Morning Consult Finance: U.S. Said to Consider Currency Deal, Tariff Delay as Part of Initial China Trade Agreement


Top Stories

  • As trade talks resume today between the United States and China in Washington, White House officials are considering including a currency agreement previously reached with China and a possible suspension of next week’s tariffs as part of an early trade deal, according to people familiar with the discussions. The people said the potential deal would be followed up by more talks on key issues like intellectual property and forced technology transfers. (Bloomberg)
  • The Securities and Exchange Commission is launching an investigation into the practices of companies that offer retirement plans for teachers and government workers to determine how administrators choose investment options and deal with conflicts of interest, according to an SEC document reviewed by a media outlet. In letters sent to the companies, the SEC is also seeking documents concerning any compensation that company administrators received for pointing investors to certain investment options or companies since Jan. 1, 2017. (The Wall Street Journal)
  • The Federal Reserve is expected to announce today that it has abandoned a proposal that would have required U.S. branches of foreign banks to have a minimum level of liquid assets as a safeguard against a cash strain, according to people familiar with the decision. The people said they expect a similar rule to be proposed by international regulators in the coming months. (Financial Times)

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Events Calendar (All Times Local)

10/10/2019
Yahoo Finance All Markets Summit
Bloomberg Live event titled “The Future of Investing: Focus on Corporate Governance” 9:00 am
Urban Institute event titled “From Concept to Action: Aligning Opportunity Zones and Mission Capital” 2:00 pm
AEI event titled “Monetary policy in the 21st century: An Allan Meltzer perspective” 3:00 pm
10/15/2019
PIIE event: “Currency, Credit and Crisis: Central Banking in Ireland and Europe” 12:15 pm
View full calendar

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General

France says EU will impose sanctions on U.S. if aviation row not settled
Francesco Guarascio, Reuters

France’s Finance Minister Bruno Le Maire said on Thursday the European Union would impose sanctions on U.S. products if no settlement was reached with Washington on a trade dispute over illegal EU subsidies to the aviation industry.

Elizabeth Warren Vows to Remake Capitalism. Businesses Are Bracing.
Greg Ip, The Wall Street Journal

For the past generation, Democratic presidential candidates have mostly talked of redistributing the rewards of American capitalism while leaving its basic structure intact. Elizabeth Warren promises to break that mold.

Why central banks are edging away from the dollar
Eva Szalay and Colby Smith, Financial Times

The US dollar has long towered over global markets and finance. But cracks are starting to appear in the edifice.

Stocks Whipsawed Before Trade Talks; Dollar Slumps: Markets Wrap
Yakob Peterseil, Bloomberg

U.S. equity futures and European stocks swung from gains to losses as a long-anticipated meeting on trade between America and China approached, and after contrasting reports on the talks spurred volatile trading in Asia. Treasuries were steady, while the dollar slumped.

Banking

Mitch McConnell meets with pot execs in California, pitched need for cannabis banking reform
Max A. Cherney, MarketWatch

Senate Majority Leader Mitch McConnell, a longtime opponent of reforming marijuana laws, is spending more time than usual thinking about cannabis on a trip to California this week.

Financial Products and Investments

Prudential Plans to Boost Life Insurance Prices for Vapers
Katherine Chiglinsky, Bloomberg

Prudential Financial Inc. says the health scare around vaping is changing its calculus.

Fidelity Is Latest to Cut Online Trading Commissions to Zero
Justin Baer, The Wall Street Journal

Fidelity Investments eliminated trading commissions on its online brokerage, matching a step some of its biggest rivals unveiled last week.

Credit Card Delinquencies in U.S. on Rise for Smaller Issuers
Alexandre Tanzi, Bloomberg

Despite a 50 basis point decline in the U.S. 10-year note yield since late July, the average interest rate on credit cards continues to hover close to record levels, newly released data from the Federal Reserve show.

SEC’s reforms spark debate over ‘ugly’ IRA rollovers
Mrinalini Krishna, Financial Times

Tighter rules on best practice in switching retirement schemes still divides opinion.

Supreme Court case creates jitters for defined benefit plan managers
Bruce Love, Financial Times

A successful claim could complicate the lingering appeal of old-style pension schemes.

Billionaire Fisher Shocks With Sexual Remarks, Wonders Why
Sabrina Willmer, Bloomberg

First Ken Fisher shocked his audience with sexist and off-color remarks. Then the billionaire said he didn’t understand why.

Housing and GSEs

Mortgage Costs Outpaced by Drop in Interest Rates
Ben Eisen, The Wall Street Journal

Interest rates have been plummeting, but the cost of taking out a mortgage hasn’t fallen as fast.

Taxes

Trump’s Tax Bill Has Cost Homeowners a Trillion Dollars
Allan Sloan, Fortune

In recent weeks, President Donald Trump has been talking about plans for, as he put it, a “very substantial tax cut for middle income folks who work so hard.” But before Congress embarks on a new tax measure, people should consider one of the largely unexamined effects of the last tax bill, which Trump promised would help the middle class: Would you believe it has inflicted a trillion dollars of damage on homeowners—many of them middle class—throughout the country?

New Jersey Governor Continues Push for SALT-Cap Removal
Danielle Moran, Bloomberg

New Jersey Governor Phil Murphy said he will continue to back a legal challenge to President Donald Trump’s limit on state and local tax deductions despite a recent setback in federal court.

Financial Technology

Cryptocurrency Investors Get New IRS Income-Reporting Rules
Laura Davison and Allyson Versprille, Bloomberg

Cryptocurrency holders know more about what the Internal Revenue Service expects to see on their tax returns, thanks to new guidance from the agency.

PayPal exit from Facebook project shows power of D.C.’s disapproval
Brendan Pedersen, American Banker

PayPal’s decision to back out of Facebook’s cryptocurrency plan is the clearest sign yet that skepticism among members of Congress and regulators may be the biggest obstacle to getting the Libra project off the ground.

Altcoins: Ahead of Libra, XRP cryptocurrency gains toehold in commerce
Tom Wilson, Reuters

Facebook’s Libra may be grabbing all the headlines at the moment, yet a major cryptocurrency already exists that’s gained a toehold in mainstream commerce.

Opinions, Editorials and Perspectives

What You Don’t Know About Direct Selling Day
Joseph N. Mariano, Morning Consult

The claim is that Truth In Advertising (TINA) protects consumers. But TINA seems to have been stung by the same cynical bug that has afflicted Washington D.C. politics, and decided to criticize the individual direct sellers — consumers or independent contractors — who took the time to have their voices heard in the halls of Congress. 

Libor Refuses to Die
Mark Gilbert, Bloomberg

The current plan is for Libor to wink out of existence by the end of 2021. Changes in the wholesale funding market mean it’s no longer based on actual transactions between banks.

Research Reports

Who Borrows for College—and Who Repays?
Andrew F. Haughwout et al., Federal Reserve Bank of New York

Student loans are increasingly a focus of discourse among politicians, policymakers, and the news media, resulting in a range of new ideas to address the swelling aggregate debt. Evaluating student loan policy proposals requires understanding the challenges faced by student borrowers.

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