October 2nd – The BESA Times
Twenty-first Edition - Sunday, October 2nd
Every week, a complete snapshot of what happened around the world in the past week
Notable Headlines
Deutsche Bank AG was dealt a fresh blow when an Italian court charged the company, an employee and five former executives for colluding with Banca Monte dei Paschi di Siena SpA to falsify the Italian lender’s accounts in 2008. Deutsche Bank has been trying to reassure investors and clients that it can withstand the financial strain of mounting legal bills. A U.S. Department of Justice request last month that the lender pay $14 billion to settle a case tied to mortgage-backed securities rattled confidence and drove its shares to record lows.
The Chinese Yuan officially became one of five global reserve currencies, the culmination of several years of efforts by Chinese policy makers to gain such recognition. The currency’s entry into the International Monetary Fund’s Special Drawing Rights -- alongside the dollar, euro, pound and the yen -- comes amid China’s efforts to boost its international usage and ambitions of providing an alternative to the dollar. Describing the inclusion as a “historic milestone,” IMF Managing Director Christine Lagarde said in a statement Friday that it reflects the progress that the Asian country has made in reforming its financial systems and liberalizing markets.
Spain’s Socialist leader Pedro Sanchez resigned on Saturday, pushed out by rebels after more than 10 hours of tempestuous talks in Madrid, potentially signaling the beginning of the end for the country’s nine-month political impasse. With his supporters gathered outside the party’s headquarters, Sanchez announced his resignation in a televised statement after his call for an emergency leadership election was rejected by group’s federal committee. He was defeated 133 votes to 107, a party spokesman said. Sanchez had been seeking the membership’s backing after the party was torn apart by fighting over whether to let its traditional rival, Mariano Rajoy’s People’s Party, take office.
Colombia on Friday left its benchmark interest rate unchanged at 7.75 per cent for a second straight month, after a better inflation reading. Higher inflation and the drop in oil prices have weighed on the economic growth of the country that was once a market darling. Bancolombia said in a note that "the favorable inflation performance in August, the correction of short and medium-term expectations, and the current account deficit for 2Q16, which recorded significant adjustment (from 5.3% of GDP in 1Q16 to 4.1%) allow the Bank to leave the repo rate unchanged".
A week in the financial markets
Our Homemade Article
Will China's VAT reforms add value? by Felix Lim for BESA
What to expect for next week?
The United States is expected to have created 171,000 jobs in September, compared with the 151,000 jobs in August. The unemployment rate is expected to remain unchanged at 4.9 per cent. However, average hourly earnings are expected to have climbed 0.3 per cent in September from the previous month, when they rose 0.1 per cent. And earnings are expected to have climbed 2.6 per cent from a year ago.
A week after more than 80m viewers tuned in to watch Hillary Clinton and Donald Trump in the first presidential debate, viewers will get the chance to see a debate between vice presidential nominees Mike Pence (R) and Tim Kaine (D) on Tuesday.
The UK Conservative Party Conference starts on Sunday. Prime Minister Theresa May has come under pressure to clarify her Brexit strategy and name the month when she will trigger the so-called article 50 — the mechanism for leaving the EU. Ms May will speak on Sunday in a session titled “Global Britain: Making a success of Brexit” and then again on Wednesday in a session focused on domestic policy.
WRITTEN BY THE BESA RESEARCH TEAM
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