BARC.L - Barclays PLC
| Previous close | 182.48 |
| Open | 183.78 |
| Bid | 187.74 x 0 |
| Ask | 187.80 x 0 |
| Day's range | 183.32 - 187.88 |
| 52-week range | 131.04 - 187.88 |
| Volume | 5807391 |
| Avg. volume | 48,449,447 |
| Market cap | 33B |
| Beta (5Y Monthly) | 0.83 |
| PE ratio (TTM) | 18.60 |
| EPS (TTM) | 10.10 |
| Earnings date | 13 Feb 2020 |
| Forward dividend & yield | 0.07 (4.07%) |
| Ex-dividend date | 2019-08-08 |
| 1y target est | 221.84 |
- Bloomberg
Emerging Markets Get Fresh Boost of Hope Over Trade Deal
(Bloomberg) -- Emerging-market stocks jumped to an almost eight-month high last week and currencies rose to the strongest since July as the U.S. and China finally agreed on a phase-one trade deal. Mixed signals along the week whipsawed markets, but ultimately every developing-nation currency except the Turkish lira advanced, also helped by commitments in the developed world to keep interest rates low.The following is a roundup of news from emerging markets and highlights for the week ending Dec. 15.Read here our emerging-market weekly preview, and listen here to our weekly podcastHighlights:The U.S. and China said they agreed to the details of the first phase of a broader trade agreement in a move that will see the U.S. reduce tariffs, at least temporarily calming fears of an escalating trade war involving the world’s two largest economiesThe deal hinges on China increasing purchases of farm goods such as soybeans and pork, and making new commitments on intellectual property and currencyIn return, the U.S. agreed to reduce some existing tariffs, halving 15% duties on $120 billion of imports but maintaining a 25% levy on some $250 billion of Chinese goods. The U.S. will also delay new import taxes set to take effect on Sunday on $160 billion of products such as smartphones and toysChina will suspend additional tariffs on certain imports from the U.S., according to the Ministry of FinanceThe Federal Reserve left interest rates unchanged and signaled it would stay on hold through 2020. Chairman Jerome Powell repeatedly stressed his belief that the labor market can improve further despite unemployment being at a half-century lowThe House Judiciary Committee plowed ahead with articles of impeachment against President Donald Trump, despite objections and amendments from the panel’s Republican membersChina announced that it would target economic growth next year within a “reasonable range,” maintain its proactive fiscal policy and keep prudent monetary policy, according to a summary of decisions from the main annual economic planning meetingThe Asian nation’s ambassador threatened Germany with retaliation if it excludes Huawei Technologies Co. as a supplier of 5G wireless equipment, citing the millions of vehicles German carmakers sell in ChinaPrime Minister Boris Johnson won a decisive election and put the U.K. on track to leave the European Union next month, which reduced the uncertainty over BrexitThe Turkish central bank delivered another rate cut that exceeded forecasts, emboldened by the lira’s stability and egged on by President Recep Tayyip Erdogan’s calls for more aggressive easingBrazil cut its benchmark rate by half a percentage point to a record low and left the door open for additional easingS&P Global Ratings revised Brazil’s outlook to positive from stable, putting the Latin American country a step closer to the first upgrade since 2011Buoyed by slower inflation and progress toward receiving billions of dollars in foreign aid, Ukraine cut borrowing costs by twice as much as analysts predictedSaudi Aramco shares climbed for a second day on Thursday, but the oil giant failed to hold on to the $2 trillion valuation that Crown Prince Mohammed bin Salman had long targetedThe stock jumped the daily 10% limit on the first day of trading in Riyadh on WednesdayArgentina’s new economy minister, Martin Guzman, outlined broad themes about policy proposals to revive the economy, but didn’t delve into specifics that Argentines and investors have waited months to hearThe country will open talks with bondholders to delay the nation’s debt payments, Guzman said in his first public comments as minister, adding that he’s already negotiating with the International Monetary Fund for a new program amid a recessionAsia:The Asian Development Bank cut its economic growth forecasts for China and India to below 6%, dimming prospects across the continentChina’s consumer inflation accelerated to a seven-year high in November while producer prices extended their run of declines, complicating the central bank’s efforts to support the economyBonds from at least 57 Chinese companies totaling $43.4 billion face repayment pressure, according to company and ratings firm statements compiled by BloombergThe country plans to maintain stability in the foreign exchange market in 2020 and will take steps to prevent financial risks in the sector, the State Administration of Foreign Exchange saidMore than 5,600 retail jobs could be lost and thousands of stores shut down over the next six months, as pro-democracy protests in Hong Kong continue to disrupt sales during the crucial festive periodA U.S. federal commission has called for sanctions against India’s home minister and other top leaders if the country passes a controversial bill that will prevent Muslim migrants from neighboring countries from receiving citizenshipIndia’s parliament approved the controversial bill after hours of heated debate among lawmakers and protests in some parts of the countryIndia may have its debt rating downgraded in the event of a major economic slowdown, S&P saidThe country is considering raising the investment limit of foreigners in government bonds to at least 10% of the outstanding stock from 6% currently, the Business Standard reports, citing unnamed sourcesInflation galloped to its highest level in more than three years, giving monetary policy makers reason to keep rates on hold despite flagging economic growthSouth Korea’s parliament approved a 512.3 trillion won ($437 billion) budget for 2020 that aims to counter economic headwinds and support areas that can become new growth driversThe jobless rate ticked higher for a third month, an unexpected outcome that illustrates the challenge of boosting hiring in an economy struggling with slumping exports and weak investmentThe total balance of South Korean government bonds climbed to 695.7 trillion won at end of October from 691.5 trillion won the previous monthNorth Korea took its most personal swipe at Trump in more than two years, saying the U.S. leader’s recent comments made him sound like a “heedless and erratic old man”Indonesia’s cabinet may amend a legally imposed cap on the budget deficit, which would allow the government to spend and borrow more to stimulate growth in Southeast Asia’s biggest economy. Fiscal flexibility may be a good thing for Indonesia, Fitch Ratings saidThe nation sees a wider deficit as the right response amid a slowdown, according to Finance Minister Sri Mulyani IndrawatiIndonesia will ramp up its fiscal stimulus in the first quarter of next year to support growth amid a global slowdown, the economy minister saidThe government said the European Union’s tariffs on the Asian nation’s biodiesel shipments are “unacceptable” and all options to counter the policy are on the table, including retaliatory actionsBank Indonesia sees current-account deficit at 2.7%-2.8% of gross domestic product in 2019The central bank to hold more daily local NDF auctions from Jan. 2Thailand’s economy is expected to grow more than 3% next year and the government stands ready to issue more stimulus if necessary, Finance Minister Uttama Savanayana saidThe medium-term fiscal position remains strong and there’s scope for further stimulus steps, Deputy Prime Minister Somkid Jatusripitak saidS&P raised its ratings outlook on Thailand to positive from stable, citing political stability and expectations that growth will recover modestlyThe World Bank lowered Malaysia’s 2020 economic growth forecast to 4.5%, largely due to weaker-than-anticipated investment and export growth in the third quarter of this yearThe Philippine central bank kept its key interest rate unchanged for a second straight meeting at 4%. Bangko Sentral ng Pilipinas maintained forecasts for average inflation until 2021 as it kept the policy rate at 4%, Assistant Governor Iluminada Sicat saidBangko Sentral ng Pilipinas is considering to cut the key rate by 50 basis points in 2020, Governor Benjamin Diokno saidThe Philippines will no longer target economic growth as high as 8% by the time President Rodrigo Duterte steps down in 2022, according to his economic managersThe country’s trade deficit for October came in at $3.25 billion, less than estimate $3.6 billion, but wider than a revised $3 billion a month earlierTaiwan’s exports rose the most in more than a year as shipments to China recovered. Exports increased 3.3% in November from a year earlier, the fastest pace since October last year, shortly after the U.S. imposed tariffs on $200 billion of Chinese productsThe majority of foreign capital inflows recently have gone to equities, with smaller amounts in bonds and in cash, Taiwan central bank deputy governor Yen Tzung-ta saidEMEA:Turkey calls on U.S. not to do anything that could harm their bilateral ties, warning its NATO ally against sanctioning Turkey or recognizing mass killings of Armenians during dying years of Ottoman Empire a century ago as “genocide”The authorities have extended their campaign against perceived political enemies into the $750 billion financial industryTurkey’s parliament speaker Mustafa Sentop submits security and military cooperation deal with Libya to parliament for approval after the maritime boundary delimitation agreement has been activated in the past week, Hurriyet newspaper reportedSaudi Arabia is reviewing its plan for life after oil with Crown Prince Mohammed bin Salman said to be unsatisfied with progress and the government seeking to control spendingThe kingdom may tap international debt markets as early as next month as it seeks funding to help bridge its widening budget deficitSerbia was upgraded one level to BB+ by S&P Global RatingsFor many bond investors, it’s a matter of when, not if, Lebanon restructures its $87 billion of debt as it reels under a deepening financial crisis. Working out what the trigger would be or the extent of the fallout is another matter entirelyThe nation’s president ordered a week-long postponement in talks to pick a new premier, just one day before lawmakers were set to name a businessman to head the next cabinetMoody’s Investors Service said emergency measures by the central bank to address foreign-currency shortages forced three of the country’s top lenders into a “deposit default”The crisis with Qatar “continues,” a top United Arab Emirates official said after high-level Qatari participation at a Riyadh summit led to speculation that the regional rift could come to an endEgypt’s inflation accelerated for the first time in five months, reaching 3.6% in November as the effect of last year’s surge in prices faded but offering the central bank little reason to reverse a monetary easing cycleSouth African inflation slowed in November, getting closer to a nine-year low, as calls increase for the central bank to help support an economy at risk of a recessionManufacturing production contracted for the fifth consecutive month in October, the longest such streak since the global financial crisisEskom Holdings SOC Ltd., South Africa’s state-owned power utility seen by Goldman Sachs Group Inc. as the biggest threat to the country’s economy, implemented week-long rolling blackoutsWhile the power cuts are implemented to prevent a collapse of the electricity grid, they have a debilitating effect on the economy by curtailing mining activity and factory output and causing crippling traffic delaysPortfolio investment inflows rose to the highest level in more than a year in the third quarter after the country’s biggest Eurobond sale yetBank of Russia Governor Elvira Nabiullina hinted she may take a breather after delivering five consecutive interest rate cuts, potentially putting the brakes on a rally in Russian assets this yearUganda will spend as much as a fifth of government revenue on interest payments in this financial year and the IMF warned this could reduce expenditure on human capital and infrastructure projectsThe central bank held its benchmark rate at 9%, saying subdued inflation provides room to shield the economy from global headwinds and increasing domestic needs for private-sector financingGhana’s inflation rate rose to the highest level in four months in November as the cedi continued to weakenPoland’s government plans to place new restrictions on judges, ignoring concerns by the European Union and its own Supreme Court that it’s eroding the rule of lawRomania’s credit outlook was cut by S&P, which voiced skepticism at the new government’s efforts to tame a budget deficit that’s ballooning beyond EU limitsCzech inflation surprisingly accelerated to the fastest pace in seven years, which may rekindle the debate over rate increases when the central bank meets next weekLatin America:Brazil’s economic activity expanded at a modest pace for a third consecutive month in October, as policy makers signal more monetary easing may be on tap amid below-target inflationRetail sales rose for a sixth consecutive month in OctoberLower house of Congress approved the base text of a bill that facilitates the privatization of water and sewage treatment. The government sees the approval of the bill as crucial to attracting foreign investmentArgentina is willing but unable to pay its debt under current conditions and needs the economy to grow again before meeting its obligations, President Alberto Fernandez said in his first speech after being sworn inThe IMF is waiting for the details of the new Argentine government’s economic plans to review its $56 billion credit line, its chief spokesman saidArgentina, the world’s biggest seller of processed soybean meal and oil, raised export taxes on Saturday as the government seeks to fund spending under new presidentMexico’s Senate passed changes to a new NAFTA replacement free-trade deal with the U.S. and CanadaInflation slowed to slightly below the central bank’s target for the first time since 2016, bolstering economists’ expectations that policy makers will keep cutting interest rates this monthMexico objected to the congressional proposal to create as many as five U.S. labor attaches to monitor implementation of the free trade deal with the U.S. and CanadaChile’s lower house of Congress rejected a proposal to impeach President Sebastian Pinera over his handling of nearly two months of unrest that has left more than 20 dead and caused a slump in economic activityPeru’s central bank kept borrowing costs unchanged at the lowest level since 2010 as policy makers gauge the need for additional stimulus amid delays to public works spending and slowing global growthVenezuela President Nicolas Maduro said a court ordered the capture of members of an opposition group, including National Assembly leader Juan Guaido, for their role in an alleged conspiracy that Maduro claimed had been foiled\--With assistance from Colleen Goko, Selcuk Gokoluk and Paul Wallace.To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at yteso1@bloomberg.net;Netty Ismail in Dubai at nismail3@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.netTo contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Karl Lester M. YapFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
U.S. Retail Sales Miss Forecasts as Restaurants Decline
(Bloomberg) -- U.S. retail sales missed forecasts calling for an acceleration in November as clothing stores and restaurants posted declines, signaling the economy’s main engine may cool in the fourth quarter by more than previously thought.The value of overall sales climbed 0.2% after an upwardly revised 0.4% increase the prior month, Commerce Department figures showed Friday. The median estimate in a Bloomberg survey called for a 0.5% increase.Sales in the “control group” subset increased a below-forecast 0.1% following a 0.3% gain. The measure excludes food services, car dealers, building-materials stores and gasoline stations, providing a reading considered more reflective of underlying consumer demand.The data suggest a slowdown in business investment and weakness in manufacturing is weighing more broadly on Americans’ willingness to spend, which could mean a soft holiday-shopping season despite a relatively strong labor market, improved wage gains and record stock prices. At the same time, consumers likely still have enough wherewithal to support the expansion, and an easing of U.S.-China trade tensions should aid the economy in 2020.While the readings were slightly weaker than expected across a number of categories, “we’re not taking any strong signal from this report,” said Michael Gapen, chief U.S. economist at Barclays Plc.“We did expect private consumption to decelerate in the fourth quarter off its previous pace, so this is in line with what we were expecting in terms of direction,” he said. “Looking to 2020, labor markets seem to be holding up just fine and income growth is still quite solid.”Bloomberg News reported Thursday that President Donald Trump signed off on a phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on about $160 billion of consumer goods from the Asian nation, according to people familiar with the matter. U.S. stocks The S&P 500 Index fell amid conflicting signals from both sides on the extent and possible terms of any trade deal.Other early indications for the holiday shopping season were more optimistic, with BofA Global Research reporting retailers had the highest sales gains for the period up to Black Friday since 2013.Online RetailersOnline sales were a strong element of Friday’s report. Sales at nonstore retailers, which includes e-commerce, rose 0.8% from the prior month, the biggest gain since August. They’re up 11.5% from a year earlier, though that’s down from October’s increase.A Bloomberg survey this month showed growth in consumer spending was expected to ease to a 2.1% pace in the fourth quarter, from 2.9% in the prior three months. Control-group sales have increased a paltry annualized 1.3% over the latest three months, down from 3.4% in the three months through October.Even so, the weakness in consumer spending -- which accounts for two-thirds of the economy -- is likely not dire enough to spur the Federal Reserve to resume cutting interest rates.Fed Chairman Jerome Powell noted in a press conference this week that consumer confidence remains elevated and that spending is healthy, with policy makers expecting to hold interest rates steady through the end of 2020. Last week’s jobs report for November showed payroll gains topped all economist estimates.The retail sales report showed eight of 13 major categories increased, with solid gains in autos and electronics and appliance stores.Health CareAmong declines, sales at health and personal care stores dropped by the most in almost a year, while receipts at apparel and sporting goods and hobby stores also fell. Restaurants posted a 0.3% drop, also the largest in almost a year.Filling-station receipts increased 0.7%, the report showed. The retail figures aren’t adjusted for price changes, so sales could reflect changes in gasoline costs, sales, or both. Separate data on the consumer price index this week showed that gasoline prices rose 1.1% in the month, which could have boosted these figures.Excluding automobiles and gasoline, retail sales were little changed, following a 0.2% gain the previous month.The sales data don’t capture all household purchases and tend to be volatile from month to month. Personal-spending figures will offer a fuller picture of U.S. ion in data due Dec. 20.A separate Labor Department report Friday added to signs of muted inflation pressures in the economy. The U.S. import price index rose 0.2% in November from the prior month, matching forecasts, and fell 1.3% from a year earlier. Excluding petroleum, the index was also up 0.2% from the prior month.(Updates with comment from economist in fifth paragraph.)\--With assistance from Kristy Scheuble, Sarina Yoo and Reade Pickert.To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.netTo contact the editor responsible for this story: Scott Lanman at slanman@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Bank of Russia Hints at Pause After Five Straight Rate Cuts
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Bank of Russia Governor Elvira Nabiullina hinted she may take a breather after delivering five consecutive interest rate cuts, potentially putting the brakes on a rally in Russian assets this year.The likelihood of more cuts “remains roughly the same, but they might come later,” Nabiullina told journalists in Moscow after a rate decision on Friday. “The space for reductions is shrinking.”The bank lowered its benchmark interest rate by 25 basis points to 6.25%, according to a statement published on Friday, taking the total reduction this year to 150 basis points. Another rate cut is possible at the next meeting in February or later in the first half, but not guaranteed, Nabiullina said.The ruble, which has been the best-performing currency in emerging markets this year, pared an intra-day gain of as much as 1% after Nabiullina’s comments. Government bonds were flat, despite a wider rally in emerging markets on Friday.“It’s a reminder that things can go both ways as markets have become very focused on further easing,” said Liza Ermolenko, an economist at Barclays in London. “They are probably trying to manage expectations.”The rate cuts have so far failed to stoke inflation, which fell well below the bank’s 4% goal last month, while economic growth has also lagged behind the government’s goals. Nabiullina said Friday that the effect of easing will be spread out and the central bank needs time to evaluate the impact.What Our Economists Say:“A subtle change in the guidance leaves the door open for further easing but signals a greater chance of a pause before the next move. We still think another cut will come early next year, but that’s going to be data dependent.”\- Scott Johnson, Bloomberg EconomicsAnalysts at Goldman Sachs Group Inc. warned earlier this month that the central bank is underestimating the potential for price growth to slow dramatically and will come under pressure to revise down its 4% target. Disinflationary risks still exceed pro-inflationary risks over the short-term horizon, the central bank said in its statement Friday.A pickup in spending in 2020 on a six-year government infrastructure program may help boost inflation, but the project has so far faced delays due to caution from bureaucrats about releasing funds.Russian local-currency government bonds, known as OFZs, have attracted inflows of about $16 billion this year due in part to faster-than-expected easing. The ruble is still a top pick for investors going into 2020, according to a Bloomberg survey of 57 global money managers.Russia followed Brazil and Turkey in cutting rates this week as the Federal Reserve held off easing monetary policy further. Optimism about a U.S.-China trade deal has also created a rosier backdrop for emerging markets.The ruble “still looks OK from all major perspectives,” said Dmitry Polevoy, chief economist at the Russian Direct Investment Fund in Moscow. “We continue seeing value in OFZs even though one shouldn’t expect the similar performance as in 2019.\--With assistance from Zoya Shilova, Andrey Biryukov and Áine Quinn.To contact the reporters on this story: Andrey Biryukov in Moscow at abiryukov5@bloomberg.net;Anya Andrianova in Moscow at aandrianova@bloomberg.netTo contact the editors responsible for this story: Gregory L. White at gwhite64@bloomberg.net, Natasha DoffFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Investing.com
NewsBreak: Europe Stocks Surge on U.K. Poll. U.S. Trade, Fed Repo Plans
Investing.com -- European stocks surged in early trading on Friday on a combination of the U.K. election result, signs of an imminent trade deal between the U.S. and China, and the Federal Reserve's plans to prevent a repeat of the year-end volatility seen in 2018.
- Bloomberg
Pound’s World-Topping Rally Wobbles as Market Braces for Swings
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.The pound swung between gains and losses as British voters headed to the polls to decide between Conservatives hoping to deliver Brexit in January and a Labour Party promising a second referendum.Bets on overnight volatility in sterling surged to the highest in nearly three years and traders hedged the risk of a surprise in options markets. The currency has been the world’s best performer in recent months, on speculation a majority for Prime Minister Boris Johnson would allow him to get his Brexit deal through Parliament. The rally has held even as polls conducted ahead of voting suggested the race was narrowing.“Our base case is for the Tory Party to secure a comfortable, at least a 20-seat majority and the outcome should be sufficient to keep the pound supported over the long run,” wrote Credit Agricole SA strategists including Valentin Marinov in a research note. “If the Conservatives win fewer seats, there is a risk of a ‘sell-the-fact reaction’ that could see the pound a bit weaker in the immediate aftermath.”The pound traded down 0.4% at $1.3146 by 3:20 p.m. in London, after dipping to a low of $1.3116 during European Central Bank President Christine Lagarde’s press conference. It earlier touched the highest since March 27, and has still gained 6.5% against the dollar in the past three months. It slipped 0.3% to 84.63 pence per euro.The pound has been the market barometer of political risk since the June 2016 Brexit vote. After touching an almost three-year low in early September, it has recovered on expectations that Johnson’s gamble to call an election could result in a majority that would allow him move on to trade talks with the European Union.Polls in the U.K. will stay open until 10 p.m., with the first indication of voting due after that in an exit poll. The first results are set to begin filtering through between 11 p.m. and midnight.Pulling All-NighterTraders are preparing for a long day. Some of HSBC Holding Plc’s currency sales and trading team in London will work overnight, while Barclays Plc plans additional staffing in New York, London and Singapore, according to spokespeople at the banks.Investors have turned to the options market to hedge their positions. Bets that the pound will fall in the next week have surged to the highest level since the aftermath of the 2016 Brexit referendum.“There is plenty of scope for a surprise,” said Jeremy Stretch, head of Group-of-10 currency strategy at Canadian Imperial Bank of Commerce, citing the unknowns of the turnout, tactical voting and poor weather in the U.K.’s first December election since 1923. Stretch will return to the office to work through the night.Mark Dowding, a portfolio manager at BlueBay Asset Management in London, will be having a Christmas party with his team Thursday evening. He expects them all to be huddled around a television when the exit poll is released at 10 p.m., the so-called “witching hour” for currency markets between the end of New York’s day and the start of Asian trading.“We will be waiting until morning before deciding on any trades,” he said. “We are skeptical there will be sufficient liquidity to trade much on overnight news.”(Updates prices.)\--With assistance from Eddie van der Walt.To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.netTo contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Neil Chatterjee, William ShawFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
UPDATE 2-Second U.S. law firm files London forex class action
U.S law firm Hausfeld has filed a lawsuit in London against major banks over alleged foreign exchange (forex) rigging in a bid to take over a high-profile British class action from compatriot Scott & Scott. The new action, called FX Claim UK, seeks damages from Barclays, Citibank, RBS, JPMorgan , UBS and MUFG Bank over their role in forex spot trading cartels between 2007 and 2013 and was filed at London's Competition Appeal Tribunal (CAT) on Wednesday.
- Bloomberg
Barclays to Sell Automated Options Trading Business to GTS
(Bloomberg) -- Electronic market maker GTS agreed to buy Barclays Plc’s automated U.S. options trading division.About 40 Barclays employees will join GTS as part of the deal, according to a statement Wednesday. They include Kirill Gelman, who will continue to run a business that quotes prices for more than 735,000 securities and handles about 2% of exchange-listed U.S. equity options volume.Banks such as Barclays used to play a bigger role making markets on exchanges, but they’ve been muscled out by high-frequency trading firms including GTS, Citadel Securities and Virtu Financial Inc., whose focus on speed and efficiency gives them an edge. GTS, with help from a previous takeover of a Barclays division, is one of the largest traders on the New York Stock Exchange.“We looked at virtually every options business that had material size and a solid reputation, and decided this was the New York Yankees of options,” Ari Rubenstein, co-founder and chief executive officer of GTS, said in an interview. “The principals of this team have operated impeccably together for over a decade. It’s one of the few price-making businesses left at a bank that’s impressive.”Barclays generated 1.48 billion pounds ($1.95 billion) of revenue from equities trading in the first nine months of 2019, down 11% from a year earlier. The firm didn’t break out how much revenue comes from the Automated Volatility Trading unit.“Barclays did a really good job continuing to invest in this business,” Rubenstein said.A Barclays spokeswoman declined to comment. Bloomberg News reported in August that Barclays and GTS were negotiating a deal.The transaction adds equity options to the roster of assets GTS trades, a list that already included stocks, exchange-traded funds, Treasuries, futures and currencies.The New York-based firm bought Cantor Fitzgerald LP’s ETF unit earlier this year, bringing aboard industry legend Reggie Browne. In 2016 it picked up a Barclays division that now oversees NYSE floor trading for major companies including Exxon Mobil Corp., Alibaba Group Holding Ltd. and AT&T Inc.\--With assistance from Viren Vaghela, Stefania Spezzati and Michael J. Moore.To contact the reporter on this story: Nick Baker in Chicago at nbaker7@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Sam Mamudi, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
Small British banks want softer rules to help them compete
Britain's mid-tier banks have asked the Bank of England to ease rules introduced after the financial crisis that they say hamper their efforts to compete with bigger rivals that have a tight grip on the market. Four banking industry sources said these so-called "challengers" have stepped up lobbying in meetings with the central bank and finance ministry officials in recent months to ease requirements for holding special debt aimed at shielding taxpayers from bailing out troubled banks. Smaller banks have long-argued that rules are stacked in favour of the "big six" lenders - RBS, Lloyds, Barclays, HSBC, Santander and Nationwide.
- Bloomberg
Bank of Japan Expects Sizable Impact From Abe’s Economic Package
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Bank of Japan officials see a sizable impact from government stimulus announced last week, raising the likelihood that the bank will upgrade its economic forecasts for the first time in a year next month, according to people familiar with the matter.Japan Leans on Fiscal Stimulus to Keep Recession at BayThe possibility of higher growth projections would likely strengthen a building view among economists that the BOJ will stand pat on key policy measures at its meeting next week and for some time to come, barring unexpected developments in U.S.-China trade talks, markets or economic data.The BOJ doesn’t revise its growth projections until January, when it next issues quarterly forecasts.The package announced last week by Prime Minister Shinzo Abe includes 13.2 trillion yen ($121 billion) of fiscal measures to support an economy facing an export slowdown, typhoon damage and the fallout from a recent sales tax hike. While the economy grew in the first three quarters with the support of domestic demand, it is forecast to shrink 2.6% in the last three months of the year.Officials at the BOJ expect the government’s stimulus to boost growth from the next fiscal year starting in April, the people said. The central bank’s projections are likely to be largely in line with the government’s view, according to some of the people.The government said its fiscal measures will boost growth by 1.4 percentage point over time, but hasn’t made clear the specific impact for the next fiscal year.Economists have cast doubt on the government’s figure for boosting growth, but they largely agree that the package makes it easier for the BOJ to hold off on extra stimulus. Analysts at banks including Barclays Plc and JPMorgan Chase & Co. are telling clients they should no longer expect the BOJ to ease anytime next year.When the Abe administration introduced economic stimulus measures in 2016, the BOJ raised its growth forecast for the following fiscal year to 1.3% from 0.1%.(Adds more comments and details throughout.)To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net;Sumio Ito in Tokyo at sito58@bloomberg.netTo contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Jason Clenfield, Paul JacksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
Nightmare before Christmas? Traders dig in for long British election night
It's the time of year when London's bankers and traders wind down and prepare for holidays. Instead, many are cancelling leave and will work all night on Thursday as Britain votes in an unpredictable election that could convulse global markets. Major banks including Barclays and HSBC also plan to deploy extra staff through the night, not just in London but also on trading floors in New York, Hong Kong and Singapore, to make sure they're constantly on call for clients.
- Fool.co.uk
Have £1k to invest? I’d buy these 2 FTSE 100 stocks today instead of saving in a Cash ISA
I think these two FTSE 100 (INDEXFTSE:UKX) shares could offer superior returns than a Cash ISA.
- Reuters - UK Focus
Barclays head of corporate broking Kunal Gandhi has left -sources
Barclays head of corporate broking, Kunal Gandhi, has left the British bank, sources with direct knowledge of the matter said on Tuesday. Gandhi led the British bank's broking business, an advisory role unique to investment banking in the country which involves advising companies on strategy and acting as intermediaries between boards and shareholders. Gandhi ran some of the bank's relationships with top British blue-chip companies, including the London Stock Exchange , according to past Barclays internal memos.
- Reuters - UK Focus
Santander UK latest bank to cut CEO pension perks
Santander's UK chief executive Nathan Bostock will have his pension allowance cut from next year, as the bank becomes the latest to bow to investor pressure to rein in executive pension perks. Bostock's pension allowance - which was worth 588,000 pounds ($754,404.00) last year - will be reduced from 35% of his base pay to 22% in 2020 and to 9% in 2021, a source familiar with the matter said. Santander's move comes as rivals including HSBC and RBS have already cut executive pension perks this year to meet corporate governance guidelines, while others including Barclays and Lloyds have plans to do so.
- Fool.co.uk
This is how much £1,000 in Barclays shares 5 years ago would be worth today
Are a high-looking dividend yield and a low-looking valuation worth the risk with Barclays?
- Bloomberg
EM Review: Renewed Trade Deal Hopes Supported Risk Appetite
(Bloomberg) -- Emerging-market currencies and stocks rose last week for the first time in four as concerns about trade tensions eased, with President Donald Trump saying negotiations were “moving along well” and China working on waiving retaliatory tariffs. Optimism on a phase one deal overcame noise caused earlier in the week by Trump’s decision to reinstate tariffs on Argentina and Brazil steel and aluminum exports, alleging the two countries had intentionally cheapened their currencies.The following is a roundup of emerging-markets news and highlights for the week ending Dec. 7.Read here our emerging-market weekly preview, and listen here to our weekly podcastHighlights:With a flurry of trade threats across three continents in the span of 24 hours, President Donald Trump reminded financial markets that he’s heading into an election year using tariffs as his main source of international economic leverageTrump said “we’ll see,” on Dec. 15 tariffs, adding “something could happen but we’re not discussing that yet”The U.S. and China are said to be moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade dealWhite House economic adviser Larry Kudlow said the two countries are trying to agree on the amount of U.S. agriculture products China is willing to purchaseTrump suggested legislation he signed that expresses U.S. support for Hong Kong protesters complicates his efforts to reach a trade deal with ChinaChina avoided measures related to trade in its first retaliation against the Hong Kong bill, instead vowing to sanction some rights organizations and halt warship visits to the cityThe U.S. House of Representatives also overwhelmingly approved legislation that would impose sanctions on Chinese officials over human rights abuses against Muslim minorities, prompting Beijing to threaten possible reprisalsChinese state media said the government would soon publish a list of “unreliable entities” that could lead to sanctions against U.S. companiesChina’s exports unexpectedly fell in November, while imports reboundedU.S. trade with China extended its slide in October as goods imports from the nation fell to a fresh three-year low amid prolonged talksChina is in the process of waiving retaliatory tariffs on imports of U.S. pork and soy by domestic companiesTrump is reinstating tariffs on steel and aluminum from Argentina and Brazil, alleging the two countries had cheapened their currencies to the detriment of U.S. farmersBrazil’s economy minister said Trump is making “a terrible mistake” and President Jair Bolsonaro said he would talk to the U.S. leader as he has “an open channel” with himU.S. job gains roared back in November as unemployment matched a half-century low and wages topped estimatesSpeaker Nancy Pelosi set the House in motion toward a historic vote to impeach Trump on a rapid timetable that could bring the process to conclusion before the Christmas holidayIndia’s central bank unexpectedly kept its benchmark interest rate unchanged as headline inflation breached its medium-term target for the first time in more than a yearNorth Korea said it was preparing a choice of “Christmas” gifts for Trump, in the country’s latest effort to pressure the U.S. to offer more concessions in nuclear talks before the new yearTrump revived both his “Rocket Man” nickname for Kim Jong Un and the threat of military force against North Korea, in the latest sign of rising tensions ahead of Pyongyang’s year-end deadlineSaudi Aramco raised $25.6 billion through the sale of a 1.5% stake, valuing the world’s most profitable company at $1.7 trillion; it received total bids of $119 billion; trading of the shares in Riyadh, the capital, will start on Dec. 11After a day of debate in Vienna, OPEC agreed to deepen their output-cuts target by 500,000 barrels a day, a delegate said, formalizing the supply reductions the group has already been making for most of this yearUkraine sealed a preliminary $5.5 billion loan program with the International Monetary Fund, giving President Volodymyr Zelenskiy a boost before peace talks with RussiaSouth Africa’s economy contracted for a second quarter this year in the three months through September as farming, mining and factory output slumpedSouth Africa’s government will place the national airline under a local form of bankruptcy protection as a last-ditch measure to try and prevent its total collapseAsia:A pickup in China’s factory sentiment filtered across Asia in November, though there were few signs of a strong rebound yetThe nation injected liquidity into the financial system by offering medium-term loans to banksChina’s central bank governor sounded a cautious tone on the health of the global economy, while signaling that the nation’s monetary policy makers will continue to refrain from large-scale easing stepsChina is hurtling toward another record year of onshore bond defaultsHong Kong’s business outlook worsened further in November with the city mired in recession amid ongoing protests and a volatile macroeconomic pictureIndian Prime Minister Narendra Modi’s government is considering easing lending rules for shadow banks, according to people familiar with the matterIndia sees higher GDP growth for the second half after recent government measuresConsumer confidence in India dropped to its lowest since at least 2014, the year Modi came to powerThailand’s Prime Minister Prayuth Chan-Ocha said the nation has to think about expenditure in dollars to help weaken its currencyThe Bank of Thailand said measures taken so far to curb capital inflows are “baby steps” and policy makers have plenty of tools available to deploy to curb the currency’s strengthThere’s more chance of the baht weakening and non-residents are starting to short the currency, the Bank of Thailand’s Deputy Governor Mathee Supapongse saidIndonesia requested that a group of banks submit proposals for bonds denominated in U.S. dollars, and, or euros, according to people familiar with the matterIndonesia is preparing to spend about $40 billion to extend Jakarta’s metro networkPresident Joko Widodo has signed a regulation to order his ministers and officials to streamline business approval rulesStable prices, attractive return on Indonesian assets and the situation in the global economy will provide room for Bank Indonesia to ease monetary policy further, Senior Deputy Governor Destry Damayanti saidCentral bank has sounded a more cautious tone on interest rates, signaling that the 175 basis points of tightening seen last year may not be fully unwound in the current easing cyclePakistan’s debt rating outlook was changed to stable from negative by Moody’s Investors ServiceThe Philippine inflation of 1.3% in November is within the central bank’s forecast and “accords with outlook of a gradual pickup to target midpoint in 2020-21,” Governor Benjamin Diokno saidTaiwan’s foreign-exchange reserves increased to $474 billion in November from $472 billion in OctoberEMEA:South Africa’s current-account deficit narrowed less than forecast in the third quarter as outflows to foreign shareholders increasedZimbabwe’s domestic lenders are steering well clear of longer-dated treasury bills, reflecting mounting concern about rampant inflation in the southern African nationGhana will extend a levy on corporate earnings in selected sectors until 2024 as the West African nation struggles to meet revenue targetsGhanaian President Nana Akufo-Addo said he’ll seek re-election, as campaigning for next December’s vote gets underway in the West African nationNamibia’s central bank held its benchmark interest rate for a second time to maintain the currency’s peg to South Africa’s rand despite forecasts that the economy is set to shrink for a third straight yearNamibia’s foreign issuer rating was downgraded by Moody’s to Ba2, two levels below investment grade, from Ba1Nigeria’s long-term foreign debt rating was affirmed by Moody’s at B2, while its outlook is changed to negative from stableRomania’s central bank intervened in the foreign-exchange market to prop up the leu after concerns about the effect of a government spending spree on inflation and the budget pushed the currency to a record low last monthThe top Czech prosecutor renewed fraud charges against Prime Minister Andrej Babis, ordering further investigation and raising the prospect that the billionaire politician may be tried in courtPoland’s central bank extended its longest-ever pause in interest rates as scrutiny intensifies amid an unexpected economic-growth slowdown that’s paired with accelerating inflationTurkish inflation bounced back to double-digits in November, but didn’t heat up enough to block further monetary easingThe U.S. is looking at sanctioning Turkey over its purchase of Russian S-400 missile defense system, President Trump says during meeting in London with French President Emmanuel MacronTurkey’s central bank increased the number of monetary policy meetings it will hold in 2020 after criticism from President Recep Tayyip ErdoganLebanon’s central bank took emergency measures Wednesday in an attempt to ease the worst financial crisis the country has faced in decadesThe Russian government may skip all hard-currency debt borrowing next year for the first time since the 2015 crisis after the U.S. tightened sanctions in AugustGerman Chancellor Angela Merkel’s government expelled two Russian embassy staff in response to what it says is a lack of cooperation by Moscow in the investigation of a contract killing of a Georgian man in a Berlin city parkQatar said its emir has been invited by the Saudi monarch to attend this month’s summit of Gulf Arab nations in Riyadh, in what would be a major breakthrough in intensifying attempts to end a 30-month feudKuwait’s government will invest as much as $1 billion in the initial public offering of Saudi Aramco as the kingdom asks regional allies to bolster the record share sale, according to people familiar with the matterThe International Monetary Fund approved the immediate disbursement of $133.4 million for Ivory Coast after its sixth review of the country’s economic performance and extended its credit facility program by one yearLatin America:Brazil’s economy grew more than forecast in the third quarter as a broad-based expansion led by private investments and agriculture more than made up for a reduction in government spendingIndustrial production, however, missed estimates in OctoberBrazil will review GDP data for the third quarter to account for billions of dollars of exports that were under reported in a calculation errorLower house speaker Rodrigo Maia wants to put the tax reform bill to a vote in March next year, local media reportedHigher food costs fueled inflation in Brazil and Chile in November, representing a fresh challenge to monetary policy in both nationsChile’s government announced a $5.5 billion stimulus package as the economy contracted at the fastest pace since at least 1996Chile held its benchmark interest rate steady after the protests sent the currency to a record low, reviving inflation concernsEconomic activity plummeted 5.4% in October from the month before and retail sales slumped 12.1% year-on-yearMexico is offering an olive branch to U.S. Democrats after rejecting a demand they say is key to approving a new North American trade agreementThe U.S. House Democrats said a USMCA deal is within reach and urged Mexico to accept a compromise on labor-rights enforcementMexico is considering a U.S. proposal to remove protections for biologic drugs from the renegotiated Nafta trade dealArgentine President-elect Alberto Fernandez named Martin Guzman to become the country’s next Economy MinisterGuzman, a protege of Nobel Laureate Joseph Stiglitz at Columbia University, will oversee the nation’s attempts to get out of recession and renegotiate its debtFernandez said Miguel Pesce will lead the nation’s central bank, which has struggled to retain its credibility over the last two yearsJPMorgan pulled Argentine peso bonds due in 2021, 2023 and 2026 from its GBI-EM Global and Narrow seriesEcuador’s economic committee of the National Assembly voted 10-2 to approve the draft of a fast-track tax reform billNational Assembly changed electoral rules in time for the 2021 presidential and legislative elections\--With assistance from Colleen Goko, Selcuk Gokoluk, Yumi Teso, Philip Sanders and Paul Wallace.To contact Bloomberg News staff for this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net;Netty Ismail in Dubai at nismail3@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.netTo contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Cormac MullenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- The Guardian
‘I lost my £193,000 inheritance – with one wrong digit on my sort code’
‘I lost my £193,000 inheritance – with one wrong digit on my sort code’. Peter Teich sent his cash to another Barclays customer, but offered it him just £25 as a token gesture
- Fool.co.uk
ISA warning! FTSE 100 dividend stock Barclays could destroy your wealth in 2020
Is the Barclays share price too good to be true? Royston Wild says 'yes' as the UK economy will probably worsen in 2020.
- Yahoo Finance UK
What a hung parliament could mean for markets
Despite a lead for the Tories in the polls, investors and analysts are still worrying about the possibility of a hung parliament after the December election.
- Reuters - UK Focus
Big European banks face call to end funding for firms building coal-fired plants
Some of Europe's biggest banks are being challenged by environmental groups to sever all lending to utilities which they say are still developing new coal-fired power plants. The call comes as some 190 countries meet in Madrid to assess progress on the 2015 Paris Climate Agreement, which demands a virtual end to coal power by 2050. A United Nations report last year said almost all coal-fired power plants would need to close by the middle of this century to curb a rise in global temperatures to 1.5 degrees Celsius, in line with the level scientists say is needed to stave off the worst effects of climate change.
- Reuters - UK Focus
UPDATE 1-UK regulators call time on lengthy glitches in banking services
Regulators made proposals on Thursday to strengthen the ability of banks and payment firms in Britain to cope with major incidents and maintain key services with minimum interruption. The Bank of England and the Financial Conduct Authority have proposed that banks, insurers, investment firms, exchanges and financial market infrastructure (FMIs) firms like Visa that make payments possible, set "impact tolerances" for important services. Firms themselves would quantify the maximum level of disruption they would tolerate in terms of time, volume of business or number of customers affected.
- Bloomberg
India Central Bank Resists Rate Cut Pressure as Inflation Spikes
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.India’s central bank defied expectations for an interest rate cut, preferring to keep its arsenal dry in case growth in Asia’s third-largest economy struggles to recover strongly in coming months.The decision not to cut in the face of spiking consumer prices is likely to burnish the Reserve Bank of India’s inflation-fighting credentials, three years after it adopted a 4% medium-term target. The six-member Monetary Policy Committee headed by Governor Shaktikanta Das decided to wait and see how the five rate cuts already delivered this year pan out before it does more.The MPC unanimously voted to keep the repurchase rate at 5.15%, confounding both economists and markets. None of the 43 economists surveyed by Bloomberg predicted the move, with Das telling reporters after the rate decision that the pause was temporary.“The RBI is keeping some of its powder dry for later,” said Teresa John an economist with Nirmal Bang Institutional Equities Pvt. in Mumbai. “We believe space for rate cuts -- 40 to 50 basis points -- is likely to open up in the first half of the next fiscal year as growth is unlikely to be significantly above 6%.”The surprise move was prompted by a spike in inflation in October above the central bank’s 4% medium-term target, and follows less than a week after data showed growth slowing to a six-year low. The RBI, has lowered rates by a total 135 basis points. with cuts in each of its policy meetings this year until now, though banks haven’t passed on all of that easing to borrowers.“There is space available for further monetary policy action,” Das told reporters. “There is a need to maximize the impact of rate reductions,” he said adding that such actions could not be “mechanical.”Sovereign bonds and stocks declined, with the yield on the benchmark 10-year bonds rising 13 basis points to 6.60%. The rupee rose 0.1% to 71.4250 per dollar.While central banks around the world have been loosening monetary policy to offset a growth slowdown, the RBI seemed more worried that food prices are likely to remain sticky.“The RBI did indicate that it recognizes there is policy space to cut further, but policy makers appear to be keen to build inflation credibility amid higher prints,” Rahul Bajoria and Ashish Agrawal, analysts at Barclays Bank Plc. wrote in a note. “Despite cutting growth projections sharply, it has left the door open for future cuts as long as inflation comes down in line with its projections.”The RBI cut its full-year growth forecast for the fiscal year through March to 5% from 6.1%, while adding the inflation print in October was “much higher than expected.” The central bank raised its inflation forecast for the second-half of the fiscal year to 4.7%-5.1% from 3.5%-3.7% seen previously.Transmission WoesA crisis among shadow lenders and a build-up of bad loans at banks have curbed lending in the economy. The spread between the central bank’s key policy rate and the weighted average lending rate on outstanding loans from commercial banks is the highest in data going back to February 2012.Das said the central bank was aware of vulnerability among the top 50 shadow banks it was monitoring closely. It was trying to encourage banks to lend more to the crisis-ridden shadow banking sector, which has been a huge driver of domestic consumption by way of consumer loans in recent years.As such he indicated that monetary policy alone could not get the economy out of the slowdown and the government too needed to deploy counter-cyclical measures to boost activity.Prime Minister Narendra Modi’s government has announced a slew of measures, including $20 billion in tax breaks to companies. It’s also merged weak state-run banks with stronger ones in a bid to spur lending, eased foreign investment rules and set up a special real-estate fund to salvage stalled residential projects.What Bloomberg’s Economists SayThe Reserve Bank of India’s shock hold on interest rates suggests rising inflation is a bigger concern than slumping growth. If so, this raises the prospect of another hold at its February review. The failure to ease -- the consensus forecast was for a 25 basis point cut, while we expected a deeper reduction -- will delay a recovery in the economy.\-- Abhishek Gupta, India economistClick here to read the full reportDespite these measures a recovery looks uncertain. While Das said there were “green shoots,“ most high frequency indicators show that a rebound is some way off.The RBI’s decision “defies the expectation of the market and also the body language of the central bank over the last six months or so when they seemed amenable toward out-of-the-box thinking and being very proactive in terms of supporting growth,” said Taimur Baig, chief economist at DBS Bank in Singapore.\--With assistance from Tomoko Sato, Kartik Goyal and Ragini Saxena.To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.netTo contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Jeanette RodriguesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Japan Leans on Fiscal Stimulus to Keep Recession at Bay
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Japan’s Prime Minister Shinzo Abe announced stimulus measures to support growth in an economy contending with an export slump, natural disasters and the fallout from a recent sales tax increase.The total stimulus package amounts to around 26 trillion yen ($239 billion) spread over the coming years, with fiscal measures around half that figure, according to a government document released after a cabinet meeting Thursday evening. The stimulus will boost growth in the economy by about 1.4 percentage point, the document said.“We shouldn’t miss this chance, this is exactly when we should accelerate Abenomics and overcome our challenges,” Abe said, shortly before the cabinet meeting approving the measures. End of Line for BOJ Leaves Kuroda Talking Up Fiscal FirepowerThe extra spending comes amid a rising awareness around the world that more government help is needed to keep economies growing in the face of a global slowdown that is exposing the limits of relying on central banks to do the heavy lifting of economic management.“In any country, the positive impact of extra monetary stimulus is limited, which is especially true in Japan and Europe where rates have turned negative. You have no effective choice but to execute fiscal measures to support growth,” said Harumi Taguchi, Tokyo-based principal economist at IHS Markit.Earlier in the day, Abe described the stimulus as a three-pillared package designed to aid disaster relief, protect against downside economic risks and prepare the country for longer-term growth after the 2020 Tokyo Olympics.He said the stimulus would be funded by a supplementary budget for the current fiscal year ending in March, and special measures in the following year. The package outlines 4.3 trillion yen in funding for the measures in an extra budget this fiscal year.While the package was slightly larger than expected, the fresh spending measures of under 10 trillion yen left markets largely unimpressed. The officially released figures at the end of the day all matched the numbers contained in a draft seen by Bloomberg News earlier Thursday.Economists, meanwhile, cast doubt on whether the extra spending really packed the punch claimed in the draft. They said the government could have timed the tax increase better, but also asked if a perfect time for a tax hike exists.Bond Traders Shrug Off Japan’s $239 Billion Bid to Boost EconomyWith the package, Abe looks intent on minimizing the risk of a recession that would tarnish the record of his Abenomics growth program, while shoring up his own political support after recent scandals. To that end, an array of measures with a large price tag that can be paid for with the bare minimum of extra borrowing would fit the bill for a country with the developed world’s largest debt load.The package earmarks spending to improve the country’s resilience to extreme weather, to extend a rebate system for cashless payments and to put a tablet or device on every school child’s desk through the end of junior high school.“The size of the package is pretty big considering the official government assessment of the economy is that it remains on a recovery trend,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. “We’ve heard a lot about preventive interest rate cuts, but these are preventive fiscal measures.”Extra government spending gives the Bank of Japan welcome breathing space to keep its monetary easing policy on hold as fiscal policy takes the driving seat in propping up growth.Barclays Changes BOJ Call, Expects No Easing Through FY2021Ahead of the announcement of the plan, some economists had already switched their forecasts on the BOJ’s policy stance toward a holding pattern rather than additional action, taking into account the likelihood of the stimulus package and the central bank’s lack of extra ammunition.The BOJ has already piled up assets worth more than the size of Japan’s entire economy in its bid to support growth and inflation. But the mounting side effects of its easing program on the banking sector and a perceived lack of effectiveness of taking yet more action are keeping the bank on hold unless absolutely necessary.Japan’s economy kept growing in the first three quarters of 2019 despite an export slump exacerbated by the U.S.-China trade war, but it is forecast to shrink 2.7% in annualized terms this quarter. The sales tax hike and typhoon damage, combined with weak exports are the factors set to push the economy into reverse.The package aims to get Japan’s economy up and running again to avoid any further deterioration in global demand triggering a recession early next year.Punching PowerStill, economists were skeptical that the measures would boost growth by the 1.4 percentage point set out by the government.Based on rough calculations following the news, Masaki Kuwahara, senior economist at Nomura Securities Co., saw a boost of around 1 percentage point over time from the package. More specifically, he said the economy would get a 0.6 percentage point gain over the next two fiscal years.Takashi Shiono, economist at Credit Suisse Group AG, said the kick from the spending would be up to 0.2 percentage point in the coming year.“That’s probably smaller than the consensus view, but we think the budget for public spending can’t be spent so quickly because of labor shortages and already solid demand for construction companies,” Shiono said.What Bloomberg’s Economist Says“Japan’s fiscal stimulus package appears to be a marginally larger than expected, going by the size of the planned extra budget and actual spending in the draft reported by Bloomberg News. This is clearly positive for growth -- likely helping avert a recession -- but it won’t be sufficient to prevent a significant slowdown in 2020.”\--Yuki Masujima, economistClick here to read more.(Updates with official confirmation of figures, comment from Prime Minister Abe)\--With assistance from Emi Urabe and Emi Nobuhiro.To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net;Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net;Takashi Hirokawa in Tokyo at thirokawa@bloomberg.netTo contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Paul Jackson, Jason ClenfieldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Negative Rates Are Starting to Worry ECB Officials
(Bloomberg) -- Five weeks since Mario Draghi retired from running the European Central Bank, finding an outright fan of his legacy of negative interest rates has become a lot harder.Governing Council members, who collectively lowered the key rate to minus 0.5% shortly before Draghi’s term ended, are increasingly portraying it as a necessary evil that shouldn’t be compounded. Sparse communication on monetary matters by his successor as president, Christine Lagarde, hasn’t dispelled that impression.Banks have picked up on the mood change, dropping predictions that Lagarde -- under the guidance of Chief Economist Philip Lane, the intellectual standard-bearer who proposed the latest cut as part of a stimulus package -- would ease again at her first policy meeting on Dec. 12.It’s a striking development for an institution whose credibility hangs on the promise that it can always do more if needed to revive inflation, and whose policy guidance explicitly states that rates can still fall further. It suggests that a strategy review planned by the new chief will need a thoughtful scrutiny of the toolkit.“We don’t expect they’ll cut rates further,” said Sarah Hewin, chief economist for Americas and Europe at Standard Chartered Bank. “I’m not sure there is a consensus that negative rates are bad, but I’m wondering whether with this transition from Draghi to Lagarde -- a new broom at the helm -- there’s an opportunity to vocalize their concerns.”Don’t Be PassiveLane has defended negative rates as a complement to other measures that aim to spur economic activity. In one speech last month, he said they aren’t “super loose” -- citing the absence of a price surge as a demonstration of that. In another, he said the policy forces banks to chase higher investment returns.Aline Schuiling, an economist at ABN Amro Bank NV, reckons the weakness of the economy means the ECB will cut again, probably in March. There is “some recovery in growth, but not very spectacular,” she said.Yet the lack of a broad public defense for negative rates has let a chorus of criticism from bankers fill the void. Among them is Deutsche Bank AG President Karl von Rohr, who last month described them as “the biggest challenge facing the European financial industry.” Even the ECB’s own financial stability review flagged the risks of ultra-loose money.Two of the ECB’s prospective new board members took a similarly cautious view when quizzed by the European Parliament this week. Italy’s Fabio Panetta said officials need to be alert to the “unintended consequences of monetary policy.” His German colleague, Isabel Schnabel, said the institution should listen carefully to voters’ concerns on sub-zero rates.Ministerial MoaningSuch discontent is vocal in someeuro-zone countries, notably Germany and the Netherlands. Reflecting that, ECB officials are also privately encountering pushback from some finance ministers, according to people familiar with the matter.Bundesbank President Jens Weidmann and Dutch central bank Governor Klaas Knot, already skeptics of loose policy, look unlikely to back another rate cut unless the economy worsens significantly. So far, it seems to be stabilizing. At Draghi’s final meeting in October, one participant made a plea for “patience” to allow current easing to work.Bank of Spain Governor Pablo Hernandez de Cos said this week he couldn’t rule out that sub-zero policy could eventually harm monetary-policy transmission.Perhaps most striking is that Bank of Italy Governor Ignazio Visco, a long-time backer of monetary stimulus, has started criticizing the sub-zero policy, saying he prefers asset purchases.“The longer they remain negative and the lower they go, the higher is the likelihood of significant negative side effects,” the Italian told German newspaper Handelsblatt. “I’m not encouraging this.”One of the last banks holding out for a December rate cut, JPMorgan Chase, has thrown in the towel. Economist Greg Fuzesi said that “given the lack of any easing signal, and the time it often takes for the ECB to build consensus, it is becoming increasingly hard to see the ECB do more.” Barclays said this week that “the bar for more easing is high.”The chief worry is that policy is close to the so-called reversal rate, where the harmful effects outweigh the good. Lane’s denial that such a situation is near may be valid, but it’s also unsurprising that the chief economist wants to dispel any impression of monetary impotence.He and many of his colleagues, including Lagarde, do make the point that more government spending could speed up the path to normalization. Germany, the prime candidate to do that, isn’t rushing to respond though, and a newly created euro-area fiscal capacity is tiny.In short, central bankers are approaching their last meeting of the year with a heavy heart about one of their signature policy tools, even if there’s no immediate way out.Austrian Governor Robert Holzmann said in September that negative rates aren’t sustainable and will need to be reversed. That’s a relatively extreme view in the Governing Council -- but the open hand-wringing on the matter among his colleagues suggests he could one day have company.(Updates with Barclays forecast in 15th paragraph.)\--With assistance from Catherine Bosley.To contact the reporter on this story: Craig Stirling in Frankfurt at cstirling1@bloomberg.netTo contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Paul GordonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
HSBC, StanChart Help Keep Coal Industry Alive, Says Greenpeace
(Bloomberg) -- Four British banks have provided $31.8 billion of financing to coal companies in the past three years, even as they publicly moved away from doing business with some of the fossil-fuel industry, according to Greenpeace.The environmental group said Barclays Plc, HSBC Holdings Plc, Standard Chartered Plc and Royal Bank of Scotland Group Plc provided “life support” to companies with plans to build new coal plants, according to a report published Thursday.“The coal industry should be on its deathbed, but is being kept alive only by desperate and dirty funding from banks,” said Rosie Rogers, head of Greenpeace U.K.’s climate campaign.Greenpeace’s data tracked loans and underwriting of debt securities from the start of 2016 to Sept. 30 of this year. Since 2016, all four of the banks have said they’ve stopped lending to new coal-fired power plants. The banks have moved away from other hydrocarbon businesses: HSBC has said it won’t finance projects in Canada’s oil sands, for instance, and RBS has followed suit.When contacted by Bloomberg News for comment on Greenpeace’s data, all four banks’ press officers pointed to these policies and simultaneous efforts to finance renewable energy.Barclays, however, disputed some of Greenpeace’s methodology. The group’s data on coal lending would count a Barclays loan to a coal-producing conglomerate’s renewable division, for instance, even if the bank had no relationship financing coal production, according to a spokeswoman for the lender.Financial firms are under pressure from environmental groups to cut funding to businesses that emit large amounts of carbon dioxide, such as coal plants, and instead support climate-friendly projects. Another source of pressure is the rise of green investing, where funds have an explicit mandate to avoid buying stocks in companies perceived to fund dirtier industries.Greenpeace’s data was provided by Urgewald, a non-profit environmental and human rights organization, and BankTrack, a Dutch not-for-profit group that campaigns against the financing of projects it deems environmentally or socially harmful.To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.netTo contact the editors responsible for this story: Tim Quinson at tquinson@bloomberg.net, Keith Campbell, Marion DakersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
