February 1, 2018.
United States:
Deposit-Shunning Banks Get Big Break as U.S. Eases Leverage Rule
Bank of New York Mellon Corp. and State Street Corp. stand to benefit most as U.S. regulators rush to ease a key leverage rule, giving the custody-banking giants room to once again accept deposits they’ve shunned in recent years. The Federal Reserve and the Office of the Comptroller of the Currency may unveil a proposal as early as next week to ease the leverage ratio from the 5 percent minimum currently in place for the nation’s eighth largest banks, according to people with knowledge of the plan. BNY Mellon and State Street would see their minimum requirement drop to below 4 percent, giving the pair leeway to soak up billions of dollars in additional deposits, under draft terms described to Bloomberg.
Europe:
Europe Stocks Advance as Treasuries Lead Bond Drop: Markets Wrap
Stocks in Europe and Asia kicked off February with gains, as investors decided the outlook for growth and corporate earnings was strong enough to quell concerns about the recent jump up in bond yields. Treasuries resumed a slide and the dollar edged higher. Amid a flurry of company results the Stoxx Europe 600 Index headed for the first advance in four days, led by finance and technology shares. The MSCI Asia Pacific Index also rose, with a surge in Japanese stocks offsetting declines in China and India. Core government bonds across Europe fell, tracking 10-year Treasuries and after solid manufacturing data from the region. The pound increased a third day alongside the euro, though U.K. numbers disappointed.
Asia:
India Breaches Deficit Goals, Taxes Stock Investors to Woo Votes
India will miss its budget deficit targets as Prime Minister Narendra Modi looks to placate angry rural voters and create jobs before national elections next year. The government also ended a tax break on certain equity investments. The budget shortfall will be 3.5 percent in the year ending March 31, Finance Minister Arun Jaitley told lawmakers in New Delhi Thursday, wider than the previous 3.2 percent target. The government will aim for 3.3 percent next year rather than its earlier 3 percent goal. Most economists in a Bloomberg survey had predicted 3.5 percent and 3.2 percent, respectively. “We have taken up programs to direct the benefits of structural reforms and good growth to reach the farmers, poor and other vulnerable sections of the society and uplift the underdeveloped regions,” Jaitley said. “This year’s budget will consolidate these aims and particularly focus on strengthening agriculture and rural economy.”
