Tuesday, September 20, 2016

Today's Headlines

Posted by Gary .....at 3:15 PM
Bloomberg:
  • Yuan Funding Crunch Shows Risks in Reserve Currency Ranking. China’s desire to stabilize the yuan risks undermining its future as a global reserve currency.
    For the second time this year, the overnight cost to borrow the offshore currency in Hong Kong surged above 20 percent amid speculation the People’s Bank of China is mopping up liquidity to boost the exchange rate    . The volatility comes less than two weeks before the yuan’s inclusion in the International Monetary Fund’s Special Drawing Rights -- an event seen as a validation of President Xi Jinping’s efforts to promote its standing on the world stage. The PBOC said on Monday that the speculation wasn’t accurate.
  • Deutsche Bank’s Low Capital Makes It No. 1 for Risk, Hoenig Says. Deutsche Bank AG’s status as the riskiest among more than two dozen large banks is worsening, according to a measure of its leverage used by Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig, adding to woes for Germany’s biggest lender as it braces for a large settlement over mortgage securities. In a twice-yearly look at what’s known as the leverage ratio -- a lender’s capital measured against its assets -- Deutsche Bank drags behind the rest of the major global banks, according to data released Tuesday by Hoenig. A lower ratio means the bank has less of a cushion if a crisis arises. Deutsche Bank’s ratio of 2.68 percent as of June 30 is about half of the average for the eight biggest U.S.-based firms including JPMorgan Chase & Co. and Citigroup Inc. It also trails its ratio of 3.01 percent from last year.
  • Mexico’s Central Bank Tested by Traders as Peso Falls to Record. The Mexican peso posted the biggest loss among the most-traded currencies as it sank to a record, testing the central bank’s willingness to intervene. The peso weakened 0.7 percent as of 12:24 p.m. in New York and traded as low as 19.8723 per dollar Tuesday, missing out on the gains in most emerging-market currencies as policy makers in the U.S. and Japan entered their final stretch before announcing decisions on their benchmark rates. The currency has plunged 5.2 percent this month, more than twice as much as the second-biggest loser among 31 major currencies tracked by Bloomberg.
  • European Stocks Little Changed as Investors Focus on Fed Meeting. (video) European stocks were little changed as investors speculated on the direction of Federal Reserve monetary policy at its meeting this week. The Stoxx Europe 600 Index fell 0.1 percent to 341.01 at the close of trading, erasing earlier gains of as much as 0.4 percent. The Fed’s policy decision is in focus for indications of the health of the world’s biggest economy and the likely trajectory of interest rates. Economists and investors expect the central bank to keep borrowing costs unchanged. December is the earliest month with at least even odds of a hike.
  • Iran Committed to Building Oil-Market Consensus, OPEC Head Says. Iran is committed to building a consensus on stabilizing the oil market between OPEC and non-member countries, the group’s new Secretary-General Mohammed Barkindo said. Iranian Oil Minister Bijan Namdar Zanganeh and President Hassan Rouhani “assured me that Iran will do everything possible in joining hands with members within the OPEC group as well as outside OPEC," Barkindo said in a Bloomberg Television interview in Rome. "I am quite satisfied with the assurances" given during talks this month in Tehran, he said.
  • OPEC May Hold Formal Meeting in Algiers as Oil Glut Persists. OPEC may turn its planned informal meeting in Algiers next week into a formal session as it seeks ways with other producers to cut crude supplies by 1 million barrels a day to re-balance markets and stabilize prices, Algerian Energy Minister Noureddine Bouterfa said. OPEC will hold an informal meeting after the closing session of the International Energy Forum conference in Algiers on the afternoon of Sept. 28, Bouterfa said on public radio. Depending on discussions until then or even during the informal session, OPEC ministers, since all will be present, can transform the gathering into an extraordinary meeting, he said.
Wall Street Journal:
CNBC:

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