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Calls for WeWork’s CEO to step down, yuan gains as trade talks eyed, and explaining the repo market. Here are some of the things people in markets are talking about today.
Some WeWork directors are planning to push Adam Neumann to step down as chief executive after the startup delayed its initial public offering, according to people familiar with the matter. Officials tied to SoftBank Group Corp., the company’s largest investor, want Neumann to step down as CEO of We Co., WeWork’s parent company, said the people, who asked not to be identified because discussions are ongoing. SoftBank founder Masayoshi Son is among those favoring Neumann’s removal, CNBC reported Sunday, citing sources it didn’t identify. Representatives for WeWork and SoftBank declined to comment. A board meeting could come as early as this week.
The yuan climbed with U.S. equity futures as investors monitored signs of progress in trade discussions between the two largest economies. The yen edged lower and stock futures pointed to a mixed start in Asia Monday. Japan is closed for a holiday. China’s Ministry of Commerce said trade groups from the two nations held “constructive” talks on relevant economic and trade issues of mutual concern in Washington last week. Also helping sentiment: China Business News reported that Vice Agriculture Minister Han Jun said his nation’s withdrawal from a planned visit to U.S. farm states had nothing to do with trade talks. U.S. equities retreated Friday and Treasuries rose. Investors will also be watching this week: the U.K. Supreme Court may rule on the legality of Prime Minister Boris Johnson’s suspension of Parliament and U.S. GDP data is released. U.S. central bankers will be on parade including New York Fed President John Williams and St. Louis Fed President James Bullard. In Asia, there’s a Thailand rate decision Wednesday.
Hong Kong Update
Hong Kong police again clashed with protesters in various parts of the city, with firefighters called in to put out blazes set by the demonstrators in the 16th week of pro-democracy protests. Earlier thousands had rallied at shopping malls in Hong Kong’s Kowloon and New Territories districts, after an afternoon that saw some people vandalize a train station before clashing with riot police in the Shatin area. The rallies were initially relatively muted coming after Saturday’s clashes that continued late into the night with protesters throwing petrol bombs and police firing tear gas.
In normal times, not even Wall Street thinks too much about the arcana of short-term money markets. But over the past week, the Federal Reserve has had to work unusually hard to rein in a key policy rate after overnight repo lending dried up. Suddenly, everyone is asking the same question: what does it mean? Despite assurances by the Fed and others to the contrary, the stress in the market for repurchase agreements, or repos, has exposed some fundamental weaknesses in the nation’s financial system which have been a decade in the making. While they don’t pose a significant problem during good times, the risk is clear: without a permanent fix, sudden cash shortages could lead to broader financial market turmoil in a downturn.
Deutsche Bank Asset Transfer
Deutsche Bank AG is close to completing a deal with BNP Paribas SA to transfer its prime brokerage business to the French bank, according to people familiar with the matter. The transaction may be announced as early as Monday, said the people, who didn’t disclose the terms of the deal. No final agreement has been reached and the accord could still be delayed or fall apart, the people said, asking not to be identified discussing private information. Representatives at Deutsche Bank and BNP declined to comment.
What We’ve Been Reading
This is what’s caught our eye over the weekend.
- Asia’s best-performing currency may have room to run.
- India’s Modi endorses Trump ahead of 2020 election.
- A long-despised and risky economic doctrine now a hot idea.
- Hedge funds expose banks to heightened CLO Risk, BIS says.
- China interested in Thai manufacturing sites amid tariffs.
- Five heirs from wealth Asian families focus on pollution.
- China’s love affair with Australia fizzles.
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