Good morning! Here’s what you need to know.
S&P cut the European Union’s outlook from “stable” to “negative.” Cutting its outlook for the EU reflects S&P’s view that the EU’s credit rating, which currently stands at AA+, has greater than 1-in-3 chance of being cut in the next 2 years.
China is cracking down on short-selling. China stepped up its crackdown on short-selling of shares on Tuesday, unveiling rules that make it harder for speculators to profit from hourly price changes, as some of the nation’s major brokerages suspended their short-selling businesses.
Eurozone producer prices are coming. At 10 a.m. London time (5 a.m. ET), eurozone producer prices for June are released, and analysts are expecting a 2.2% fall year on year. Producer prices offer a hint at what may impact on consumer prices further down the line.
The DoJ launched a criminal probe into Deutsche Bank. The United States Department of Justice is investigating trades worth billions of dollars that Germany’s Deutsche Bank AG made on behalf of its Russian clients, Bloomberg reported, citing people familiar with the matter.
A US budget expert now thinks a federal government shutdown is more likely than not in the Autumn. Stan Collender, who has worked on both the House and Senate Budget Committees, now puts the odds of a shutdown at 60% — up from 40% last week. In his weekly running column on Forbes, he wrote that the uptick was due to the “craziness going on in Washington.”
Asian markets are mixed. Japan’s Nikkei is down a little, 0.26% lower, and Hong Kong’s Hang Seng is also 0.19% below Monday’s closing level. China’s Shanghai Composite Index is up 1.67%.
Brazil is resisting Monsanto’s bid for Syngenta. Seed giant Monsanto’s unwanted takeover bid with Switzerland’s Syngenta AG would face strong resistance in Brazil should it go forward, farmers and lawyers said, a hurdle that could delay or force major concessions to the $US45 billion (£28.85 billion) deal.
Petrobras failed to produce a new fuel price policy, according to Reuters. Brazil’s state-run oil company, Petrobras, has failed to present its board of directors with a promised plan to bring domestic fuel prices in line with world levels, three sources with direct knowledge of the situation told Reuters.
The Bank of Japan doesn’t see British and American rate hikes as a financial risk. Bank of Japan Deputy Governor Kikuo Iwata said on Tuesday he did not think that an interest rate increase by the US Federal Reserve or the Bank of England will pose a risk to financial markets.
AIG boosted its profit after successes in China. Insurer American International Group reported a 5.6% jump in quarterly operating profit, driven by investments in one of China’s biggest insurers and earnings from aircraft leasing company AerCap. AIG, the largest commercial insurer in the United States and Canada, also boosted its share buyback program by up to $US5 billion (£3.21 billion) and more than doubled its quarterly dividend to 28 cents per share.