Markets under pressure as ‘Trump bump’ falters

Global markets recede as the so-called ‘Trump bump’ runs out of steam Despite share prices climbing sharply on the back of last November’s surprise election victory by Donald Trump, the fabled ‘Trump bump’ appears to be running out of steam as Wall Street signals its disapproval over the president’s failure to secure support for his most prominent pre-election pledge. Trump’s disappointment over his inability to pass the repeal of Obamacare through Congress was mirrored by tumbling US shares, as the market wobbled over the prospect of the administration’s power to deliver on a raft of growth-boosting measures, including a comprehensive package of tax cuts. Read more…

Oil prices soar as Opec deal nears agreement

Opec agrees deal to cut supplies in Vienna talksOil cartel Opec has agreed to cut supplies, causing crude prices to soar to the $50-a-barrel mark. Opec pumps around a third of the world’s oil, which makes the commitment to cut production by around 4% – the equivalent of 1.2m barrels a day – made headline news on the markets. Cartel members have been allowing output to rise over the last two years in a bid to damage the profits of US shale and other high-cost producers. Immediately after the news, the S&P 500’s oil and gas exploration and production index — mostly comprising US shale companies — rocketed 10.8 per, with almost all US energy companies benefiting from the outward ripples. Read more…

Federal Open Market Committee holds interest rates steady

US interest rates remain on hold as the Fed looks for more certainty before signalling a hikeUS interest rates on hold as the Fed looks for certainty

The Federal Open Market Committee (FOMC) made the decision to hold US interest rates steady in July. Market analysts had predicted the hold as the continued threat of economic uncertainty coupled with the upcoming presidential election prevented the Federal Reserve from the announcing a rate hike in the short term. It’s the fifth time the Fed has stuck to its guns since nudging the rate up last December for the first time in nearly a decade. Many believe that it could be the end of the year before a further change is contemplated. Read more…

Will London lose its ranking as the world’s financial capital post-Brexit?

London is the financial capital of the UK but will it maintain its appeal after Brexit?The race is on to be the new London

June’s surprising referendum result has put the UK on track to leave the European Union, at the same time sparking speculation that its capital city will experience a mass exodus as overseas-owned banks seek to secure their trading position within Europe. Some organisations already have a foothold in mainland Europe and may be prepared to adopt a ‘wait and see’ approach before jumping ship. But if London does lose its passporting arrangements, which European cities are in line to seize its banking crown? Read more…

Former Barclays bankers jailed for Libor fraud

Former Barclays traders handed lengthy jail terms for Libor riggingManipulating benchmark rates for gain

Four former Barclays bankers have been handed down jail time following a three-month trial at Southwark Crown Court in London, England. The charges related to conspiring to fraudulently rig global benchmark interest rates between 2005 and 2007 and the convictions represent a victory for the Serious Fraud Office (SFO), which has been pursuing investigations into the Libor scandal for some years but has achieved just one other successful prosecution against six acquittals. Two more Libor-fixing cases by other former Barclays bankers are still under investigation. Read more…

Are US interest rates set to rise again?

The Federal Reserve looks set to hike US interest rates in the coming monthsThe Federal Reserve looks set to hike US interest rates in the coming months

It seems increasingly likely that the Federal Reserve will impose further interest rate hikes this year, six months after it increased rates for the first time in almost ten years. At the Fed’s review in April, members voted strongly to keep interest rates unchanged, pointing to fears over the sluggish growth of US economy in Q1, Britain’s potential exit from the EU and uncertainty over China. Four hikes were forecast for 2016, but it’s a figure that’s been revised down to two in the light of flat economic conditions globally. Read more…

Are we heading towards a cashless economy?

Cashless could be on the cards as banks weigh up the pros and consCould cash become obsolete?

We’ve all become more wedded to plastic as advancements in technology allow us to pay for everything from a breakfast muffin to a wide-screen TV with a credit card. But the idea of a cashless economy seems unthinkable. Central banks are evaluating the situation, though, to enable them to exert more control over economic recovery measures. It’s no good establishing QE and negative interest rates to stimulate the economy if people hoard cash instead. Read more…

What’s a Brexit and what would it mean for the US?

How does speculation over Britain’s potential exit from the EU affect the US?British exit from EU could affect US markets

Brexit is a term that may well be unfamiliar to many Americans, although there could be repercussions down the line, should the UK vote to leave the EU in the June referendum. Britain’s prime minister David Cameron has been trying to renegotiate key agreements with the EU to improve its position within the union. But with US interests closely connected to those of the UK and the outcome of the vote far from certain, it’s worth paying attention to proceedings. Read more…

Negative interest rates deployed by Bank of Japan

Negative interest ratesBank of Japan introduces negative interest rates to boost economy

In a bid to shake the economy out of its stalemate, the Bank of Japan has introduced negative interest rates. In theory, the 0.1% rate should encourage lending and begin to turn the tide of deflation. In practice, because banks and other lenders will, in effect, be charged for hoarding deposits, they ought to be more inclined to lend to businesses and consumers and, in turn, promote spending and business investment. It’s the latest in a raft of initiatives designed to boost commercial confidence and support Japan’s plans to move inflation towards its 2% target. Read more…