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☆ EU lawmakers set up clash with member states over share trade ban
▼ + stars: | 2023-03-01 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 1 (Reuters) - A panel of European Union lawmakers were set for a clash with member states after they backed a draft law banning brokers from earning fees in return for directing share trades to specific trading platforms. The European Parliament and the EU bloc's 27 member states must now thrash out a joint position that would become law. "A ban of PFOF is a huge disservice to retail clients and to the Capital Markets Union as a whole," said Markus Ferber, a committee member from Germany, where many PFOF brokers are based. The proposed ban is part of a draft law to update the bloc's securities rules known as MiFID. The committee also backed reducing off exchange "dark trading" favoured by big investors to 7% of total trading from 8% at present, and below the 10% which EU states want.

☆ FTSE 100 falls as Ocado sinks; still set for best Feb in six years
▼ + stars: | 2023-02-28 | by ( Shashwat Chauhan | ) www.reuters.com time to read: +2 min

The blue-chip FTSE 100 (.FTSE) lost 0.6% with shares of Ocado (OCDO.L) plunging 10.5% on the online supermarket and technology group's worse-than-expected full-year loss. "Ocado is in the eye of the cost-of-living storm because its offering isn't synonymous with being the best value," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. Lund-Yates said Ocado is a higher-end option, without the same benefits of enticing people with tangible, physical goods like peer Marks & Spencer (MKS.L). Despite recent volatility, the exporter-heavy FTSE 100 is on track to record its best February performance since 2017 as higher earnings and weakness in the pound earlier in the month made equities more attractive. On the flipside, hedge fund firm Man Group (EMG.L) gained 7.9% after posting a higher full-year core pretax profit and beating expectations on assets under management.

☆ Britain not behind other central banks in digital currency plans, says BoE
▼ + stars: | 2023-02-28 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Feb 28 (Reuters) - Britain is not lagging other central banks in issuing a digital version of its currency for day-to day-payments, Bank of England Deputy Governor Jon Cunliffe said on Tuesday. Central banks across the world are studying digital versions of their currencies to avoid leaving digital payments to the private sector as the decline of cash has accelerated in some cases due to the COVID-19 pandemic. Financial sector officials also say a digital pound would help stay abreast of advances in payments and help keep London a competitive global financial centre. "It's more likely than not," Cunliffe said, when pressed by lawmakers on whether a digital pound would go ahead. "This is not about here is a particular thing that needs to be done, but about opening a new frontier for people to improve payments," Cunliffe.

☆ Morning Bid: Irksome inflation won't die down
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +4 min

Friday's latest U.S. inflation surprise was matched in Europe on Tuesday, with French and Spanish headline inflation rates unexpectedly rising again in February - making for an uncomfortable final day of a transformative month for markets. And worryingly, market-based measures of inflation expectations are rising sharply again too. U.S. two-year 'breakeven' inflation rates , taken from inflation-protected Treasury securities, have jumped 80 basis points this month to 2.8% - wiping away the prior assumption that inflation would return to the Fed's 2% target over two years. In Europe, the five year, five-year forward inflation linked swap has jumped 20bps to a 9-month high just under 2.5%. Stock markets steadied after early losses, with U.S. futures only slightly in the red ahead of the open and month end.

LONDON, Feb 24 (Reuters) - The global nickel market flipped from deficit to surplus over the course of 2022, according to the International Nickel Study Group (INSG). Indonesia's mined nickel production expanded by 48% to 1.58 million tonnes in 2022, according to the INSG. However, as Indonesian production of Class II nickel rises, the Class I market shrinks. Around 70% of the physical nickel supply chain is now priced at a discount to the LME benchmark. LME nickel volumes slumped by 28% last year and January's activity was 60% lower than that of January 2022.

☆ Nvidia cheer ripples through chips as investors assess Fed minutes
▼ + stars: | 2023-02-23 | by ( Huw Jones | ) www.reuters.com time to read: +5 min

[1/3] The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 24, 2023. The MSCI all country share index (.MIWD00000PUS) was slightly firmer, adding to the year's 4.5% advance, after falling nearly 20% in 2022. The yield on 10-year Treasury was slightly firmer at 3.9254%. The Australian and New Zealand dollar were both slightly firmer against the dollar. Fed officials Mary Daly and Raphael Bostic are also due to make appearances later on Thursday.

FCA officials said the sector will begin adapting ahead of the rules, as it did with similar rules in the European Union. They rejected concern among lawmakers the new regime would create "bubbles" as money flocked to the fewer funds that qualify as sustainable. Lawmakers on the committee examining the FCA's proposals put Cummings on the defensive over his criticism that too many funds will be excluded. Kate Levick, associate director of sustainable finance at think tank E3G, told the hearing the FCA's plan "would remove the significant amount of greenwashing currently in the market". ($1 = 0.8290 pounds)Reporting by Tommy Reggiori Wilkes and Huw Jones; Editing by Mark Potter and Emelia Sithole-MatariseOur Standards: The Thomson Reuters Trust Principles.

☆ Full steam ahead on new consumer 'duty', Britain's finance watchdog says
▼ + stars: | 2023-02-22 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

[1/2] The City of London is seen as buses cross Waterloo Bridge in London, Britain, February 17, 2023. "The deadline of 31 July will not be moved, and we are here to help," Sheldon Mills, FCA executive director for competition and consumers, told a conference. Mills said there had been some "initial resistance", but hard work now should mean fewer expensive mistakes down the line. "After the deadline, we will take a pragmatic approach and will help those who are taking their final steps towards meeting the standards of the Duty," Mills said. Firms must nominate a board member to "champion" the new duty firm-wide, from designing a product to selling it, even through third-party distributors.

☆ EU calls for fast-track crypto capital rules for banks
▼ + stars: | 2023-02-20 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Feb 20 (Reuters) - Tough capital rules for banks holding cryptoassets must be fast-tracked in the European Union's pending banking law if Europe wants to avoid missing a globally-agreed deadline, the bloc's executive has said. The global Basel Committee of banking regulators from the world's main financial centres has set a January 2025 deadline for implementing capital requirements for banks' exposures to cryptoassets such as stablecoins and bitcoin. "Banks have expressed interest in trading crypto-assets on behalf of their clients and to provide crypto-assets-related services." Basel's standards are applied in the EU with a law, and a delay could mean that banks have to wait longer to enter the cryptomarket as separate EU rules for trading cryptoassets come into force in 2024. To enforce Basel's crypto rules, the EU could either propose a new law, or expand the banking law it is now finalising as called for by the European Parliament.

☆ Britain's post-Brexit asset management revamp eyes liquidity, tokenisation
▼ + stars: | 2023-02-20 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

Until Britain's departure from the European Union in 2020, rules for the UK funds sector were written in Brussels. The sector has fallen short in dealing with stresses in recent years in Britain and elsewhere due to inadequate liquidity, prompting scrutiny globally. "The regulatory framework contains rules around liquidity management. "But the growth of the fund industry means that liquidity management in funds is also relevant to the good functioning of markets," the discussion paper out for public consultation said. The FCA said it wants to see fund managers complying with liquidity stress testing guidelines issued by the EU's securities watchdog ESMA, which will be converted into UK rules.

☆ Britain begins post-Brexit asset management revamp, focus on liquidity
▼ + stars: | 2023-02-20 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Feb 20 (Reuters) - Britain set out plans on Monday for a post-Brexit review of its rules for the 11 trillion pound ($13.2 trillion) asset management sector, with a focus on bolstering liquidity after a near meltdown in funds used by pension schemes last September. Until Britain's departure from the European Union, rules for the UK funds sector were written in Brussels. "The regulatory framework contains rules around liquidity management. "But the growth of the fund industry means that liquidity management in funds is also relevant to the good functioning of markets," the discussion paper said. The FCA said it wants to see fund managers carrying out effective liquidity management by complying with stress testing guidelines issued by the EU's securities watchdog ESMA.

☆ G20 watchdog says commodity market concentration poses threat to wider economy
▼ + stars: | 2023-02-20 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

The FSB, which coordinates financial rules for G20 economies, said that forced governments to offer liquidity to some cash-strapped market participants. But fallout from the surge in nickel prices echoed concerns over large, concentrated positions and opacity in commodities more generally. The commodities market adapted to stress by switching to opaque over-the-counter (OTC) or off-exchange contracts where margin requirements are less strict, making ties between commodities and banks more complex, the report said. FSB Commodities Graphic 1The FSB said vulnerabilities in commodities are similar to those in non-bank financial intermediaries as economies went into COVID-19 lockdowns, and are now being addressed. FSB Commodities Graphic 2Reporting by Huw Jones; Editing by Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

☆ KPMG reaches settlement with liquidator of Carillion
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +1 min

REUTERS/Benoit TessierLONDON, Feb 17 (Reuters) - KPMG said on Friday it has reached a confidential settlement agreement with the liquidator of Carillion, the builder it audited before it collapsed. Carillion collapsed in 2018 under 7 billion pounds ($8.40 billion) of debt, with thousands of jobs lost, leading to government-backed reviews which recommended a shake-up in auditing standards. Liquidators of Carillion last year sued KPMG for 1.3 billion pounds for missing "red flags" during its audits of the construction giant. Carillion was an extreme and serious corporate failure, and it is important that we all learn the lessons from its collapse," KPMG's UK chief executive Jon Holt said in a statement. Britain's auditing watchdog, the Financial Reporting Council (FRC) has yet to announce the outcome of its investigation in KPMG's audits of Carillion.

☆ Morning Bid: When doves cry
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +2 min

The market has succumbed to the Fed and is now pricing U.S. interest rates to stay above 5% for the year. This has pushed benchmark 10-year Treasury yields to their highest since late December, with the dollar at six-week highs. Thursday's report showed goods and services prices increased, raising questions about the goods disinflation narrative, according to strategists from Saxo Markets. UK retail data and French inflation data are on deck and will help investors to gauge the state of inflation in the region. The data comes a day after France's CAC 40 touched a record high while London's FTSE 100 continued its recent run of record highs.

☆ Morning Bid: Growth trumps rates
▼ + stars: | 2023-02-16 | by ( ) www.reuters.com time to read: +6 min

While there were some questions about seasonal adjustments in the data, economists were impressed that sales growth was pretty broad based and have scrambled to re-crunch first quarter U.S. output forecasts as a result. There may be a more mixed picture from Thursday's data slate on producer prices, housing starts and weekly jobless claims. Even though rates futures and Treasury yields ticked back a bit today, pricing now has Fed policy rates moving as high as 5.25% and staying above 5% all year. And while full-year earnings growth estimates for S&P500 companies have sunk to zero, consensus forecasts are now pencilling in a rebound of almost 12% next year. Uncertainty about the pace of growth and annual tax receipts in April makes it difficult for government officials to predict the exact "X-date", it said.

☆ FTSE 100 at record high on positive Centrica, StanChart earnings
▼ + stars: | 2023-02-16 | by ( Shashwat Chauhan | ) www.reuters.com time to read: +2 min

SummarySummary Companies FTSE 100 hits record high, trading above 8,000 pointsCentrica, StanChart, Relx jump on upbeat resultsVodafone rises on report of looking at options for Africa unitFTSE 100 up 0.3%, FTSE 250 adds 0.4%Feb 16 (Reuters) - UK's FTSE 100 rose to a record high on Thursday, underpinned by corporate earnings from Centrica and Standard Chartered, while higher commodity prices drove up heavyweight miners. The blue-chip FTSE 100 (.FTSE) gained 0.3%, trading comfortably above the 8,000-point mark it had breached in the previous session. The exporter-heavy FTSE has had a stellar start to the year as positive corporate earnings and rising commodity prices supported the index. Shares of Centrica (CNA.L) jumped to top the FTSE 100, adding 4.2%, after the British gas owner's annual profit more than tripled and as it announced an extension of its share buyback programme. Standard Chartered (STAN.L) rose 1.8% after the lender reported a 28% rise in annual pretax profit and unveiled a $1 billion share buyback programme.

SummarySummary Companies Centrica, StanChart jump on upbeat earningsVodafone up on report exploring options for African UnitFTSE 100 up 0.2%, FTSE 250 flatFeb 16 (Reuters) - Britain's internationally-focussed FTSE 100 on Thursday closed above 8,000 points for the first time as upbeat earnings from Centrica and Standard Chartered countered global risk-off sentiment after hotter-than-expected U.S. inflation data. The blue-chip FTSE 100 (.FTSE) gained 0.2%, off an intra-day record high hit earlier in the day, but still at its highest ever closing level of 8,012.53 points. The exporter-heavy index has had a stellar start to the year, gaining 7.5% so far as positive corporate earnings and rising commodity prices supported the index. Data showed U.S. producer prices rose more than expected in January while jobless claims unexpectedly fell, fanning speculation the U.S. Federal Reserve would keep raising interest rates for longer than expected. Shares of Centrica (CNA.L) jumped to top the FTSE 100, adding 5.7%, after the British Gas owner's annual profit more than tripled and it announced an extension of its share buyback programme.

☆ G20 watchdog homes in on decentralised finance after FTX crash
▼ + stars: | 2023-02-16 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

FSB member countries will now "proactively" analyse vulnerabilities from DeFi as part of regular monitoring of crypto markets, the report said. The collapse of FTX last November exposed vulnerabilities in intermediaries and DeFi, the report said. FSB DeFi Graphic 1SUPERVISION GAPSThe most worrying vulnerability in DeFi relates to "mismatches" in liquidity from different maturities in liabilities and assets, the report said. Until the sharp retreat in bitcoin prices and the FTX crash, regulators had largely focused on cryptoassets rather than related technology. FSB DeFi Graphic 2Reporting by Huw Jones Editing by Helen PopperOur Standards: The Thomson Reuters Trust Principles.

☆ EY expects 'massive approval' in vote to split up company
▼ + stars: | 2023-02-14 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Feb 14 (Reuters) - Partners in EY are expected to give approval for spinning off the company's consulting arm and listing it on the stock market by the end of the year, a senior EY official said on Tuesday. "We expect a massive approval, but it's not to say there is still not a lot of work to do," Delarue told Reuters. Just over half of EY's 145 country networks will vote on splitting each national network into separate auditing and consultancy units. It is a move which does not make sense for all networks, Delarue said. The "Newco" will account for $25 billion of revenue and 7,000 partners, with what's left of EY representing $20 billion and 6,000 partners.

☆ Britain sets out legislation to regulate buy-now-pay-later credit
▼ + stars: | 2023-02-13 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Feb 13 (Reuters) - Britain on Tuesday will set out draft legislation to regulate "buy now pay later" credit, saying the sector posed potential harm to consumers without thorough affordability checks. BNPL companies are largely unregulated and typically offer on-the-spot interest-free short-term loans that spread payments for retail goods like clothing. The finance ministry said it will launch a public consultation on Tuesday on legislation to regulate BNPL, giving the Financial Conduct Authority (FCA) powers to authorise operators and their activities. Last February, the FCA told BNPL operators Clearpay, Klarna, Laybuy and Openpay to change their contracts after identifying potential harm to customers. It had to use consumer rights law pending the new legislation the ministry was announcing on Monday.

☆ ESG tops regulatory demands in finance as UK, EU rules diverge - KPMG
▼ + stars: | 2023-02-13 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 13 (Reuters) - Financial firms in Britain and the European Union remained under significant pressure to comply with diverging environmental, social and governance (ESG) rules over the past six months, KPMG's Regulatory Barometer showed on Monday. The barometer, aimed at helping firms with compliance planning, also tracks the scale of the divergence between UK and EU regulations, with KPMG saying the biggest differences are in areas like customer protection and access to markets. "The volume of emerging requirements for ESG and Sustainable Finance may lead to further divergence despite global standard-setters' best efforts," she said. Being aligned with EU rules would be a pre-condition for Britain if it wanted to regain access to the bloc's financial market. Britain has said it wants to tailor some rules inherited from the EU to better fit into UK markets, while maintaining high international standards.

☆ Morning Bid: The waiting game
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +2 min

Worries over an economic slowdown, the direction of inflation and concerns about the pace of monetary tightening are all weighing on sentiment. But before that, UK GDP data for fourth quarter is due later on Friday and is expected to be flat, according to a Reuters poll. That's the third time it has scaled a new peak in less than a week and the GDP report will likely influence the market on the day. Investors are also waiting for Japan's government to present the new Bank of Japan governor nominee, also due on Tuesday. Since short-seller Hindenburg published its report on Adani last month, some $110 billion has been wiped off the value of the group's main seven listed firms.

☆ Morning Bid: Volatility stirs
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

World markets end a rough week of confusing and competing narratives in distinctly edgy form, with peculiarly subdued volatility gauges flickering back to life. Both 10 and 30-year yields hit their highest levels in over a month early on Friday. Job shedding in the digital sector continued, with Yahoo's plans to lay off more than 20% of its total workforce. That said, the year-on-year oil price trend continues to be negative, as it's been all year and base effects from last year's price spike around the Ukraine invasion will only deepen that and weigh on headline inflation further. Goldman Sachs lowered its oil price forecasts for this year and next, cutting its Brent 2023 price forecast by $6 to $92 per barrel - still above current levels around $86.

[1/2] The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 8, 2023. Crude prices eased, with gold firmer as the dollar index fell 0.18%, while MSCI's U.S.-centric index of stock performance in 47 countries (.MIWD00000PUS) shed 0.44%. China's blue chips (.CSI300) rose 1.3%, pulling away from a one-month trough, while Hong Kong's Hang Seng Index (.HSI) gained 1.6%. Crude prices eased as oil infrastructure appeared to have escaped serious damage from the earthquake that devastated parts of Turkey and Syria, while U.S. inventories swelled and investors worried about central bank rate hikes. Gold prices rose for a fourth straight session as the dollar faltered, even as Fed officials indicated more rate hikes are warranted to rein in inflation.

Last week, Bailey signalled the tide was turning on inflation, even if it was too soon to declare victory. We have got the largest upside skew in our forecasts that we have ever had on inflation," Bailey said. Haskel aligned himself with Catherine Mann who also sees big upside risks to the BoE's price forecasts. By contrast, Tenreyro said the full force of the BoE's rate hikes over the last year had yet to be felt, with economic momentum already fading. "It's crucial to see it through, that we do enough to address potential upside risks to inflation," he said.

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