ECB official: Monetary policy should factor in climate risk | Giants reportedly back Facebook cryptocurrency | Asian-Pacific markets mixed amid Middle Eastern tensions
14 June 2019
CFA Institute: Financial NewsBrief
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Pelosi: House won't raise debt limit until spending caps lifted
The House will not act on legislation to raise the US debt limit until the Trump administration agrees to lift spending restrictions on domestic agencies, House Speaker Nancy Pelosi said. Treasury Secretary Steven Mnuchin said if agreement is reached on spending caps, "the debt ceiling has to be included."
The Associated Press (13 Jun.) 
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ECB official: Monetary policy should factor in climate risk
Central banks should consider risk presented by climate change when they establish monetary policy, instead of solely as a financial-stability concern, said European Central Bank Governing Council member Francois Villeroy de Galhau. "It is also part of our mandate for monetary policy because climate change affects price evolutions, [affects] the economic outlook," Villeroy de Galhau said.
Reuters (13 Jun.),  The Hill (13 Jun.) 
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Giants reportedly back Facebook cryptocurrency
Companies including Mastercard, PayPal, Visa and Uber have agreed to invest in Facebook's cryptocurrency, sources say. Each company will invest about $10 million in a consortium that manages the coin, which will be backed by a portfolio of government-issued currencies to ensure stability, the sources say.
MarketWatch (13 Jun.),  CoinDesk (UK) (14 Jun.) 
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Market Activity
Asian-Pacific markets mixed amid Middle Eastern tensions
Asian-Pacific stock markets were mixed Friday as investors became increasingly concerned about attacks on oil tankers in the Middle East. Japan's Nikkei 225 gained 0.4%; Hong Kong's Hang Seng Index fell 0.8%; Australia's S&P/ASX 200 added 0.2%; China's Shanghai Composite dropped 1%; South Korea's Kospi lost 0.4%; and India's Sensex was down 0.8%.
CNBC (14 Jun.),  The Economic Times (India) (14 Jun.) 
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Technology-innovation board opens on Shanghai exchange
China has opened a technology-innovation board on the Shanghai Stock Exchange. The exchange has approved six companies to trade on the board, which was created to stimulate investment in innovative-technology companies and to encourage them to list shares in China, instead of offshore exchanges.
South China Morning Post (Hong Kong) (13 Jun.) 
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ESR Cayman's Hong Kong IPO postponed
Property developer ESR Cayman has delayed a Hong Kong initial public offering, which could have raised as much as $1.24 billion. The offering's aggressive pricing faces resistance, sources say, and demand is poor.
Reuters (13 Jun.) 
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Report: Brexit uncertainty stymies London IPO market
Initial public offering activity in London is at a 10-year low, with only 13 firms listing on the London Stock Exchange in the first half of the year and only one cross-border listing, and the trend is likely to continue, according to a report by law firm Baker McKenzie. "The markets will recover, but right now Brexit has a chokehold on the industry," said Adam Farlow, head of the Europe, Middle East and Africa capital-markets practice.
Financial News (UK) (subscription required) (13 Jun.) 
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Swiss central bank plans benchmark shift to Saron
The Swiss National Bank will adopt the Swiss Average Rate Overnight as its policy rate to replace Libor.
Financial Times (subscription required) (13 Jun.) 
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Economics
Kudlow: Trade dispute to hit China harder than US
The economic burden of the US-Chinese trade dispute will harm China more than the US, says Larry Kudlow, director of the White House National Economic Council. A meeting between Chinese President Xi Jinping and US President Donald Trump at an upcoming Group of 20 meeting hasn't been formalized, Kudlow says.
Reuters (13 Jun.) 
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EU reportedly allows more beef imports from US
The EU has agreed to increase hormone-free beef the US can export annually, a concession that could ease trade tensions, sources say. US producers reportedly can sell 18,500 metric tons initially and 35,000 metric tons after seven years.
Reuters (13 Jun.) 
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Geopolitical/Regulatory
ESMA turns to AI to tackle unstructured data
The European Securities Markets Authority increasingly uses artificial intelligence to clarify and analyze unstructured data sets generated by post-crisis reporting requirements as the regulator monitors systemic risk. "You can have a much more sophisticated view of the risks" if AI can link data sets, says Steffen Kern, head of risk analysis and economics.
Practice Insight (13 Jun.) 
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EU regulator: New powers not enough for AML oversight
The European Banking Authority's new powers to combat money laundering across the banking system are insufficient, Chairman Jose Manuel Campa says.
Financial Times (subscription required) (11 Jun.) 
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Global use of euro on the rise, ECB says
The euro's use as a global currency has surged after sitting at a record low last year, according to the European Central Bank. Growing confidence in the eurozone and concerns about the US political landscape have pushed the euro's share of the foreign exchange reserve market to 20.7%, an increase of 1.2 percentage points during the past decade, while the US dollar's share has reached a historic low.
Reuters (13 Jun.),  Financial Times (subscription required) (13 Jun.) 
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CFTC's Behnam: Regulators should encourage quicker Libor shift
US regulators should find ways to encourage market participants to accelerate the transition away from Libor, Commodity Futures Trading Commission member Rostin Behnam says. "We may need to think about more aggressive policy decisions to help the transition move along in a quicker, more expedient way," Behnam says.
MLex (subscription required) (13 Jun.) 
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CFTC's Berkovitz exasperated at failure to set position limits
Commodity Futures Trading Commission member Dan Berkovitz has voiced frustration that position limits on 28 commodities haven't been established nine years after the Dodd-Frank Act authorized the CFTC to set them. "I hope that we will complete it soon," he said.
MLex (subscription required) (13 Jun.) 
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Financial Products
BlackRock launches cybersecurity, genomics ETFs
BlackRock has brought to NYSE Arca two exchange-traded funds that give exposure to cybersecurity and genomics. The iShares Cybersecurity and Tech ETF picks investments from the NYSE FactSet Global Cyber Security Index, while the iShares Genomics Immunology and Healthcare ETF is linked to the NYSE FactSet Global Genomics and Immuno Biopharma Index.
ETF Strategy (13 Jun.),  CNN (13 Jun.),  ETF Trends (13 Jun.) 
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