Posts from Friday Sep 7 2012

‘Sept 1, Friday…Partridge Shooting begins…’

‘… 3 Sunday…13th after Trinity…11am WAR’

That’s from the August-September 1939 diary of Montagu Norman, the Bank of England’s longest serving governor, who held the job down from 1920 to 1944. Click to view. Read more

US payrolls and past as predictor for construction and manufacturing employment

CreditSights has updated its sector-specific chart to reflect this morning’s payrolls report, and you can see that construction and manufacturing employment continue to be well below their pre-recession levels, while education & health are well above and kept climbing in August. Read more

Sticking it to Glasenberg, and standing by Mick

Fierce statement out of Xstrata on Friday afternoon…

The Independent Directors of Xstrata plc have today written to Glencore International plc to request clarification of the outline proposal (the “Proposal”) provided to the Xstrata Board immediately prior to the Xstrata Court Meeting and New Xstrata General Meeting today in Switzerland. Read more

‘The only numbers you need to know in US Credit’

Via Marc Ostwald at Monument Securities on Friday, credit factoid du jour (if not de l’année):

Total dealer positions in corporate bonds fell to $58.5b as of Aug 29 vs $60b the previous week. It was the lowest level since $55.1b March 13, 2002. Read more

August payrolls 96,000 and unemployment rate declines to 8.1 per cent

Well, expect to hear a lot of chatter today about how the chances of QE3 have markedly increased. The extent to which the FOMC’s decision next week depended on this one report was probably overstated, but certainly it matters. Also notable is that payrolls for June and July were both revised down.

– Including revisions to June and July, payrolls in the past three months have grown on average by just 94,000 per month. Read more

Divining the Swiss franc floor

There is plenty of chatter out there about the Swiss franc floor being raised (and just as it celebrates its first birthday party too).

Nobody we have talked to has any actual idea if Jordan et al at the Swiss National Bank will kick the floor up (with SFr1.22 the likely spot if they do) and most don’t see them actually doing it . Read more

Markets Live transcript 7 Sep 2012

Live markets commentary from 

Chinese steel mills hope this stimulus thing is for real

Exhibit 1: From Caijing on Wednesday:

“The whole steel market has already collapsed in August, because any steel maker, including Baosteel (600019.SH), would make a loss at a such [low] price levels,” Wu Xichun, the honorary chairman of the China Iron & Steel Association, told a weekend conference. Read more

The (early) Lunch Wrap

Good morning New York…


Xstrata: proposal received from Glencore at 3.05 ratio per share

From the RNS:

The Board of Xstrata plc (“Xstrata”) has received a proposal from Glencore International plc (“Glencore”) to amend the terms of the merger of Glencore and Xstrata. Read more

Why it doesn’t matter if China sells its USTs

Earlier this week Paul Krugman went out of his way to point out that if China stopped buying US bonds, it wouldn’t be the end of the world.

We wanted to come back to some of his points, because well, we think they are pretty good. Read more

Tony Blair brokers Glenstrata deal

Yup. Bouncing back from the Archbishop Tutu affair, the former British Prime Minister is understood to be acting as a last minute peacemaker between Glencore’s Ivan Glasenberg and Qatar Holding, the SWF that is threatening to quash the $70bn merger of Glencore and Xstrata.

That’s the “development” referred to earlier by Glencore as it adjourned its shareholder meeting on Friday in Switzerland. Read more

China stimulates, sort of

A trillion renminbi! That’s almost like a real 2008-style stimulus (which was Rmb4tn). And beleagured Chinese stocks reacted accordingly:

Shanghai Composite chart September 7, 2012 Read more

What about some info Glenstrata? – updated

At around 8.20am this morning, there was some news from the Theatre-Casino in Zug.

Xstrata had adjourned EGM for the $80bn merger following a “development”. Read more

Further reading

Elsewhere on Friday,

- Who is speaking for the poorRead more

Rally Monkey still perched on Spanish yields

That’s Spain’s 10 year below 6 per cent for the first time since May:

 Read more

The 6am Cut London

Asian stocks rose on news of the ECB’s bond buying programme and US employment data, with the MSCI Asia Pacific index rising 1.2% and headed for its biggest gain in a month. Shares in companies exposed to Europe benefited, with Canon gaining 3.4%. Toyota, which depends on North America for a quarter of its sales, added 2.1% after data showed US jobless claims fell. (Bloomberg) Earlier, the S&P 500 rose to its highest level since 2008. (Financial Times)

Spain will not be forced into requesting a rescue until the attached conditions become crystal clear, senior officials in Madrid insisted on Thursday. MarioDraghi’s insistence that intervention from the ECB’s new bond-buying would come with “strict and effective” conditionality has effectively scrapped the “conditionality-lite” programmes Spain agreed to in June, erasing political gains the Rajoy government thought it had secured. (Financial TimesRead more