“The dollar’s influence on global financial conditions could similarly decline if a financial architecture developed around the new ‘Synthetic Hegemonic Currency’ and it displaced the dollar’s dominance in credit markets. By reducing the influence of the US on the global financial cycle, this would help reduce the volatility of capital flows to emerging market economies.” […]
Best Reads
Italian PM Giuseppe Conte resigns plunging the country into fresh political turmoil (Euronews)
“Italy’s Prime Minister Giuseppe Conte has resigned, plunging the country into fresh political turmoil.” – by Gareth Browne
Switzerland Is Held Captive By Its Big Neighbor (Bloomberg)
“With the ECB set to cut rates, the Swiss will have little choice but to go even deeper into negative territory. The SNB is a price-taker, not a price-maker.” – by Marcus Ashworth
U.S. Efforts To Derail Russian Pipelines To Europe Have Failed Since The 1960s (RFERL)
“The Trump administration and the U.S. Congress are fighting to block the 9.5 billion-euro ($10.6 billion) Nord Stream 2 project amid fears it will make NATO allies and other European countries more reliant on Russian energy and damage Ukraine by depriving it of transit fees.” – by Todd Prince
MW is Short Burford Capital Ltd (Muddy Waters Research)
“We are short BUR. For years, it was the ultimate “trust me” stock. Thanks to a light disclosure regime, the esoteric nature of its business, and unethical behavior by its largest shareholder, Invesco, it turned Enron-esque mark-to-model accounting into the biggest stock promotion on the AIM.” – Muddy Waters Research
EU disunity on US’s anti-Nord Stream 2 push (Politico)
“The European Commission doesn’t like the Nord Stream 2 gas pipeline. But it also doesn’t like the idea of the U.S. imposing sanctions to stop the Russia-backed project.” – by Anca Gurzu
European Alternatives Industry Hits €1.62 Trillion in Assets (CIO)
“Despite the European macroeconomic picture being “muted” for the past two years, last year saw record activity in most alternative asset classes. European alternative asset fund managers held €1.62 trillion ($1.82 trillion) in assets as of June 2018, up €300 billion in three years” – by Michael Katz
Boris Johnson wins race to be Tory leader and PM (BBC News)
“Boris Johnson has been elected new Conservative leader in a ballot of party members and will become the next UK prime minister.” – by Laura Kuenssberg
Ursula von der Leyen’s election is a bad day for Emmanuel Macron (New Statesman)
“The election is a reminder that ultimately it’s member states who have primacy, not European-wide institutions. ” – by Stephen Bush
Restructuring the next wave of cov-lite debt (JDSupra)
“89% of European HY bond deals in 2018 provided for cost savings and/or synergies to be included in EBITDA or pro-forma adjustments.” “85% of all leveraged loans in the UK were cov-lite by the end of 2018.” by White & Case