past month alone, the world’s biggest oil exporter has announced two major developments -- one covering an area bigger than Belgium and another that will include an airport and shipping port. That’s on top of plans to build a series of so-called economic cities -- special zones in logistics, tourism, industry and finance, an entertainment city and a $10 billion financial district.

“The overall progress with the economic cities has been very slow, even before the collapse of the oil price,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC. “Since then, the pace of development has moderated even further with a number of projects being placed on hold.”


Biggest Qatar Bank Is Weighing Funding Options While Gulf Spat Drags On

Qatar National Bank QPSC is considering options to raise financing as an ongoing standoff with its Gulf neighbors threatens to weaken liquidity in the gas-rich country, people familiar with the matter said.

The Middle East’s largest lender by assets held early discussions with international banks about the possibility of a private placement, bond sale or loan in the fourth quarter, said the people, asking not to be identified because the information is private. Final decisions haven’t been made and the bank may decide against a deal, the people said.

Qatari lenders are under pressure after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic relations and closed transport routes in June, accusing the nation of funding Islamist terrorism, a charge it denies. Foreign deposits at Qatar’s banks may fall further after dropping the most in almost two years in June as some Gulf lenders refuse to roll over holdings, people with knowledge of the matter said last week.


Fifty Years On, Southeast Asia Emerges as Global Growth Leader

The Association of Southeast Asian Nations has much to crow about as it marks its 50th anniversary: economic and social progress, a manufacturing powerhouse and relative political stability.

The 10 Asean members boast of some of the world’s fastest expanding economies like the Philippines and Vietnam, with growth rates of more than 6 percent. With a combined population of over 620 million and an economy of $2.6 trillion, the investment potential is huge and by 2020, the region will have the world’s fifth largest economy, the World Economic Forum predicts.

Yet the goal of integrated economies remains a long way off. Businesses still face restrictions despite a 2015 blueprint mapping steps to eliminate trade barriers and create a single market to allow the free flow of goods, services and labor.


China Counting on Sanctions to Stop North Korea Nuclear Push

China expressed confidence that new United Nations sanctions would help bring North Korea to the negotiating table to end its push for nuclear weapons and ballistic missiles.

Foreign Minister Wang Yi urged North Korean counterpart Ri Yong-ho to calmly react to measures to curb its exports and avoid more provocations when they met on Sunday in Manila, where diplomats from more than 20 countries are attending a security forum. Wang, who also called for the U.S. and South Korea to reduce tensions, said after meeting Secretary of State Rex Tillerson that the sanctions “created the conditions to find a breakthrough.”

“The goal is to effectively block the DPRK’s nuclear development process,” Wang told reporters in Manila. “Sanctions are needed but not the ultimate goal. The purpose is to pull the peninsula nuclear issue back to the negotiating table, and to seek a final solution.”


Markets

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2,476.83 +4.67 +0.19%
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FTSE 100 INDEX
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27,677.40 +114.77 +0.42%

Currencies

EUR-USD
1.1791 +0.0018 +0.15%
USD-JPY
110.7200 +0.0300 +0.03%
GBP-USD
1.3047 +0.0007 +0.05%
AUD-USD
0.7941 +0.0019 +0.24%
USD-CAD
1.2633 -0.0012 -0.09%
USD-CHF
0.9720 -0.0007 -0.07%
EUR-GBP
0.9037 +0.0010 +0.11%
USD-HKD
7.8194 -0.0001 0.00%
EUR-CHF
1.1460 +0.0007 +0.06%

Britons Increasingly Think U.K. Is on Wrong Track

Most Britons think the country is on the wrong track, with terrorism and health care cited as the biggest concerns, a poll showed.

More than seven in 10 respondents under 65 think the U.K. government is taking the wrong direction, up 16 percentage points since Prime Minister Theresa May unexpectedly called a general election in April and a 7-point increase since the vote in June, the survey by Ipsos MORI found.

“Leading up to and following the snap election, optimism about the direction the country is going in has been in steady decline,” Ipsos MORI Research Director Gideon Skinner said in a statement. “Concern about terrorism and the rise of extremism have both rapidly increased to become top worries for Britons.”


Saudi Oil Minister Met With Top Commodity Hedge Funds

Khalid Al-Falih, Saudi Arabia’s energy minister, met in private with some of the world’s top commodity hedge funds in July, taking the unusual step of personally canvassing investor views on the state of the market.

In the past, Saudi Arabian officials have disparaged hedge funds as unhelpful speculators that undermined OPEC’s quest for market stability. Last month’s meetings, described by people familiar with the encounters, signal the world’s largest exporter has reassessed the role of financial investors in the global oil market.

Al-Falih met the oil investors and traders in London days before traveling to St. Petersburg where OPEC and non-OPEC ministers discussed the market, the same people said, asking not to be identified because the talks were private. Although Saudi officials have met in the past with hedge funds representatives, it’s the first time meetings involving the minister have been reported.


Gulf Banks Are Refusing to Extend Qatar Deposits

Foreign deposits at Qatar’s banks may fall further after dropping the most in almost two years in June as some Gulf lenders refuse to roll over holdings, people with knowledge of the matter said.

Some banks based in Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, aren’t extending deposits with Qatari lenders when they mature, said the people, asking not to be identified because the information is private. These banks are concerned that they could face repercussions from their governments for continuing business relations with Qatar after they cut ties with the country, the people said.

Lenders are also struggling to repatriate funds because their counterparts in Qatar aren’t swapping riyals into dollars, two of the people said. Banks can either roll over their riyal deposits or convert them into dollars in the offshore market where they get a worse exchange rate than Qatar’s pegged official rate, they said.


Australia Slams the Brakes on Property Investment

One of the key engines of Australia’s five-year housing boom is losing steam.

Property investors, who have helped stoke soaring home prices in Australia, are being squeezed as regulators impose restrictions to rein in lending. The nation’s biggest banks have this year raised minimum deposits, tightened eligibility requirements and increased rates on interest-only mortgages -- a form of financing favored by people buying homes to rent out or hold as an investment.

Australia’s generous tax breaks for landlords, combined with record-low borrowing costs, have made the nation home to more than 2 million property investors. Demand from those buyers has contributed to a bull run that has catapulted Sydney and Melbourne into the ranks of the world’s priciest property markets. Now, signs are emerging that the curbs are starting to deter speculators -- and home prices are finally starting to cool.


Hong Kong's Tiny Flats Pile Up Unsold

Tiny flats are flooding Hong Kong as developers rush to target first-time buyers struggling to get into the world’s priciest market. Inventories of new flats smaller than 431 square feet (40 square meters) rose to about 1,400 at the end of June, according to Centaline Property Agency. Wong Leung-Sing, an associate director of research, said the number may rise to about 2,000 by year end, the highest in data that started in 2014. The figures include dwellings yet to be completed.

The wave of smaller flats is testimony to the price surge that has put bigger homes beyond the reach of many buyers and triggered warnings from analysts and officials that the city is at risk of a property crash. Financial Secretary Paul Chan has cautioned of a “dangerous situation” after repeated efforts to cool the market.

Developers built 2,346 pint-sized flats in the first five months of 2017, or 60 percent of last year’s total. Annual construction of small apartments surged more than 500 percent from 2011 to 2016, according to government data.


Markets

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22,026.10 +9.86 +0.04%
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2,472.16 -5.41 -0.22%
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6,340.34 -22.30 -0.35%
FTSE 100 INDEX
7,474.77 +63.34 +0.85%
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12,154.70 -26.76 -0.22%
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19,956.80 -72.45 -0.36%
HANG SENG INDEX
27,531.40 +0.44 0.00%

Currencies

EUR-USD
1.1874 +0.0004 +0.03%
USD-JPY
110.1200 +0.0700 +0.06%
GBP-USD
1.3136 -0.0002 -0.02%
AUD-USD
0.7949 -0.0001 -0.01%
USD-CAD
1.2575 -0.0011 -0.09%
USD-CHF
0.9681 -0.0005 -0.05%
EUR-GBP
0.9039 +0.0004 +0.05%
USD-HKD
7.8174 +0.0001 0.00%
EUR-CHF
1.1495 -0.0002 -0.02%

CEO Pay at FTSE 100 Firms Falls 17%

Pay for bosses at leading U.K.-listed companies declined by 17 percent last year as boards reacted to political pressure to rein in excessive compensation.

Chief executive officers in the U.K.’s benchmark FTSE 100 Index earned an average of 4.5 million pounds ($5.9 million) in 2016, down from 5.4 million pounds the previous year, the Chartered Institute of Personnel and Development and the High Pay Centre said on Thursday. Even with the decline, it would take the average British employee 160 years to make the same amount.

“We have finally seen a fall in executive pay this year, in the context of political pressure and in the spotlight of hostile public opinion,” Stefan Stern, director of the High Pay Center, said in an email. “This is welcome, but the response has been limited and very late. It is also, so far, a one-off. We need to see continued efforts to restrain and reverse excess at the top.”


Qatar Air Moves on From American Airlines Plan

Qatar Airways Ltd. dropped a plan to invest in American Airlines Group Inc. following a chilly reception from the U.S. carrier.

Buying a stake “no longer meets our objectives,” Qatar Air said in an emailed statement Wednesday, alluding to the “latest public disclosure” by American without elaborating. The U.S. carrier reported financial results July 28, capping an earnings season in which rising concerns about airlines’ pricing power dragged industry stocks to their worst month in a year.

The decision by Qatar Air marks a victory for American Chief Executive Officer Doug Parker, who called the proposed stake purchase “puzzling at best and concerning at worst.’’ American, Delta Air Lines Inc. and United Continental Holdings Inc. have fought a running battle against Qatar Air and two other Persian Gulf carriers, which U.S. airline executives accuse of getting unfair advantages from $50 billion in alleged government subsidies.


Trump Signs Russia Sanctions Bill, But Lays Out His Concerns About the Law

President Donald Trump signed a Russia sanctions bill Congress forced on him, adding a statement saying the administration will carry out the law but with reservations about its impact and the constitutionality of some provisions.

In a statement Wednesday accompanying the notice that he signed into law the legislation, which also targets Iran and North Korea, Trump laid out a list of concerns. He said it encroaches on presidential authority, may hurt U.S. ability to work with allies and could have unintended consequences for American companies.

“While I favor tough measures to punish and deter aggressive and destabilizing behavior by Iran, North Korea, and Russia, this legislation is significantly flawed,” the statement released by the White House said.


Tesla Finishes First Solar Roofs—Including Elon's House

First the Model 3 electric car. Now the solar roof. In just one week, Tesla has challenged two distinct industries with radically new products.

Tesla has completed its first solar roof installations, the company reported Wednesday as part of a second-quarter earnings report. Just like the first Model 3 customers, who took their keys last week, the first solar roof customers are Tesla employees. By selling to them first, Tesla says it hopes to work out any kinks in the sales and installation process before taking it to a wider public audience.

“I have them on my house, JB has them on his house,” Musk said, referring to Tesla’s Chief Technology Officer J.B. Straubel. “This is version one. I think this roof is going to look really knock-out as we just keep iterating.”


China's Fear of Japan-Style Economic Bust Drives Crackdown on Deals

President Xi Jinping’s top economic adviser commissioned a study earlier this year to see how China could avoid the fate of Japan’s epic bust in the 1990s and decades of stagnation that followed.

The report covered a wide range of topics, from the Plaza Accord on currency to a real-estate bubble to demographics that made Japan the oldest population in Asia, according to a person familiar with the matter who has seen the report. While details are scarce, the person revealed one key recommendation that policy makers have since implemented: The need to curtail a global buying spree by some of the nation’s biggest private companies.

Communist Party leaders discussed Japan’s experience in a Politburo meeting on April 26, according to the person, who asked not to be identified as the discussions are private. State media came alive afterward, with reports trumpeting Xi’s warning that financial stability is crucial in economic growth.


Markets

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22,016.20 +52.32 +0.24%
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2,477.57 +1.22 +0.05%
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6,362.65 -0.29 0.00%
FTSE 100 INDEX
7,411.43 -12.23 -0.16%
DAX INDEX
12,181.50 -69.81 -0.57%
CAC 40 INDEX
5,107.25 -19.78 -0.39%
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10,513.90 -72.80 -0.69%
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20,004.00 -76.04 -0.38%
HANG SENG INDEX
27,558.40 -48.97 -0.18%

Currencies

EUR-USD
1.1844 -0.0012 -0.10%
USD-JPY
110.6600 -0.0600 -0.05%
GBP-USD
1.3217 -0.0006 -0.05%
AUD-USD
0.7931 -0.0037 -0.46%
USD-CAD
1.2591 +0.0021 +0.17%
USD-CHF
0.9709 0.0000 0.00%
EUR-GBP
0.8961 -0.0005 -0.05%
USD-HKD
7.8171 +0.0005 +0.01%
EUR-CHF
1.1499 -0.0013 -0.11%

Euro's Big Month Has Chart-Watchers Looking Back to 2010 Levels

After the euro surged through a critical technical level last week, analysts who study charts to help guide their predictions are looking back to 2010 for perspective on how high it could rise.

Europe’s common currency traded at about $1.18 Tuesday, holding above the key $1.1714 mark that it breached July 26 for the first time since August 2015. The euro is coming off a five-month rally, its longest since 2013, propelled by interest-rate differentials that have gone in its favor and broad dollar weakness.

The 19-nation currency still has room to run, according to analysts at Canadian Imperial Bank of Commerce and JPMorgan Chase & Co. They point toward $1.1877 and $1.2043, the euro’s lowest levels of 2010 and 2012, respectively, as technical levels that loom as near-term targets. The options market shows that traders are gearing up for more euro strength, with demand growing for calls, which give the right to buy.


Apple's Forecast Signals Strong Sales of New iPhones This Year

Apple Inc. gave a revenue forecast that highlighted resilient demand for the iPhone ahead of the launch of its new models and the growing significance of the company’s supporting businesses.

New iPhones typically go on sale in mid- to late September, which produces a few weeks of revenue that are included in the company’s fiscal fourth-quarter results. Some analysts had reduced their estimates on concern the new high-end iPhone may be delayed, but Apple’s projections on Tuesday -- and increasing sales of other products and services -- calmed those fears.

Revenue will be $49 billion to $52 billion in the three months through September, the Cupertino, California-based company said in a statement. Analysts had predicted $49.1 billion. “We’ve put everything we know into coming up with the guidance,” Chief Executive Officer Tim Cook said in an interview with Bloomberg Television. “We really like what we see for the beginning of the back-to-school season.”


U.S. Defenders of Gulf Airlines Press Tillerson on Open Skies Deals

The major U.S. airlines that allege unfair competition by Persian Gulf rivals can’t show that new flight routes are costing U.S. jobs, allies of the Middle Eastern carriers told Secretary of State Rex Tillerson.

Opening discussions with the governments of the United Arab Emirates and Qatar over trade claims could hurt travel and tourism and encourage other countries to take actions against the U.S. “with some significant unintended consequences,” Bill Flynn, chief executive officer of freight company Atlas Air Worldwide Holdings Inc., said in an interview.

Flynn was among several corporate executives who met with Tillerson in Washington for about a half hour Tuesday in support of maintaining the existing aviation agreements with the Gulf nations. He was joined by FedEx Corp. President David Bronczek and JetBlue Airways Corp. Chief Executive Officer Robin Hayes, which are are part of the U.S. Airlines for Open Skies, a coalition that has lobbied to preserve the U.A.E. and Qatar deals.


Housing Crisis Drives Homeless Australians to Central Bank's Door

Majik used to sneak into Sydney’s botanical gardens before they were locked up at night so he could sleep safely. But as the cold weather closed in he joined other homeless people to shelter somewhere more central: outside the Reserve Bank of Australia.

“It’s impossible to afford accommodation in this city,” said Majik, 52, who has been living on the streets for three years and declined to give his surname. “We get some lovely people along here who give us a hand. They bring in food. They bring in clothing. They donate money.”

On the doorstep of Australia’s premier economic institution, a camp of about three-dozen tents and a kitchen has come to symbolize the housing affordability crisis gripping Sydney, where prices have soared 127 percent since 2009. Five years of rate cuts fueled a stratospheric housing boom in the city, where rental housing is now out of reach for 99 percent of low-income households, according to a recent report.


Short Sellers Call Time on Chinese Property Billionaire Whose Fortune Tripled

Short sellers are calling time on the remarkable rise of Sun Hongbin.

The Chinese billionaire, whose roller-coaster career has included a stint in prison and the forced sale of a developer he once predicted would become the nation’s largest, finds himself in the crosshairs of hedge funds and other bearish speculators after the biggest hot streak of his nearly three decades in business. Sun’s fortune has more than tripled this year to $5.1 billion after shares of his real estate firm, Sunac China Holdings Ltd., recorded one of the largest rallies worldwide.

In Sunac, short sellers see a prime example of what ails the broader Chinese economy: an overdose of debt-fueled investment. Even as some of the company’s high-flying peers have scaled back their ambitions amid rising borrowing costs and growing regulatory scrutiny, the Tianjin-based developer has piled on leverage to buy everything from distressed land assets to Dalian Wanda Group Co.’s theme-park business and a $2.2 billion stake in LeEco, a cash-strapped Chinese media and technology conglomerate.


Markets

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2,476.35 +6.05 +0.24%
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6,362.94 +14.82 +0.23%
FTSE 100 INDEX
7,423.66 +51.66 +0.70%
DAX INDEX
12,251.30 +133.04 +1.10%
CAC 40 INDEX
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HANG SENG INDEX
27,701.60 +161.39 +0.59%

Currencies

EUR-USD
1.1800 -0.0002 -0.02%
USD-JPY
110.5400 +0.1800 +0.16%
GBP-USD
1.3199 -0.0004 -0.03%
AUD-USD
0.7944 -0.0025 -0.31%
USD-CAD
1.2556 +0.0018 +0.14%
USD-CHF
0.9672 +0.0015 +0.16%
EUR-GBP
0.8940 +0.0001 +0.01%
USD-HKD
7.8140 +0.0007 +0.01%
EUR-CHF
1.1413 +0.0016 +0.14%

Brexit ‘Won't Be Postponed or Delayed,’ U.K.'s Hammond Says

U.K. Chancellor of the Exchequer Philip Hammond said Brexit will still go ahead in March 2019 in spite of disagreements in Prime Minister Theresa May’s cabinet over a transition period to help government and businesses adjust to the split.

Hammond, who is in Brazil to promote trade and economic ties, said the debate among leading lawmakers is about adjusting to a a new relationship with the European Union, not a question of staying longer in the 28-member bloc.

“It won’t be postponed or delayed. As Michel Barnier, the negotiator on the other side, the EU negotiator, says, the clock is ticking,” Hammond told reporters in Brasilia on Monday after meeting with Finance Minister Henrique Meirelles. “There is a discussion going on about how we will then move from full membership of the European Union to a future relationship with the European Union. That is a debate, a discussion that will go on through these negotiations.”


Some Global Banks to Shift Qatar Business From Dubai Hub

Some international banks are serving Qatar from London and New York instead of Dubai’s financial center as a regional dispute makes it harder to do business with clients in the gas-rich Gulf state, according to people familiar with the matter.

Lenders that handled clients such as the Qatar Investment Authority and wealthy family offices out of the Dubai International Financial Centre are shifting coverage to other global financial hubs to avoid damaging relations with the United Arab Emirates and Saudi Arabia, said the people, asking not to be identified because the matter is private.

Saudi Arabia, the U.A.E., Bahrain and Egypt severed diplomatic and transport links with Qatar in June, accusing it of supporting extremist groups. Qatar denies the charges. As part of the restrictions, Emirates, Etihad Airways PJSC and FlyDubai suspended flights to and from Qatar, meaning that Dubai-based bankers have to fly via Oman or Kuwait, adding hours to a flight that used to take less than 60 minutes.


Trump Ousts Scaramucci in Latest White House Shakeup

Anthony Scaramucci was removed from his new job as White House communications director on John Kelly’s first day as chief of staff, just 10 days after the financier joined President Donald Trump’s staff.

“Mr. Scaramucci felt it was best to give Chief of Staff John Kelly a clean slate and the ability to build his own team,” press secretary Sarah Sanders said in a statement announcing the departure of the SkyBridge Capital founder.

Sanders said Scaramucci left in a “mutual agreement” with Kelly, who replaced Reince Priebus on Friday. “He does not have a role at this time in the Trump administration,” she said, and won’t return to a previous job at the Export-Import Bank. Scaramucci didn’t return calls for comment, and the Export-Import Bank didn’t comment immediately.


No Bubble in Stocks But Look Out When Bonds Pop, Greenspan Says

Equity bears hunting for excess in the stock market might be better off worrying about bond prices, Alan Greenspan says. That’s where the actual bubble is, and when it pops, it’ll be bad for everyone.

“By any measure, real long-term interest rates are much too low and therefore unsustainable,” the former Federal Reserve chairman said in an interview. “When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.”

While the consensus of Wall Street forecasters is still for low rates to persist, Greenspan isn’t alone in warning they will break higher quickly as the era of global central-bank monetary accommodation ends. Deutsche Bank AG’s Binky Chadha says real Treasury yields sit far below where actual growth levels suggest they should be. Tom Porcelli, chief U.S. economist at RBC Capital Markets, says it’s only a matter of time before inflationary pressures hit the bond market.


Philippines Vows to Defend Its Outsourcing Empire

The Philippines’ $23 billion outsourcing empire is facing mounting risks: China is rising quickly as a competitor, the government wants to cut some incentives and a siege in the south of the country is worrying investors.

“We need to put our act together,” Rey Untal, head of the Philippine association of outsourcing companies, said in an interview in Manila. “The other countries know how big this IT business process outsourcing pie is globally and they want to increase their share. This is not a static world.”

Armed with a high-level of English proficiency, a young population and cheap labor, the Philippines has emerged as one of the global leaders of outsourcing with companies such as Accenture Plc among those who’ve invested. But its position is now under threat with China ranked ahead of the Philippines in terms of competitiveness, advisory firm Tholons said in a June report.


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