This Project Bridges The Gap Between Blockchain And Mainstream Software Stacks – Yahoo Finance
Coding smart contracts that run on a Linux VM is now possible thanks to Cartesi
As blockchain technology, cryptocurrencies and DeFi make the move into the mainstream, the complex processes involved in developing directly on-chain must adapt if they are to be adopted by developers and businesses outside of the space. Limitations on current blockchain platforms can be difficult to traverse and time-intensive for both the developer and the end user, creating a bottleneck that is ultimately stunting the growth of an otherwise pioneering technology.
One of the keys to mass adoption of blockchain technology lies in offering developers a way to create smart contracts with the tools they know and love; by doing this a new generation of decentralized possibilities can be unlocked whilst utilising the reliability and power of time-tested software stacks.
This is where Cartesi steps in. Launched back in 2018, Cartesi was designed to bring mainstream scalability to DApps and mainstream productivity to DApp developers as an off-chain decentralized computation platform. Cartesi gives developers who are used to working within a Linux runtime environment access to an array of well-known programming languages, tools, libraries, software, and services with which to build DApps.
Old dogs, new tricks
By creating an infrastructure that is scalable and also compatible with time-tested technologies, the Cartesi team looks to break down the barriers to entry that have no doubt held back many non-blockchain developers from exploring the near limitless potential of DApps.
“Cartesi’s mission is to close the gap between centralized and decentralized applications, both in terms of possibility and convenience.” – Erick de Moura, Cartesi Co-Founder
Based on RISC-V, a proven platform that was created as a result of research conducted at UC Berkeley, Cartesi Machines are one of three products within the Cartesi platform. Cartesi Machines offer vastly improved scalability by allowing DApps to take advantage of the increased computing capabilities available off-chain, but at the same time retaining the security that code running on smart contracts provides.
Cartesi Machines are self-contained and reproducible and transparent and consensus is reached securely on-chain with no requirement for a reputation protocol, Trusted Execution Environment, or central server. The platform’s cross-chain compatibility also makes dApps portable across the most popular public blockchains.
The Descartes SDK is what makes it possible for developers to build computationally intensive decentralized applications with their favourite Linux operating system tools and in a variety of programming languages and services such as MySQL, Python or MongoDB. DApps can use Descartes to run computations that would normally be too expensive or simply too large to execute on-chain and developers can not only save on gas fees by moving complex computations off-chain, but they also now have the option to process huge data loads that are made available by reputable and trusted data sources in a fully decentralized environment.
With the recent announcement of the implementation of popular Layer-2 scaling solution Optimistic Rollups, the Cartesi team look to “defeat the scalability limits of Ethereum, with million-fold computational gains, while preserving the strong security guarantees of the blockchain”. As well as addressing scalability issues, Cartesi rollups will also enable more people to benefit from protocols within the DeFi (decentralized finance) space built on the Ethereum blockchain by minimizing the disproportionately high transaction fees that currently plague the network.
By enabling developers to bypass the restrictions of Solidity and the Ethereum Virtual Machine (EVM) Cartesi is building this bridge between Linux open-source software and blockchain. The door is now wide open for developers from all corners of the profession to discover the true potential of DApps and blockchain, and with the eyes of the world on cryptocurrencies and DeFi, the Cartesi platform looks set to usher in a new wave of innovation.
Disclaimer: the writer has a personal relationship with the Cartesi team and used this relationship to source insights for this article. This article is not financial advice and is educational in nature. Please consult your financial advisor before investing in any digital currencies or projects.
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Gold prices gave up early gains and were flat on Wednesday, as weakness in the U.S. dollar due to higher inflation was countered by some firming in Treasury yields. Spot gold was flat $1,743.01 per ounce by 0549 GMT, after rising as much as 0.3%. "Though the dollar is weaker this morning, but a slight uptick in U.S. Treasury yields is keeping gold's upside movement muted," said Margaret Yang, a strategist at DailyFX.
Insurance broker Aon's offer to sell assets in five EU countries and takeover target Willis Towers Watson's reinsurance arm may not be enough to address EU competition concerns, people familiar with the matter said on Tuesday. Aon is looking to the acquisition to create the world's largest insurance broker ahead of Marsh & McLennan Companies Inc as the industry grapples with rising claims and new challenges from the COVID-19 pandemic and climate change. Last Friday, the London-headquartered company submitted concessions to the European Union's competition watchdog, which did not disclose details in line with its policy.
(Bloomberg) — India’s markets regulator fined Yes Bank Ltd. for claiming that riskier bonds it sold to individual investors were as safe as term deposits.Securities & Exchange Board of India late Monday ordered Yes Bank to pay 250 million rupees ($3.3 million) after it “deliberately misrepresented” the Additional Tier 1 notes, “by suppressing the inherent risks of these bonds and distorting facts to mislead their customers.”Yes Bank’s AT1 bonds, which are hybrid securities that can be written off if the issuer breaches certain triggers, got wiped out in the biggest bailout of an Indian lender last year.Mumbai-based Yes Bank will appeal Sebi’s order before the Securities Appellate Tribunal, the lender said in an exchange filing.Read More on India’s Biggest Bank RescueThe regulator also raised other points regarding bond sale disclosures and documentation at a time when there’s been a rush by retail investors to buy the notes of weaker borrowers. Sebi last month also made it more onerous for mutual funds to hold AT1 securities in a bid to protect individual buyers.Yes Bank “compared the AT1 bonds with fixed deposit on rate differentials only, but omitted the risk differentials, which led the investors to look only at the higher interest rate of these bonds without realizing these bonds have inherent risk,” Sebi said in the adjudication order on Monday. Sebi also fined three of Yes Bank’s former and current executives, while co-founder and former Chief Executive Officer Rana Kapoor is facing a separate probe on matters including this.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The S&P 500 hit a record high on Tuesday and the Nasdaq jumped as investors flocked to technology-related stocks after the United States' pause in the rollout of Johnson & Johnson's COVID-19 vaccine sparked fears of a delay in a broader economic rebound. The drugmaker's shares fell 2.7% to a one-month low as calls for pausing the use of its COVID-19 vaccine after six women developed rare blood clots dealt a fresh setback to efforts to tackle the pandemic. The technology and consumer discretionary sectors, which house high-flying technology names that flourished during coronavirus-induced lockdowns last year, rose 0.6% and 0.4%, respectively.
(Bloomberg) — Bond veteran Greg Wilensky has seen hype about a surge in inflation crushed too many times to get carried away with this year’s great reflation trade.“I’ve been managing bond portfolios for 25 years, through very large monetary programs, big deficits, and the Fed trying to raise inflation expectations,” the Janus Henderson money manager said in an interview. “As much as I can see legitimate reasons why it might happen this time — I could have said that very often over the last 12 years too.”Wilensky’s skepticism epitomizes the cooling investor enthusiasm for bets linked to a rapid economic recovery and higher prices. Trades favoring economically-sensitive value stocks, steeper yield curves and a rebound in commodities have faltered after a stellar first quarter.The MSCI AC World Value Index has lagged its growth counterpart by about 6 percentage points since March 8. Benchmark Treasury yields have retreated some 13 basis points already this quarter, even as U.S. inflation data begin to beat expectations. And Tuesday’s strong 30-year Treasury auction suggested demand for even the most interest rate-exposed bonds is returning.One of the biggest questions money managers confront now is whether the stimulus-fueled rebound in growth and inflation — in particular in the U.S. — can transition to a sustainable expansion that will keep pushing equities and bond yields higher. The International Monetary Fund recently upgraded its 2021 global growth forecast to the strongest in four decades, but the outlook beyond that is less clear-cut.Envisaging a trajectory for price levels beyond this year is even harder for investors given the warping effect of coronavirus shutdowns, temporary supply bottlenecks and base effects from last year’s disinflation. A surge in five-year U.S. breakevens– a gauge of inflation expectations — has petered out since they hit their highest since 2008 in mid-March.Simple Math Is About to Cause an Inflation Problem: QuickTake“Inflation and rates, especially as a bond investor right now, is the call that you have to make,” said Elaine Stokes, fixed income portfolio manager at Loomis Sayles. “It’s the make-or-break call of your year.”The response to the stall for many investors has been to pare back some trades geared to the sharpest stage of the economic rebound. Vishal Khanduja, fixed income fund manager at Eaton Vance Management, has halved his portfolio’s overweight in U.S. inflation-linked bonds from the start of the year.“Inflation expectations were dislocated in 2020” in a “surgical recession,” Khanduja said. “The typical post-recession positioning that you see happen over multiple years is quickly going through the market.”As for some traditional inflation hedges in the commodities markets, the story is about to get more complicated than the year-to-date rebound in oil and copper prices would suggest. Strategists at the BlackRock Investment Institute anticipate a divergence within the asset class, as factors such as climate risks are more fully captured in pricing.“The lift for oil from the economic restart is likely to be transitory, while some metals may benefit from structural trends such as the ‘green’ transition for years to come,” a team including Wei Li wrote in a note this week.Tremendous ChallengeMeanwhile, in the bond market, traders are not reacting to signs of inflation as one might expect. On Tuesday, data showed U.S. consumer prices climbed in March by the most in nearly nine years, yet 10-year Treasury yields fell five basis points to their lowest in three weeks.“The tremendous challenge right now, especially this year is that the quality of almost any of the numbers we’re looking at, whether it’s the short-term inflation numbers, the economic growth numbers, these things are being very much distorted by the economic volatility,” Janus Henderson’s Wilensky said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Credit Suisse has identified $2.3 billion worth of loans exposed to financial and litigation uncertainties in its Greensill-linked supply chain finance funds, it told investors on Tuesday. Switzerland's second-biggest bank has been reeling from its exposure to the collapse first of Greensill Capital and then Archegos Capital Management within a month. Its asset management unit was forced last month to shut $10 billion of supply chain finance funds that invested in bonds issued by Greensill after the UK firm lost credit insurance coverage shortly before filing for insolvency.
(Bloomberg) — Bitcoin advanced Wednesday, breaching the $64,000 level for the first time after eclipsing its most recent record in March a day earlier as the mood in cryptocurrencies turned bullish ahead of Coinbase Global Inc.’s listing this week.The token climbed as much as 1.6% to as high as $64,207 in Asia trading. Cryptocurrency-exposed stocks such as Riot Blockchain Inc. and Marathon Digital Holdings Inc. advanced during U.S. trading hours.Crypto bulls are out in force as a growing list of companies embrace Bitcoin, even as skeptics doubt the durability of the boom. In one of the most potent signs of Wall Street’s growing acceptance of cryptocurrencies, Coinbase will list on the Nasdaq on April 14 at a valuation of about $100 billion.Coinbase’s debut “will mark the first official juncture between the traditional financial avenue and the alternative crypto path,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “As such, a successful addition to Nasdaq should act as endorsement of cryptocurrencies by traditional investors.”Goldman Sachs Group Inc. and Morgan Stanley have announced plans to offer their clients access to crypto investments. Tesla Inc. earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.Still, skeptics argue that digital coins have been inflated by stimulus that’s also sent stocks to records. Regulators around the world are stepping up oversight and casting doubt on its usefulness as a currency.Isabel Schnabel, member of the executive board of the European Central Bank, called Bitcoin “a speculative asset without any recognizable fundamental value” in an interview with Der Spiegel this month.Coinbase’s public debut this week is also boosting the digital coins of other cryptocurrency exchanges, such as Binance Coin, which has jumped to become the third-most valuable cryptocurrency behind Bitcoin and Ether.Many analysts expect the rally to continue.“The lowest 30-day volatility since October tells us Bitcoin is ripe to exit its cage and continue in a bull-market on its way to the next $10,000 move,” according to Mike McGlone, Bloomberg Intelligence commodities strategist. “Similar to Tesla’s equity-wealth allocation to Bitcoin, the Coinbase IPO may add to the growing list of 2021 crypto-validation milestones.”(Updates with latest Bitcoin pricing in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Coinbase's listing on Nasdaq sends a powerful signal of legitimacy to the U.S. crypto community, as well as to the crypto-curious in the traditional financial sector.
(Bloomberg) — Bond traders searching for an opportunity to challenge central banks are starting to look Down Under, where a likely showdown over yield-curve control is set to test the power of policy makers to contain the next wave of reflation bets.The global trading day for bonds begins in earnest in Sydney each morning, giving developments in Australia’s $600 billion sovereign debt market an out-sized impact on sentiment. It was the scene of a dramatic “flash crash” last year when the yield program was announced, illustrating the potential for turmoil.While the Reserve Bank of Australia has largely tamed markets since then, as the economy’s recovery strengthens, wagers against the RBA’s ability to keep yields lower look poised to rise.“If inflation expectations do start to un-anchor, then I think the RBA will be one of the first central banks to be tested by bond traders,” said Shaun Roache, an economist at S&P Global Ratings in Singapore. “The RBA is a canary in the coal mine for central banks as it is ahead in its labor market recovery.”The RBA brought short-sellers quickly to heel when the global bond rout emboldened them to test its grip on yield control in February. After weeks of aggressive positioning by traders, the bank nudged up the cost of speculating on rising rates and the yield on benchmark three-year bonds fell neatly back into line with its 0.1% target.But keeping the market at bay next time may prove more difficult, as vaccination campaigns gather pace in major economies and the U.S. recovery nears an “inflection point,” emboldening traders. Pressure is already apparent in Australia’s three-year swap rate, which is increasing the costs of managing interest-rate risks for corporate borrowers.Read More: BOJ Seeks Only Tweaks to Stay Aligned with Fed, ECBIf yield control fails in Australia, it may fade away as a potential option for other monetary authorities in need of more policy ammunition. Especially because yield control’s record in Japan — the only other country to officially employ it — is patchy.Pinning the rate of one key bond maturity has helped the Bank of Japan reduce borrowing costs in general and also allowed it to slow the pace of bond purchases. But it has come at a cost. The nation’s debt market is lambasted as dysfunctional and an economic recovery strong enough to revive inflation looks as far away as ever.Widening GapBeneath the surface, problems are building Down Under too. While the RBA has its thumb on one specific bond line, there is a large gulf between the yield on this security and those maturing slightly later. There’s also a widening gap to rates on the suite of derivatives linked to three-year yields that flow through into borrowing costs for companies and consumers.The three-year swap rate surged through February and March, rising to four times the RBA’s target for three-year bonds amid pressure from higher U.S. yields and a rebounding economy at home.Australia’s bond futures tell a similar story. The yield implied by three-year futures doubled in the two weeks to Feb. 26 and remains elevated, even after retreating from its high point.“Lack of liquidity, a central bank that’s digging its heels in — all that, for us, means there’s going to be more volatility in Aussie rates,” said Kellie Wood, a fixed-income portfolio manager at Schroders Plc’s Australian unit. “The RBA has succeeded in terms of round one. But we are starting to see cracks,” said Wood, who expects the market to challenge the 0.1% target again.Stephen Miller, an investment consultant at GSFM, an arm of Canada’s CI Financial Corp., agrees that higher yields may arrive in Australia sooner than the RBA thinks. “It will be powerless if the U.S. curve shifts upwards and other rates markets follow,” said Miller.Read More: Debate Over Next Move in Bonds Has Never Been FiercerNot everyone is prepared to bet against the RBA.For Fidelity International’s Anthony Doyle, taking on the RBA may be a recipe for steep losses if past lessons from the European Central Bank and U.S. Federal Reserve are anything to go by.Nine years ago, then ECB President Mario Draghi vowed to do “whatever it takes” to save the euro, leading to quantitative easing and bond purchases that are still in place. The Fed said more than a year ago that it would buy unlimited amounts of Treasuries to keep borrowing costs at rock-bottom levels, and it’s still holding firm.Holding the Cards“I don’t think it’s ever wise to fight anyone that has a printing press,” said Doyle, a cross-asset investment specialist at Fidelity in Sydney. “The RBA as a house holds all the cards. If they want yields lower, they’ll get it.”This caution is shared by JPMorgan Asset Management’s Kerry Craig.For now, the central bank “definitely has enough dry powder,” said Craig, a strategist in Melbourne. But he is concerned that with monetary policy and markets around the world moving in sync, “you can only fight so much if U.S. rates or global rates go higher — it’s going to drag Australian ones up.”Yet Governor Philip Lowe isn’t doing everything he could to damp doubts over the RBA’s resolve. His reluctance to make an early switch in the yield target to bonds maturing in November 2024, from ones due in April 2024, is fueling debate about how soon the policy could be wound back.Lowe said at the conclusion of the latest board meeting on April 6 that a decision would be made later this year, without being more specific. He also indicated that the RBA expected to maintain “highly supportive monetary conditions” until at least 2024, even though the number of Australians with a job has returned to pre-pandemic levels.“We don’t think they’ll extend yield-curve control” beyond the current April 2024 bond, said Wood, who warned of potential taper tantrums.Lowe’s February win against short sellers, and a slide in yields at home and abroad over recent weeks, has given the RBA space to breathe. But it’s likely only a matter of time before bond traders come back for round two.“Everybody’s watching how this is going to unfold,” said S&P’s Roache. “The RBA may not want this role, but it is taking quite a starring role I think among global central banks.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) — Bitcoin neared an all-time high on Monday as bullish sentiment gathered steam ahead of a listing by the largest U.S. cryptocurrency exchange.The token rose as much as 2.6% to $61,229, the highest in nearly a month, before falling back to trade little changed. On March 13, Bitcoin reached a record of $61,742. The cryptocurrency is up almost ninefold in the past year, a return that towers above that of more familiar assets like equities or bullion.Against the backdrop of Wall Street’s growing embrace of crypto, the direct listing of digital-token exchange Coinbase Global Inc. is fanning interest. Coinbase is due to go public on the Nasdaq on April 14, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance’s, known as BNB, rose 23% Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.“A crypto company moving to IPO is a big milestone,” said Nick Jones, CEO and co-founder at cryptocurrency wallet Zumo. “It’s moves like this that make consumers feel safer with crypto and ultimately boost confidence in the space.”A growing list of companies are looking at or even investing in Bitcoin, drawn by client demand, price momentum and arguments that it can hedge risks such as faster inflation. Tesla Inc. earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.Elsewhere, Goldman Sachs Group Inc. has said it’s close to offering investment vehicles for Bitcoin and other digital assets to private wealth clients. Morgan Stanley plans to give rich clients access to three funds that will enable crypto ownership. The deck of exchange-traded funds tracking the token is expanding, while Paypal Inc. and Visa Inc. have begun using cryptocurrencies as part of the payments process.A study by Dutch asset manager Robeco suggests that despite its high volatility, a 1% allocation to Bitcoin in a diversified multi-asset portfolio could be beneficial given its resemblance to gold and its near zero correlation to other asset classes.“In recent months, a clear and emphatic narrative that Bitcoin is becoming a store of value in the form of digital gold has developed,” according to Jeroen Blokland, a portfolio manager at Robeco.Other cryptocurrencies, such as second-ranked Ether, have also been climbing. The overall value of more than 6,600 coins tracked by CoinGecko recently surpassed $2 trillion.(Adds paragraph about exchange tokens)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Britain is allowing owner Sanjeev Gupta to explore refinancing options for Liberty Steel before offering any potential government support, business secretary Kwasi Kwarteng said on Tuesday. Prime Minister Boris Johnson said this month he was hopeful the government could find a solution for Liberty Steel after its biggest lender Greensill Capital went into insolvency last month. "But we can't strip Liberty Steel in this instance now from the wider group under which it sits."
SINGAPORE (Reuters) -Singapore's central bank kept monetary policy settings unchanged on Wednesday and said the accommodative stance was appropriate due to a benign inflation outlook and global economic uncertainties caused by the pandemic. The Monetary Authority of Singapore (MAS) was, however, more upbeat about official 2021 growth projections while data showed the economy unexpectedly growing in the first quarter from a year earlier. The central bank manages monetary policy through exchange rate settings, rather than interest rates, letting the local dollar rise or fall against the currencies of its main trading partners within an undisclosed band.
(Bloomberg) — Canada is in the process of choosing advisers for its debut green-bond sale as it seeks to finance initiatives intended to reduce the country’s carbon footprint, following other Group of Seven nations including Germany and France.The Department of Finance is selecting one or two structuring advisers after having solicited pitches late last month, according to two people familiar with the matter. The selected firms will help the federal government develop a green-bond framework and determine characteristics of the transaction including size and duration, the people said.A representative for Bank of Canada, which manages the government’s domestic bond program, referred questions to the Department of Finance. Press officers for the Department of Finance didn’t provide comment.Canada’s debut in the green-bond market is part of a wide range of measures Ottawa is putting in place to deliver on its commitment to reach net-zero emissions by 2050. That includes a national carbon tax as well as an increasing focus by its housing and infrastructure agencies on sustainable businesses.The advisers will also help Canada choose firms for third-party opinions, said the people. The government will also ask the structuring advisers to provide recommendations about adherence to voluntary labels such as green-bond principles.The U.K. said last month it plans its first green issue during the 2021-2022 fiscal year, after European Union countries including Germany, Italy and France saw very strong demand for their debt sales.Green-bond issuance this year is on track to reach a fresh record. About $137 billion has been sold globally year-to-date, compared to around $46 billion over the same spans in 2020 and 2019, according to data compiled by Bloomberg. Ontario, the word’s largest sub-sovereign debt issuer, is the nation’s largest seller of green debt with C$7.5 billion ($6 billion) outstanding.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
OPEC on Tuesday raised its forecast for growth in world oil demand this year on expectations the pandemic will subside, providing help for the group and its allies in their efforts to support the market. "As the spread and intensity of the COVID-19 pandemic are expected to subside with the ongoing rollout of vaccination programmes, social distancing requirements and travel limitations are likely to be scaled back, offering increased mobility," OPEC said in the report. The upward revision marks a change of tone from previous months, in which OPEC has lowered demand forecasts because of continued lockdowns.
(Bloomberg) — If Deliveroo Holdings Plc’s listing was meant to hang an ‘Open For Business’ sign over the City of London, the opening day crash in the shares jarred somewhat with the message the U.K. had intended to send about post-Brexit Britain.Personally welcomed by Chancellor Rishi Sunak, the food delivery company’s initial public offering should have been a beacon to lure tech firms against competition from New York and Hong Kong, which have been winning the larger part of the business. Instead, concerns over the company’s governance and the treatment of its riders combined to produce one of the worst market debuts in City history.The ignominious flotation was a symbolic end to a quarter that saw London’s future as a financial center once again put in the spotlight. Since the U.K. left the European Union at the start of the year, London has faced a series of challenges to its pre-eminence, most notably the embarrassment of seeing Amsterdam — a city one tenth its size — take over as the No. 1 location for European share trading.London’s response has been a flurry of reviews into the fintech industry and listing rules, but the Square Mile’s hunt for a new identity remains a work-in-process. Early predictions of dramatic deregulation — the so-called Singapore-on-Thames option — have proved unfounded, perhaps no surprise given the City had an outsized role in writing many of the bloc’s financial rules. And for bankers in London, hopes for unhindered access to EU markets — via a process known as equivalence — have long gone, particularly as Brussels sees Brexit as a chance to deepen its own capital markets.100 Days of Brexit: a series on how Brexit changed Britain ‘Hostile’ EU’s Vaccine Spat With U.K. Boosts Support for Brexit Brexit Britain’s Biggest Test Might Be the Ability to Survive 100 Days of Brexit: Was It as Bad as ‘Project Fear’ Warned?The bloc is stepping up efforts to strong arm even more business from Britain. Banking giants including Goldman Sachs Group Inc. and JPMorgan Chase & Co. have already moved some staff and assets to the continent, and the risk is many more will follow unless the U.K. overcomes the hurdles to secure beneficial terms.JPMorgan’s Chief Executive Officer Jamie Dimon said last week that the EU “has had, and will continue to have, the upper hand.” Dimon, a long-time skeptic of Brexit, also warned he could shift bankers serving EU clients out of London.“It is clear that, over time, European politicians and regulators will make many understandable demands to move functions into European jurisdictions,” he said in his annual shareholder letter. “Paris, Frankfurt, Dublin and Amsterdam will grow in importance as more financial functions are performed there.”London’s global financial status, built on centuries of tradition and supercharged by the “Big Bang” of deregulation more than three decades ago, is unlikely to be undone by Brexit. The City got some good news on Monday when cybersecurity company Darktrace Plc announced plans for an IPO that could value the business at about $3 billion to $4 billion. Its CEO, Poppy Gustafsson, called it a “historic day for the U.K.’s thriving technology sector.”But the chipping away that’s taken place in just a matter of months has yet to be replaced by a compelling vision for London’s future, despite that multi-pronged series of reviews aimed at maintaining its position. Many of the proposed changes amount to fine tuning rather than a complete tearing up of the rulebook. Speaking to Bloomberg, executives of several major banks said they don’t expect authorities to ditch inherited rules, including the bonus cap on banker pay.What they expect is what some call a “tailoring” of London’s approach, hardly the swashbuckling reforms that some imagined.Instead, banks want to eliminate some of the annoyances that came with being part of the EU, such as time-consuming and expensive trade reporting requirements, and rules that make it more difficult to raise capital from smaller investors. The hope is the efficiency shown by the U.K. in its coronavirus vaccination policy — which is far outpacing the EU rollout — can be replicated when it comes to financial services.“It’s about speed and nimbleness, rather than sweeping changes,” said William Wright, founder and chief executive officer of New Financial, a London-based think tank.Evolution not revolution also means protecting existing strengths as much as possible. However, London’s relationship with the EU was barely mentioned in last year’s Brexit trade deal, and those talks highlighted resentments and political point scoring that could frustrate any future discussions. Of the 39 areas in which the EU could find Britain financially equivalent, it has granted only two, and both are time-limited.“I think there’s a lot of Europeans that want to have a bite of the golden goose,” said Fraser Thorne, chief executive officer of Edison Institutional Services Ltd, a London-based financial advisory firm.Read More: Listen to the Latest Stephanomics Podcast on 100 Days of Brexit How Brexit Is Changing the City of London, One Piece at a TimeOne minor positive for the City in 2021 was that the U.K. and the EU agreed a framework for talks late last month, and in a rare Brexit development, it was done on deadline. But realistically even that Memorandum of Understanding amounts to very little, and the sense is that no significant access to EU financial markets is on the cards anytime soon.Brussels has made no secret of its desire to become less reliant on U.K.-based financial services. Seen from outside Britain, Europe’s lack of a major global financial center within its own borders is a matter of political and strategic concern, and one that policy makers want to rectify.In the U.K., even some of the more mild-mannered British public servants are being more forthright about the need to protect London against an increasingly aggressive EU. At the Bank of England, Governor Andrew Bailey used a Parliament hearing to, unprompted, bluntly deliver a message: The U.K. would “resist very firmly” any EU attempt to force relocations.Any post-Brexit identity for the City will also be forged by the new business it attracts, as much as what remains in place.Sunak and his Treasury minister, John Glen, have spent the past few months trying to sell the benefits that London can offer outside a more rigid EU system.“If they get it right, London will remain an incredibly strong force,” said Alasdair Haynes, CEO at Aquis Exchange Plc. “But if they argue and there's a lot of bickering and we can't move swiftly and there's political interference then actually London is probably in the most precarious place it has ever been.”Officials are making a big play for the U.K. to build on its position as a hub for financial innovation, cultivating a growing ecosystem of fintech businesses spanning everything from consumer-facing businesses attempting to steal retail customers from the big lenders through to niche firms supplying specialized technology services to investment banks.Iana Vidal, head of government relations and policy at Innovate Finance, the lobby group for the U.K. fintech industry, says Britain could steal a march on the rest of Europe by moving faster to help mold the regulatory structure for the nascent sector.“We want to have a first-mover advantage,” she said. “You could potentially gain a head start over your competition in Europe.”That’s an opportunity acknowledged by Brexit critic Dimon, who said London “still has the opportunity to adapt and reinvent itself, particularly as the digital landscape continues to revolutionize financial services.”But in the short-term he’s pessimistic, warning that Brexit “cannot possibly be a positive” for the U.K. economy.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) — Abu Dhabi sovereign wealth fund Mubadala Investment Co. said it’s “close” to an initial public offering of Emirates Global Aluminium PJSC as it studies other major deals including a role in a consortium investing in Saudi Aramco’s oil pipelines.“We’ve been thinking about this for a couple of years and waiting for the right time for that business to be IPO’d,” Chief Executive Officer Khaldoon Al Mubarak said on Monday when asked about EGA, the Middle East’s biggest producer of aluminum. “We’re very close now.”Coming off its busiest year ever, the $232 billion fund has shown little sign of slowing down in 2021, striking deals ranging from purchasing a Brazilian refinery to investing in convertible bonds of messaging app Telegram.EGA, which is equally owned by Mubadala and Investment Corp. of Dubai, has smelters in Abu Dhabi and Dubai and a bauxite mine in Guinea. Its revenue in 2020 was $5.1 billion and it made earnings before interest, tax, depreciation and amortization of $1.1 billion.The company had planned an IPO in 2018 or 2019 but it was pulled after then-U.S. President Donald Trump imposed tariffs on aluminum imports from the United Arab Emirates. His successor Joe Biden said in February that he would keep the U.S. restrictions in place, reversing Trump’s last-minute move to grant the UAE relief from the duties.“We will decide, obviously, when the appropriate market conditions are there, but the company is certainly in a very strong position and I think is well placed for an IPO,” Al Mubarak said during a virtual conference.EIG TalksMubadala is meanwhile considering other deals. It hasn’t yet decided whether to join a group led by EIG Global Energy Partners LLC that agreed on a $12.4 billion deal with Aramco.The wealth fund has teams studying the opportunity and looking at possible returns on investing in neighboring Saudi Arabia, according to Al Mubarak. It’s previously said that it was in talks with EIG.According to an announcement last Friday, the investors will buy 49% of Aramco Oil Pipelines Co., a recently-formed entity with rights to 25 years of tariff payments for crude shipped through the Saudi Arabian firm’s network. Aramco will own the rest of the shares and retain full ownership of the pipelines themselves.Read more: Mubadala Discusses GlobalFoundries IPO at $20 Billion Value Mubadala has also made no decision about a share sale of its wholly-owned chipmaker GlobalFoundries, according to Al Mubarak. Earlier this month, Bloomberg reported that the wealth fund had started preparations for a U.S. IPO that could value the business at about $20 billion.“GlobalFoundries is a strong, well-run business,” Al Mubarak said. “We have not taken a view or a decision yet.”India PushAfter an initial pause after the pandemic first hit, the wealth fund doubled down and invested more in 2020 than in any previous year, the CEO said.India emerged as one key destination for Mubadala’s money, with its investments there in 2020 eclipsing the combined total of the preceding 19 years, Al Mubarak said.The wealth fund invested $1.2 billion in Reliance Industries Ltd.’s digital upstart Jio Platforms Ltd. in 2020, a deal that gave Mubadala a 1.85% stake in the venture.“Clearly, we were underweight in terms of India” and “over the last many years we didn’t invest as much as we should,” the CEO said. “That’s changing, and as far as we’re concerned in Mubadala, we’re certainly giving it a very particular focus.”(Updates with details on EGA in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) — New Zealand’s central bank signaled it is in no rush to remove monetary stimulus, saying the outlook remains uncertain as the economy gradually recovers from the Covid-19 pandemic.The Reserve Bank’s monetary policy committee on Wednesday maintained its current stimulatory settings, holding the official cash rate at 0.25% and the Large Scale Asset Purchase program at NZ$100 billion ($71 billion). It reiterated it is prepared to lower the cash rate further if required.“The committee agreed that, in line with its least regrets framework, it would not remove monetary stimulus until it had confidence that it is sustainably achieving the consumer price inflation and employment objectives,” the bank said. “Given that uncertainty remains elevated, gaining this confidence is expected to take considerable time and patience.”Policy makers are assessing whether an expected pick-up in inflation this year will be sustained, and whether the labor market’s gradual recovery will be hurt by the possibility of a double-dip recession. At the same time, the government now requires the RBNZ to consider the impact of its decisions on New Zealand’s housing market, where soaring prices are raising concerns about widening social inequalities.“The New Zealand economy is evolving broadly in line with RBNZ expectations, and there’s time to see how more recent developments impact things,” said Sharon Zollner, chief economist at ANZ Bank New Zealand in Auckland. “The RBNZ is under no pressure to make any bold calls about how precisely things will turn out.”The New Zealand dollar rose after the statement. It bought 70.88 U.S. cents at 3:21 p.m. in Wellington, up from 70.60 cents beforehand.The RBNZ said the outlook for growth remains similar to the scenario it presented in its last statement in February. It said inflation is likely to exceed its 2% target “for a period” but this is likely to be temporary.“This outlook remains highly uncertain, determined in large part by both health-related restrictions, and business and consumer confidence,” it said. “The committee agreed that medium-term inflation and employment would likely remain below its remit targets in the absence of prolonged monetary stimulus.”New Zealand’s economy has enjoyed a V-shaped recovery from its pandemic-induced recession and the housing market is booming, turning attention to when the RBNZ might begin to remove stimulus. The jobless rate fell to 4.9% in the fourth quarter and the central bank in February forecast that inflation will accelerate to 2.5% by June, exceeding the midpoint of its target range.Double-Dip Recession?Still, the economy unexpectedly contracted 1% in the final three months of 2020 and economists see little or no growth in the three months through March, raising the prospect of a double-dip recession.Some analysts are tipping the RBNZ will explicitly start to reduce its bond buying later this year, with a minority already projecting rate rises in 2022. But others see the central bank on hold for a prolonged period after the government in March announced a raft of measures to cool the rampant housing market, including tax adjustments to curb investor demand.The RBNZ said the extent of the dampening effect of the government’s new housing policies on house prices, and hence inflation and employment, will “take time to be observed.”New Zealand will start to allow travelers from Australia to enter the country without undergoing quarantine from April 19, which may deliver some relief for a decimated tourism industry. But the border is expected to remain closed to all other foreigners throughout 2021, and the country won’t start mass immunization until the second half.“The planned trans-Tasman travel arrangements should support incomes and employment in the tourism sector both in New Zealand and Australia,” the RBNZ said. “However, the net impact on overall domestic spending will be determined by the two-way nature of this travel.”In late February, the government instructed the RBNZ to consider the impact on housing when it makes monetary and financial policy decisions. Specifically, the monetary policy committee will to need to explain regularly how it has sought to assess the impacts of its decision on housing outcomes, Finance Minister Grant Robertson said at the time.“The committee’s initial assessment is that stimulatory monetary policy is playing a role in lifting house prices,” the bank said today. “Other factors are also influencing house prices including: the impact of low global interest rates on all asset prices, constrained housing supply and infrastructure, land use regulations, tax policies and the broader recovery in aggregate demand.”(Updates with economist in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
It’s a busier day ahead on the economic calendar after some key stats from the Asian session. The EUR, the GBP and the Greenback will be in focus later today.
(Bloomberg) — Tesco Plc shares fell after the retailer signaled U.K. grocery sales growth may decelerate as pandemic restrictions ease and consumers gradually start returning to offices and eating less at home.Tesco forecast however that lower costs will allow profit from its grocery business to recover to pre-pandemic levels. Operating profit was 1.8 billion pounds ($2.5 billion) on an adjusted basis in the year through February. Analysts expected 1.76 billion.Key InsightsTesco has benefited from more people needing food at home while working remotely. The U.K.’s vaccination drive is leading many people to return to workplaces and start eating out again, which could undermine revenue growth.A boom in online ordering has made the grocer’s online operation more profitable with U.K. e-commerce sales rising by 77%.The pandemic added costs of about 900 million pounds for Tesco to operate stores and warehouses safely during the outbreak. The retailer expects only a quarter of those costs to repeat this year, Chief Executive Officer Ken Murphy said on a call with reporters.Tesco’s banking division should also return to profit, which will eliminate another drag on its business.Market ReactionShares in Tesco fell as much as 4.4% in London Wednesday morning.Get MoreRead the statement.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
SINGAPORE (Reuters) -Crude oil climbed on Wednesday after industry data showed U.S. inventories declined more than expected and OPEC raised its outlook for oil demand, but gains were capped by worries about the coronavirus and by rising supplies. U.S. West Texas Intermediate (WTI) crude futures added 82 cents, or 1.4%, to $61 a barrel, following Tuesday's rise of 48 cents.