“The fall in custody holdings is a clear signal that foreign central banks – which have a lot of Treasury holdings – have been selling them to source dollars,” Subadra Rajappa, head of rates at Societe Generale told Bloomberg. “They need access to dollars as a lot of their payments are in dollars and that has driven them to sell Treasuries.”
The ongoing liquidation in foreign Treasury holdings – largely the result of the continued collapse in the price of oil as oil-exporters are forced to liquidate assets to obtain much needed dollars – led to the Fed’s panicked scramble to announce a foreign central bank repo facility, which it did on Tuesday morning, when it stopped short of saying it wanted to prevent a cascading domino effect from the Treasury liquidation, but made it very clear that the program will provide “an alternative temporary source of U.S. dollars other than sales of securities in the open market.“
Translation: stop selling Treasurys as the world’s (formerly?) most liquid market is now suddenly extremely illiquid, and ongoing sales will only further destabilize it.
Two of Europe’s largest banks tumbled on Wednesday, dragging down the broader Eurostoxx Bank Index, after they joined the rest of their peers in suspending shareholder payouts.
HSBC plunged in Hong Kong trading after scrapping its dividend and warning revenue and loan losses will be impacted in the first quarter from the coronavirus outbreak. The bank’s shares dropped over 7% bringing this year’s decline to 33%. Meanwhile, Standard Chartered tumbled 5.2% after it too announced a suspension of dividends and a buyback plan.
Comment by tonytran2015: Old news that will reappear in multitude after the coronavirus triggered recession.
- People can end up being bankrupted over debts as small as $5,000
- Consumer advocates are alarmed by the number of clients with small debts taken to court by Lion Finance
- Last financial year Lion Finance filed 512 bankruptcy cases, just shy of the 543 filed by the ATO
Renowned geopolitical and financial cycle expert Charles Nenner told his clients back in January 2020, “It was time to sell . . . . I am afraid they can lose 40% to the downside.”
Well, we are more than halfway there, and Nenner warns it’s going to go lower – much lower. Nenner says,
I think people have finally stopped laughing about Nenner’s 5,000 DOW call.
The bankers created mortgage loans in Swiss francs to be reimbursed in Polish zloty claiming that the currency was very stable and it was, therefore, a good deal. When the Swiss franc peg broke on January 15, 2015, mortgages throughout Europe were sent into turmoil for the bankers had been selling their mortgages linked to the Swiss franc.
The Reserve Bank of India (RBI) said it wanted to “quickly restore depositors’ confidence” in the bank.
Depositors with Yes Bank can now only withdraw the equivalent of about $630 (£486) during a one-month moratorium.
During this time, the RBI will work on a rescue plan for India’s fifth biggest private bank.
Yes Bank has an estimated $28bn in deposits but had been seeking new capital to bolster its finances before it was seized by the central
- Banks are now automatically
transferring vulnerable customers to low-fee and fee-free accounts. They
do not make people aware when they are stuck in a dud home loan, but
banks deserve credit for killing off unsolicited overdraft offers,
charging dishonour fees on basic accounts and simplifying the products
fund trustees and directors who do not act in the best interests of
members now face civil penalties. They are also banned from wining and
dining employers to shift their employees’ accounts;
- Legislation is coming to outlaw unfair contract terms in insurance and provide more transparency for customers;
- About $1.5 billion in remediation has already been returned to customers, and the total is expected to hit $10 billion.
- The Reserve Bank has slashed interest rates from 0.75 per cent to a fresh record low of 0.5 per cent
- The RBA has now cut interest rates four times within the past year
- Coronavirus could wipe anywhere from 0.3 to 7.9 per cent from Australian GDP depending on the outbreak’s severity, analysts warn
What is behind the sudden surge in Treasury yields?
Several factors are pushing yields higher: The U.S. economy is growing above trend, capacity utilization is high, and the intensifying trade conflict with China suggests disruption in some supply chains, which leads to higher prices. The Federal Reserve is selling $50 billion of Treasuries per month, and the U.S. Treasury must issue $1.3 trillion of paper over the next 12 months. All these factors are pushing yields up