European Parliament committee takes up U.S. trade deal | U.S. banks challenge European rivals in FX market | Japanese retail sales recover after months in decline
 
28 May 2015
CFA Institute: Financial NewsBrief
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G-7 chiefs seek broader view of issues
Finance ministers and central bankers from industrial countries are taking a long-term view of economic issues as they begin private talks on financial policy. The Group of Seven, seeking to reclaim the spotlight from China, Brazil and India, as well as the Group of 20, is meeting this week in Dresden, Germany. The G-7 is hoping for a marquee gathering, such as the World Economic Forum in Davos, Switzerland, and the Federal Reserve's annual meeting in Jackson Hole, Wyo. Reuters (27 May.), Bloomberg (27 May.)
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European Parliament committee takes up U.S. trade deal
The European Parliament International Trade Committee is set to vote Thursday on nonbinding recommendations to the European Commission on negotiations with the U.S. for the Transatlantic Trade and Investment Partnership. A key test of the agreement includes an arbitration mechanism and other issues to be voted on separately. Politico (28 May.)
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U.S. banks challenge European rivals in FX market
U.S. banks are making a strong play for the European foreign exchange market. Trading has declined in the past year at Deutsche Bank, Barclays and UBS, according to a survey by Euromoney Institutional Investor. Citigroup remains No. 1, with 16.1% market share, followed by Deutsche Bank at 14.5% and Barclays at 8.1%. Electronic trading accounts for 53.2% of the FX market, the survey says. Reuters (27 May.), Bloomberg (26 May.)
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Japanese retail sales recover after months in decline
After falling for three consecutive months, retail sales in Japan started growing again in April, lending support to the Bank of Japan's argument that consumer spending will help boost economic recovery. Sales rose 5% compared with April 2014, the trade ministry said. First-quarter gross domestic product rose at the fastest pace in a year. Reuters (28 May.)
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PBOC expects 7% GDP growth this year
China will be able to provide stable employment and 7% growth in gross domestic product this year, despite downward pressure on the economy, according to the People's Bank of China. The central bank expects the service sector and small businesses to contribute to job creation. Market News International (27 May.)
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HKUST-NYU Stern Master of Science in Global Finance: A one-year, executive-format master program for experienced finance professionals. Participants from 10 countries with average 11 years of work experience. Classes held in Hong Kong, New York, and Beijing/Shanghai. Graduates become alumni of HKUST and NYU Stern. Inviting application for class commencing in Nov 2015. (read more)
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Reader Survey
Have technological changes in market practices (high-frequency trading, robo-advisers, Big Data analytics) led to increased amounts of ethical misconduct by investment professionals?
No -- technology is simply a tool and ethical decisions are made by the investment professional  34%
Yes -- technology provides greater opportunities for ethical misconduct  33%
Uncertain -- ethical misconduct occurred before technological opportunities existed  21%
Yes -- ethical consequences are not considered by the technology developers  12%


Poll results are as of 4:30 p.m. EDT Wednesday with 533 total respondents.
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Japan, South Korea advance among mixed Asian-Pacific markets
Asian-Pacific markets were mixed Thursday, with South Korea and Japan posting gains. Japan's Nikkei 225 rose 0.4%. Hong Kong's Hang Seng Index fell 2.2%. Australia's S&P/ASX 200 dropped 0.2%. China's Shanghai Composite plummeted 6.5%. South Korea's Kospi gained 0.2%. India's Sensex was down 0.5%. CNBC (28 May.), The Economic Times (India) (04 Jun.)
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Encouraging talk of debt deal drives down Greek yield
Prime Minister Tsipras Meets With Chancellor Merkel In Berlin
Tsipras (Sean Gallup/Getty Images)
The yield on Greece's two-year bond fell to 22.9%, from 24.5%, after Prime Minister Alexis Tsipras said a final agreement with international creditors is close. Other debt in the eurozone periphery was affected, with Italy's 10-year yield declining to 1.86%, from 1.92%. GlobalCapital (subscription required) (27 May.)
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Chipmaker Avago in talks to acquire Broadcom
Avago Technologies is nearing a $35 billion agreement to buy competing chipmaker Broadcom, people familiar with the matter said. Broadcom's share price spiked nearly 20% and Avago's increased 9% after the talks became public Wednesday. The Wall Street Journal (tiered subscription model) (27 May.), Reuters (27 May.)
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Economics
BoE launches effort to bolster transparency
The Bank of England aims to change the meeting schedule of the Monetary Policy Committee to improve transparency and decision-making. The central bank has been criticized for trying to keep from public view an examination of consequences if the U.K. were to leave the EU. Reuters (27 May.), Bloomberg (27 May.), Financial Times (tiered subscription model) (26 May.)
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Japan recruits foreign investment from Asian firms
The Japanese government is trying to persuade companies throughout Asia to invest in its facilities. Prime Minister Shinzo Abe's economic-growth strategy calls for the expansion of incoming foreign direct investment to $283 billion by 2020. Nikkei Asian Review (27 May.)
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BlackRock CEO: Low interest rates create "structural problems"
Fink
Fink (Toru Yamanaka/Getty Images)
Pension funds and insurers are being harmed by low interest rates intended to boost global economic growth, said Larry Fink, BlackRock's chairman and CEO. Companies are "having more structural problems than ever before" in meeting rising liability without sufficiently yielding assets, he said. Reuters (27 May.)
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Fed: Retirement savings, pensions lacking among workers
Nearly one-third of U.S. workers have no pension or retirement savings, according to a Federal Reserve survey. Of more than 5,800 respondents, 38% intend to work as long as possible or do not plan to retire. Reuters (27 May.)
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Women in Investment Management
2-3 June 2015; San Antonio, Texas, United States
Advances in Asset Allocation
14-16 July 2015; New York, New York, United States
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Geopolitical/RegulatoryAdvertisement
FINRA seeks comment on revised broker-compensation rule
The Financial Industry Regulatory Authority wants public comment on a rewritten proposal for broker compensation. The rule would require brokerages to send clients "educational communication" that suggests questions they should ask brokers about compensation received to change firms. InvestmentNews (free registration) (27 May.)
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Obama urges Labor to proceed with fiduciary rule
President Barack Obama is pressing the Department of Labor to impose a fiduciary duty on financial professionals who give retirement advice. "Inaction is not an acceptable option," said Jeffrey Zients, director of the National Economic Council. The Hill (27 May.)
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European Parliament panel rejects ring-fencing bill
Center-right and liberal parties on the European Parliament Economic and Monetary Affairs Committee have narrowly lost an effort to scale back legislation to separate risky bank trading if volume exceeds a certain level. Parties on the left lost a bid to strengthen the bill to stop banks from being "too big to fail." Reuters (26 May.)
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SEC urged to force corporate disclosure of campaign donations
The Securities and Exchange Commission should require companies to disclose campaign contributions, former Chairmen Arthur Levitt and William Donaldson say, calling the agency's inaction "inexplicable." A record 1.2 million comment letters backing a 2011 petition show the issue is of "paramount public interest and growing concern to investors," Levitt and Donaldson wrote in a letter to Mary Jo White, head of the SEC. Bloomberg (27 May.)
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Trial evidence shows Libor e-mails sent to BoE official
A senior official at the Bank of England was among recipients of daily e-mails suggesting how to set the London Interbank Offered Rate, according to evidence presented at trial. Prosecutors are trying to link former trader Tom Hayes to the e-mails. He has pleaded not guilty to criminal charges. The Wall Street Journal (tiered subscription model) (27 May.)
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One-Question Survey on Future of Finance: Share Your Ideas
The Future of Finance depends on developing the most qualified investment leaders to improve investor outcomes. Please share your comments to inform our Women in Investment Management Conference:

What is the one change that could most help women rise to top management positions, and how can we hold the industry and ourselves accountable for accomplishing such a change?
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Financial Products
Elkhorn launches ETF focused on capex efficiency
Elkhorn Investments has brought to Nasdaq an exchange-traded fund that buys stocks of companies that make the most efficient capital expenditures. The Elkhorn S&P 500 Capital Expenditures Portfolio is linked to the S&P 500 Capex Efficiency Index. ETF Trends (27 May.), ETF.com (27 May.)
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