HONG KONG (Reuters Breakingviews) - The markets just delivered a stinging reminder about Chinese consumption. Fresh threats by President Donald Trump to apply tariffs on another $200 billion of goods from the People’s Republic sent mainland stocks reeling on Tuesday. They are now trading at their lowest in a year. Bond prices also fell and the yuan posted its sharpest single-day decline against the dollar since January 2017. Local demand has not yet decoupled from global trade.
LONDON (Reuters Breakingviews) - By the UK accountancy regulator’s timid standards, criticism that big audit firms “must act swiftly” to improve the quality of their work is a sizeable rebuke. The power to impose larger fines adds extra heft to official censure. Still, it does nothing to solve the fundamental problem in the accounting business: a lack of competition.
MILAN (Reuters Breakingviews) - Immigration has once again become the European Union’s top political challenge. Though fewer people are arriving from Africa and elsewhere than a few years ago, the issue will be central when EU leaders meet next week. A unified approach could help prevent a repeat of the crisis of 2015. The danger is that anti-immigrant sentiment pushes countries like Germany and Italy towards ineffective piecemeal solutions.
HONG KONG (Reuters Breakingviews) - ZTE is becoming a harder option to price. The Chinese telecommunications equipment maker’s future rests in the hands of American politicians. It lost another $1.4 billion in value on Tuesday morning after the U.S. Senate passed a measure that would yank a lifeline thrown by the Trump administration. The company’s fate isn’t sealed yet, though.
LONDON (Reuters Breakingviews) - Virgin Money has turned out to be an acquiescent bride. The UK lender on Monday agreed to wed larger CYBG in a deal worth 1.7 billion pounds. The agreement to create the UK’s sixth-biggest bank by assets comes barely a month after Virgin Money spurned an initial approach. A union may well make sense – but its shareholders are entitled to feel short-changed.
NEW YORK (Reuters Breakingviews) - Poor Mexico, the saying goes. So far from God, so close to the United States. Not so, says Andrew Selee in his new book “Vanishing Frontiers: The Forces Driving Mexico and the United States Together”. The two countries, which share a 2,000-mile border and a sometimes bloody history, are united by complex, ever-deeper ties that contradict easy prejudice.
LONDON (Reuters Breakingviews) - Rolls-Royce investors are keeping their seat belt fastened despite the promise of an increasingly smooth journey. The British plane engine-maker aims to generate 1 pound of free cash flow per share over the mid-term, quadruple this year’s estimate. Despite the bullish new target, shareholders don’t look to be pricing it in fully. A distant horizon and history of one-off costs suggest why.
HONG KONG (Reuters Breakingviews) - Xiaomi's initial public offering escalates the battle of the bourses. The smartphone-maker originally filed to list in Hong Kong. On Thursday, the Beijing-based company said it will sell at least half of its expected $10 billion initial public offering across the border in Shanghai. This is a blow to the former British colony which only recently changed its rules to woo more tech listings.
NEW YORK (Reuters Breakingviews) - Carlo Cottarelli talks about how he nearly led a caretaker government after President Sergio Mattarella last month rejected a euroskeptic finance minister put forward by the parties that won March elections. The former IMF economist has some advice for Italy’s new bosses.
NEW YORK (Reuters Breakingviews) - The telco firm prevailed against the DOJ and can now legally buy Time Warner for $85 bln. The green light doesn’t mean that regulators will roll over for other deals however. T-Mobile US and Sprint may still be in the crosshairs. Plus: An Australian bank cartel runs into trouble.
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