Financial Regulation

Frontrunning: June 14

  • Federal Reserve Expected to Deliver Rate Increase (WSJ)
  • Fire engulfs London tower block, at least six dead, more than 50 injured (Reuters)
  • Children lost, baby thrown to safety (Reuters)
  • Democrats Accuse Sessions of ‘Stonewalling’ (BBG)
  • World stocks march on as Fed rate hike looms, dollar steady (Reuters)

Qatar Crashes In Escalating Gulf Crisis; Oil Fails To Rebound As Global Stocks Dip

S&P futures point to a slightly lower open ahead of today's US non-mfg ISM and Service PMI data. European shares fall, while Asian shares are little changed. Several European countries are closed for Whit Monday leading to subdued trading. Following the latest unexpected Gulf Crisis overnight, in which Gulf nations cut all diplomatic relations with Qatar amid stunning allegations of funding terrorism, oil spiked but has since pared almost all gains.

What Is Causing China's Yield Curves To Invert: UBS Answers

The inverted curve reflects a contradiction between market expectations on policies and economic fundamentals. On one hand, the slowdown of economic growth may prevent the back end of the yield curve from further going up. On the other hand, financial institutions' funding costs have kept rising but the financing costs for the real economy measured by loan rates have not risen that much.

European, US Stocks In Eerie Calm As French Vote Looms

Global markets were oddly calm on Friday, the last day of trading before the first round of France's closely fought presidential election, with European stocks posting modest declines ahead of Sunday's main event, Asian shares rising, and set for first weekly gain in the past month, while U.S. futures were unchanged.

Futures Flat Ahead Of Yellen As Geopolitical Risks Loom; Fear Barometer Spikes

S&P futures point to a slightly lower open, while Asian and European stocks are likewise modestly in the red. Trading volumes are muted for most markets on Monday with investors spooked by rising geopolitical tensions in the Middle East and the Korean peninsula. It is also a holiday-shortened week in much of the West.

US Futures Rebound Sharply, Erase All Syrian Airstrike Losses

After initially tumbling in the aftermath of the U.S. missile attack on Syria which jolted financial markets, boosting haven assets and temporarily shifting investor focus from today's jobs data , S&P futures have managed to recoup all losses (the Nikkei closed up 0.4% after sliding earlier in the session), with Europe also just fractionally lower and climbing fast.

Gary Cohn Backs Reinstating Glass-Steagal, Breaking Up Big Banks

The former Goldman Sachs Group Inc. executive who is the top White House economic adviser told lawmakers he could support legislation breaking up the largest U.S. banks, according to people familiar with the matter, a development that bolsters congressional efforts to reinstate the Depression-era Glass-Steagall law.

Key Events In The Coming Busy Week: Payrolls; FOMC Minutes; Trump Meets Xi

The key economic releases in the US this week are ISM manufacturing on Monday, ISM non-manufacturing on Wednesday, and the employment report on Friday. The minutes of the March FOMC meeting will be released on Wednesday, while several Fed officials are scheduled to speak this week. The meeting between Trump and Xi set for Thursday and Friday at Mar-A-Lago will likely attract significant attention.

Geithner's Right (For Once)

What Geithner is unwilling to say is what's obvious: now that policymakers have shot their wad and the room for maneuver is limited, there can't be a centralized, painless "fix" for the next inevitable financial crisis.

45 Trillion Reasons Why Gary Cohn Has Recused Himself From All Goldman Matters

“consistent with the stringent ethics rules established by the Trump Administration, Mr Cohn will recuse himself from participating in any matter directly involving his former employer, Goldman Sachs. He will also recuse himself from any matter or potential rulemaking before the CFTC in which Goldman Sachs has participated.”

The Four Key Themes From Q4 Conference Calls

Since President Trump’s surprise victory over Hillary Clinton in November, investors and management teams have been acutely focused on the new administration’s policy proposals. As expected, all 4 key themes discussed on Q4 conference calls are closely linked to Trump's policies and include tax reform, regulation, fiscal spending and trade policy.