Juncker: EU would allow Brexit delay through May | High-ranking Chinese official to join US trade talks | Asian-Pacific markets mixed amid US-Chinese mobile gear conflict
19 February 2019
CFA Institute: Financial NewsBrief
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Top Stories
Trump's border emergency declaration challenged by 16 states
Sixteen states have filed a lawsuit alleging President Donald Trump's emergency declaration aimed at providing money to build a wall along the US-Mexican border is unconstitutional. The states said diverting money from other programs will harm their economies, prevent upgrades of military bases and damage drug-fighting efforts.
The Associated Press (19 Feb.) 
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Juncker: EU would allow Brexit delay through May
Postponement of Brexit to after the European Parliament election in May is an option that can't be ruled out, European Commission President Jean-Claude Juncker says. "If such a request were to be made [by the UK], no one in Europe would oppose it," he says.
Politico (18 Feb.) 
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High-ranking Chinese official to join US trade talks
Chinese Vice Premier Liu He, considered the czar of China's economy, will travel to Washington this week to join US-Chinese trade talks. Economists and trade groups view the surprise move as a sign negotiations are progressing.
The Associated Press (19 Feb.) 
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Market Activity
Asian-Pacific markets mixed amid US-Chinese mobile gear conflict
Asian-Pacific stock markets were mixed Tuesday after the Chinese government accused the US of making unfair statements about Chinese-made mobile network equipment. Japan's Nikkei 225 rose 0.1%; Hong Kong's Hang Seng Index lost 0.4%; Australia's S&P/ASX 200 gained 0.3%; China's Shanghai Composite edged up 0.1%; South Korea's Kospi declined 0.2%; and India's Sensex fell 0.4%.
CNBC/The Associated Press/Reuters (19 Feb.),  The Economic Times (India) (19 Feb.) 
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BoJ's Kuroda open to additional monetary easing
The Bank of Japan will consider further relaxing monetary policy if inflation triggered by foreign exchange trends and an economic slowdown hinder the central bank's ability to push inflation up to 2%, Governor Haruhiko Kuroda said.
Market News International (19 Feb.) 
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Small firms' investor relations feel strain of MiFID II
The research-unbundling rule in the EU's revised Markets in Financial Instruments Directive is affecting investor relations at small and midsize companies with small IR teams more than at large firms, which have sophisticated and big IR departments.
Practice Insight (18 Feb.) 
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Student-loan servicer Navient turns down $3.2B takeover offer
Navient, a student-loan servicer, has rejected a $3.2 billion takeover bid from hedge fund Canyon Capital Advisors and private equity firm Platinum Equity Advisors. The $12.50-per-share offer is a 6.6% premium above Navient's closing price Friday.
Reuters (18 Feb.) 
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Analysis: Negative-yielding bonds underscore slow growth
The proliferation of negative-yielding sovereign debt in Europe and Japan highlights weak growth prospects in many developed nations, Daniel Kruger writes. The number of government bonds paying a coupon below zero has increased 21% since October, after decreasing during 2017 and much of 2018.
The Wall Street Journal (tiered subscription model) (18 Feb.) 
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Economics
Automakers urge US not to impose tariffs on imported cars
Auto industry groups have warned that if the Trump administration imposes tariffs of as much as 25% on imported cars and parts, US jobs will be at risk and the cost of automobiles will go up thousands of dollars. The Motor and Equipment Manufacturers Association said it was "alarmed and dismayed" that a Commerce Department report with recommendations on auto imports was being kept secret.
Reuters (18 Feb.) 
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Manufacturers: No-deal Brexit would bring catastrophe
The UK faces the "catastrophic prospect" of a no-deal Brexit because of chaos in Parliament and selfishness by politicians, says Judith Hackitt, head of manufacturing organization Make UK. It is clear warnings about economic consequences of a no-deal Brexit are not "scaremongering," Hackitt says.
Reuters (18 Feb.) 
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India severs economic ties with Pakistan
India has terminated a special customs arrangement with Pakistan and has raised the import duty on Pakistani goods to 200%. The action is retaliation for a bombing killing 44 paramilitary policemen that India blames on Pakistan.
Nikkei Asian Review (Japan) (tiered subscription model) (19 Feb.) 
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Geopolitical/Regulatory
ESMA would grant UK clearinghouses licenses in no-deal Brexit
The European Securities and Markets Authority says it will immediately let LCH, ICE Clear Europe and LME Clear provide services in the EU if a no-deal Brexit occurs.
Financial News (UK) (subscription required) (18 Feb.),  Financial Times (subscription required) (18 Feb.) 
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ECB to assess bank-lending outlook as crunch worries mount
The European Central Bank will evaluate the lending outlook for banks next month amid fears they will reduce credit and worsen a slowing economy, Chief Economist Peter Praet says. Some banks could face a cliff edge to repay or refinance about €750 billion in ECB funding that begins maturing next year.
Reuters (18 Feb.) 
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CFTC's Quintenz suggests cryptocurrency self-regulatory approach
Cryptocurrency platforms should "come together to form some type of self-regulatory structure where they can discuss, agree to, implement, and hopefully examine or audit," Commodity Futures Trading Commission member Brian Quintenz says. Such an organization could conduct audits for insider trading, business conduct, conflicts of interest, redemption, custody and liquidity, he says.
Cointelegraph (18 Feb.) 
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Financial Products
Franklin Templeton to debut 4 index ETFs in Canada
Franklin Templeton Investments will introduce four exchange-traded funds this week in Canada that track different indexes. The Franklin FTSE Canada All Cap Index ETF, the Franklin FTSE US Index ETF, the Franklin FTSE Japan Index ETF and the Franklin FTSE Europe ex UK Index ETF have management fees ranging from 0.05% to 0.09%.
The Globe and Mail (Toronto) (tiered subscription model) (18 Feb.) 
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