Supreme Court Fight Complicates US Covid-19 Aid, Spending Talks
ECB Set To Review Flagship Bond-Buying Tool In Fighting Covid-19
ECB Proposes To Lower Banks' Reporting Burden, Raise Data Quality
Germany's Scholz: To Take 2021 New Debt Of Just Under EUR100B
Bundesbank: Economic Recovery In Germany Is Losing Momentum
Swedish Gvt Promises $12B To Kick-Start Economy In 2021 Budget
'Last Chance Saloon': UK Gets Final Warning To Avoid New Lockdown
UK's Hancock: Any New Virus Ploys Will Be Different Vs. 1st Lockdown
China’s Rejection Of The Taiwan Buffer Zone Raises Risk Of A Clash
China Releases Unreliable Entity List; Denies It Targets US Companies
US To Slap Sanctions On Over Two Dozen Targets Tied To Iran Arms
Oil Slips; Libya To Add c.200K B/D Of Fresh Oil Output In Coming Days
TikTok App Store Ban Delayed After Trump Approves The Oracle Deal
Goldman Adds Boeing, Raytheon To Conviction Buy; Drops Lockheed
Norway Proposes SWF Invests More In US, Canadian Stocks Vs. EU
HSBC, StanChart, Deutsche Shares Slump On FinCen Reports Leak

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By David Madden (Market Analyst at CMC Markets UK)

Equity markets in Europe are suffering large losses as health concerns and lockdown fears are weighing on sentiment. Recently the World Health Organisation warned about a ‘very serious’ situation in Europe with respect to the number of new Covid-19 cases. Localised lockdowns have become more prevalent lately and there has been increasing chatter of a lockdown for London. The speculation is that there could be a reintroduction of a number of restrictions on the UK’s capital city, but it is unlikely to be as severe as what was imposed in March.       

In London, it is a broad-based sell off as travel, hospitality, transport, banking, energy, mining, and housebuilding stocks are in the red. Some sectors would lose out more than others in a lockdown. BA’s owner, IAG, is the biggest faller in the airline industry. The food and drink business was only starting to back on its feet again when the concerns about rising cases and news of local lockdowns struck. Restaurant Group, Marstons and Mitchells & Butlers shares are all down over 10%. On the domestic transport front, Go-Ahead group and FirstGroup singed new government contracts to keep rail services operating for the next six to 18 months. Westminster will essentially assist the struggling sector to ensure that the public can avail of the services. The contract-based systems put in place by the government hasn’t been well received by all rail operators as some have expressed concerns the government fees might be too low. 

Ocado, the online grocer, has benefitted greatly from the pandemic as it prompted a surge in demand for online shopping. The stock is showing a small gain today as speculation of a London lockdown has made it attractive to investors.         

HSBC shares are in the red as it was alleged the bank is one of many big name finance houses that was flagged by the US authorities in relation to money laundering. A report in the International Consortium of Investigative Journalists (ICIJ) stated that HSBC disclosed $4.5 billion in suspicious transactions to the US’s Treasury department. The bank in question was caught up in a money-laundering scandal involving a Mexican cartel, which resulted in a fine of $1.9 billion in 2012. Since then the finance house tightened its regulatory checks, but some of the suspicious transactions referenced by the ICIJ appear to have taken place post the Mexican fiasco. To make matters worse for HSBC over the weekend the Global Times, a newspaper that is controlled by the Chinese government, revealed that the bank might be put on Beijing’s unreliable entities list. Should that be the case it would make it hard for the bank to make further inroads into mainland China. HSBC’s London-listed shares have fallen to a level last seen in 2009. Standard Chartered shares have fallen to their lowest level in over 20 years as they were also mentioned in the ICIJ article.

Things have gone from bad to worse as far as Rolls-Royce shares are concerned as they are at a 16 year low. The company was already struggling in advance of the pandemic as the Trent-1000 engines were causing problems, and then it was announced that the XWB engines were also an issue. The health crisis threw up huge problems for the aviation sector on account of the travel bans. Airlines are back in business, albeit at a reduced rate. Given the uncertainty hanging over the airline industry, the prospects for Rolls-Royce are not great as commercial aircraft engine demand is likely to remain low. It was reported that Rolls-Royce is in talks with sovereign wealth funds to raise roughly £2.5 billion. The news about seeking new capital has hit the stock price as it sends out a negative image.

Superdry shares have tumbled as the full-year pre-tax loss widened to £166.9 million, from £89.3 million last year. Revenue fell by 19.2% to £704 million. The fashion house blamed the pandemic for the wider loss but it confirmed that trading has picked up since the UK economy has reopened. Superdry is not out of the woods yet as its business is still disrupted by the health crisis and it remains cautious about the economic recovery. The heavy discounting activity that was introduced to get rid of stock hurt margins.

Oracle and Walmart shares will be in focus today after President Trump has approved its planned takeover of TikTok’s US business. Previously Mr Trump expressed concerns about TikTok on the grounds of national security but he has now given Oracle and Walmart his ‘blessing’ with respect to the planned transaction.         

Nikola Corporation shares will be in play today as Trevor Milton, the group’s founder, announced that he is stepping down as executive chairman. The company has hit back at allegations of fraud, but investor confidence remains subdued.           

We are expecting the Dow Jones to open 402 points lower at 27,255, and the S&P 500 is called down 39 points at 3,280.   

• Smarter and standardised reporting procedures proposed to reduce banks’ reporting costs
• Banking industry involvement in improving procedures needed

The European Central Bank (ECB) today published the European System of Central Banks’ (ESCB) input into a European Banking Authority (EBA) feasibility report on reducing the reporting burden for the European banking industry. Under Article 430c of the Capital Requirements Regulation (CRR), the European Parliament and the Council of the European Union mandated the EBA to carry out a feasibility study and requested that input from the ESCB be taken into account.

The ESCB report proposes to reduce the reporting burden for banks in the fields of statistical, resolution and prudential reporting without losing the information content that is indispensable to monetary policy, resolution and supervisory tasks. This can be achieved through:

- a common standard data dictionary and common data model for statistical, resolution and prudential information requirements;
- smarter procedures, such as harmonised transmission reporting formats, the removal of duplications and improved data sharing between authorities;
- increased cooperation between European authorities, and between authorities and the banking industry, to achieve a common standard data dictionary, a common data model and smarter procedures.

These efforts should help to reduce the reporting burden for banks and increase the quality of the data received by authorities. As a result, banks would be able to reduce costs, and authorities could better monitor developments in the banking industry.

The European Central Bank (ECB) today published the European System of Central Banks’ (ESCB) input into a European Banking Authority (EBA) feasibility report on reducing the reporting burden for the European banking industry. Under Article 430c of the Capital Requirements Regulation (CRR), the European Parliament and the Council of the European Union mandated the EBA to carry out a feasibility study and requested that input from the ESCB be taken into account.

The ESCB report proposes to reduce the reporting burden for banks in the fields of statistical, resolution and prudential reporting without losing the information content that is indispensable to monetary policy, resolution and supervisory tasks. This can be achieved through:

a common standard data dictionary and common data model for statistical, resolution and prudential information requirements;

smarter procedures, such as harmonised transmission reporting formats, the removal of duplications and improved data sharing between authorities;

increased cooperation between European authorities, and between authorities and the banking industry, to achieve a common standard data dictionary, a common data model and smarter procedures.

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On Sep 21, 03:43 AM, E-mini Dow price declined 2% from its previous close. This has occurred 43 times over the last 12 months.

53% (23 out of these 43 times), the price has increased 3 hours later by an average of 228.65 points. The maximum price increase has been 1324.0 points.

20 times out of 43, the price has decreased 3 hours later by an average of 247.35 points. The maximum decrease in price has been 581.0 points.

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