Daily Agenda: Carney Struggles to Instill Confidence
Barclays traders convicted of rigging Libor; Swiss tax authorities ask UBS for client data; attacks hit Saudi Arabia; Foxconn going public.
Bank of England governor Mark Carney used a press conference following the release of the bank’s biannual Financial Stability Report as a venue to again assure markets that he was committed to softening the impact of a U.K. departure from the European Union through aggressive policy measures. The announcement today that the Financial Policy Committee would lower capital requirements for banks came as a first step. With increasing political uncertainty overshadowing the U.K.’s economic future, Carney’s role as a voice of calm has become central to market narratives. With tumbling sentiment indicators and news that Standard Life Investments was forced to suspend redemptions from its commercial real-estate fund after massive withdrawals, Carney clearly faces massive challenges in his attempts to instill confidence. The pound sterling slid lower in trading early Tuesday as yields implied by futures markets for U.S. ten-year Treasuries set a fresh all-time low.
Switzerland demands more information from UBS. The Federal Tax Administration of Switzerland requested more client data from UBS on Tuesday in an ongoing probe spurred by requests from French authorities. The French inquiry follows one by German authorities as European Union governments seek to crack down on tax avoidance.
Barclays traders convicted. Yesterday a jury convicted three former Barclays employees of rigging the London interbank offered rate, or Libor, at a trial in Southwark Crown Court in London. Two other defendants were found not guilty. The convictions related to rate fixing spanning from 2005 to 2007.
Saudi Arabia target of terror attacks. Explosions in Medina, Qatif and Jeddah yesterday left at least four people dead in attacks. No terrorist organization has yet claimed responsibility for the strikes. The attacks come on the eve of Eid al-Fitr, the holiday that marks the end of Ramadan.
Hon Hai to take Foxconn public. Today Hon Hai Precision Industry filed for an initial public offering of its Foxconn Interconnect Technology division in Hong Kong in a float that could raise as much as $1 billion. The Taiwanese hardware manufacturer is poised to profit from increased demand for high-speed connectivity as cloud-based data becomes more prevalent.
RBA keeps rates in place. Policymakers at the Reserve Bank of Australia kept policy rates on hold at 1.75 percent as had been widely anticipated. The Aussie slid against major currencies in response as traders continue to discount the likelihood of a rate hike due to persistent deflationary pressure.