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Bank of Japan Expected to Maintain Monetary Policy Stance | British Pound Drops on No-Deal Conjecture

Published July 29, 2019

  • US officials traveled to China today for the first in-person talks since negotiations broke down in May. Expectations from this latest round of consultations are low as neither side have demonstrated any urgency to reach a compromise ahead of tomorrow’s meeting. However, there have been some signs of goodwill: Chinese companies are expected to sign more deals to buy American agricultural products.
  • The Bank of Japan began a two-day policy meeting Monday amid market expectations that it will strengthen its commitment to keeping interest rates ultra-low to prevent a surge in the yen. As the central bank aims to achieve its 2% inflation goal, the short-term interest rate has been adjusted to minus 0.1% and long-term rates will be around 0% following six years of aggressive monetary easing.
  • The British pound fell to a two-year low this morning as Prime Minister Boris Johnson’s new cabinet members made headlines over the weekend with Brexit. Michael Gove, Johnson’s top aide, stated that a “no-deal is now a very real prospect”. GBPUSD has since lowered to 1.2255.
  • The government of Alberta has relaxed the production limits imposed on oil producers as it exports more barrels via rail and pipeline. This easing of the production limit by 25,000 barrels a day translates to operators producing about 175,000 barrels a day below what they were producing late last year. A barrel of Western Canadian Select was trading at $36.89 this morning.

To the Clients of EncoreFX:

 

It is with much regret that we inform you that EncoreFX’s (the “Company”) offices are suspending trading effective immediately.

This suspension will give the Company time to consider its restructuring alternatives. The restructuring has become necessary as a number of customers to whom the Company granted credit have defaulted on their obligations to the Company due mainly, we believe, to the rapid changes in the FX market caused by the coronavirus pandemic.

 

In order to provide stakeholders with transparency, the Company has filed an assignment in bankruptcy pursuant to Section 49(1) of the Bankruptcy and Insolvency Act (Canada) (the “BIA”) with respect to its Canadian operations and has assigned its Australian and New Zealand subsidiaries in Voluntary Administration in Australia and New Zealand. 

 

Ernst & Young has been appointed as the licensed insolvency trustee (the “Trustee”) in Canada and as the Administrator in Australia. 

 

Once the Trustee, working with the Company, has determined the best options for the Company and its stakeholders it will share that information with you. Information pertaining to the bankruptcy of EncoreFX will be available, in due course, on the Trustee’s website at: www.ey.com/ca/encorefx.