May calls on EU to be flexible on Irish border | Criticism expressed of potential US tariff on cars | Asian-Pacific markets mostly higher as yuan weakens
20 July 2018
CFA Institute: Financial NewsBrief
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Top Stories
Trump first US president to knock Fed in quarter-century
President Donald Trump criticized the Federal Reserve for raising interest rates while also saying, "I'm letting them do what they feel is best." Trump's comments were the first public presidential statement critical of the Federal Reserve since the term of George H.W. Bush.
USA Today (19 Jul.),  The Hill (19 Jul.) 
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May calls on EU to be flexible on Irish border
UK Prime Minister Theresa May is urging the EU to "evolve" its position regarding the border between the Republic of Ireland and Britain's Northern Ireland after Brexit. The EU proposal "is something I will never accept, and I believe no British prime minister could ever accept," she is expected to say in a speech scheduled for Friday.
The Guardian (London) (19 Jul.),  Reuters (20 Jul.),  RTE (Ireland) (19 Jul.),  The Irish News (Belfast, Northern Ireland) (20 Jul.) 
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Criticism expressed of potential US tariff on cars
Criticism expressed of potential US tariff on cars
Ross (Win McNamee/Getty Images)
A bipartisan group of 150 lawmakers, officials of several foreign governments and a trade group representing major automakers criticized President Donald Trump's proposal to impose a levy of as much as 25% on imported cars and automotive parts. US Commerce Secretary Wilbur Ross said it is too early to say whether Trump's proposal will be put into effect.
Reuters (19 Jul.),  The Toronto Star (19 Jul.),  The Mainichi (Japan)/Kyodo News (20 Jul.) 
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Market Activity
Asian-Pacific markets mostly higher as yuan weakens
Most Asian-Pacific markets posted gains Friday as China's yuan fell against the US dollar. Japan's Nikkei 225 declined 0.3%; Hong Kong's Hang Seng Index gained 0.8%; Australia's S&P/ASX 200 added 0.4%; China's Shanghai Composite jumped 2%; South Korea's Kospi rose 0.3%; and India's Sensex was up 0.4%.
CNBC (20 Jul.),  The Economic Times (India) (20 Jul.) 
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China Tower IPO aims to raise up to $10B next week
Mobile telephone infrastructure operator China Tower expects to raise between $8 billion and $10 billion in its initial public offering. The IPO is scheduled to launch in Hong Kong on Wednesday, said a source with knowledge of the plan.
South China Morning Post (Hong Kong) (19 Jul.) 
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China's yuan falls below one-year low; dollar declines
China's yuan falls below one-year low; dollar declines
(Pixabay)
China's yuan dropped to its lowest value in more than a year on foreign exchange markets and the US dollar lost value after President Donald Trump said the yuan was "dropping like a rock." Trump said the strong dollar may be disadvantageous to the US.
Reuters (20 Jul.),  Nikkei Asian Review (Japan) (tiered subscription model) (20 Jul.) 
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Comcast bows out of Fox bidding war
Comcast says it is stepping away from its bidding war with Disney over 21st Century Fox assets to focus instead on acquiring UK pay-TV provider Sky, with CEO Brian Roberts saying, "I'd like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company." Fox has agreed to a $71.3 billion purchase by Disney.
Variety (19 Jul.) 
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Strong profit, revenue send Microsoft shares higher
Microsoft reported quarterly profit and revenue that topped the forecasts of Wall Street analysts, largely due to growing acceptance by businesses of its cloud services and Office 365 productivity package. The company's shares gained almost 4% in after-hours trading.
Reuters (19 Jul.) 
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Economics
US initial unemployment claims lowest since 1969
The number of Americans filing for state unemployment benefits fell last week to a seasonally adjusted 207,000, the smallest number since December 1969, the Labor Department said. Economists surveyed by Reuters expected claims to rise to 220,000.
Reuters (19 Jul.) 
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Survey: Advisers don't understand how clients see philanthropy
Many advisers make inaccurate assumptions about their clients' views on charitable giving, according to a survey from the U.S. Trust. "Advisors who approach these conversations in a meaningful way -- focusing on personal goals and passions as well as the more technical aspects of giving -- are more likely to satisfy their clients' philanthropic needs while also growing their business," said Claire Costello of the U.S. Trust.
ThinkAdvisor (free registration) (19 Jul.) 
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Geopolitical/Regulatory
SEC looks into improved oversight of electronic bond trading
Securities and Exchange Commission Chairman Jay Clayton has instructed his staff to review whether there are opportunities to "enhance the framework for oversight" of electronic platforms that trade bonds. The action came after Democratic commissioners called for disclosure of potential conflicts of interest by those platforms.
MLex (subscription required) (19 Jul.) 
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The Fed isn't worried about cryptocurrencies, Powell says
There aren't enough cryptocurrency assets being traded to present a threat to the financial system, Federal Reserve Chairman Jerome Powell told the US House Financial Services Committee. The central bank doesn't have any authority over cryptocurrencies and isn't interested in overseeing them, he said.
BloombergQuint (India) (18 Jul.) 
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IMF: Oversight of eurozone lenders needs to change
A "material impact" to some eurozone lenders' capital and cash positions could result from sudden increases in interest rates, the International Monetary Fund said. The EU's Single Supervisory Mechanism should depend less on staffing from national central banks and supervisors in order to improve safeguards against another financial crisis, the IMF said.
Reuters (19 Jul.),  Financial Times (subscription required) (19 Jul.) 
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EU seeks trade alliance with China, sidestepping US
The European Union is pushing China to open its economy to foreign investments and help restore the international trade order following US President Donald Trump's tariffs on US trade allies. The EU has signed a trade deal with Japan and started free-trade talks with Australia and New Zealand.
The Wall Street Journal (tiered subscription model) (18 Jul.) 
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UK, EU need bilateral derivatives-contract solution, FCA says
The Financial Conduct Authority's Nausicaa Delfas said the UK and the EU must create derivatives contractual certainty after Brexit "either through an implementation period or by some other means." Delfas said, "This is an example of a situation where both sides could take unilateral approaches to dealing with the risk, but where a bilateral solution with the EU would be preferable."
Futures & Options World (subscription required) (19 Jul.) 
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French ex-traders given prison terms for Euribor manipulation
A London judge has handed down prison terms totaling more than 13 years for two former French traders convicted of conspiring to manipulate Euribor. Christian Bittar, who pleaded guilty, was sentenced to more than five years in prison, while Philippe Moryoussef was sentenced in absentia to eight years in prison.
Reuters (19 Jul.),  Bloomberg (tiered subscription model) (19 Jul.) 
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Experience of US consumer-finance bureau director nominee scrutinized
The experience of President Donald Trump's nominee to direct the Consumer Financial Protection Bureau, Kathy Kraninger, drew praise from Republicans and questions from Democrats during a Senate banking committee hearing. Some senators criticized choices Kraninger made while serving in the White House Office of Management and Budget, specifically regarding disaster relief and the separation of children from their families at the US-Mexican border.
Los Angeles Times (tiered subscription model) (18 Jul.),  The Washington Post (tiered subscription model) (19 Jul.) 
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Financial Products
Impact Shares rolls out racial-equality ETF
Impact Shares has brought to NYSE Arca an exchange-traded fund investing in companies that support racial equality. The Impact Shares NAACP Minority Empowerment ETF is designed to replicate the performance of the Morningstar Minority Empowerment Index.
ETF Trends (19 Jul.),  ETF (19 Jul.) 
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