Chart showing that retail footfall picked up when shops reopened on June 15, but remains well down on normal levels

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Google, Amazon Web Services and Microsoft have refused to agree to a proposal that would give Hong Kong regulators access to customer banking records.

The companies have been locked in negotiations since last year with the Securities and Futures Commission over providing access to financial data on their cloud platforms.

But the dispute has intensified after Beijing imposed a national security law on the Chinese territory last month, according to multiple people with direct knowledge.

The law had made signing the scheme “politically impossible”, one person said, adding that the companies feared potential sanctions from US lawmakers.

The regulations would force cloud services providers to grant regulators access to corporate records without notifying customers in order to speed up access during raids. But tech groups now worry that doing so could compromise privacy obligations. Tech executives could also face fines and jail terms for not complying with data requests under the new security law. (FT)

Coronavirus digest

  • Florida reported a one-day record of coronavirus deaths, underlining its status as one of the hardest-hit US states. A Federal Reserve board governor warned the new infection spike could lead to a “second dip” in the economy.

  • Biotech Moderna’s potential Covid-19 vaccine produced immune responses in an early stage trial. Hospitals are stocking up on drugs for an autumn spike.

  • The UK’s Office for Budget Responsibility said tax increases of £60bn or a return to austerity would be needed to stabilise public finances. Rishi Sunak is reviewing the capital gains tax regime, ahead of possible levy hikes.

  • Emmanuel Macron promised a further €100bn for France’s recovery in a Bastille Day address, but stood by his economic reform agenda. Paris is bubbling over with post-lockdown optimism, Renée Kaplan writes.

  • Doubts are clouding confidence in China’s recovery, even as its economy is expected to return to growth in the second quarter. (FT, WSJ)

We have launched a new UK economic recovery tracker to follow how quickly sectors are rebounding. Follow our live coverage here.

In the news

UK bans Huawei from year end Britain’s rollout of 5G networks could be delayed by up to three years and cost an extra £2bn after Boris Johnson moved to ban Huawei, wading into the US-China cold war. US sanctions were a decisive factor in the U-turn, making Huawei too high a risk. The FT View is the about-face is correct. (FT)

Boris Johnson bowed to US pressure by banning Huawei from selling new 5G equipment in the UK from December 31 © FT montage

US backtracks on foreign student deportations The White House has rescinded a rule that would have forced foreign students to leave the country if their courses go online, after being sued by several universities. But students graduating in the pandemic said uncertainty still looms. (FT)

Trump signs Hong Kong bill The US president signed legislation giving his administration more power to impose sanctions on Chinese officials and issued an executive order removing Hong Kong’s special trade privileges. On Tuesday, China announced sanctions on Lockheed Martin over missile part sales to Taiwan. (FT)

US banks set aside record $28bn Three of America’s biggest banks allocated a combined $28bn for loan losses, pushing Wells Fargo to a quarterly loss and hitting profits at JPMorgan Chase and Citigroup. Delta Air Lines will shed 17,000 employees through early retirement as it reported a $7bn second quarter pre-tax loss. (FT)

Column chart showing net income across Citigroup, JPMorgan Chase and Wells Fargo hits lowest level since financial crisis

Saab chief warns of UK-EU defence ‘disaster’ Micael Johansson, chief executive of Saab, Britain’s partner in the Tempest fighter jet programme, said it would be a “disaster” if the UK quit the EU without a defence co-operation agreement. Brexit boosterism is masking the slow progress of talks, Martin Sandbu writes. (FT)

US regulator probes oil fund disclosures The US derivatives regulator is examining disclosures by managers of commodity funds popular with retail investors, its chairman told the FT, following the oil price crash. Despite Covid-19’s economic chill, ETF issuances are up, confounding analysts. (FT)

Tesla’s share rise stuns Tesla’s share price has been one of the most eye-catching oddities in a summer of counterintuitive rallies. This week its valuation hit $320bn, or 50 per cent more than Toyota. “Wow,” Elon Musk said. But elsewhere, fund managers are fearing the rush into tech stocks. (FT)

Tesla's market cap has surpassed all other carmakers

Biden outlines $2tn green energy plan Joe Biden pledged the US would take “irreversible steps” to cut carbon emissions, decarbonise power generation by 2035 and rejoin the Paris climate accord if he became president. BlackRock punished 53 companies, including ExxonMobil and Volvo, over climate policy inaction. (FT)

Who is leading the 2020 US election polls? The FT’s interactive calculator lets you follow the latest movements in the US election.

Epstein associate Maxwell pleads ‘not guilty’ Ghislaine Maxwell, accused of conspiring with Jeffrey Epstein, was denied bail by a New York judge, who cited the British socialite’s “extraordinary capacity to evade detection”. (FT)

The day ahead

Opec+ meeting The oil-producing group is expected to ease output curbs agreed in April by about 2m barrels a day at a virtual meeting on Wednesday. Read more in Energy Source — and sign up here. (FT)

EU’s tech tax ruling The EU’s second-highest court will decide whether the European Commission was correct to order Apple to pay €13bn in back taxes to Ireland in 2016. An EU tax crackdown is essential for sustainable growth, writes Paolo Gentiloni, European Commissioner. (FT)

Goldman Sachs reports The Wall Street bank is set to surpass main street rivals in the second quarter when it reports on Wednesday thanks to surging trading revenues and advisory fees. (Yahoo, FT)

Can you really split assets fairly in a divorce? Join Lucy Warwick-Ching and Emma Gill, director of divorce and family law at Vardags, for a live Q&A at 12pm UK time on Wednesday July 15.

What else we’re reading

Covid-19 has exposed society’s dysfunctions If we wish to avoid a political breakdown we should not seek to suppress markets, but instead temper their gales, writes Martin Wolf. Much of our debate now is on how to support economic security. Answers will have to be global. (FT)

The Wirecard Big Short Leo Perry of Ennismore Fund Management long believed that Wirecard was a fraud. What the short seller never expected was that it would take six years for the rest of the world to cotton on, or that he could be spectacularly vindicated — yet still barely profit. (FT)

Leo Perry, who co-runs Ennismore Fund Management, discovered scores of inconsistencies in Wirecard’s documents © FT montage; Charlie Bibby/Financial Times

Fight for a French luxury group Chinese investors who trace their lineage to a renowned fourth-century calligrapher are fighting to retain control of a 256-year-old French crystal glassmaker, following a private credit deal gone wrong. (FT)

Spain’s coronavirus jobs crisis Covid-19 has already left an indelible mark on Spain, with more than 40,000 excess deaths. But a further legacy of the pandemic will be the destruction of jobs and livelihoods — and here too the country risks becoming one of the worst-affected in Europe. (FT)

Chart shows projected unemployment rates in Q4 2020 showing a quarter of the Spanish workforce could soon be unemployed

Covid-19 crisis through the eyes of a billionaire “I’m sure I already have it. What do I care?” said the billionaire on the day the pandemic was declared. Over the next three months, a reporter called up one of America’s richest man for an unfiltered take on the crisis. He didn’t hold back. (Bloomberg)

Hagia Sophia culture wars Recep Tayyip Erdogan’s decree that the 1,500-year-old Hagia Sophia, the Byzantine cathedral-turned-mosque-turned-museum will once again be a mosque is about more than religious chauvinism, David Gardner writes. Corporate capitalism is helping drive cancel culture. (FT, Atlantic)

If Turkey’s EU accession bid was already moribund, the Hagia Sophia decree is probably its death certificate © Reuters

ECB’s bank merger hopes fall on deaf ears For sale: a 150-year-old German bank. Great fixer-upper potential. Yours for just over €6bn. In any other industry, Martin Arnold writes, it would be ripe for a takeover — just not in Europe’s banking sector. (FT)

FT Conversations

What readers are saying about ‘Hong Kong migration to UK could hit 200,000’:

“My father was one of those Ugandan immigrants (who came to the UK via the Uganda Resettlement Board). He came over with the equivalent of just 50p in his pocket. He lived in a council estate in a crammed house with the family, working two jobs, launderette by day and lorry yard by night. His brothers were the same. He now owns a business, a few properties and sent me through 15 years of private schooling. I am very proud and grateful of what he has achieved . . . I fear most of my local chums from this country lack the will to do hard work.” — BrexitBojo

Cartoon of the day

UK to ban new Huawei kit

© Banx

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