2024-10-02 19:11

NEW YORK, Oct 2 (Reuters) - The U.S. Securities and Exchange Commission's enforcement director is leaving the agency, the regulator said on Wednesday, marking the end of a three-year tenure during which the regulator stepped up scrutiny of Wall Street and cryptocurrency firms. Gurbir Grewal has led the SEC's 1,500-person enforcement unit since July 2021, after serving as New Jersey attorney general as well as in other state and federal government roles. During his tenure, SEC enforcement has drawn ire from the likes of cryptocurrency and Wall Street firms for its crackdown on core business practices. The SEC has pursued big cases in the crypto sector during Grewal's tenure, including suing exchanges Binance and Coinbase (COIN.O) , opens new tab for facilitating illicit offerings to retail investors. It also charged FTX as part of a larger government action against the exchange's multibillion-dollar fraud and sued the firm's auditor for negligence. Under his leadership, SEC enforcement staff embarked on a sprawling, multi-year investigative initiative focused on Wall Street's use of personal devices and apps such as WhatsApp to discuss business, levying over $2 billion in civil fines against dozens of firms including JP Morgan Chase JPM.N, Goldman Sachs GS.N and Morgan Stanley MS.N. That "off-channel" investigative sweep, which began in 2021, is still generating enforcement actions, and has also ensnared hedge funds, private equity funds and ratings agencies. The initiative drew attention for its breadth across the sector and the hefty penalties the SEC sought, which Grewal described as an effort to deter violations. "From recalibrating penalties and remedies to confronting emerging risks to holding issuers, insiders, and gatekeepers accountable, I am incredibly proud of all that we’ve accomplished as a Division during my tenure," Grewal said in a statement. Under Grewal, SEC enforcement has also fought Elon Musk in court over the billionaire's failure to show up to testify for the agency's investigation into his takeover of Twitter, now known as X, and brought charges against billionaire investor Carl Icahn for disclosure failures. The enforcement division under Grewal brought more than 2,400 enforcement actions yielding more than $20 billion in penalties and other payments, the SEC said in its statement. Grewal plans to leave the regulator for private practice, according to a source briefed on the matter. His last day at the SEC will be Oct. 11, and Deputy Director Sanjay Wadhwa will take over as acting director, the SEC said. Sam Walder, the division's chief counsel, will take over as acting deputy director. Sign up here. https://www.reuters.com/world/us/us-securities-regulators-top-cop-leave-agency-2024-10-02/

2024-10-02 15:22

Oct 2 (Reuters) - Crypto asset manager Bitwise has filed an initial registration statement with the U.S. SEC for an exchange-traded product for XRP tokens, as it seeks to introduce more crypto products after a landmark regulatory decision to approve spot bitcoin ETF earlier this year. Bitwise earlier this year was among the firms which got the nod from the Securities and Exchange Commission for their bitcoin ETFs. The approval came after a decade-long tussle between the digital asset industry and the SEC, which had rejected the products due to market manipulation concerns. XRP is a digital token that powers the XRP Ledger (XRPL) public blockchain. XRPL is best known for its role in facilitating cross-border payments and remittances. The token has a market value of above $30 billion, Bitwise said. Exchange-traded product is a regularly priced security that trades on a stock exchange. It tracks underlying security, currency or an asset. These are similar to stocks and can be bought and sold during the day. Sign up here. https://www.reuters.com/technology/crypto-asset-manager-bitwise-files-xrp-etp-with-securities-regulator-2024-10-02/

2024-10-02 14:20

WARSAW, Oct 2 (Reuters) - The National Bank of Poland (NBP) left interest rates unchanged on Wednesday, in line with expectations, and said inflation should return to target after the energy price shock fades. Inflation in September was 4.9%, well above the upper limit of the central bank's inflation target of 2.5% plus or minus one percentage point, and is expected to rise further at the turn of the year. However, in the medium term, the central bank expects CPI to return to target. "When the effects of the energy price increase fade – amid the current NBP interest rates level – inflation should return to the medium-term target," the Monetary Policy Council (MPC) said in a statement. "The inflation developments over the medium term will be also affected by further fiscal and regulatory policy measures, the pace of economic recovery in Poland and labour market conditions." The Polish MPC has kept interest rates unchanged since October 2023, with the reference rate at 5.75%. Meanwhile, other central banks in the region are in the process of easing monetary policy - interest rates are falling in Hungary and the Czech Republic, and recently the U.S. Fed and European Central Bank have also lowered costs of borrowing. The market is now waiting for Thursday's press conference with Governor Adam Glapinski. In September, Glapinski reiterated that the central bank did not expect inflation to return to target before 2026. He said it could, however, start weighing monetary easing earlier, with the March 2025 inflation projection being a key moment. "The MPC did not surprise and did not change interest rates. There is a long way to go before cuts are resumed, complicated by, among other things, the increase in core inflation," Bank Pekao analysts wrote on social media platform X. Sign up here. https://www.reuters.com/markets/europe/polish-cbank-leaves-rates-unchanged-inflation-remains-high-2024-10-02/

2024-10-02 14:12

BRASILIA, Oct 2 (Reuters) - The upgrade of Brazil's credit rating by Moody's highlights a risk premium in the local yield curve that does not reflect the fundamentals of Latin America's largest economy and should be reduced, Finance Ministry officials told Reuters on Wednesday. Following Tuesday's upgrade of Brazil's long-term issuer and senior unsecured bond ratings to Ba1 from Ba2, moving the country just one notch from regaining investment grade, the Brazilian real opened 1% higher against the U.S. dollar. Meanwhile, interest rate futures were trading lower, though still above 12% for longer maturities -levels many economists consider high and unsustainable in the long run. Speaking anonymously, a senior ministry official said Moody's action, taken amid strong market skepticism reflected in asset prices over Brazil's fiscal outlook, would help restore normality. "The revision, together with the maintenance of a positive outlook, should start to encourage non-resident inflows, as they tend to anticipate investment-grade status," the official said. "As it becomes credible that we'll regain investment grade by 2026, the movement should intensify by 2025." A second official noted that the current market pessimism reflects what is often an "ideological" view of public finances under the leftist administration of President Luiz Inacio Lula da Silva. Finance Ministry officials have emphasized that Brazil remains committed to meeting the target of eliminating its primary deficit this year and next, with a 0.25% gross domestic product (GDP) margin. Market souring has intensified amid recent government measures considered controversial on how spending, tax exemptions, and new revenues are accounted for, which have raised concerns among experts about the credibility of the country's new fiscal framework and its debt trajectory. Brazil's gross debt has increased 4.1 percentage points year to date, to 78.5% of GDP in August. On Tuesday, central bank chief Roberto Campos Neto said the yield curve's risk premium seemed "exaggerated" compared with peers, whose economies are also not generating primary surpluses. Sign up here. https://www.reuters.com/world/americas/brazil-credit-rating-upgrade-paves-way-reduced-risk-premium-officials-say-2024-10-02/

2024-10-02 14:01

MEXICO CITY, Oct 2 (Reuters) - Mexican central bank deputy governor Jonathan Heath, in an interview published on Wednesday, said that the nation's benchmark interest rate should stay at its current level for longer. Heath, in a podcast with bank Banorte, said that even though core inflation is coming toward the monetary authority's target, the need to keep rates high still persists. The central bank board member was the sole dissident in last month's monetary policy decision, voting to hold the rate at 10.75% when the others moved to cut the rate to 10.50%. Mexico's annual headline inflation slowed to 4.66% in the first half of September, its fourth consecutive fortnight of declines. Core inflation moderated to 3.95%, its lowest level since early 2021. The central bank's inflation target range is 3%, plus or minus one percentage point. Heath added that there was the need to break the stubbornness of services inflation. If inflation comes down in the fourth quarter of this year, "then we could be on the path toward a normalization in monetary policy," he said. Sign up here. https://www.reuters.com/markets/rates-bonds/mexico-cenbanker-heath-argues-holding-benchmark-rate-longer-2024-10-02/

2024-10-02 12:55

LONDON, Oct 2 (Reuters) - China's significant stimulus measures have kicked the prices of key metals higher, and the gains have largely been sustained even amid a debate as to whether Beijing has actually done enough to boost the world's second-biggest economy. The raft of announcements last week, which included lower interest rates and easier home purchase terms, saw metals prices respond, especially those with a high degree of China exposure, such as iron ore. The price of the key steel raw material leapt on both China's domestic exchange and in Singapore, the main contract for global investors. China buys about 70% of global seaborne volumes, with the major exporters being Australia and Brazil. The Dalian Commodity Exchange contract jumped 10.7% to finish at 821.5 yuan ($117.14) a metric ton on Monday, having earlier in the session hit 835 yuan, its highest since July 16. The contract hasn't traded since then given China's extended Golden Week public holidays, but Singapore Exchange futures ended at $108.24 a ton on Tuesday, up 15.4% from the previous close, taking the gain from the recent low of $91.38 on Sept. 23 to 18.4%. What is clear is that the sharp jump in the price of iron ore is a sentiment-driven rally, largely driven by Chinese retail investors. Iron ore prices had been trending lower since reaching $143.60 a ton on Jan. 3, the second trading day of the year, largely as China's steel output moderated amid tepid demand from the key property sector. New home prices fell at the fastest pace in more than nine years in August, according to official data released on Sept. 14, sliding 5.3% from a year earlier. There is also a massive overhang of unsold properties, which has put developers under financial stress and undermined confidence among buyers. The question for the market is whether the latest round of stimulus measures is enough to significantly shift the needle for steel demand, or whether at best they will arrest the current decline without sparking a recovery. Will the measures actually result in higher steel demand, or is the current path of 2024 output likely to be below last year's production still the most likely outcome? It's hard to construct a case that will see a strong rise in steel demand from property by the end of the year. A recovery may be possible in 2025, especially if Beijing continues to implement measures to boost the sector. STEEL OPTIMISM It's outside of property where steel demand may move higher, with policies to boost sales of new energy vehicles and more energy-efficient appliances may result in higher manufacturing demand. Infrastructure demand for steel may also lift as Beijing encourages local governments to accelerate projects. Overall, this means that despite the stimulus last week being by far and away the most significant this year, there are still real doubts as to whether it will result in a major improvement in physical demand for commodities. It's also likely the case that even if China's domestic steel demand does improve from 2025 onwards, it will merely result in a shift to local consumption and a reduction in exports. However, it's also worth noting that sentiment-driven price rallies, such as the current uplift in iron ore, can sustain for an extended period if investors remain confident in the longer-term outlook. While iron ore's reaction to the stimulus has been exuberant, the more subdued response by copper shows some investors remain cautious over China's prospects. China accounts for just over half of the world's copper demand, giving it a dominant position, but also not one that is completely immune to developments in the rest of the world. Shanghai copper contracts ended at 78,810 yuan ($11,227) a ton on Monday, up 1.8% from the close of 77,400 yuan on Sept. 26. London copper closed at $9,979 a ton on Tuesday, around the same level it was prior to the first stimulus announcements last week, and down from the four-month high of $10,080.50 reached on Sept. 26 amid the initial flurry of China optimism. The difference between copper and iron ore is that the iron ore price is far more susceptible to the actions of Chinese retail investors. Copper's muted response to China's stimulus measures is likely because the Western investor community is more sceptical, and at the same time is concerned about the state of demand in the rest of the world. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/exuberant-iron-ore-subdued-copper-show-different-sides-china-stimulus-russell-2024-10-02/