The 6am Cut London | FT Alphaville

The 6am Cut London

China’s manufacturing growth foundered slightly in July, confounding expectations for a recovery as the government has stepped up support measures. The official July manufacturing PMI was 50.1, down from 50.2 in June. The HSBC PMI was 49.3, showing deceleration was slowing since June when the privately-compiled index was 48.2  (Financial Times).

South Korea’s exports were 9% lower in July than a year earlier and inflation fell to a 12-year low. The decline was attributed to slowing demand from key markets of China, Europe and the US; although a strong performance in July 2011 also contributed to the sharp fall. The unexpectedly big fall in consumer inflation to 1.2% year-on-year led to higher expectations of more monetary easing (Financial Times).

MF Global customers will “eventually be made whole” according to the failed brokerage’s bankruptcy trustee Louis J. Freeh. Freeh, who is working on recovering creditors’ funds, said he believed efforts by fellow trustee James Giddens to recover customer funds would be successful. “A person familiar with Mr. Freeh’s analysis said there might even be enough left over once customers are repaid to distribute roughly $500 million or more in additional assets to the company’s creditors.” (Wall Street Journal)

Italian police seized documents at Barclays’ Milan offices as part of an investigation that seeks to see if Italian consumers were hurt by the bank’s manipulation of Libor. The search, which took place on Friday, netted documents, emails and other digital material, according to two consumer groups that sparked the investigation by filing an initial complaint with investigative magistrates (Financial Times).

The SEC is seeking permission from Congress to regulate the $3tn municipal bond market, which is currently exempt from disclosure requirements and direct enforcement (Wall Street Journal).

Chinese house prices posted the biggest gain in a year in July and the market is at a ‘turning point’, according to the country’s biggest property website Soufun (Bloomberg).

AIG is buying a network of financial advisers from its rival Hartford Financial for up to $90m, in a sign of confidence from the bailed-out US insurer (Financial Times).

Google is delaying release of the ‘Nexus Q’, its first in-house designed and marketed consumer electronics device (Reuters).


India’s growth could be hit by massive power outages. (Bloomberg)

– Switzerland is the new China of foreign reserves. (Financial Times)

– Hans-Werner Sinn and Friedrich Sell suggest temporary Eurexits be allowed. (Financial Times)

– Oakland vs Goldman Sachs case a lightning rod for financial sector criticism. (Reuters)


Asian markets
Nikkei 225 down -94.80 (-1.09%) at 8,600
Topix down -8.91 (-1.21%) at 727.40
Hang Seng up +7.23 (+0.04%) at 19,804

US markets
S&P 500 down -5.98 (-0.43%) at 1,379
DJIA down -64.33 (-0.49%) at 13,009
Nasdaq down -6.32 (-0.21%) at 2,940

European markets
Eurofirst 300 down -9.62 (-0.90%) at 1,063
FTSE100 down -58.35 (-1.02%) at 5,635
CAC 40 down -29.05 (-0.87%) at 3,292
Dax down -1.80 (-0.03%) at 6,772

€/$ 1.23 (1.23)
$/¥ 78.01 (78.11)
£/$ 1.57 (1.57)

Commodities ($)
Brent Crude (ICE) down -0.25 at 104.67
Light Crude (Nymex) down -0.19 at 87.87
100 Oz Gold (Comex) up +3.30 at 1,614
Copper (Comex) unchanged 0.00 at 341.95

10-year government bond yields (%)
US 1.47
UK 1.47
Germany 1.29

CDS (closing levels)
Markit iTraxx SovX Western Europe -1.3bps at 256.89bp
Markit iTraxx Europe +2.3bps at 159.78bp
Markit iTraxx Xover +9.89bps at 633.44bp
Markit CDX IG +1.25bps at 107.5bp

Sources: FT, Bloomberg, Markit