Investors abandoned $1.8 billion in credit-default insurance on European high-yield bonds last week, according to Barclays. That represents the most bullish and the riskiest position taken in a year.
UK inflation outstripped the Bank of England's target in May when it reached 2.1%. However, a poll of economists shows little expectation the BoE will act unless inflation surpasses 3% for a sustained period.
BlackRock has agreed to purchase Baringa Partners' technology for modelling climate risk, which will be incorporated into BlackRock's Aladdin risk-management operation. Financial-services companies and government agencies use the technology to manage the shift to reduced carbon emissions.
The UK Financial Conduct Authority has published a paper outlining benefits of dark pools, while the EU has made clear it wants trading moved to lit venues. Market participants see the FCA's forthcoming wholesale market review as a definitive marker, with consultant Charlotte Decuyper saying, "It will reveal the future regulatory direction for financial services, in particular regarding the market data and transparency regimes post-Brexit."
A survey from ACA Group shows 97% of firms report trades and transactions incorrectly under the EU Markets in Financial Instruments Regulation, with researchers finding widespread misunderstanding of MiFIR objectives and requirements. However, 87% of respondents are confident their reports are submitted correctly.
China has introduced rules aimed at improving standardisation and transparency of commodity price indices. The rules require that index providers be independent of stakeholders in markets covered and that information used to prepare indices be disclosed.
JPMorgan Chase has agreed to acquire UK online wealth-management platform Nutmeg Saving and Investment, as the bank moves toward a presence in UK retail banking and investment. The deal gives Nutmeg a valuation of about £700 million, sources say.
Global banks are signing more credit support annex agreements with their Chinese counterparties in anticipation of a surge of derivatives market growth if China agrees to full recognition of close-out netting. "When and if close-out netting is recognised, business development will pick up significantly faster with CSAs already in place," says Charles Feng, Standard Chartered's head of macro trading for Greater China and north Asia.
Trading of derivatives linked to SONIA on ICE Futures Europe surged to record levels on Thursday. UK authorities had asked firms to switch to the Libor replacement rate on that date as part of its "SONIA First" initiative.
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