The US economy is suffering from "persistent trade tensions and slower global growth," according to the Federal Reserve's Beige Book. The economy continued expanding modestly in September and into October, but many companies are downgrading outlooks for growth, the survey finds.
US retail sales declined 0.3% in September, the first decrease in seven months, leading to concerns that weakness in manufacturing is spreading to other parts of the economy. Households reduced spending on building materials, hobbies, online purchases and vehicles, the Commerce Department says.
The Bank of Canada has been researching the possibility of issuing its own digital currency that would offer "all the convenience and security of wireless, electronic payments." A presentation to Bank of Canada governor Stephen Poloz and its board of directors noted that the central bank needs "to innovate to stay in the game."
About 40% of corporate debt in major economies could be at risk if an economic downturn occurs, the International Monetary Fund says. "The search for yield in a prolonged low-interest-rate environment has led to stretched valuations in risky asset markets around the globe, raising the possibility of sharp, sudden adjustments in financial conditions," the IMF says.
UK Prime Minister Boris Johnson and European Commission President Jean-Claude Juncker say negotiators have reached agreement on a Brexit deal. However, Northern Ireland's Democratic Unionist Party, the support of which is key to the UK's plan to exit the EU, says it cannot accept the terms of the proposal because of concerns about customs arrangements, consent and a lack of clarity on value-added tax. Party leaders say they will continue working with the UK government toward a viable deal.
Best-execution reporting requirements under the EU's revised Markets in Financial Instruments Directive aren't delivering intended benefits because different formats make analysis and comparison difficult, executives say. Regulators must put forth a standard template to allow better comparison of reports, says Alex Wolcough of Appsbroker Fintech.
Dublin has taken almost a third of the firms relocating from London because of Brexit, according to a report by think tank New Financial. Dublin has gained the most firms at 115, followed by Luxembourg with 71, Paris with 69, Frankfurt with 45 and Amsterdam with 40.
Money market funds are reluctant to sell the Federal Reserve their Treasury bills to help fund the repo market because they would have to replace them with lower-yielding instruments.
If Brexit occurs without a transition agreement, UK financial-services firms could end up in regulatory limbo as EU regulation ceases but the UK hasn't enacted legislation to fill the void. The UK government is working on legislation to provide a partial fix, but it is unclear whether the move will succeed because Prime Minister Boris Johnson doesn't have a working majority in Parliament.
The Bank of England says Libor's continued use poses a financial stability risk and is considering introducing policy tools in Q4 to accelerate the transition. The BoE says the tools "could be deployed by authorities to reduce the stock of legacy Libor contracts to an irreducible minimum ahead of end-2021."
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