Former US Commodity Futures and Trading Commission chairman Gary Gensler, now a Senior Lecturer at MIT Sloan School of Management, described the underlying cryptocurrency cash market as "a mess" during a US House Committee on Agriculture hearing, noting that Congress needs to establish who should regulate it. "The [Securities and Exchange Commission] has securities, the CFTC has derivatives, I think you want to debate what to do with the underlying market," he said.
China's yuan dropped to its lowest value in more than a year on foreign exchange markets and the US dollar lost value against the currencies of major US trading partners. Both declines followed the broadcast of an interview on CNBC in which US President Donald Trump said the US is at a disadvantage because of its strong dollar and that the yuan was "dropping like a rock."
European credit is facing signs of increased bearish investor sentiment as the European Central Bank prepares to wind down a programme through which it has purchased $190 billion worth of corporate bonds in about two years. Fresh corporate debt has been less plentiful, spreads are expanding, and Societe Generale credit strategist Juan Valencia says, "The big issue for European credit investors is risk-reward -- there is too little upside and lots of downside."
A "material impact" to some eurozone lenders' capital and cash positions could result from sudden increases in interest rates, the International Monetary Fund said. The EU's Single Supervisory Mechanism should depend less on staffing from national central banks and supervisors in order to improve safeguards against another financial crisis, the IMF said.
The International Monetary Fund said the absence of a UK-EU free trade agreement under Brexit would hinder EU economic output by as much as 1.5% over five to 10 years. A more optimistic scenario that includes a free trade agreement would result in little economic harm to the EU, according to IMF economists.
Some central banks, including the Bank of England, will likely follow the example of the US Federal Reserve and increase interest rates in the coming months; Norway's central bank is projected to raise rates in September. The People's Bank of China is the main exception, being expected to ease policy in response to the trade tariffs imposed by US President Donald Trump.
A London judge has handed down prison terms totalling more than 13 years for two former French traders convicted of conspiring to manipulate Euribor. Christian Bittar, who pleaded guilty, was sentenced to more than five years in prison, while Philippe Moryoussef was sentenced in absentia to eight years in prison.
The European Union has warned that it would reciprocate if US President Donald Trump imposes tariffs on European car exports, saying that Trump administration measures threaten free trade globally. Trump said that car export tariffs would be a response to EU trade practices, following the $5 billion fine imposed by the EU competition authority on US conglomerate Google.
UK Prime Minister Theresa May is urging the EU to "evolve" its position on how to handle the border between the Republic of Ireland and Britain's Northern Ireland after Brexit. The EU proposal for dealing with customs issues at the Irish border after the UK pulls out of the EU "is something I will never accept, and I believe no British prime minister could ever accept," she says in the text of a speech she is scheduled to deliver today.
The European Commission said it has referred Slovenia and Spain to the EU Court of Justice over the countries' lagging compliance with the revised Markets in Financial Instruments Directive. Slovenia has not informed the European Commission of any efforts taken toward MiFID II compliance while Spain says it has reached only partial compliance.
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