The world this week
The proposed merger of T-Mobile and Sprint, first floated in April last year, faced a fresh hurdle as a group of American states led by California and New York launched a lawsuit to block it. The states are challenging the deal because it is “exactly the sort of consumer-harming, job-killing mega-merger our antitrust laws are designed to prevent”, according to Letitia James, New York’s attorney-general.
Antitrust concerns were also voiced when United Technologies Corporation announced its intention to merge its aerospace business with Raytheon, creating a $166bn behemoth in the industry. UTC provides electronics and communications systems mainly to commercial airlines and Raytheon sells defence equipment, including the Patriot missile system, to the Pentagon. They hope the civil/military split of their interests will satisfy competition regulators. Donald Trump has already waded in, suggesting that the new “big, fat, beautiful company”, will raise costs for America’s armed forces.
Worries over trade continued to unsettle global markets. “The rising threat of protectionism” was citied by Mario Draghi, the president of the European Central Bank, as one factor in its decision on June 6th to postpone further rises in interest rates until at least the middle of 2020. Mr Draghi pledged to use “all instruments” under his control to avert an economic setback in the euro zone.
Market jitters caused investors to flee to safe assets. The German government sold ten-year Bunds at a yield of -0.24%, meaning the buyers will lose money if they hold the bonds until they mature. It was the bond’s lowest yield on record in a direct auction.