The FT’s markets round-up: “Persisting concerns about Europe’s debt crisis and waning global growth weighed on markets and delivered another session that lacked strategic clarity. But reports that central banks from major economies were prepared to provide liquidity to financial markets after Greek elections if needed, boosted sentiment. In the US, expectations were also compounded by the possibility of further stimulus measures from the Federal Reserve. The FTSE All-World index rose 0.4 per cent, helped by a 1.1 per cent jump for the S&P 500 in New York, but suppressed by a 0.5 per cent loss for the FTSE Eurofirst 300.” (Financial Times) Read more
Actually, maybe not the best analogy. Bank of England governor Mervyn King did announce the activation of cheap, long-term funding for UK banks against wide collateral in his Mansion House speech on Thursday.
But there’s an element of credit easing… Read more
Ahead of next week’s FOMC meeting, and as the G20 tries to preemptively assuage global markets with the kind of enthusiastically meaningless statements in which it specialises…
Since the last FOMC meeting we’ve had two disappointing US payroll reports, declining measures of inflation and inflation expectations, worries that growth in emerging markets has slowed more than anticipated, and Europe… well, how much time have you got? Read more
Markets were taking that line as not the existing swap lines a bullishly ambiguous signal as we headed into the close at pixel time:
Click the image above for the NY Fed’s announcement… Read more
Amazing what sometimes comes out of the European Parliament.
That’s an amendment from Jean-Paul Gauzès, Member of European Parliament, to the otherwise fairly sober draft legislation on how EU bodies should monitor governments’ finances, including bailout programmes. Dubbed the “two pack”, the draft legislation (including the Gauzès amendment) was approved by MEPs on Wednesday. This won’t come into force until the European Council has reviewed the legislation, which is going to mean months of negotiation, rejection of parts of the measures, and amendments, probably. Read more
Click the pic to peruse the UK government’s white paper on bank reform, published on Thursday in response to Vickers…
The consultation is open until September. On a quick read-through we’d highlight some of the proposed exemptions from ring-fencing retail ops — also this move on leverage ratios: Read more
Time was when Credit Agricole expected 2012 to be the year Emporiki, its Greek subsidiary, finally turned a pre-tax profit.
Lucky little Cyprus.
It has just been downgraded two notches by Moody’s to Ba3, has problems with its banks, and will have even bigger ones if a Grexit occurs, but it also has suitors. And that’s suitors in the plural. Read more
Live markets commentary from FT.com
So, Italy auctions €4.5bn of medium term debt just after Spain’s 10-year bond yields head north of 7 per cent… Awkward!
But it didn’t go that badly.
Arm-twisting Demand looked good, Italy met the top end of its planned issue, and yields didn’t spike as hard as they might have. Read more
This has been widely pre-announced on Twitter. But, according to Trade Web figures, Spain’s borrowing costs on10 year paper spiked up through 7 per cent at 9.55, London time…
FT Alphaville loves futuristic research reports.
Here’s Espirito’ Santo’s Caroline Gulliver with a look at what we can expect from “shopping in the future”. Some of the points echo our own beyond scarcity and multiple currency/payment method thoughts very closely… such as the idea that quality will become ever more important to customers while pricing will increasingly become a function of who you are and your relationship with the retailer. One price will fit fewer and fewer people. While supply chains and inventory holdings will respond ever more dynamically to demand in order to stay competitive. Read more
Having just looked at the prospect of a flat (at best) steel consumption growth rate from China, the next question for many will be: what does this mean for iron ore? Because pretty much all of the projected increase in iron ore demand is expected to come from China:
Even if you don’t buy the once-popular assertion that China needs more of just about everything to meet its growing economy, zero growth in steel consumption might seem pessimistic, given that rural Chinese are still moving to cities in large numbers.
Nomura analysts Matthew Cross and Ivan Lee looked at China’s urbanisation rate and concluded that it can keep progressing at its current pace for years without needing an increased rate of steel consumption. In fact, they argue that China’s annual steel needs won’t increase at all in 2012 and 2013 — and that’s with new government stimulus. Read more
From the Swiss National Bank this morning:
The Swiss National Bank (SNB) will maintain the minimum exchange rate of CHF 1.20 per euro and will enforce it with the utmost determination. It remains prepared to buy foreign currency in unlimited quantities for this purpose. Even at the current rate, the Swiss franc is still high. Another appreciation would have a serious impact on both prices and the economy in Switzerland. The SNB will not tolerate this. If necessary, it stands ready to take further measures at any time.
Elsewhere on Thursday,
- John Nash was 84 yesterday. Happy Birthday. Read more
France is pressing for new measures from the EU, pointing to the failure of the Spanish bank bail-out to calm market fears. France wants the ESM to be able to inject funds directly into banks; and also wants the ECB to begin supervising European banks, taking responsibility for stress-testing and winding up failed bank, as a step towards a banking union. Paris believes it is “making progress” on winning support from Germany for the proposals, the FT reports.
Tensions between European leaders are becoming clearly visible, says Bloomberg, with Wolfgang Schauble on Wednesday criticising Greek yacht owners and Mariano Rajoy declaring “battle” on the ECB. Read more
Asian stock markets were lower on Thursday as fears around the eurozone surged again. The MSCI Asia Pacific index was off 0.4 per cent with Japan’s Nikkei 225 Stock Average down 0.6 per cent, South Korea’s Kospi Composite index off 0.2 per cent, and Australia’s S&P/ASX 200 index 0.4 per cent lower. Hong Kong’s Hang Seng index lost 0.7 per cent and China’s Shanghai Composite index dropped 0.6 per cent.
Nikkei 225 down -12.86 (-0.15%) at 8,575
Topix down -0.17 (-0.02%) at 726.27
Hang Seng down -96.00 (-0.50%) at 18,931 Read more