The European Central Bank has indicated that it has no plans yet to start tapering its bond-buying scheme, with President Mario Draghi saying it will be discussed in the fall. Other central banks such as the Bank of Japan have made similar decisions, as inflation continues to remain low despite a generally brightening economic outlook.
The CEOs at Citigroup and Deutsche Bank have told staff that they plan to relocate substantial parts of their operations to Frankfurt, Germany, moves that could affect hundreds of jobs. Morgan Stanley made a similar announcement this week, adding to a growing list of major banks choosing Frankfurt as their post-Brexit base.
A Liquidnet survey of asset managers found that more than half of them have seen a rise in electronic fixed-income trading over the past 12 months. Additionally, 86% of European managers say Europe's revised Markets in Financial Instruments Directive, which takes effect in January, is the main driver behind the move, compared with 39% of US traders.
A number of market-risk executives at smaller Asian banks say they might be prevented from using the reduced sensitivities-based method of risk calculation, which is designed to offer a simpler alternative to the sensitivities-based approach outlined in the Fundamental Review of the Trading Book. The method appears to be unavailable for use across the board by banks with overseas subsidiaries, a common set-up for many Asian entities.
A report by The UK in a Changing Europe think tank refuted Prime Minister Theresa May's assertion that "no deal is better than a bad deal" as Britain withdraws from the EU. Failed Brexit negotiations could result in "a further significant fall in the exchange rate, a consequent rise in inflation, a fall in wages and consumer demand and a fall in business confidence, leading to a slowdown in investment", the report says.
Nasdaq says systematic internalisers will have an unfair advantage over other trading platforms under Europe's revised Markets in Financial Instruments Directive. Nasdaq is calling on the European Commission to reconsider rules governing systematic internalisers.
The People's Bank of China injected 510 billion yuan into the financial system this week, the most in six months. The bank will continue to actively manage liquidity as it works to deleverage the economy, market observers say.
Quant funds are expected to spend $7 billion annually by 2020 in their quest for technology that aids development of investment strategies to get an edge on competitors. Image recognition that monitors and extrapolates information such as the number of customers entering a store, along with extensive use of social media, are among techniques being evaluated, although observers say data extracted might not always prove substantively useful.
Returning to Washington, D.C., on 23-24 October, SIFMA's Annual Meeting features candid conversations and in-depth breakout sessions on the state of the capital markets, including today's business, economic and financial regulatory outlook. Confirmed speakers include US Treasury Secretary Steven Mnuchin; Abigail Johnson of Fidelity Investments; David Solomon of Goldman Sachs; and Warren Stephens of Stephens Inc. for one-on-one conversations. Join us for expert insights and unparalleled networking with the foremost policymakers, regulators and financial-market experts. Early-bird rates now available.
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