The 6am Cut London | FT Alphaville

The 6am Cut London

The US manufacturing sector expanded in March, “underlining the diverging fates of the world’s biggest economy and the eurozone,” the FT writes. The US ISM index slightly bested estimates with a 53.4 reading, while PMIs across the eurozone confirmed an expected contraction of manufacturing activity. The PMI for Britain registered its highest reading in ten months, surprising everyone. (Financial Times)

Unemployment throughout the eurozone also rose last month, according to figures from Eurostat. (Wall Street Journal)

The Commodity Futures Trading Commission has sued the Royal Bank of Canada for allegedly engaging in wash trades. The CFTC “alleged in a lawsuit filed in Manhattan federal court that RBC knowingly executed ‘riskless’ trades through two offshore subsidiaries from June 2007 until May 2010, violating rules that require competitive pricing and arms-length transactions. The CFTC is seeking an injunction and penalties,” writes the FT. (Financial Times)

Avon Products rejected a $10bn offer from Coty Inc for being too low. (Reuters)

– Junk bonds are set to become increasingly popular as sources of financing for private equity deals, as CLOs wind down and banks remain cautious about lending to private-equity firms. (Financial Times)

– Pimco’s Total Return Fund brought in $1.7bn of investor money in the first quarter after having net outflows of $3bn the prior quarter. (Bloomberg) The fund enjoyed a comeback of sorts in the first quarter as its bet on mortgage bonds began to pay off. (Wall Street Journal)

– Michel Barnier has responded to critics of the technical standards proposed to implement the alternative investment fund managers directive, or AIFMD. Barnier, the European Union commissioner for the single market, said that he “will not be intimidated” by the lobbying of the hedge fund and private equity industries. (Financial Times)

The Greece finance ministry continues trying to convince the hold-out investors in Greek foreign-law bonds to accept a 75 per cent loss. The hold-out investors account for €6.4bn out of the €16.9bn of foreign-law Greek bonds. (Financial Times)


– Nouriel Roubini and Arnab Das propose a divorce settlement for the Eurozone. (Financial Times)

The tussle for the World Bank presidency highlights the complexities facing global institutions, writes Alan Beattie, who adds that it “reflects the complications of a world where power over the institutions of global governance is shifting from those developed nations that set up the bank to emerging economies.” (Financial Times)

One possible legacy of the recession in the US is that it has “brought an enduring shift in the geography of American growth.” (New York Times)

– The euro’s real tragedy “is that it has been disowned by its own kin,” writes Martin Sandbu. (Financial Times)

It’s time to take a closer look at credit card debt collection practices. (New York Times)

“The cost of too little growth far outweighs the cost of too much,” write Betsey Stevenson and Justin Wolfers (Bloomberg View)