Good morning, New York
Gulf Keystone: The latest executive remuneration scheme seems to have been fashioned so as to encourage takeover speculation amongst the hoards of retail investors who follow this Kurdistan oil play. Paul has more.
The US bond sell-off: nothing to get excited about, it’s long overdue, according to SocGen strategist Albert Edwards. And on the recent change of mood against analysts, “global EPS optimism tends to respond more quickly to the good news from the EPS gainers than the adverse news from EPS losers.” Joseph has more on the latest from Edwards.
China flash PMI: the index moved down to 48.1 in March, the fifth straight month of contraction and the worst for four months. Kate has the details.
Oil watch: Although estimates for oil demand growth have come down lately, it’s also the case that Opec countries have little spare capacity and that non-Opec countries have had supply disruptions recently. Tack that on to the anticipated effect of sanctions on Iran (which don’t fully kick in until July) and the financialisation of commodities generally in recent years. Read Cardiff’s post for further analysis and explanatory charts.
Natural Gas: BP, ExxonMobil and ConocoPhillips are in discussions about a $40bn project to export liquefied natural gas from Alaska to Asia, potentially opening up large but stranded reserves that currently have no route to market. (FT)
Student Loans: the Consumer Protection Bureau in the US reckons that student loans topped $1tr as of last year, which is 16 per cent higher than an estimate by the Federal Reserve Bank of New York. The general rise in student loans is in part due to tuition fees going up, but also because of Americans going to college rather than being confronted with a weak labour market. Higher debt levels may lead the latest generation of graduates to delay home purchases, harming the fragile recovery in housing. (WSJ)
The European Central Bank is falling behind on a €40bn covered bond purchase programme launched at the height of eurozone crisis, in a sign it could be dropped. (FT)
Iran sanctions: the US has given six-month exemptions to Japan and ten European countries because they have significantly cut imports of Iranian oil. Without the reprieve, banks in those countries risked being cut off from the American financial system. China and India were granted no such exemption. (Reuters)
The World Bank: The US is under intense pressure to nominate a top-notch candidate for the presidency of the institution after developing countries put forward two credible contenders of their own. (FT)
Tech Watch: Iceland is promoting its data centre capabilities, in a bid to gain share in the $41bn market. The country’s climate and supply of geothermal energy may give it an edge (Bloomberg). Meanwhile, China has overtaken the US in smartphone and tablet activations, coming out ahead in the month of February by one percentage point – 23 vs 22 for share of total activations in the world (Bloomberg).
Markets: Growth-focused assets are sliding after slack Chinese and German manufacturing data once again raised concerns about the health of the global economy (FT’s Global Market Overview). S&P 500 futures suggest a negative open for US markets as well (Bloomberg).
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