BCS - Barclays PLC

NYSE - Nasdaq Real Time Price. Currency in USD
7.55
+0.11 (+1.48%)
As of 3:20PM EDT. Market open.
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Previous Close7.44
Open7.53
Bid7.55 x 21500
Ask7.56 x 28000
Day's Range7.51 - 7.56
52 Week Range7.07 - 10.48
Volume986,309
Avg. Volume2,649,275
Market Cap33.473B
Beta (3Y Monthly)0.90
PE Ratio (TTM)67.41
EPS (TTM)0.11
Earnings DateN/A
Forward Dividend & Yield0.26 (3.52%)
Ex-Dividend Date2018-08-09
1y Target Est7.65
Trade prices are not sourced from all markets
  • Business Wire6 hours ago

    Barclays and Annaly Launch New Research Study, Government-Sponsored Enterprise (GSE) Reform: Unfinished Business

    Barclays, in partnership with Annaly Capital Management, Inc. (NLY) (Annaly), today released a new joint-study, entitled GSE Reform: Unfinished Business, which lays out steps that policymakers might take to reform the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). The study is co-authored by Ajay Rajadhyaksha, Head of Macro Research at Barclays, V.S. Srinivasan, Managing Director in Annaly’s Agency and Residential Credit Group, and Andreas Strzodka, Director of Macro Strategy at Annaly.

  • Moody'syesterday

    Small Business Origination Loan Trust 2019-2 DAC -- Moody's assigns provisional ratings to four classes of SME Notes to be issued by Small Business Origination Loan Trust 2019-2 DAC

    Rating Action: Moody's assigns provisional ratings to four classes of SME Notes to be issued by Small Business Origination Loan Trust 2019-2 DAC. Global Credit Research- 25 Jun 2019. GBP million of securities ...

  • Moody's2 days ago

    ID H&FA - Sgl. Fam. Mtg. Bds - 2019 Indenture -- Moody's assigns Aa1 to Idaho Housing & Finance Association Single Family Mortgage Bonds 2019 Series B-1 and Aa1/VMIG 1 to 2019 Series B-2; outlook stable

    Moody's Investors Service has assigned Aa1 rating to the proposed $1.665 million of Idaho Housing and Finance Association (IHFA), Single Family Mortgage Bonds, 2019 Series B-1 (Fixed Rate) (Federally Taxable) and Aa1/VMIG 1 to $11.035 million of 2019 Series B-2 (Variable Rate) (Federally Taxable) (collectively, the "Bonds"). The Bonds will be issued under the anticipated new General Indenture of Trust, dated as of July 1, 2019 (the "2019 General Indenture").

  • Trump Rattles Emerging Markets With Threat of China Tariffs
    Bloomberg2 days ago

    Trump Rattles Emerging Markets With Threat of China Tariffs

    (Bloomberg) -- Emerging-market currencies had their best weekly gain since July 2017 lat week and stocks strengthened for a fourth consecutive week as major central banks adopted a more dovish stance, improving investors appetite for risk assets. Bonds also gained, with yields on local government notes nearing an all-time low as the drumbeat for an interest rate cut in the U.S. got louder.Read here, our emerging-market week ahead story.Listen to the emerging-market weekly podcast, here.The following is a roundup of emerging-markets news and highlights for the week ending June 23.Highlights:The Federal Reserve signaled it was ready to lower rates for the first time since 2008, citing “uncertainties” that have increased the case for a cut as officials seek to prolong the near-record U.S. economic expansionThe decision was not unanimous, with St. Louis Fed President James Bullard seeking a quarter-point rate cutMinneapolis Fed President Neel Kashkari said he had advocated for a 50 basis points rate cut at the last meetingMario Draghi nudged the European Central Bank closer to pumping more monetary stimulus into the economyU.S. President Donald Trump accused the euro area and China of weakening their currencies to gain an economic advantage, calling out European Central Bank President Draghi for a willingness to inject monetary stimulus if neededThe U.S. and China said their presidents will meet in Japan later this month to relaunch trade talks after a month-long stalemate, triggering a rally in financial markets. Trump said Tuesday that he had a “very good” phone conversation with Chinese counterpart Xi JinpingA group of chief executive officers of American corporations are set to meet with Chinese Premier Li Keqiang as the simmering trade war ensnares companies from both countriesChina cut its U.S. Treasury holdings to the lowest in almost two years as the months-long trade conflict dragged on between the world’s two largest economiesChina’s Xi told Kim Jong Un that the world wanted him to make progress in nuclear talks with the U.S., drawing a complaint from the North Korean leader that he had already attempted to compromise with little successSecretary of State Michael Pompeo said the U.S. and North Korea were in a “better place” after the leaders of the two countries exchanged lettersTurkey will retaliate against any U.S. sanctions imposed after it takes delivery of a missile-defense system from Russia, President Recep Tayyip Erdogan saidThe Trump administration is weighing three sanctions packages to punish Turkey over its purchase of the Russian S-400 missile-defense system, according to people familiar with the matterErdogan also slammed the Turkish central bank’s high borrowing costs and said they must come down, a statement sure to worry investors concerned about the bank’s autonomy Iran said it shot down a U.S. drone near the entrance to the Persian Gulf, escalating tensions in a region that’s been on the brink of a military confrontation for weeksTrump on June 22 said the U.S. will impose major new sanctions on Iran on MondayHe called off retaliatory strikes on three Iranian sites following the downing of the U.S. Navy drone because the action would not have been “proportionate”Trump downplayed the attack, suggesting a “loose and stupid” individual may have been responsible for the strike Iran will exceed an agreed cap on its inventories of low-grade uranium on June 27, potentially breaching for the first time a landmark 2015 agreement that was meant to prevent it from developing a nuclear bomb Lebanon’s Eurobonds have entered distressed territory as a budget delay and rising political tension in the region complicate efforts to tackle the nation’s fiscal crisisExchange-traded funds that invest in emerging markets suffered a seventh week of outflows, led by Asian assetsGold prices surpassed $1,400 an ounce for the first time since September 2013 on Friday, buoyed by dovish central banks Asia:China will maintain its long-standing commitment to reform and opening up of the economy in order to continue to expand, Premier Li saidThe People’s Bank of China and the main securities regulator called on big banks and brokerages to increase financing support for leading securities firms at a meeting on Tuesday, according to people familiar with the matterHuawei Technologies Co. is preparing for a 40% to 60% drop in international smartphone shipments as the Trump administration’s blacklisting hammers one of the Chinese tech giant’s most important businessesChina will likely increase the quota for new municipal bond issuance this year, and government debt levels will continue to rise, according to Zhao Quanhou, a researcher at Chinese Academy of Fiscal Science, which is under the Ministry of Finance.New home-price growth quickened last month after government measures to spur demand in smaller cities took effectMinutes of the Bank of Korea’s May 31 meeting showed there were at least two dissenting voicesThe escalating U.S.-China trade dispute and concerns over global economic slowdown have increased volatility in South Korea’s financial markets and somewhat weakened companies’ financial soundness, the Bank of Korea said in a semi-annual Financial Stability Report submitted to parliamentExports are showing no sign of recovery as a downturn in the global technology cycle and the U.S.-China trade war drag onBank Indonesia left its key rate unchanged while it cut reserve ratio requirements for lenders. Governor Perry Warjiyo said on Thursday that policy makers will cut rates, but it’s considering “the timing and the magnitude” The government plans to boost investment and improve balance of payment resilience to boost economic growth, according to Finance Minister Sri Mulyani IndrawatiIndia’s flagging growth prospects and subdued inflation give room for decisive action through easing of both monetary and fiscal policies, minutes of the latest meeting of monetary policy makers showedThe end of political uncertainty associated with elections and continuation of economic reforms will lead to a reversal of the current weaknesses in some economic indicators, Reserve Bank of India Governor Shaktikanta Das saidThe Bank of Thailand’s monetary policy is data dependent with an eye on financial stability as well as the tough export outlook, Somchai Jitsuchon, a member of the central bank’s monetary policy committee, saidThe central bank is closely monitoring baht strength and watching out for currency speculation, Assistant Governor Vachira Arromdee said as the baht reached its six-year high during the weekThe U.S.-China trade war is a serious concern for Thailand that has the potential to undermine global business, Prime Minister Prayuth Chan-Ocha saidExports fell for a third month to 5.79% from year earlier in May, exceeding estimate of a 5% dropBank Negara Malaysia isn’t budging from a trading ban on offshore ringgit derivatives, according to Governor Nor Shamsiah Mohd YunusShamsiah said that companies shifting operations from China to Malaysia to sidestep higher U.S. tariffs could add about 10 basis points to growth this year, on top of the current forecast of 4.3% to 4.8%The Philippine central bank surprised most economists by keeping its policy rate unchanged at 4.5%. The monetary authority said it expects the peso to be at about 52.01 per dollar this year and at about 51.50 next yearThe Philippines has ample supply of dollars to meet any increase in demand during imports season, according to Bangko Sentral ng Pilipinas Governor Benjamin DioknoTrade Secretary Ramon Lopez says the nation’s exports may still grow by about 4% this year when global demand recoversTaiwan’s central bank kept its key rate unchanged at 1.375% as expectedThe ruling Democratic Progressive Party’s executive committee officially nominated President Tsai Ing-wen as its candidate in the presidential election scheduled for JanuaryEMEA:Russia returned to the Eurobond market after the dovish Fed meeting, selling $1.5 billion of debt maturing in 2029 and $1 billion of them maturing in 2035, with yields at 3.95% and 4.3% respectively The dovish market mood has driven Poland’s benchmark bond yield below the inflation rate for the first time in almost two decades Serbia raised 1 billion euros ($1.1 billion) from its first publicly syndicated euro deal, taking advantage of low borrowing costs in Europe to refinance more expensive dollar securities Saudi Arabia may sell euro-denominated bonds for the first time after testing investor appetite for a possible deal, according to two people familiar with the matterSaudi Crown Prince Mohammed Bin Salman said Aramco will go through with an initial public offering as soon as next year, though no decision has been made on where the stock will tradeHe also blamed Iran for the recent attack on tankers near the Strait of Hormuz, adding to accusations that are stoking tensions in a region supplying a third of the world’s oilMSCI Inc. will probably upgrade Kuwaiti equities to its main emerging-market index this week, which could trigger $2.8 billion of inflows from passive funds, according to the head of of the nation’s stock exchangePressure on South Africa’s credit rating is “more to the downside than the upside at the moment,” with state-owned electricity company Eskom the “main focus,” said Fitch Ratings’ managing director, Ed ParkerMoody’s Investors Service said South Africa’s credit-rating outlook is stable, giving the country’s new government more time to tackle key challenges such as low economic growth and embattled state-owned companies to ward off junk statusTurkish opposition candidate Ekrem Imamoglu won the redo of the Istanbul mayor’s race by a landslide on Sunday, in a stinging indictment of President Erdogan’s economic policies and his refusal to accept an earlier defeatThe Istanbul exchange started publishing quotes for the lira overnight reference rate, or TLREF, on June 17. The fixing is calculated using a weighted-average of repo transactions, which are short-term borrowings secured by government securitiesGhana’s first-quarter economic growth slowed after expansion eased in mining and the quarrying industry, which includes oil Uganda’s central bank kept its key rate at a two-year high for a fourth straight meeting as it sees inflation edging higher. The Monetary Policy Committee held the rate at 10%Zimbabwe’s stock market hit a record high, for all the wrong reasonsThe nation’s inflation rate is showing no signs of slowing down, reaching the highest level since it peaked at 500 billion% in 2008An attempted coup failed June 22 in Ethiopia, the prime minister’s office said on its Facebook/Twitter page. The nation has one international bond, a $1 billion facility due 2024 that saw its yield plummet about 200 basis points this year to 5.59% on Friday Latin America:Brazil held its benchmark interest rate at a record low and signaled it will be able to cut borrowing costs to help a frail economy once a key austerity measure advances further in CongressThe government struck a deal with lawmakers to vote the pension reform bill in the lower house of Congress in the first half of July, local newspaper Folha de S. Paulo reportedOdebrecht SA, the holding company of the Brazilian conglomerate that stretches from construction to oil and gas, filed for bankruptcy protection in a Sao Paulo courtThe company’s construction unit, which was not included in the bankruptcy filing, made a proposal to restructure $3.1 billion of its debt in an out-of-court dealMexico’s Senate ratified the North American trade deal with the U.S. and Canada, becoming the first to do so amid a truce reached with Trump over an unrelated tariff threatTrump praised Mexico’s efforts to crack down on migrants crossing the border into the U.S. after the two countries entered an agreement aimed at stemming the flow of people crossing Mexico from Central AmericaState-run oil producer Pemex plans $2.5 billion of debt refinancing in 2019, Reuters reportsArgentina remained in recession in the first quarter as unemployment hit a 13-year high and the central bank maintained the world’s highest interest ratesFormer central bank chief Federico Sturzenegger said monthly inflation could slow to 1% by year-endNation’s primary budget surplus rose to the highest level recorded since the data series began in March 2000, in nominal termsColombia left its benchmark interest rate unchanged as its economic recovery stalls and the peso surges the most in the worldProtests broke out in eastern Caracas on Friday during the third day of visits by the United Nation’s High Commissioner for Human Rights, Michelle Bachelet, in Venezuela\--With assistance from Colleen Goko, Selcuk Gokoluk, Philip Sanders, Aline Oyamada and Alec D.B. McCabe.To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at yteso1@bloomberg.net;Netty Ismail in Dubai at nismail3@bloomberg.net;Ben Bartenstein in New York at bbartenstei3@bloomberg.netTo contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Alex NicholsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Business Wire5 days ago

    Barclays US LLC 2019 Dodd-Frank Act Stress Test Results

    Barclays notes the Board of Governors of the Federal Reserve publication of the 2019 Dodd-Frank Act stress test results for Barclays US LLC on 21 June 2019.

  • Moody's5 days ago

    Massachusetts Department of Transportation Metropolitan Highway System, Revenue Bonds (Senior) Variable Rate Demand Obligation 2010, Series A-2, $107.665MM -- Moody's takes rating actions on LOC-backed MassDOT- Metropolitan Highway System Senior Bonds 2010 Series A-1 and A-2

    Moody's Investors Service ("Moody's") has upgraded the long-term letter of credit-backed ratings of the Massachusetts Department of Transportation (MassDOT) Metropolitan Highway System Revenue Bonds (Senior) Variable Rate Demand Obligations 2010 Series A-1 to Aa1 from Aa2 and 2010 Series A-2 to Aa3 from A1 (collectively, the Bonds). The Bonds are supported by direct-pay letters of credit (LOC) provided by Citibank, N.A. (Series A-1) and Barclays Bank PLC (Series A-2) (collectively, the Banks). The long-term ratings are based on a joint default analysis (JDA) which reflects Moody's approach to rating jointly supported transactions.

  • Moody's5 days ago

    Massachusetts Department of Transportation Metropolitan Highway System, Revenue Bonds (Senior) Variable Rate Demand Obligation 2010, Series A-1, $100MM -- Moody's takes rating actions on LOC-backed MassDOT- Metropolitan Highway System Senior Bonds 2010 Series A-1 and A-2

    Moody's Investors Service ("Moody's") has upgraded the long-term letter of credit-backed ratings of the Massachusetts Department of Transportation (MassDOT) Metropolitan Highway System Revenue Bonds (Senior) Variable Rate Demand Obligations 2010 Series A-1 to Aa1 from Aa2 and 2010 Series A-2 to Aa3 from A1 (collectively, the Bonds). The Bonds are supported by direct-pay letters of credit (LOC) provided by Citibank, N.A. (Series A-1) and Barclays Bank PLC (Series A-2) (collectively, the Banks). The long-term ratings are based on a joint default analysis (JDA) which reflects Moody's approach to rating jointly supported transactions.

  • Moody's5 days ago

    Peralta Community College District, CA, Taxable 2005 Limited Obligation OPEB (Other Post Employment Benefit) Bonds, Series B-2, $38.45M -- Moody's upgrades to Aa3 LOC-backed Peralta Community College District, CA Taxable 2005 Limited Obligation OPEB Bonds Series B-2

    Moody's Investors Service ("Moody's") has upgraded to Aa3 from A1 the long-term letter of credit-backed rating of Peralta Community College District, CA, Taxable 2005 Limited Obligation OPEB (Other Post Employment Benefit) Bonds, Series B-2 (the Bonds). The short-term VMIG 1 rating assigned to the Bonds remains unchanged. The Bonds are supported by a direct-pay letter of credit (LOC) provided by Barclays Bank PLC (the Bank).

  • Bond Traders Have the Fed Firmly on Their Side
    Bloomberg7 days ago

    Bond Traders Have the Fed Firmly on Their Side

    (Bloomberg Opinion) -- Faced with an extraordinarily difficult situation, Federal Reserve Chair Jerome Powell gave bond traders exactly what they wanted in the central bank’s latest monetary policy decision.While the Fed left its benchmark lending rate unchanged in a range of 2.25% to 2.5%, changes to language in the Federal Open Market Committee’s statement, like removing the word “patient” and pledging to “act as appropriate to sustain the expansion,” pointed to reducing interest rates in the near future. One voting member, St. Louis Fed President James Bullard, even dissented in favor of a cut. On top of that, the “dot plot” showed the median projection among policy makers was for lowering interest rates at some point before the end of 2020. The reaction in the world’s biggest bond market was swift, even though a Bank of America Merrill Lynch survey released Tuesday found that being long U.S. Treasuries has become the world’s most-crowded trade for the first time ever. Two-year U.S. yields dropped 10 basis points after the announcement to 1.76%. The day of the Fed’s last meeting, it was 2.3%. Benchmark 10-year yields also fell toward the 2% level, which hasn’t been breached since around the time Donald Trump was elected president. The yield curve steepened sharply.On top of validating dovish wagers among bond traders, who had priced in 2.5 cuts for 2019 ahead of the decision, the Fed’s latest shift is also a victory for Trump, who has been pounding the table for lower interest rates and whose White House, as Bloomberg News reported, in February explored the legality of demoting Powell. (He said “let’s see what he does” when asked later on Tuesday if he still wants to demote him.)This is probably not the outcome that Powell wanted but the one he felt he had little choice but to deliver. Just consider what has happened since the last Fed member spoke on June 7, before its blackout period began.June 7: The May jobs report showed nonfarm payrolls rose 75,000, missing all estimates in a Bloomberg survey, with the unemployment rate steady at 3.6%. June 7: Trump tweeted that tariffs on Mexican goods, which sparked a massive flight-to-quality trade in Treasuries, were “indefinitely suspended.” June 12: Consumer price index data missed estimates. June 14: Retail sales were stronger than expected, while the University of Michigan's gauge of expected inflation fell to an unprecedented low. June 17: The New York Fed’s Empire State Manufacturing Index plunged in June by the most on record. June 18: European Central Bank President Mario Draghi promised that officials are ready with stimulus if needed. June 18: The S&P 500 came within 0.8% of a record high.This is a decidedly mixed bag. The labor market remains strong but is slowing from its breakneck pace. Inflation is at risk of persistently undershooting the Fed’s target. Business confidence is weakening, though consumers are resilient. And central banks around the globe are shifting to easier policy in anticipation of slower growth ahead. The Fed’s own updated projections reflect this murky outlook: Growth is now seen as higher in 2020, at 2%,  while officials predict inflation will be lower than they thought in the coming year and a half. Powell took the path of least resistance. Just as the first rule of bond trading is “don’t fight the Fed,” one mantra of heading up the central bank could well be summarized as “don’t fight the markets.” He made abundantly clear that officials have had a “significant” change in their outlook relative to earlier this year, as evidenced by the adjusted FOMC statement. I wrote earlier this week that this Fed decision would show if the markets broke Powell. It’s possible that already happened in late December, when stocks were in freefall and Trump privately discussed firing his pick to lead the central bank. In what’s known as the “Powell pivot,” in early January he backed off from his previously firm stance that the balance-sheet runoff would continue on “automatic pilot” and went from shrugging off “a little bit of volatility” to assuring investors that he was attuned to the market’s concerns about downside risks.Bond traders, meanwhile, can quickly move on from debating whether the Fed will lower interest rates this year to when those cuts will begin. Policy makers left themselves some room to maneuver, but not much. In fact, the updated 2019 dot was close to forecasting an interest-rate reduction. After capitulating to markets this time, it would seem as if July is definitely in play. Fed funds futures indicate a cut next month is a near certainty.“They’re delivering on and above market expectations,” Jeffrey Rosenberg, systematic fixed-income senior portfolio manager at BlackRock Inc., said on Bloomberg TV. “The markets will now expect action in July,” added Michael Gapen at Barclays Plc.It’s regrettable that Powell didn’t show more backbone. Sure, his overarching goal is to sustain the economic expansion, and it’s clear that the data isn’t as strong as it was during the zenith of the tightening cycle. But that’s to be expected at this point, a decade after the recession ended and amid some self-inflicted pain on the trade front.This is a crucial time for the Fed and for monetary policy in general. Given that the ECB and Bank of Japan haven’t managed to wean their economies off extraordinary stimulus measures, it raises tough questions about whether central banks are doing more harm than good with what appears to be a tendency to prop up markets at every turn. Powell did a better job than his predecessor at staying the course, but he has proved willing to capitulate at most turns in 2019.Powell has advantages that his counterparts don’t, including a stronger domestic economy and a policy rate that has increased eight times since December 2016. He at least has a bit of room to try an “insurance cut” to keep the good times going.But fractionally lower interest rates aren’t going to magically fix the U.S.-China trade tensions nor provide the spark needed to lift inflation or encourage vast business investment. It serves mostly as a signal to Wall Street that the Fed knows its cues. Powell can only hope that the short-term high will be worth it in the long run.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Barclays names Gruber as chemicals head for Europe and Middle East: source
    Reuters7 days ago

    Barclays names Gruber as chemicals head for Europe and Middle East: source

    Barclays has named Gabriel Gruber as the new head of its chemicals banking team for Europe and the Middle East as it seeks to win more business after advising the likes of Evonik on their recent disposals, a source familiar with the matter said. Gruber has 15 years of experience covering clients in the chemicals sector and was promoted to managing director last year. Barclays has been in the driving seat on several high profile chemicals transactions, advising Air Liquide on its purchase of Airgas in 2015 and also representing Evonik and Total on the recent disposals of their respective chemicals units.

  • Financial Times7 days ago

    Japan’s export slump deepens in May amid global trade tensions

    Data published by Japan’s Finance Ministry on Wednesday showed that exports from the world’s third-biggest economy fell by 7.8 per cent during the month compared to a year ago, marking the sixth month of contraction in a row. The depressed export figures came during a month that saw a marked rise in global trade ructions. Exports to the rest of Asia fell 12 per cent during the month, led by a 10 per cent drop-off in goods shipped to China, Finance Ministry data showed.

  • Business Wire8 days ago

    Barclays Appoints Daniel Zimbaldi as a Managing Director in Financial Institutions Group (FIG) M&A

    Barclays announces the appointment of Daniel Zimbaldi as a Managing Director in Financial Institutions Group (FIG) M&A. Mr. Zimbaldi will be based in New York. Mr. Zimbaldi joins Barclays with close to 15 years of experience in banking, most recently as a Managing Director at Evercore in the Depositories and Specialty Finance Group.

  • Investing.com8 days ago

    Sterling at 2019 Lows on Brexit Fears, Aussie Slides

    Investing.com - The British pound was trading near its lowest levels of the year on Tuesday as fresh fears over the prospect of a no-deal Brexit weighed, while the Australian dollar was pressured by growing expectations for another rate cut by the country’s central bank.

  • Facebook's Answer to Bitcoin Poses a Double Threat
    Bloomberg9 days ago

    Facebook's Answer to Bitcoin Poses a Double Threat

    (Bloomberg Opinion) -- Regulators will be watching closely when Facebook Inc. unveils its cryptocurrency project this week. Their vigilance is warranted.Mark Zuckerberg, the social network’s founder, isn’t going to gamble with what remains of his public image by replicating the worst excesses of the Bitcoin craze. He’s not trying to create a speculative currency; a potential wave of mom-and-pop investment losses is the last thing he needs. He just wants a digital medium of exchange for use on his apps. Nevertheless, his bid to launch an online payments revolution carries plenty of risks, from antitrust concerns to the threat that it might pose to financial stability.Weekend media leaks suggest that Facebook’s “Libra” project will be a continuation of its past efforts to expand its payments business and keep customers within the walled garden of its social media apps by creating their very own money.While Zuckerberg is poised to unveil a team of partners – reportedly including eBay Inc., Farfetch Ltd., Spotify Technology SA, Uber Technologies Inc. and Vodafone Group Plc – so far this feels very much like Facebook’s baby. Tellingly, it’s not one that the big banks or the other Silicon Valley and Seattle giants seem ready to adopt quite yet, unless Zuckerberg surprises us with some bigger names at the launch. The target customer base for these new digital tokens looks certain to be the 2.6 billion-strong users of Facebook, WhatsApp and Instagram.While Facebook will no doubt assure us that this project is all about making the lives of its customers ever easier, giving them the ability to actually buy stuff in a way that Bitcoin has rarely offered, it’s hard to square it away with the political effort to curb Big Tech’s monopolistic tendencies (regardless of that roster of launch partners and their $10 million participation fees). It’s crucial that Libra doesn’t become a protective glue that binds Zuckerberg’s social networks even more closely together at a time when many regulators want to break them up. Libra will be presented as an open-source partnership whose benefits are available to all, but to what extent will it really be held at arm’s length from the Zuckerberg empire? Indeed, if the financial and business benefits of using Libra accrue mainly to Facebook, it will merely enshrine its market dominance.As such, regulators must find out who will own the giant new datasets. They might even want to push the case that this kind of data should be made available to governments or rivals to avoid the problems of the past, where a handful of companies ended up owning all of the information about our online activities.While Facebook barely makes any money from its payments business today – with payments and other fees accounting for less than 2% of last year’s $55.8 billion of revenue – some analysts reckon Libra could change things. Barclays is reportedly predicting $19 billion in additional revenue by 2021 if the tokens gain traction. Libra is scheduled to launch across a dozen countries in 2020. That’s a lot of potential data and new sources of revenue.Financial stability is a worry too and regulators should ask for transparency on how Libra is structured. The token is expected to be a “stablecoin,” which is pegged to existing fiat currencies such as the U.S. dollar or the euro. That will damp price volatility, unlike the free-wheeling Bitcoin, whose price in the past five years has gone from $600 to $19,000, and now to $9,000. Regulatory oversight of which currencies are held in reserve to back the Libra coin would go some way to building faith in Facebook’s capacity to redeem tokens when customers ask for it.While no one wants to choke innovation unnecessarily, Facebook hasn’t exactly done much to earn everybody’s trust in recent years. Any chance to put the necessary controls in at the beginning, rather than firefighting down the road, should be grabbed by the regulators.To contact the author of this story: Lionel Laurent at llaurent2@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Did the Markets Break Jerome Powell? We’re About to Find Out
    Bloomberg9 days ago

    Did the Markets Break Jerome Powell? We’re About to Find Out

    (Bloomberg Opinion) -- This week’s Federal Reserve decision will be the most consequential one yet under the leadership of Chair Jerome Powell.Sure, Fed officials will almost certainly leave interest rates unchanged, and they won’t do anything with the central bank’s balance sheet beyond what they have previously indicated. But the move in financial markets has been so swift, with traders so convinced that policy makers will lower interest rates imminently, that every change in their statement’s wording, every syllable uttered by Powell during his press conference, and any tweak in the “dot plot” will be scrutinized as much as ever. After all, vast sums of money (not to mention strategists’ reputations) are riding on a decidedly dovish shift.It truly seems as if bond traders have gone too far and are setting themselves up for disappointment. They have priced in a 92% chance of a quarter-point rate reduction in July and 2.75 cuts by the end of the year. Barclays Plc strategists would say that’s too conservative — they’re calling for a 50-basis-point cut next month and an additional 25 basis points in September in one of the more aggressive Wall Street forecasts. Basically, as Michael Purves at Weeden & Co. put it, markets are “almost taunting the Fed.”Make no mistake, Fed officials have a number of reasons for caution. While President Donald Trump tabled threatened tariffs on Mexico, a potentially drawn-out trade war with China looms large. U.S. inflation continues to fall short of the central bank’s stated 2% target, while the University of Michigan's gauge of expected price changes fell to an unprecedented low late last week. And the bedrock of this rate-hiking cycle — a seemingly unstoppable labor market — is showing early signs of slowing, with American companies adding just 75,000 workers in May, missing estimates for a 175,000 gain.All of this lines up with Powell’s pivot since the end of last year, from signaling further interest-rate increases and keeping the balance sheet runoff on “automatic pilot” to being patient and winding down the bank’s “quantitative tightening.” He and other policy makers have clearly indicated this is as far as they’ll go in tightening monetary policy this time around.That’s not the same thing as saying they’re ready to begin easing.The problem is, bond traders (and, admittedly, financial journalists) don’t care about that nuance. Conviction that the Fed is done hiking, by definition, means that the next move in interest rates will be lower, making it a matter of “when,” not “if.” After Powell said earlier this month that “as always, we will act as appropriate to sustain the expansion,” it was perceived as opening the door to cutting interest rates, even though he didn’t really say that. RBC Capital Markets had a brilliant report that noted the “weak” May jobs number was actually perfectly consistent with the Fed’s outlook. No matter; traders scurried to wager on easing sooner rather than later in the wake of the payrolls data. So here we are, with markets brazenly taunting the Fed. Will Powell dare to defy them?Unfortunately, recent history doesn’t provide a clear answer. In January, I wrote that the Fed was officially at the market’s mercy, given a decision that was seen as giving in to the late-2018 equities tantrum. Two-year Treasury yields fell about 12 basis points in the following 27 hours. In March, it was more of the same, with central bankers managing to beat traders’ lofty dovish expectations by shifting the dot plot to show zero interest-rate increases in 2019, compared with two in December. Again, two-year yields tumbled, ending the week 15 basis points lower than they were before the decision.Things went differently last month. After what looked like another bond rally in the making, Powell managed to entirely reverse it, and then some, by highlighting “transitory factors” keeping inflation subdued. “Our baseline view remains that with a strong job market and continued growth, inflation will return to 2% over time,” he said. Two-year yields climbed eight basis points in the next 27 hours, to 2.35%, a level that almost exactly aligns with the current effective fed funds rate. In other words, bond investors were more or less on board with the idea of a “patient” Fed holding rates where they are.Obviously, the outlook has changed since then, but not nearly to the extent that market pricing would indicate. As one example, Citigroup Inc.’s U.S. economic surprise index is at the same level it was on May 1, the day of the Fed’s most recent decision. The persistently negative reading is hardly a cause for celebration — it signals data have been worse than expected — but it could just as likely indicate that forecasters have to come to terms with the expansion turning 10 years old and serve as an early warning that the economy is rolling over. As RBC’s Tom Porcelli and Jacob Oubina noted, it’s all about the narrative.Given all that, which Powell will investors get? The one who gives them what they want and more, or the one who is willing to push back? I believe that deep down, Powell would strongly prefer to keep interest rates where they are and only begin easing when he and other officials observe clear and persistent signs of weakness. The U.S. economy is not at that point yet. It doesn’t help that Trump continues to pound the table for lower rates, in what has become a now-commonplace break from recent presidential history, while simultaneously trumpeting the “tremendous potential our Country has for GROWTH.”If I had to guess, the dot plot will turn flat, with the current 2.375% median fed funds rate extending through at least 2021. That’s the definition of patience. Then, Powell will reiterate in his press conference that the Fed stands ready to act as appropriate. In doing so, he preserves the option to lower interest rates as soon as July or September, without making any sort of explicit commitment. If that’s seen as insufficiently dovish, as some rates strategists suggest, then tough.Powell, at the helm of the world’s most influential central bank, can afford to be more deliberate than traders looking to get ahead of the next big move. At the same time, the cacophony of calls for rate cuts is tough to shut out. Should he capitulate entirely, he will be permanently viewed as a Fed chair who was broken by bond traders. To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Reuters13 days ago

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    (Bloomberg Opinion) -- The race to succeed Mark Carney as governor of the Bank of England has already taken one twist, with Theresa May’s resignation making it likely that the current Chancellor of the Exchequer won’t be in office to make the appointment. The downfall of fund manager Neil Woodford has cast a shadow over the leading candidate’s chances of landing the prestigious job.Andrew Bailey has been the head of the Financial Conduct Authority for almost three years. The regulator’s role in the chain of events that led to Woodford freezing redemptions from his flagship fund last week is being questioned by Nicky Morgan, the U.K. lawmaker who chairs Parliament’s Treasury Committee.With about 3.8 billion pounds ($4.8 billion) of cash now trapped in Woodford’s fund, Morgan has written to Bailey asking him to detail by June 18 how much “supervisory contact” the FCA had with the investment firm. Bailey’s answers may determine whether or not he becomes head of the U.K. central bank.According to a survey of economists, he had been the front-runner, ahead of rivals such as former Reserve Bank of India governor Raghuram Rajan, and BOE Deputy Governors Jon Cunliffe, Ben Broadbent and Dave Ramsden.(1)But the embarrassment of having one of the U.K.’s most storied stock pickers drop the gate on a big equity fund on his watch won’t help Bailey’s chances.My colleagues at Bloomberg News have reported that Woodford Investment Management makes about 65,000 pounds a day in fees from the shuttered fund. On Tuesday, Bailey told the BBC the fund manager “should consider his position” on those payments. A spokesman for Woodford later rejected that call, saying “the company will continue to charge the fee as the fund remains actively managed.”That’s not a good look when investors are still paying for the privilege of having their money trapped in a fund that’s frozen indefinitely. It’s even worse when the regulator tries to ease their pain, only to be rebuffed by the very people it oversees.Woodford isn’t the only implosion occupying Bailey’s in-tray. The FCA is investigating how Metro Bank Plc misclassified assets on its balance sheet, a revelation that drove shares in the so-called challenger bank to a record low in February and prompted it to tap investors for additional money.The pressure is on the FCA to show it can act tough when justified. That certainly wasn’t the case a year ago, when a 12-month probe into Barclays Plc Chief Executive Officer Jes Staley’s attempts to unmask a whistle-blower led to the executive being fined rather than dismissed – an outcome that seemed at odds with the FCA’s insistence that protecting informants is paramount to prevent misconduct in the industry.And the FCA has yet to explain how vigilant it was – or wasn’t – over the alleged misdoings of Tim Haywood, a fund manager at GAM Holding AG, which were reported to it by a company whistle-blower. GAM was also forced to halt redemptions  in his fund, and has taken a year to offload its illiquid holdings to repay investors.In the Woodford case, Morgan has asked Bailey to clarify how long investors are likely to have to wait to get their money back. That may be impossible for the FCA chief to say. What he will need to specify, however, is why the watchdog didn’t act as soon as Woodford started listing some of the fund’s privately held investments on the Guernsey International Stock Exchange to sidestep a limit on how much of the pool could be allocated to illiquid assets.“Simply listing an unquoted company overseas doesn’t in itself make the stock more liquid,” Bailey wrote in an article published by the Financial Times earlier this week under the heading The “Woodford episode raises issues for financial regulators.”That’s absolutely correct. So where was the FCA when Woodford started rearranging the deckchairs of his illiquid assets?It’s impossible for any regulator to prevent blow-ups from happening on their patch. After all, that’s why they exist in the first place. But the Woodford debacle has been brewing for such a long time that Bailey will need to show that his agency wasn’t asleep at the wheel – otherwise whichever politician ends up responsible for picking Carney’s replacement is likely to choose anyone but Bailey.(1) Since that poll was taken, Ofcom chief Sharon White was named chairman of retailer John Lewis Partnership Plc at a salary of 990,000 pounds, more than twice the stipend available at the central bank.To contact the author of this story: Mark Gilbert at magilbert@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

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