The 6am Cut London | FT Alphaville

The 6am Cut London

Asian shares rose for a second day and the yen strengthened slightly, after better than expected US retail sales. The MSCI Asia Pacific index was 0.2% higher as gains were limited by fears that positive data may lead the Fed to scale back its bond-buying. The Nikkei was 0.13% higher. (Financial Times)(Bloomberg)

David Cameron will today rush out a draft bill for an EU referendum in a bid to defuse growing acrimony among Conservatives over his strategy for renegotiating Britain’s relationship with Brussels. (Financial Times)

Regulator queries 1m swaps transactions: The CFTC has issued a “special call” asking Wall Street banks, commodities traders and hedge funds to provide documents that would prove recent derivatives transactions known as “exchanges of futures for swaps” were legal. Lawyers at the CFTC enforcement division are also scrutinising the trades for possible violations. Goldman Sachs, JP Morgan and Citi are among the banks that received requests, which cover EFS executed following the passage of the Dodd-Frank financial reform law in 2010 until this year, people familiar with the inquiry said. EFS are two-step transactions used for commodity deals, often in illiquid markets. (Financial Times)

Help to Buy scheme already appears to be boosting UK housing: The scheme, announced in the Budget in March, has helped raise inquiries by new buyers to their highest level since November 2009, according to a Royal Institute of Chartered Surveyors poll. Twenty-five per cent more chartered surveyors recorded an increase in demand for property than a fall in April, up from 13 per cent in March, Rics said on Tuesday. (Financial Times)

Big European clothing retailers signed garment factory safety agreement, US peers less keen: H&M, Inditex, Primark and Tesco signed the five-year legally bindin accord designed to improve safety conditions in Bangladesh’s garment factories after a building collapse last month killed at least 1,127 workers. But major US retailers including Wal-Mart, Sears, and JC Penney have so far demured, while Gap said it wouldn’t sign the agreement in its current form. (Wall Street Journal)(Reuters)

France is preparing to tax smartphones, tablets and all other internet-linked devices to help fund the production of French art, films and music. The proposal was made in a government-commissioned report that was broadly endorsed by the Hollande administration. (Financial Times)

Glass Lewis recommends against Goldman compensation: The investor advisory cited a “disconnect between pay and performance” in its recommendation that shareholders vote against the executive compensation plan and the re-election of James Johnson, head of the board’s compensation committee and former chief executive of US mortgage giant Fannie Mae. (Financial Times)

Fitch questions Seagram Building bond ratings: Fitch Ratings, which was frozen out of the deal, has criticised a securitisation backed by the Seagram Building located at 375 Park Avenue, home to the Four Seasons restaurant, after digging into the details of the underlying mortgage on the property. The top tranche of the $440m of bonds, marketed by Citi, are rated triple A by Moody’s and Kroll Bond Ratings, but Fitch says the tranche should be no higher than single A based on its assessment of future rental income. (Financial Times)

COMMENT AND CURIOS:

- RBS and Lloyds are slowing Britain’s economic recovery. (Wall Street Journal)

- Andrew Ross Sorkin (ft. Hank Paulson) makes the case for Jamie Dimon retaining dual role. (NYT Dealbook)

- Hedge funds that were once bearish on the euro have turned bullish. (Financial Times)

- Saudis welcome US shale as locking in a future for oil. (Financial Times)

- Japan, China and South Korea vie to take advantage of melting Arctic ice. (Bloomberg)

- ‘Zombie-like’ Lehman seeks millions from retirement homes, hospitals and colleges. (Bloomberg)

- James Mackintosh: Beware the biotechs stock boom. (Financial Times)

- Selling the Australian dollar, buying the Mexican peso to trade China slowdown. (Wall Street Journal)

- Emerging markets turn sour for global banks. (Financial Times)

- Richard Bernstein: Smaller, domestically-focused US companies are outperforming. (Financial Times)

OVERNIGHT MARKETS: UP SLIGHTLY

Asian markets
Nikkei 225 up +19.04 (+0.13%) at 14,801
Topix up +0.79 (+0.06%) at 1,233
Hang Seng down -28.13 (-0.12%) at 22,962

US markets
S&P 500 up +0.07 (0.00%) at 1,634
DJIA down -26.81 (-0.18%) at 15,092
Nasdaq up +2.21 (+0.06%) at 3,439

European markets
Eurofirst 300 down -2.44 (-0.20%) at 1,231
FTSE100 up +6.78 (+0.10%) at 6,632
CAC 40 down -8.63 (-0.22%) at 3,945
Dax up +0.70 (+0.01%) at 8,279

Currencies
€/$ 1.30 (1.30)
$/¥ 101.60 (101.77)
£/$ 1.53 (1.53)

Commodities ($)
Brent Crude (ICE) up +0.03 at 102.85
Light Crude (Nymex) up +0.19 at 95.36
100 Oz Gold (Comex) up +4.40 at 1,439
Copper (Comex) down -2.95 at 333.25

10-year government bond yields (%)
US 1.91%
UK 1.90%
Germany 1.36%

CDS (closing levels)
Markit iTraxx SovX Western Europe -0.3bps at 89.59bp
Markit iTraxx Europe +3.96bps at 96.82bp
Markit iTraxx Xover +13.5bps at 396.2bp
Markit CDX IG +1.46bps at 73.48bp

Sources: FT, Bloomberg, Markit