Bank of England Audio Was Leaked, Giving Some Traders an Edge - The New York Times

LONDON — The Bank of England said Thursday that an audio feed from its news conferences had been released to some investors before it had been made public, giving them a leg up on the rest of the market.

The central bank said it was investigating how a third-party supplier had gotten early access to policymakers’ remarks since earlier this year. In the world of high-speed trading, just a few seconds’ lead time can offer some investors a trading advantage.

The Financial Conduct Authority, which regulates Britain’s financial markets, also said it was investigating the leak.

After queries from The Times of London, the bank said the audio feed of its news conferences, which is used as a backup in case the video feed fails, had been “misused by a third-party supplier to the bank since earlier this year to supply services to other external clients.”

The audio feed provides traders a five- to eight-second advantage over the video feed, The Times reported.

The supplier of the audio feed was not identified.

Comments from the Bank of England’s news conferences are closely monitored for indications about the bank’s thinking on interest rates and the state of the economy.

The bank said that it had disabled the supplier’s access. “As a result, the third-party supplier did not have any access to the most recent press conference and will no longer play any part in any of the bank’s future press conferences,” it said in a statement.

“The bank operates the highest standards of information security around the release of the market sensitive decisions of its policy committees,” the statement added. “The issue identified related only to the broadcast of press conferences that follow such statements.”

Any trades made on the basis of leaked information or insider dealing would come under the review of the Financial Conduct Authority.

A spokeswoman for the agency said in an email that it was looking into the Bank of England leak, but declined to comment on whether any trading had occurred on the basis of the leaked information.

The bank routinely puts reporters through tight precautions to prevent leaks that could prove valuable to traders. Before they are allowed to view policy announcements and forecasts ahead of their release, reporters are locked in a room with a security guard standing by and cellphone connectivity is cut. They are not allowed to leave the room until after the embargo is lifted.

Premature access to potentially market-moving information is a crucial concern to financial regulators around the world. In a 2015 case, prosecutors and regulators in the United States asserted that 32 traders and hackers had reaped more than $100 million in illegal proceeds from a scheme that provided a look at corporate news releases before they were made public.

Elian Peltier contributed reporting.

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2019-12-19 08:39:00Z
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Fiat Chrysler and Peugeot owner agree deal to create world's third largest automaker - CNN

The companies said in a joint statement Wednesday that they expect the 50-50 merger to be completed within 12 to 15 months, pending approval from shareholders and regulators.

The deal, which was first announced in October, should help spread the huge cost of developing electric and autonomous vehicles and help the mid-sized carmaker compete with larger rivals. The combined company would have roughly 410,000 employees and annual revenues of $190 billion.

Fiat Chrysler (FCAU) and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of General Motors (GM), which sold 8.3 million, and not far behind Volkswagen and Toyota (TM), which each sold over 10 million. Renault, Nissan and Mitsubishi Motors, which share some resources as part of an alliance, sold a combined 10.8 million cars last year.

In a statement on Wednesday, the companies said that Chinese carmaker Dongfeng Group had agreed to sell part of its stake in PSA back to the French automaker, a move that could appease US regulators.

The planned sale of 30.7 million shares would reduce Dongfeng's stake in PSA from 12.2% to just 4.5%.

The combined company will be based in the Netherlands, which is the current headquarters of Fiat Chrysler, although it will keep a head office for its North American operations near Detroit.

John Elkann, the US-born scion of the Italian family that founded Fiat, will be chairman of the combined company, while PSA chief executive Carlos Tavares will be CEO.

The merger comes amid a global auto sales slowdown, which could worsen as economies around the world slow or even fall into recession.

At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe.

The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

The carmaker with the most urgent need to combine in this case was PSA, which has fallen behind on developing clean cars.

Electric vehicles account for less than 0.3% of its overall sales, and it had to pay Tesla for credits needed to comply with EU emissions standards. Fiat Chrysler has also trailed larger rivals in developing electric vehicles.

Even the biggest players in the industry are making changes.

Volkswagen (VLKAF) and Ford (F) are working together to develop electric and self-driving vehicles, while German carmakers BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop driverless technology. Honda has invested in General Motors' self-driving car unit.

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2019-12-18 12:15:00Z
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Fiat Chrysler and Peugeot owner agree deal to create world's third largest automaker - CNN

The companies said in a joint statement Wednesday that they expect the 50-50 merger to be completed within 12 to 15 months, pending approval from shareholders and regulators.

The deal, which was first announced in October, should help spread the huge cost of developing electric and autonomous vehicles and help the mid-sized carmaker compete with larger rivals. The combined company would have roughly 410,000 employees and annual revenues of $190 billion.

Fiat Chrysler (FCAU) and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of General Motors (GM), which sold 8.3 million, and not far behind Volkswagen and Toyota (TM), which each sold over 10 million.

In a statement on Wednesday, the companies said that Chinese carmaker Dongfeng Group had agreed to sell part of its stake in PSA back to the French automaker, a move that could appease US regulators.

The planned sale of 30.7 million shares would reduce Dongfeng's stake in PSA from 12.2% to just 4.5%.

The combined company will be based in the Netherlands, which is the current headquarters of Fiat Chrysler, although it will keep a head office for its North American operations near Detroit.

John Elkann, the US-born scion of the Italian family that founded Fiat, will be chairman of the combined company, while PSA chief executive Carlos Tavares will be CEO.

The merger comes amid a global auto sales slowdown, which could worsen as economies around the world slow or even fall into recession.

At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe.

The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

The carmaker with the most urgent need to combine in this case was PSA, which has fallen behind on developing clean cars.

Electric vehicles account for less than 0.3% of its overall sales, and it had to pay Tesla for credits needed to comply with EU emissions standards. Fiat Chrysler has also trailed larger rivals in developing electric vehicles.

Even the biggest players in the industry are making changes.

Volkswagen (VLKAF) and Ford (F) are working together to develop electric and self-driving vehicles, while German carmakers BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop driverless technology. Honda has invested in General Motors' self-driving car unit.

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2019-12-18 10:40:00Z
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US futures point to slightly lower open - CNBC

U.S. stock index futures were slightly lower Wednesday morning.

At around 2:45 a.m. ET, Dow futures dipped 12 points, indicating a negative open of more than 7 points. Futures on the S&P and Nasdaq were both slightly lower.

On Tuesday, the S&P closed higher for the fifth consecutive session, notching its longest winning streak since November. The Dow and Nasdaq ended with record closing highs in the previous session.

Market focus is largely attuned to global trade developments, as investors await more details about a preliminary trade agreement between the U.S. and China.

Late last week, President Donald Trump and Chinese officials announced that the world's two largest economies had agreed on a so-called "phase one" deal.

It is understood that Beijing agreed to billions of dollars in agricultural purchases from the U.S., while Trump said he would not move ahead with a new round of planned tariffs, among other items.

The deal, which is not yet signed, is set to be confirmed in the first week of January, according to U.S. Trade Representative Robert Lighthizer.

Corporate earnings

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2019-12-18 07:24:00Z
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Fiat Chrysler and Peugeot Agree on Terms to Forge New Auto Giant - The New York Times

Fiat Chrysler and PSA of France said Wednesday that they had agreed to the terms of a merger that would create the world’s fourth largest automaker.

The companies said they had signed a binding agreement formalizing the merger, announced in October.

The accord brings Fiat Chrysler and PSA, the maker of Peugeot and Citroën cars, much closer to creating a carmaker bigger than General Motors. But there will remain the task of integrating the companies, a process that could take many months.

PSA has shown no sign of second thoughts about the merger even after Fiat Chrysler became the target last month of a racketeering lawsuit by G.M. The complaint asserts that Fiat Chrysler bribed United Auto Workers officials in contract negotiations to get an advantage over G.M. Fiat has called the suit “meritless.”

The accord confirmed that Carlos Tavares, the head of PSA, would be the chief executive of the new company, and that John Elkann, the chairman of Fiat Chrysler, would be the chairman. Mr. Elkann is a scion of Italy’s powerful Agnelli family, which has long controlled Fiat.

By combining, Fiat Chrysler and PSA will surpass Volkswagen as the market leader in Europe. Between them they will have more than 400,000 employees and sales worldwide of 8.7 million vehicles.

The companies could share the cost of developing electric cars and autonomous-driving technology, which world automakers expect to be crucial in the coming decades. Electric cars need to meet stricter emissions regulations in Europe to avoid steep fines.

“Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility,” Mr. Tavares said in a statement.

But analysts regard the two carmakers, which have not said what the new entity will be called, as an imperfect match. They share some weaknesses, including a dependence on the declining European market and the lack of a strong presence in China, the world’s largest car market by far.

The merger has the blessing of the French government, which earlier this year derailed an attempt by Fiat Chrysler to merge with Renault. PSA and Fiat have said they will not close any factories, pleasing political leaders, but analysts are skeptical that they can keep that promise when sales are under pressure around the world.

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2019-12-18 07:00:00Z
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US housing starts rise more than expected, with permits at a 12-1/2-year high - CNBC

U.S. homebuilding increased more than expected in November and permits for future home construction surged to a 12-1/2-year high as lower mortgage rates continue to boost the housing market and support the broader economy.

Housing starts rose 3.2% to a seasonally adjusted annual rate of 1.365 million units last month, with single-family construction racing to a 10-month high and activity in the volatile multifamily sector increasing for a second straight month, the Commerce Department said on Tuesday.

Data for October was revised higher to show homebuilding rising to a pace of 1.323 million units, instead of advancing to a rate of 1.314 million units as previously reported.

Economists polled by Reuters had forecast housing starts increasing to a pace of 1.345 million units in November.

Housing starts jumped 13.6% on a year-on-year basis in November. Building permits increased 1.4% to a rate of 1.482 million units in November, the highest level since May 2007.

The housing market is regaining momentum after the Federal Reserve cut interest rates three times this year, pushing down mortgage rates from last year's multi-year highs. A survey on Monday showed confidence among homebuilders jumped in December to the highest level since June 1999.

But the scope for strong gains in the sector, which accounts for about 3.1% of the economy, is limited as builders complained they are "still underbuilding due to supply-side constraints like labor and land availability."

In addition to land and labor shortages, mortgage rates have backed up in recent weeks after the Fed signaled further rate cuts were unlikely. The U.S. central bank kept rates steady last week and indicated borrowing costs could remain unchanged at least until through 2020.

The 30-year fixed mortgage rate has risen to 3.73% from a year-low of 3.49% in early September, but is still below its peak of 4.94% in November 2018, according to data from mortgage finance agency Freddie Mac.

Residential investment rebounded in the third quarter after contracting for six straight quarters, the longest such stretch since the 2007-2009 recession. It is expected to contribute to gross domestic product again in the fourth quarter.

Single-family homebuilding, which accounts for the largest share of the housing market, increased 2.4% to a rate of 938,000 units in November, the highest level since January. Single-family housing starts rose in the West and Northeast but fell in the Midwest and the populous South.

Single-family housing building permits rose 0.8% to a rate of 918,000 units in November, the highest since July 2007.

Starts for the volatile multi-family housing segment increased jumped 4.9% to a rate of 427,000 units last month. Permits for the construction of multi-family homes rose 2.5% to a rate of 564,000 units.

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2019-12-17 13:30:00Z
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US manufacturing production rose more than expected in November - CNBC

A General Motors assembly worker moves a V6 engine, used in a variety of GM cars, trucks and crossovers, from the final assembly line at the GM Romulus Powertrain plant in Romulus, Michigan, August 21, 2019.

Rebecca Cook | Reuters

U.S. manufacturing output rebounded more than expected in November, as the end of an almost six-week strike at General Motors plants boosted auto production.

The Federal Reserve said on Tuesday that manufacturing production rose 1.1% last month after a downwardly revised 0.7% fall in October. Industrial output also rose 1.1% in November after a downwardly revised drop of 0.9% in October.

Excluding motor vehicles and parts, overall industrial production and manufacturing output in November rose 0.5% and 0.3% respectively.

Economists polled by Reuters had forecast overall manufacturing output would rise 0.7% and industrial output would increase 0.8% in November. Production at factories still fell 0.8% in November on a year-on-year basis.

The United Auto Workers union reached a new four-year labor contract with General Motors in late October, ending a strike by about 46,000 workers with the No. 1 U.S. automaker.

The Fed's measure of the industrial sector comprises manufacturing, mining, and electric and gas utilities.

There was a 12.4% jump in the production of motor vehicles and parts in November. Overall, production rose 2.1% for consumer goods and 1.7% for business equipment, the Fed said. Utilities output increased 2.9% compared to a decline of 2.4% in the previous month.

The manufacturing sector, which makes up about 11% of the U.S. economy, has been weakened by a 17-month trade war between the United States and China.

Last Friday, the world's two largest economies announced a "Phase one" agreement that reduces some U.S. tariffs in exchange for increased Chinese purchases of American farm goods.

With overall industrial output rising, capacity utilization, a measure of how fully firms are using their resources, increased 0.7 percentage point to 77.3% in November from a downwardly revised 76.6% in October.

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2019-12-17 14:15:00Z
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