Headlines

Spain’s arduous economic recovery has reached a milestone after the number of people employed finally surpassed pre-crisis levels, the Financial Times reported. But while the figure of 19.52m with jobs, announced by the labour ministry on Tuesday, represents a new peak and the highest since 2007, other statistics present a bleaker picture of the negative effects of a decade of turmoil and its effects on millions of workers. Despite the rising job numbers, Spain still has an unemployment rate of 13.6 per cent, according to EU statistics, the worst in the 28-country bloc after Greece.

Costa Rica’s legislative assembly on Monday approved the placement of up to $1.5 billion in bonds in coming months as the Central American country struggles to reduce its mounting debt burden, Reuters reported. Over the past 10 years, public debt in Costa Rica has doubled and now stands at about 53 percent of gross domestic product. The first tranche of the dollar bond debt issue will be placed in international markets from August, said Rocio Aguilar, Costa Rica’s finance minister. The government will have a year to complete the bond issue.

Turkey has announced plans to sell debt in the international bond market for the first time since March as the country seeks to take advantage of a thaw in investor sentiment and a sharp drop in yields across developed markets, the Financial Times reported. The country has hired BNP Paribas, Citigroup and HSBC to sell a dollar-denominated bond that will mature in 2024, the Ministry of Treasury and Finance said. It will mark the fourth time this year the country has sold paper in currencies other than the lira.

Countries that perform well on environmental, social and governance metrics are viewed by investors as less likely to default, a new study that examined credit default swap spreads on sovereign bonds has found, the Financial Times reported. In an analysis of 59 countries between 2009 and 2018, Hermes Investment Management found that countries with the best ESG scores tend to have the lowest CDS spreads and vice versa, suggesting a link between credit risk and ESG performance.

Let this sink in for a minute: Yields on two-year Italian government bonds briefly fell below 0% on Tuesday. That's right - for a moment, investors decided it was just fine to pay Italy for the privilege of lending it money, even though barely a month ago the country was on the verge of a fiscal crisis so bad some wondered whether it would be need to leave the euro zone, a Bloomberg View reported. It matters little that yields ended the day on the right side of zero at 0.02%, but even that shows how the “greater fool” theory in markets has gone too far.

Funding Circle floated to much fanfare last September. It matches small businesses who want to borrow with investors looking for better returns than their cash could earn sitting in a savings account, the Financial Times reported. Shareholders may feel aggrieved about their returns however: shares in the lender are already down more than 60 per cent since its debut and fell another 25 per cent at the beginning of trading today. The reason for the sharp fall? Funding Circle warned this morning that revenue growth this fiscal year will only be half of what it previously expected.

Moody’s Investors Service’s India unit has put its chief on leave amid a probe into a controversial rating decision, in the latest sign of trouble in the nation’s credit evaluation industry, Bloomberg News reported. ICRA Ltd.’s board has decided to place Chief Executive Officer Naresh Takkar on leave, the company said in an exchange filing Monday evening. The rater is examining concerns raised in a whistle-blower complaint, sent to it by the regulator, that its executives interfered to guarantee top ratings for a financier that plunged to default just two months later.

Truworths International Holdings Ltd. fell the most in five months in Johannesburg as the South African retailer joined the ranks of those feeling the pain from the U.K.’s ailing shopping streets, Bloomberg News reported. Truworths said Tuesday British footwear subsidiary Office had started debt restructuring talks with its lenders in the face of the “depressed retail trading environment.” The stock slumped as much as 6.5%, the biggest drop since January, making it the second-worst performer among Johannesburg’s general retailers this year.

The Indian government is considering giving more powers to the central bank to regulate the struggling shadow banking sector, Finance Minister Nirmala Sitharaman informed the Parliament on Monday, the International New York Times reported on a Reuters story. The government does not have any plans to infuse funds in privately-held shadow banks, she said in a written reply. "Government has received a proposal from RBI to strengthen RBI's regulatory and supervisory powers under the Reserve Bank of India Act, 1934, and the same is under consideration," Sitharaman said.

China’s banking regulator plans to tighten rules on so-called cash-management products, according to people familiar with the matter, impacting an estimated $2 trillion worth of the investments, Bloomberg News reported. The China Banking and Insurance Regulatory Commission aims to treat CMPs similar to money-market funds by imposing stricter rules on pricing and restricting where and for how long the inflows can be invested, the people said, asking not to be identified as the deliberations are private.