North America

HSBC’s chief executive was dislodged by the force of the challenges facing the bank. Now, its global markets division is under pressure as senior management continues with reform, writes David Rothnie.

The two to 10 year section of the Gilt market inverted on Wednesday and 30 year US debt yields fell below 2%, strengthening portents that the UK is headed for a recession, though SSA bankers showed no concern about the moves.

Credit Suisse sold a dollar-denominated additional tier one (AT1) bond on Wednesday. Despite hefty demand for the notes, the issuer only revised the pricing by a small margin as market turmoil increased through the day.

Acadia Healthcare, which owns UK mental healthcare provider the Priory Group, needs the consent of lenders if it wants to go through with its plan to sell the company, a research company says. US-based Acadia could be forced to use the proceeds of the sale to deleverage.

Equity capital markets bankers and investors are coming to terms with the idea that there may not be a trade deal to end tensions between the US and China this year, despite the former delaying some of its latest tariffs on Chinese goods until the end of the year.

The People’s Bank of China (PBoC) bagged Rmb30bn ($4.3bn) through a two tranche trade on Wednesday. It was not the first time the issuer picked a curious time to sell Bills.

Recession fears are rising again as GDP slows, global trade tensions rise and overvalued stock markets become more volatile. Big tech should take advantage of high price to earnings ratios to raise equity capital now and to prepare for tougher days ahead.

In this round-up, China’s positive trade data despite the trade war surprised markets, trading volume in USD/CNH futures hit new highs thanks to the weak renminbi, and the Mainland’s foreign currency reserves fell after two months of growth.

In this round-up, hostility between China and the US continued, the State Council unveiled rules on the Shanghai Free Trade Zone and Beijing said it would intervene if the Hong Kong government fails to calm down the recent unrest.

Mexican leasing company Unifin issued $200m of three year debt via a private placement this week on the back of reverse inquiry from an institutional investor.

Lloyds Bank dipped into dollars for senior funding on Wednesday, a day after UBS launched a deal in the same currency. A syndicate official noted that European financial institutions are being tempted across the Atlantic amid more inhospitable conditions in the euro market this summer.

As the market digests news of the weaker renminbi, which broke seven against the dollar for the first time since the financial crisis on Monday, analysts are predicting that a new equilibrium for the currency will emerge. Rebecca Feng reports.