Michael Barr, vice-chair for supervision at the US Federal Reserve, outlined tougher capital rules for larger lenders.
Institutions with US$100 billion or more in assets will be required to stow away additional capital that can be used to absorb any losses.
In response, banks including JPMorgan Chase, Bank of America and Goldman Sachs, said further capital requirements would lead to higher borrowing costs and fewer loans for consumers and businesses. The financial sector was 0.3 per cent higher at the time of writing.
Amazon announced a partnership with travel booking site Priceline to offer discounts during Tuesday’s Prime Day – a shopping event with deals exclusively for Amazon Prime members. This is the first time an online travel agency has participated in the shopping event as Amazon broadens its offerings in hopes to boost sign-ups. Amazon declined 2.3 per cent.
Rest of the World
Taiwan’s Foxconn has withdrawn from a US$19.5 billion semiconductor joint venture with Indian conglomerate Vedanta, dealing a setback to chipmaking plans for India. Foxconn (+0.6 per cent) had collaborated with Vedanta for over a year to bring their semiconductor idea to reality.
China’s consumer price index was unchanged in June from the prior year, according to data released by the National Bureau of Statistics. Core inflation, which excludes food and energy costs, slowed to 0.4 per cent from 0.6 per cent.
China’s producer price index fell 5.4 per cent from a year earlier – the ninth consecutive drop and its steepest since December 2015.
Australia
The ASX 200 declined 0.5 per cent as weak Chinese inflation data weighed on iron ore prices and the resource sector. BHP, which accounts for about 10 per cent of the ASX 200, lost 1.1 per cent. Rio Tinto also lost 1.1 per cent, finishing at A$110.48.
Westpac announced the appointment of Luci Ellis as the company’s new chief economist. Ellis, an Assistant Governor at the Reserve Bank of Australia, will begin her new role in October.
She will replace Bill Evans, Westpac’s chief economist since 1991. The company closed at A$20.84 – unchanged from the previous session.
Dual-listed travel software company Serko Limited (NZX and ASX) traded 3.6 per cent higher on light volumes on the ASX. In New Zealand the company increased 1.8 per cent.
New Zealand
NZX 50 closed 0.6 per cent lower at 11,912.7.
Channel Infrastructure announced a conditional Asset Sale Agreement with US-based Seadra Energy for the option to purchase permanently decommissioned parts of the former refinery at their Marsden Point site.
A non-refundable option payment of US$4 million has been paid by Seadra Energy. The purchase price of the assets agreed between the parties is US$33.875m (NZ$54.549m) should Seadra Energy elect to exercise the option.
Channel Infrastructure finished 4.0 per cent higher at $1.57.
Stride Property inched 0.7 per cent higher after advising Industre Property Joint Venture entered into unconditional agreements to sell two industrial assets, at 22 Ha Crescent and 15 Ride Way, both in Auckland.
The aggregate sale price of these properties is $43.5m and is above the combined book value for these assets.
Coming up today
US: MBA Mortgage Applications
UK: Employment (Labour market overview)
Australia: Westpac Consumer Confidence, NAB Business Confidence, CBA Household Spending
NZ: Card spending data expected today has been delayed to Thursday.
For more information on the latest market moves, get in touch with Jarden.
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