Seven days in the Square Mile

A meeting of central bankers in Wyoming failed to address the two big questions facing traders: the path of short-term interest rates and the pace of the Fed’s balance sheet reductions. Fed chair Janet Yellen instead delivered a defence of post-crisis regulation. As the end of her term approaches, there is speculation she may be replaced by Gary Cohn, currently head of President Trump’s National Economic Council. The euro hit an 18-month high against the dollar. The pound fell to a fresh eightyear low against the euro; the currencies are now approaching parity. PM Theresa May embarked on a trade trip to Japan in hope of hammering out a post-brexit trading relationship. Ahead of the third round of Brexit talks this week, German business urged European negotiators to “put shared economic interests first” and agree temporary customs arrangements to alleviate uncertainty on both sides. The Co-op entered talks to acquire the UK convenience store operator Nisa, replacing Sainsbury’s, which had reportedly been mulling a bid. The FCA investigation into RBS’S “turnaround unit” found that almost all the SMES placed under its supposed care suffered some form of financial abuse. Mitie, the outsourcing group, is to be investigated by the City watchdog over the timing of recent profit warnings. James Liang, a Volkswagen engineer, was sentenced to 40 months in prison in the US for his role in the diesel emissions scandal.