Daily Agenda: Markets Remain Unsure of Fed Hike

Brazil’s Senate votes to press ahead with Rousseff impeachment trial; PBOC pledges to push international usage of the yuan.


As the U.S. presidential election race continues to rumble along with theatrics and inflammatory rhetoric, discussions of the nation’s underlying economy remain relatively muted. In early trading today, the U.S. dollar declined against all major currencies and Treasury futures rose as many market participants concluded that a September rate hike by the Federal Reserve was far from certain. Despite gains in the labor market, a supply glut driven decline in oil prices and increasing signals that the U.K.’s economy is coming under pressure, appears to have convinced at least some investors that the FOMC may not act this year. With second-quarter earnings season in its final stretch, many investors are left wondering how macro forces will impact markets as the summer winds down.

Brazil’s senate votes to advance presidential trial. In a vote of 59-to-21 Brazil’s senate voted early today to begin a trial of impeached President Dilma Rousseff. The ousted leader faces charges of improper accounting and other manipulations to mask budgetary shortfalls and declining growth. The trail is scheduled to begin on August 25 after the conclusion of the summer Olympic Games in Rio de Janeiro.

PBOC to promote yuan. In a statement posted online today, officials at the People’s Bank of China announced a new push to see the yuan used more actively internationally by improving coordination abroad. Few details were provided, but references to improved trade infrastructure and financing indicate a significant overhaul may be in the works.

Valeant to shed assets to cover debt. Embattled pharmaceutical company Valeant Pharmaceuticals International Inc. announced second-quarter earnings yesterday that were lower than consensus analyst estimates at $1.40 per share. Company management targeted $8 billion in sales of assets in an effort to streamline the balance sheet. It was also announced that the company will be reorganized into three segments.

Texas confirms its first Zika death. Public health officials in Texas confirmed yesterday the first death caused by the mosquito-borne Zika virus within the state’s borders. The victim, a newborn, died of complications from birth defects caused by the virus. Texas has had a total of 97 confirmed cases. The news comes on the same day that Florida confirmed four new cases of infection.

Bookmaker rejects buyout bid. William Hill, a U.K. gambling firm that handles odds on sport as well as geopolitical events, yesterday rejected an offer of more than $4 billion by a group led by 888 Holdings. In rejecting the offer, company management cited debt with which the new entity would be saddled as a result of leverage underlying the proposed deal. The gaming industry in the U.K. has seen significant consolidation in recent years.