Headlines

In recent weeks, the sometimes-frantic developments in Italian politics and the responses from its European partners have unleashed a dangerous mix of panic and speculation, which risked becoming a self-fulfilling prophecy until the formation of a new government calmed markets, the Financial Times reported. Turbulence was initially triggered by leaks of the agreement between the League and the 5 Star Movement, as the first version provided for an exit clause from the euro and the cancellation of government bonds purchased under the ECB’s quantitative easing programme.

Most customers of collapsed UK brokerage Beaufort Securities will not face any costs as a result of the firm’s insolvency, after administrators PwC revised down its fees, the Financial Times reported. The accountancy firm said on Friday it had reached an agreement with creditors and the Financial Services Compensation Scheme to cap fees at £10,000 per customer, with many expected to pay far less than that. Fewer than 10 customers, with large cash accounts, are now expected to take a haircut on their funds following a meeting of creditors held on Wednesday.

Greece’s supreme court has rejected an appeal by the country’s former statistics chief to quash his conviction in 2017 on charges of violation of duty, the Financial Times reported. According to people with knowledge of the decision, which has not yet been officially made public, the supreme court upheld the ruling against Andreas Georgiou, the former president of the statistical agency Elstat, even after the court’s own prosecutor asked for the conviction to be annulled.

House of Fraser said it needed to close 31 stores to survive, in a plan likely to result in as many as 6,000 job losses, making the department store group the latest in a long line of retail casualties in Britain, Reuters reported. The closures include the group’s flagship shop on Oxford Street in central London and will leave it with just 28 stores across Britain and Ireland.

China’s efforts to connect the world’s third-biggest bond market with the international financial system are hitting dual headwinds -- a climb in global borrowing costs, and the country’s own campaign to reduce financial leverage, Bloomberg News reported. The dynamics have contributed to defaults by 12 bond issuers in 2018 through June 4, after 18 for the whole of 2017, according to Fitch Ratings. Firms from JPMorgan Chase & Co. to Fidelity International are warning to prepare for more.

Kuwait’s Public Institution for Social Security is seeking the liquidation of Abraaj Holdings as creditors step up pressure on the Dubai-based buyout firm that’s facing allegations of misused funds, Bloomberg News reported. The fund filed a petition in the Cayman Islands for the liquidation and winding up of Abraaj Holdings after the firm defaulted on a $100 million loan that was due on June 3, the Public Institution for Social Security said in a statement. The fund holds a stake in Abraaj Holdings and had provided $731.8 million in loans and investments by 2013, it said.

HSBC Holdings Plc’s Steven Major is starting to show a little less conviction on two of his big investment calls of recent years: bullish Treasuries and bearish credit. The shift comes as traders shaken by weeks of turbulence across asset classes regain their footing, Bloomberg News reported. In European credit markets, the biggest high-grade sell-off in more than two years has created a short-term buying opportunity, while Treasuries offer little less value given the Federal Reserve’s policy trajectory, the strategist said in a research note.

The European Central Bank’s chief economist has just shown how determined his colleagues are not to flinch over Italy, Bloomberg News reported. Peter Praet’s message to investors on Wednesday to be ready for a pivotal discussion on quantitative easing on June 14 underlines how officials led by President Mario Draghi are keen to appear unfazed at the political crisis in the region’s third-biggest economy. Within two weeks, the ECB went from watching investors fret over the return of euro zone turmoil to arriving at the cusp of winding down bond buying.

The International Monetary Fund came to Argentina’s rescue on Thursday with a standby arrangement worth $50bn over three years, far more than envisaged by markets which are expected to welcome the move. The loan is subject to approval from the IMF board, the Financial Times reported. Its size surprised local media which had speculated would be closer to $30bn. “I thought it was going to be big but this far exceeds expectations.

An early rebound in embattled eurozone financials on Thursday fizzled out in later trading, as investors remain divided on whether the sector truly represents a long-term buying opportunity, the Financial Times reported. The Euro Stoxx bank index sits near a 19-month low and is down 11 per cent for 2018 but stabilised after European Central Bank officials expressed confidence on Wednesday that the need for aggressive stimulus could conclude by the end of the year as the economy gained momentum and inflation rose.