| China is speeding up market reforms. Beijing's latest outbreak shows Covid-19's insidious ability to hide. And President Donald Trump plans to halt a whole crop of work visas. Here are some of the things people in markets are talking about today. Faced with the twin threat of a slumping economy and rising tensions with the U.S., China is speeding up efforts to boost stock trading and open its capital markets. In recent months, Beijing has unveiled a series of measures including a new streamlined approach toward initial public offerings to plans to increase daily price limits for some equities, letting some of its biggest banks trade bond futures and a new batch of stock-index options contracts. In the latest move, the Shanghai Stock Exchange said on Friday it will overhaul its benchmark index. The government is trying to funnel more funds toward privately owned enterprise as officials seek to minimize the impact of the coronavirus pandemic on its economy. At the same time, concern over Chinese firms' reliance on U.S. markets for fundraising, especially in the technology sector, is driving action to increase the allure of homegrown bourses. This includes Hong Kong, which is seeing a wave of secondary listings by mainland companies. The changes are impressive: Here's a timeline for key events carried out in the past year. Just as Beijing looked poised to claim victory over the coronavirus, a 52-year-old man with fever and chills showed how the pandemic can come roaring back from apparent obscurity. The patient tested positive for Covid-19 on June 11. The Chinese capital's first reported case in 55 days scuppered hopes that months of physical distancing, meticulous testing and quarantining had driven the pathogen to extinction in the city. Now, more than 200 people have tested positive across Beijing, schools are shut and thousands of domestic flights canceled. The resurgence offers a stark warning to countries that appear to have cut chains of transmission: The coronavirus's ability to cause little or no symptoms in a large proportion of people enables it to spread silently for weeks — even months — creating viral reservoirs that can remain hidden until someone becomes sick enough to warrant testing. Asian stocks looked poised to open higher Tuesday after technology shares lifted U.S. benchmarks as investors bet on companies that will better weather a patchy economic recovery. Futures in Japan, Australia and Hong Kong pointed higher. The Nasdaq 100 jumped more than 1% and the Nasdaq Composite capped a seventh straight advance in its longest rally of the year. The S&P 500 lagged, with some sectors under pressure as investors weighed the economic impact of virus flareups in some states. The dollar weakened and Treasuries dipped, while gold tested a seven-year high. Crude oil settled above $40 a barrel in New York. Bank of China is wading into the Wirecard saga now. It's discussing ending a credit facility to the German payments company, a move that would complicate the beleaguered firm's fight for survival after it was engulfed by a multi-billion-dollar accounting scandal. China's fourth-largest lender may write off most of the 80 million euros ($90 million) it's owed and not extend the credit line, the people said, asking not to be identified as the discussions are private. Bank of China — one of a group of at least 15 commercial banks behind $2 billion in financing to Wirecard — plans to engage an external legal team to look into how it can minimize losses, they said. President Donald Trump plans to sign an order Monday temporarily halting access to several employment-based visas, a senior administration official said. The order will freeze new a host of visas, including those that authorize people to jobs with highly specialized knowledge, and temporary jobs in agriculture, construction, forestry and many other industries. The move will affect hundreds of thousands of people seeking to work in the U.S. The technology industry has relied on some of these visas to hire foreign talent, particularly in the fields of science and engineering, but critics say some companies have abused the program to displace American workers. The issuance of new green cards will also remain halted through the end of the year. "I think it's going to make a lot of people very happy. And it's common sense," Trump said. The U.S. faces an unemployment rate of 13.3% after businesses closed or reduced staff in response to the coronavirus pandemic. The president's order won't affect certain workers who are already in the U.S. What We've Been Reading This is what's caught our eye over the past 24 hours: And finally, here's what Tracy's interested in this morning In the aftermath of the 2008 financial crisis, regulators encouraged the migration of risk from bank balance sheets to a range of buy-side investors in a host of different ways. One of those was through so-called regulatory capital (or reg cap) trades, and it's worth pausing to consider those in the wake of the massive Wirecard scandal. Bloomberg reported over the weekend that some of the exposure from a revolving credit facility (RCF) extended by Deutsche Bank to the limping German payments company was bundled into a collateralized loan obligation, or CLO. Because RCFs don't normally end up in traditional CLOs, it seems likely that this one went into what's known as a synthetic or balance sheet CLO — also known as a reg cap trade.  These reg cap trades proliferated after 2008 as a way for banks to offload loan exposure to groups of sophisticated investors such as specialized hedge funds. Banks repackage loan exposure on their balance sheets, slicing them up into different tranches. They then purchase protection on some of the respective tranches from investors, thereby insulating the banks from some potential losses and allowing them to claim regulatory capital relief so long as they could show the deal represented a true transfer of risk. In return, investors got juicy yields at a time when those were in relatively short supply. The enormity of the Wirecard scandal has the potential to upend a whole bunch of things in the financial system, from Germany's market regulation to investors' dependence on auditors like Ernst & Young. While reg cap trades have so far acted as designed — in the sense that they've successfully shifted risk from banks to investors — I can't help but wonder if they'll come under additional scrutiny now too. There's now a Japanese edition of Five Things. 世界のビジネスニュースを毎朝メールでお届けします。ニュースレターへの登録はこちら。 | 
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