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PayPal falters on Libra; October rate cut; Vanguard tests direct currency trades

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PayPal falters on Libra; October rate cut; Vanguard tests direct currency trades

Amidst growing regulatory concern, PayPal Holdings Inc. is looking at backtracking its support for Facebook Inc.'s Libra as it missed attending a key meeting on Thursday, the Financial Times reports, citing people familiar with the event. Besides PayPal, all founding members of the project attended the meeting, which was held in Washington, to discuss how to handle the increased opposition on the planned cryptocurrency. A source told the news outlet that PayPal may rejoin the project at a later stage.

While Facebook COO Sheryl Sandberg has tentatively agreed to testify at a House Financial Services Committee hearing on Oct. 29 to answer questions about Libra, the panel does not intend on officially scheduling a hearing until CEO Mark Zuckerberg agrees to appear before the committee by January 2020, Reuters reports, citing a congressional source.

Fidelity Investments and T. Rowe Price Group Inc. vehicles purchased a collective stake of 14.4% in investment advisory firm StepStone Group LP as it prepares for its potential initial public offering that could happen as soon as next year, Bloomberg News reports.

Vanguard Group Inc. has been testing a new currency trading method whereby asset managers can bypass large investment banks, a person familiar with the matter told Bloomberg News. Powered by blockchain technology, the platform could directly trade currencies without intermediaries, which could spell a challenge to the dominance of big banks such as JPMorgan Chase & Co. and Deutsche Bank AG.

Goldman Sachs Group Inc.'s bets on Uber Technologies Inc., Avantor Inc., HeadHunter Group PLC and Tradeweb Markets Inc. have turned against it as the investment banking giant faces losses worth approximately $260 million, Bloomberg News reports. As of June 30, the company's own-account investments in the four companies represented about 55% of its public investment portfolio.

Lobbying efforts on behalf of Mastercard Inc. and Visa Inc. by U.S. trade officials paid off as Indonesia agreed to relax its rules concerning its domestic payment network, Reuters reports, citing Indonesian government and industry sources, and emails reviewed by the news outlet. The move will allow the payment processors to carry out credit card transactions without partnering with a local company. Otherwise, Visa and Mastercard's earnings would have taken a hit.

In a news release, the California Department of Business Oversight said as long as state-chartered banks and credit unions comply with the guidance issued by the federal government on cannabis banking, the department will not bring regulatory actions against them for establishing a banking relationship with licensed cannabis businesses.

Gov. Gavin Newsom signed a bill, which allows Californian counties and cities to establish public banks, the Los Angeles Times reports. According to the statewide law, local agencies and joint powers authorities can apply to the California Department of Business Oversight for a public banking charter.

Traders expect the Federal Reserve to announce another rate cut in October as key economic indicators pointed to weaker U.S. momentum. While Fed officials declined to explicitly commit to further rate cuts this year, investors continue to speculate if a decision to do so could be taken at the regulator's Oct. 29-30 meeting or during its Dec. 10-11 discussions.

In other parts of the world

Asia-Pacific: Bank inquiry in Australia; some LSE investors urge HKEX to raise bid

Europe: Danish banks face extra capital buffer; banks lose in Poland case; Deutsche move

Middle East & Africa: Nigeria levies 500B naira fine on 12 lenders; Abu Dhabi eyes more digital banks

Now featured on S&P Global Market Intelligence

New York community banks growing, but not as profitably as rest of US in Q2 : New York's community banks and thrifts posted loan and deposit growth that outpaced the U.S. as a whole in the second quarter, but the state's banks were not as profitable as their peers nationwide.

Headwind from mix shift to time deposits lets up : When interest rates were rising, a rotation into pricey time deposit accounts added to the funding cost pain for U.S. banks. Now, with cuts to short-term rates and an even steeper drop in intermediate-term rates, that particular headwind appears to have dissipated, and some banks say they are poised to reap the benefits of maturing certificates of deposit.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng fell 1.11% to 25,821.03, while the Nikkei 225 rose 0.32% to 21,410.20.

In Europe, around midday, the FTSE 100 was up 0.35% to 7,102.21, and the Euronext 100 increased 0.27% to 1,057.94.

On the macro front

The employment situation report, the international trade report and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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