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European markets climb ahead of FOMC minutes

Rodney Fletcher — Wed, 23 Nov 2022 15:34:42 +0000

Europe

After getting off to an initially positive start, with the FTSE100 at a touching distance of 7,500, the session was fairly lackluster as investors assess tonight’s FOMC minutes release amid a weakening economic outlook, after that the PMIs all indicated further economic weakness in Q4. It also raises the possibility that this will lead central banks to refrain from any hikes as aggressive as previously thought.

With the World Cup well underway, we are seeing a second day of wins for Flutter Entertainment and Entain. The possibility of shocking results like the Argentina, Saudi Arabia game has the potential to lead to an increase in betting habits as the tournament progresses.

Halfords shares fell despite a 10.2% rise in total first-half revenue to £765.7m, but profits fell sharply from £64.3m a year ago at £29.3m, which, while better than pre-pandemic levels, was on earnings that were somewhat lower.

On the forecast, Halfords was quite pessimistic, warning that underlying pre-tax profits for the full year would be at the lower end of its previous forecast of £65-75m. This seems to be mainly due to the underperformance of its retail stores, which saw their revenues shrink in the first half compared to a year ago, while expecting its automotive centers to remain resilient. Revenue here has increased by more than £109.1m since the same period last year, helped by the acquisition of Lodge Tyre.

The long hot summer has been a boon for the likes of Britvic as the drink maker recorded a 15.5% rise in revenue to £1.62bn, which helped boost after-tax profits by 45.3% to £140.2m sterling. With no lockdown restrictions to contend with and hospitality returning, the business appears to have benefited from the double boost of a pandemic rebound and one of the hottest summers on record in the UK .

Boohoo shares fell sharply after reports emerged that workers at its Burnley warehouses face grueling working conditions. Following a 2020 scandal that saw some of the company’s suppliers paid less than minimum wage, there are concerns that despite an overhaul of its oversight procedures, some mindsets may be harder to change.

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US markets opened slightly higher after weekly jobless claims and appear to be treading water ahead of the release of tonight’s FOMC minutes and after weekly jobless claims rose unexpectedly more than expected to 240,000 vs. 223,000. The latest November PMIs added to the positive tone, after unexpectedly falling into contractionary territory for manufacturing and services as well.

The poor numbers are also weighing on the US dollar as well as yields, adding to a narrative that rate hikes are working and the Fed may not have to adopt a full 5% terminal rate.

Manchester United shares are up sharply again following reports that the Glazers are open to a full sale of their stake in the club. Shares rose sharply yesterday on hopes that a sale process was imminent, with the club confirming in a statement that a process was underway.

resume Shares rose after the company announced it would cut 6,000 jobs over the next 3 years as the PC market struggled with weakening PC demand. In the third quarter, revenue was well below expectations due to weaker demand for PCs and its fourth quarter numbers also disappointed, with revenue coming in at $14.8 billion, although profits edged down to CA$0.85. For the new fiscal year 2023, the company offered an uncertain outlook with first quarter earnings expected to reach C$0.70 per share and adjustments for the full year. EPS between CA$3.20 and CA$3.60 per share.

At the end of the third trimester, Deere and Co lowered its full-year earnings forecast to $7 billion to $7.2 billion from $7 billion to $7.4 billion. due to downward pressure on operating margins. This morning’s fourth quarter numbers seem to suggest there was no need for caution, with fourth quarter revenue of $15.54 billion and profit of C$7.44, although above expectations of CA$7.10. Full-year profits were $7.13 billion, while revenue for the year was $52.58 billion, up 19% as the company managed to pass on price increases to its clients. The farm equipment maker also raised its 2023 profit forecast to between $8 billion and $8.5 billion, due to strong demand for tractors from farmers who are fetching higher prices for their crops.

Effects

The US dollar was already in decline even before the latest services and manufacturing PMIs unexpectedly slipped into contractionary territory in November. The latest 1-year inflation expectations from the University of Michigan also surprisingly fell from 5.1% to 4.9%.

The New Zealand dollar is one of the best performers against the US dollar after the RBNZ raised rates by 75 basis points, along with its projection of where interest rates are likely to peak.

The Pound also looks set for another strong day today, pushing above the 1.2000 area and to three-month highs against the US Dollar, as well as hitting record highs against the Euro in almost 3 weeks.

The rise appears to have coincided with news that the UK Supreme Court had ruled that the Scottish government had no right to hold a unilateral referendum without the UK government’s consent. Although a bit of a relief, the ruling will do little to alter the independence narrative that is a staple of the Scottish government.

Goods

Reports that the EU is considering capping Russian crude oil prices are dampening the broader oil complex, although the OECD’s pessimistic projections for the economic outlook for next year don’t really help either. As China also grapples with a record number of covid cases, the macroeconomic outlook continued to deteriorate for oil this week, with prices on course to fall for the third week in a row.

Volatility

Oil prices remained very much in the spotlight on Tuesday, with OPEC hinting that it could consider cutting production in something of a reversal from its stance a few days ago. Crude edged higher as a result, but continues to trade near two-month lows. One-day flight over West Texas Intermediate printed 62.65% vs. 41.96% on the month.

This again fueled the price of oil and gas producing stocks, with CMC’s proprietary basket covering the sector finding support. The ten components thus made significant gains, with a daily flight of 59.2% against 49.16% for the month.

ADR DouYu managed to find support after the rout earlier in the week due to these disappointing results. The underlying appreciated by less than 2%, but this was still enough to take the daily volatility of the video streaming provider to 221.9% against 195.22% over the month.

Elsewhere, activity has been rather more limited, with fiat currency pairs all showing daily volatility levels below their one-month equivalents, while cryptos also remain somewhat subdued.

Industries begin to thrive after Covid-19

Rodney Fletcher — Wed, 23 Nov 2022 04:00:00 +0000

BSCIC FIELD IN JHENAIDAH

Wed Nov 23 2022 10:00 AM Last updated on: Wed Nov 23 2022 10:00 AM

Factories in the BSCIC Industrial Zone in Jhenaidah have weathered the fallout from Covid-19 and are now enjoying better business. For example, this unit that manufactures jute yarn, bags and fabrics earns a good income by shipping its products abroad. PHOTO: Azibor Rahman

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Factories in the Bangladesh Small and Cottage Industries Corporation (BSCIC) Industrial Estate in Jhenaidah are beginning to flourish after being threatened with closure amid the pandemic years of 2019 to 2021.

The industrial zone was established in 1988 on 15.70 acres of land along the Jhenaidah-Dhaka highway in Dhanharia village, according to BSCIC officials.

For all the latest news, follow the Daily Star’s Google News channel.

With the 101 plots of the BSCIC estate already allocated to various industries, only five units in the area are currently inoperative as their owners will soon be changed.

The total investment in the industrial zone amounts to Tk 207.67 lakh, while about 97% of the service charges levied on the factories are made monthly.

There are 61 Category A plots which are 4,500 square feet in size while the 25 Category B plots are 300 square feet. In addition, there are 14 category C plots which have different sizes.

During a recent visit to the BSCIC area, this correspondent found that most businesses inside the complex have been having a good time lately.

However, plot owners said they would feel safer if there were protective entrance and exit gates on the estate while a canal running through it is set to be upgraded.

Businesses in the BSCIC area provide a number of valuable services and products in the region and beyond.

Md Hasanuzzaman, senior executive of Metal, said they are importing agricultural machinery from India and selling them to farmers in Bangladesh.

“We are doing good business,” he added.

Md Sahabuddin, director of Serf Agro Industry, said they produce various fertilizers.

“We produce sulphur, gypsum, zinc fertilizers and all types of pesticides, which are supplied to farmers in different districts in Bangladesh as well as some countries abroad,” he added.

The factory employs a hundred workers.

Md Abdul Mozid, Director of Smart Cables Industry, said that they have been operating in the industrial zone for 12 years now.

“We are producing cables and marketing them to different districts across the country. Now we are heading for good profits,” he told the Daily Star.

Ashaduzzaman, director of Zaman Jute Diversify, said that they produce jute yarn and export it to EU countries.

The company has three units in the BSCIC area which employ a total of 1,000 people.

“We also collect jute from different markets to make bags and fabrics,” he added.

Selina Rahman, Deputy Director of Jhenaidah BSCIC, said these industries have been hit by multiple crises amid the Covid-19 pandemic.

“Some 10-12 influential people had taken plots but and they were not running any business. Exercising their authority, they held the plot to no avail,” she added.

Rahman went on to say that she had submitted a quote for the construction of two gates, but the authority only agreed to install one.

“The rest will be built in turn,” she said.

Rahman then informed that a problem with the area’s drainage system has already been resolved while undisturbed electricity and water supply are being provided smoothly.

Children’s March Against Child Abuse – Magnetic Support

Rodney Fletcher — Tue, 22 Nov 2022 00:23:13 +0000

#MontegoBay, Jamaica, November 21, 2022 – Children from all over Sainte-Élisabeth took to the streets of the parish capital of Rivière Noire on Friday, November 18, in an organized march against child abuse.

The event was planned by the Child Protection and Family Services Agency (CPFSA) and was part of a series of child-led marches across the island to commemorate ‘World Day for Prevention of Child Abuse”, observed internationally on 19 November.

The children, who represented St. Elizabeth’s primary and secondary schools, marched along High Street, North Street and Market Street, while carrying signs reading “Stop the Silence, End the Violence” to raise awareness of the problem of child abuse in the country.

The group then gathered at JAG Myers Park in the city, for a special ceremony to promote the safety and protection of Jamaican children.

In his address, the Minister without Portfolio in the Prime Minister’s Office, the Hon. Floyd Green, commended CPHA for its initiative to draw attention to such a “critical issue”.

Mr Green, who is also MP for South West St. Elizabeth, said simple support not only for children, but also for parents, can be the best way to prevent child abuse.

“That’s why I plan to partner with our National Parent Support Commission and CPHA to launch a Parent Mentor Program. [programme] because the reality is a lot of people who become parents have no idea how to be a good parent and we have to admit that and work with them to make sure their kids feel love,” he said. -he declares.

For her part, CPHA Southern Regional Director Francine Rhoomes said the entity continues to protect the country’s children, many of whom are in need of care and protection.

“With that [CPFSA] team across the region, we ensure that, as best as possible, [their] voices are heard. We act when there are incidents of child abuse, and we want to make sure people know what to do and where to call in the event of an incident,” she explained.

“As we celebrate, I want us to remember why we are here and that is because of the children,” she added.

Schools in attendance included Black River High School, Black River Primary School, Hampton School, Sandy Bank Primary School, Red Bank Primary, Fullerswood Primary and Infant School, Happy Grove Primary and Infant School, Lewisville High School, Lacovia Primary and Infant School, Holland Primary School and Pedro Plains Primary.

Contact: Okoye Henry

Version: JIS

Terrorists start rejecting Naira and go for CFAs

Rodney Fletcher — Mon, 21 Nov 2022 07:29:34 +0000

Nigeria – The Shura Council of Islamic State West Africa Province (ISWAP) has banned the receipt of Naira to farmers and fishermen due to the Nigerian government’s decision to rethink and reissue higher denominations of the currency, a Republic of Chad-based Zagazola Makama Media Network reported.

Zagazola Makama is a growing reference for authentic information and analysis on the insurgency in the Lake Chad region and beyond.

The Islamic State West Africa Province is a militant group and administrative division of the Islamic State, a Salafist jihadist militant group and an unrecognized proto-state.

ISWAP is mainly active in the Chad Basin and leads a large insurgency against the states of Nigeria, Cameroon, Chad and Niger.

The Nigerian government had announced its decision to redesign the N200, N500 and N1000 banknotes which the government would start issuing by December and the old banknotes would cease to be legal tender by January 31, 2023.

This move by the government was found to have left the people of ISWAP in the Tumbus of Lake Chad and away from bank branches, in confusion as it would be extremely difficult for them to change their money into new notes.

The Central African CFA franc (French: franc CFA or simply franc) is the currency of six independent states in Central Africa: Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon.

The results show that N1,000 is currently trading between 1,400 CFA and 1,430 CFA.

Zagazola Makama reported that an intelligence source told a counter-insurgency expert and security analyst in the Lake Chad region, that the insurgents are now receiving the West African CFA francs that they intend to replace the Nigerian naira as the trading currency in the region. .

The sources said that the terrorists also banned all Nigerian fishermen, herders and farmers from sneaking into Lake Chad through Marte, Abadam and Gamborun Ngala to prevent Naira from reaching the terrorists’ camps in Lake Chad. .

Ibn Umar and Malam Ba’ana, ISWAP commanders in charge of taxes and levies, who imposed the ban, said people were only allowed to pass through safe routes established by the terror group – Bulgaram , Cikka, Guma, Maltam, Doron Liman and Villages of Ramin Dorina in the Republic of Cameroon.

In exchange, ISWAP collects 1,500 West African CFA francs, monthly taxes from people who seem very willing to pay.

They also secured trade routes for merchants, to allow them access to food, weapons, fuel and other logistical means.

It was only recently that a Kaduna-based Islamic cleric, Ahmad Gumi, said the proposed overhaul of the Naira by the Central Bank of Nigeria was poorly timed and would not curb kidnappings as many believe as bandits would start to collect ransoms in dollars.

“As to the issue of Naira hungry kidnappers, it goes without saying that they will resort to dollars and other hard currencies which will put even more pressure on him making the situation rotten bad.

“Kidnappings can only be stopped by strong policing, social justice for all and a fair distribution of wealth. No amount of cosmetic measures will stop it,” Mr. Gumi said.

Mr Gumi, a self-proclaimed bandit ombudsman, whose media aide Tukur Mamu is being investigated for illicit dealings with bandits, disclosed in a Facebook post.

Meanwhile, traders said the naira rally in the parallel market weakened on Tuesday as the currency depreciated to 800 naira/US$1 from 690 naira to the dollar recorded the penultimate week Friday. For the rest of the week, the Naira hovered between N780 and N850 and stabilized at N785 on Friday.

Ukrainian president denounces ‘short truce’ with Russia

Rodney Fletcher — Sat, 19 Nov 2022 07:13:18 +0000

Ukrainian President Volodymyr Zelensky on Friday rejected the idea of a “short truce” with Russia, saying it would only make things worse.

“Russia is now looking for a short truce, a respite to regain strength. Someone can call it the end of the war, but such a respite will only aggravate the situation,” the Ukrainian leader said in broadcast remarks. at the Halifax International Security Forum.

“A truly real, lasting and honest peace can only be the result of the complete demolition of Russian aggression,” Zelensky said.

The White House said earlier today that only Zelensky could decide when to open peace talks with Russia, dismissing the idea that it was pressing Kyiv to negotiate an end to the nearly nine-month war sparked by the invasion of Moscow in February.

General Mark Milley, the top US military officer, however, has suggested in recent weeks that Kyiv could capitalize on battlefield victories against Moscow forces and open talks to end the conflict.

Milley said Wednesday that while Ukraine has won key successes, Moscow still controls around 20% of the country and Kyiv troops are unlikely to force the Russians out of the country soon.

Dubai Financial Services Authority Releases New Regime to Regulate Crypto Tokens | Latham & Watkins LLP

Rodney Fletcher — Fri, 18 Nov 2022 17:57:47 +0000

The regime is introducing rules on various crypto tokens, including cryptocurrencies and stablecoins, in the international financial center of Dubai.

On November 1, 2022, the Dubai Financial Services Authority (DFSA) crypto token regulatory regime came into effect.

The rules extend the DFSA framework for regulating investment tokens established in 2021 (the 2021 rules). The Dubai International Financial Center (DIFC) scheme defines a token as a cryptographically secure digital representation of value, rights or obligations that can be issued, transferred and stored electronically, using ledger technology distributed (DLT) or other similar technology. The 2021 rules regulated only investment tokens, which included security tokens and derivative tokens (in essence, token equivalents of conventional securities and derivatives, respectively) (investment tokens). Under the 2021 rules, persons engaging in certain activities with investment tokens (e.g. issuing, offering, holding, promoting, trading, advising, trading) must obtain DFSA approval and comply with certain obligations.

On March 8, 2022, the DFSA released its Consultation Paper 143 (the Consultation Paper), setting out regulatory proposals for other types of tokens, in particular cryptocurrencies, payment tokens, and hybrid utility tokens ( for example, which provide additional rights to tokens). holders, such as discounts).

The consultation document invited the market to provide comments on the planned regime by May 6, 2022 and, on October 18, 2022, issued a feedback statement regarding the comments received (the statement). The Statement did not anticipate major changes to the proposals outlined in the consultation document.

Key Definitions in the DFSA Regime

A Encryption token is a token if it: (a) is used, or is intended to be used, as a medium of exchange or for payment for investment purposes; or (b) confers a right or interest in another token that meets the requirements of clause (a) above.

The scheme defines a Fiat Crypto Token (e.g., stablecoin) as a type of cryptographic token in which price and volatility are determined, in whole or in part, by reference to a fiat currency or a combination of fiat currencies.

A token is not a Crypto Token (and falls outside the scope of the new regime) if it is (i) an Investment Token (or any other type of investment) or (ii) an Exclud Token. The first type of token is governed by the 2021 rules.

Tokens excluded

Non-fungible tokens (NFT) are unique and non-fungible tokens. They relate to identified assets and prove ownership or provenance of those assets. In the view of the DFSA, no financial services are provided via NFTs and therefore these tokens should be outside the scope of the new rules.
Utility Tokens are tokens that can only be used by the holder to pay, benefit from a discount or access a product or service provided by the issuer or an entity of its group. The DFSA suggested continuing to monitor developments around these tokens to determine if they should be regulated.
CBDC refers to digital currency issued by any government, government agency, central bank or other monetary authority. The DFSA viewed these tokens as similar to fiat currencies.

Excluded tokens generally fall outside the scope of the new regime. However, the DFSA noted that certain issuers and service providers of NFTs or Utility Tokens must be registered as Designated Non-Financial Businesses and Professions (DNFBPs) in order to comply with anti-money laundering rules, and submit suspicious transaction reports in the UAE. authorities.

Prohibited tokens

Algorithmic tokens are Crypto Tokens using an algorithm of increasing or decreasing the supply of Crypto Tokens to stabilize the price or reduce its volatility.
Privacy Tokens are Crypto Tokens intended to allow the holder to hide, anonymize, obscure or prevent the tracking of:

Prohibited tokens cannot be used in the DIFC. The DFSA banned them due to a lack of transparency regarding the algorithms used and the transactions made with the use of these tokens.

Regulated activities within the scheme

Persons need permission from the DFSA to engage in dealing (as principal or agent), arrangement, management, advice, negotiation, clearing, provision of custodial services and conducting certain other activities with respect to Crypto Tokens (Authorized Persons). Certain activities are expressly prohibited:

An Approved Person is not permitted to engage in any activity related to a utility token or an NFT (to separate activities regarding regulated and unregulated tokens).
The use of Crypto Tokens by money service providers is generally not permitted, except where such tokens are Fiat Crypto Tokens used solely for the purpose of transferring money or performing a payment transaction, and provided that these tokens are in the name of the money service provider (not its client).
Crowdfunding operators are not permitted to operate platforms that facilitate investments in Crypto Tokens. It is also prohibited to organize commercial facilities related to Crypto Tokens.

Approved Persons must comply with a number of requirements, depending on the exact scope of their activities. These requirements may include obligations for reporting, disclosure, ensuring information security, or stating certain mandatory terms in customer agreements.

Recognition of cryptographic tokens

Regulated activities cannot take place in the DIFC with Crypto Tokens, unless the DFSA recognizes the tokens (Recognized Crypto Tokens).

Recognition of tokens by the DFSA is based on a number of criteria (which the DFSA assesses cumulatively), including regulatory status in other jurisdictions, adequacy of transparency and technology used, risk mitigation and size, as well as market liquidity and volatility.

The DFSA has determined the initial list of recognized crypto tokens, namely recognized Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). An authorized person, an applicant for the relevant DFSA approval, or an issuer or developer of the crypto token may file an application with the DFSA for recognition of specific crypto tokens.

The DFSA may revoke Recognized Crypto Token status if the affected crypto token becomes unsuitable for use in the DIFC. Approved Persons must notify the DFSA of material events or developments that reasonably suggest the crypto token no longer meets the criteria.

Summary

The new regime represents a step forward on the part of the DFSA in regulating tokens in the DIFC-free zone. It aims to establish the DIFC as a hub for Virtual Asset Service Providers (VASPs), similar to the Abu Dhabi Global Market (ADGM) (which, since its introduction in 2018, has run its own regulatory framework for virtual assets) and the recent one established the Dubai Virtual Asset Regulatory Authority (DVARA), which regulates the activities of VASPs in the Emirate of Dubai outside the geographical area of the DIFC.

The regulatory approach taken is generally consistent with that of the ADGM and the approach taken at the federal levels of the United Arab Emirates and the Emirates. (Read this Latham blog post for more information.)

Questions remain as to what further steps the DFSA will take to regulate the crypto industry and how the DIFC regime will interact with rules promulgated outside the DIFC at the individual Emirati and federal level. The DFSA announcements set expectations for further consultations on crypto tokens, which will focus, among other things, on decentralized finance (DeFi).

Latham & Watkins will continue to monitor developments related to virtual assets in the Middle East, including additional upcoming rules and regulations.

Letter to the editor: Letter on wealth, income not quite right

Rodney Fletcher — Fri, 18 Nov 2022 09:05:43 +0000

Regarding yesterday’s letter (“Who Wins? Follow the Numbers,” Nov. 17), the Dow Jones Industrial Average going from 1,000 to 33,436 (these numbers don’t represent money) over 50 years is not a 3,253.6% return. Using a calculation of the time value of money, this represents an average annual return of around 7%. And the median household income going from $11,120 to $70,784 over 50 years represents, according to the same method of calculation, a return of approximately 4% per year.

Also, the Dow Jones Average is not necessarily a measure of corporate wealth, and household income is not a measure of personal wealth. Wealth and income are different things.

The Dow Jones Industrial Average represents the price of a basket of stocks that can be bought by anyone. If the author of the letter does not increase his fortune by investing part of his income in the stock market, it is his fault. It’s not the companies fault that people don’t choose to participate in the growth of American industry. There are problems with the industry, but that’s the wrong argument.

Rob Glenn

Harpswell

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Dimensional launches a new ETF

Rodney Fletcher — Thu, 17 Nov 2022 16:29:41 +0000

After list of three new sustainable exchange-traded index funds on the New York Stock Exchange earlier this month, Dimensional Fund Advisors launched a new sustainable bond fund on NYSEDimensional Global Sustainability Fixed Income ETFs (DFSB ). According to the issuer, DFSB provides value-added exposure to global fixed income securities, seeks higher expected returns through systematic exposure to duration, credit and currency of issue, and applies strong risk management.

The fund seeks to reduce carbon footprint exposure by excluding or underweighting issuers with high carbon intensity or potential emissions from reserves. The strategy also applies targeted environmental and social exclusions.

“We believe that investing well and integrating sustainability values need not be mutually exclusive. We believe we have been effectively implementing sustainability strategies with this dual purpose for nearly 15 years,” said Isabelle Williams, senior investment strategist at Dimensional.

Williams added: “Overall, our research shows that there is no strong evidence that ESG only these factors are a systematic source of higher returns or lower risk. But ESG considerations can be incorporated into diversified portfolios that target higher expected returns.

In a press release announcing the launch of its three sustainable equity ETFs, Dimensional co-CEO and Chief Investment Officer, Gerard O’Reilly, said, “Dimensional’s approach to sustainable investing incorporates exclusions and emissions-based weighting criteria to reduce carbon footprint exposure to both between and within sectors.

“In just a few years, Dimensional Funds has managed to capture the attention of advisors with its low-cost active management. ETFs range,” said Todd Rosenbluth, head of research at VettaFi. “Continued expansion of the product line to include sustainable strategies provides more tools for advisors to build asset allocation strategies.”

DFSB has an expense ratio of 0.25%.

For more information on Dimensional ETFs, visit dimension.com/etfs.

For more news, insights and strategy, visit VettaFi.

Sell GBP/JPY, Target 158.00 Say MUFG

Rodney Fletcher — Thu, 17 Nov 2022 08:35:00 +0000

A pick-up in risk appetite has helped support the pound, particularly against the dollar, but MUFG expects weak UK fundamentals to put the UK currency on hold and lead to medium-term weakness.

He adds; “We continue to believe the GBP remains vulnerable to further weakness due to the weakening outlook for the UK economy which has likely already slipped into recession.”

MUFG sees selling the pound against the yen as better value than selling against the euro, especially as it sees the yen as still significantly undervalued and likely to rally amid spike in global yields .

He recommends selling the Pound to Yen exchange rate (GBP/JPY) at 164.00 with a target of 158.00.

The recovery in risk will support the pound…

According to MUFG, the latest US CPI data has helped ease financial conditions, which will provide an element of support for the British pound. He adds; “The easing of global financial conditions creates a more supportive environment for the GBP in the near term and should make it less difficult for the UK to finance its high current account deficit.”

This is important given that MUFG analysis shows that GBP/USD movements have become more highly correlated with global equity markets this year.

According to the bank, a 1.0% advance in global equities results in a 0.61% gain for GBP/USD.

If equity markets are buoyed by expectations of a less aggressive stance from the Fed, GBP/USD will tend to benefit from broader support from sterling.

However, the pound will be vulnerable if the stocks reverse.

…but weak UK fundamentals pose clear downside risks

MUFG still expects broader fundamental developments to undermine the pound and added; “We remain skeptical about the ability of the pound to strengthen on a more sustainable basis and against a broader basket of currencies given that the economic fundamentals in the UK remain unfavorable.”

According to the bank, the economy is being hit by multiple negative shocks, including deteriorating terms of trade due to rising energy and food prices, as well as tighter financial conditions as the Bank of England sells gilts.

The bank also stresses that fiscal policy will be tightened, which will have a negative impact on the economy.

Many measures will probably be postponed, which will help limit the short-term effects on the economy.

However, a lasting medium-term tightening would dampen the economy over a long period.

According to the MUFG, this tightening should help to further ease the BoE’s concerns about the medium-term inflation outlook and reduce the risk of further substantial rate hikes.

In this context, he added; “We still believe the BoE has room to disappoint these moderate rate hike expectations, which is dampening GBP performance going forward.”

The undervalued yen in global markets

The MUFG previously recommended selling the pound against the euro, but has now switched to recommending selling the pound against the yen.

He added; “Even after strong recent gains, we believe there is potential for the yen to rebound further as it remains deeply undervalued. He also expects a spike in global bond yields to support the Japanese currency.

IRS Warns: Hundreds of Crypto Criminal Tax Cases Ahead; Hiring 300 special agents means more to follow | BakerHotelier

Rodney Fletcher — Wed, 16 Nov 2022 20:34:48 +0000

Take away food :

The 2022 IRS Annual Criminal Investigation Report highlights significant lawsuits and identifies cryptocurrency as a priority area heading into 2023.
Chief of Criminal Investigations Jim Lee reveals plans to hire 500 new staff to continue pursuing cases and warns that hundreds of crypto-related cases are ready to be publicly charged.
Taxpayers with a potential problem should consider resolving issues nowbefore tax officials target them in criminal prosecution.
Companies in this sector need to ensure that compliance addresses the risks of tax evasion in their business activities.

The 2022 annual report[1] from the IRS’ Criminal Investigations Division (CI) (the report) demonstrates an impressive year for enforcement, especially when it comes to cryptocurrency. Following the release, CI chief Jim Lee made it clear that the division will continue to closely monitor crypto transactions. He warned, “Expect more outward-facing tax crypto cases here in the near future” — “outward-facing” referring to accusations made publicly.[2] Lee also warned that criminal charges could result from “runaway transactions” (i.e. the process of converting digital assets into fiat currency). Bolstered by the prominent placement of disclosure language on the front of Form 1040, it can be expected that law enforcement will bring more criminal tax cases against those who fail to disclose transactions involving assets. digital. Given the division’s 90.6% conviction rate on cases accepted for prosecution in fiscal year 2022, businesses and individuals should act now to work with an attorney to ensure they are in compliance with all applicable laws and regulations.

Fiscal 2022 report touts major successes

According to the report, in 2022 the division identified $32.6 billion involved in fraud, including $5.7 billion in tax evasion, three times the amount of fraud identified by the division in the fiscal year. 2021. Additionally, the division seized approximately $7 billion in crypto, reportedly double the amount seized the previous year. In addition, more than 2,550 criminal investigations were opened, of which 1,564 resulted in convictions (resulting in the conviction rate of 90.6% mentioned above). Touting those victories in the report, Lee warned that “if a CI special agent has you in his [sic] crosshairs, chances are you’re going to jail. The report also details cybercrime as a major priority and area of strength for the division, including the introduction of the Office of Cyber and Forensic Services, which brings together various teams within the division to investigate misconduct related to cryptography. However, the battle has only just begun, according to Lee, who said the division is “just laying the groundwork to do more in 2023.”

Hundreds of Crypto Cases and Rise in Hirings for Upcoming IRS Criminal Investigations

In addition to his previous warnings, Lee publicly announced in a recent call with Bloomberg Tax that the division already has hundreds of crypto-related cases for which it expects to bring charges, an important announcement for all companies or individuals operating in the cryptocurrency space or who have engaged in asset transactions digital. Lee also noted that many of these cases will be related to off-ramp trades.

To support the division’s aggressive law enforcement efforts, including continued investigations and prosecutions, Lee announced plans to hire more than 500 new IRS employees, including 360 new special agents. In light of the ambitious hiring plan, the failure of taxpayers to report digital asset transactions is more likely to come under scrutiny by the division. This is a continuation of the division’s focus on digital asset enforcement, which began as early as 2019 when IRS Form 1040 first required front-page disclosure of asset activity. taxpayers’ virtual currency. In the updated 2021 Form 1040, language referring to “virtual currency” has been replaced with “digital asset” – likely a sign that the IRS is targeting a broader scope of reported transactions and will be aggressive against the sub -statement.

The IRS has been open about its aggressive stance on enforcement, its willingness to bring cases, and the types of cases it prioritizes. The IRS’ increased enforcement activity mirrors actions taken by other agencies in 2022 that also flagged the prioritization of crypto-related enforcement. For example, the Securities and Exchange Commission nearly doubled the size of its Crypto Assets and Cyber Unit and the Department of Justice (DOJ) is making a concerted effort to improve policing with the Digital Asset Coordinator Network to be led by the National Cryptocurrency Enforcement Team. .[3] Now more than ever, it is imperative for businesses and individuals to take steps to comply with all applicable laws and regulations and ensure they have competent counsel in case they become the target. of an investigation.

[1] 2022 Annual Report, IRS CI Division, available at https://www.irs.gov/pub/irs-pdf/p3583.pdf.

[2] “‘Hundreds’ of Crypto Cases Coming, IRS Criminal Chief Says”, Bloomberg Tax, November 3, 2022, 4:52 p.m., available at: https://news.bloombergtax.com/daily-tax-report/hundreds-of-crypto-cases -coming-irs-criminal-chief-says.

[3] “SEC Signals Ramp-up in Crypto Enforcement by Nearly Doubling Its Crypto Assets Cyber Staff”, BakerHostetler, 5 May 2022, available at https://www.bakerlaw.com/SEC-Signals-Ramp-Up-in-Crypto – Application-by-almost-doubling-of-his-crypto-assets-cyber-personal-unit; “DOJ Targets Cryptocurrency Fraud”, BakerHostetler, October 12, 2021, available at https://www.bakerlaw.com/DOJ-Targets-Cryptocurrency-Fraud.

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