The 6am Cut London | FT Alphaville

The 6am Cut London

Asian stocks rose as the BoJ maintained easing policy and China’s July trade growth was much higher than expected. The Nikkei rose 1% and the yen weakened 0.2% after rising 1.4% yesterday. (Bloomberg)(Financial Times)

Today: Earnings – Commerzbank, Rio Tinto H1 estimate, Aviva, Deutsche Telekom, Nestle.

Chinese trade data beat: Exports rose 5.1% for July, year-on-year, compared to a median forecast of 2%. Import growth was even stronger at 10.9%, while the median forecast was for only 1%. (Bloomberg)(Financial Times)

BoJ keeps policy steady, as expected. The central bank also said Japan’s economy was starting to recover modestly. (FastFT)(Statement)

JPMorgan MBS criminal probe launched: The US Department of Justice has opened a criminal probe into JPMorgan Chase’s sale of mortgage-backed securities, a new front in the government’s examination of the largest US bank by assets. The bank said yesterday it was “responding to parallel investigations” – civil and criminal – into its sale of MBS between 2005 and 2007. It also revised up its estimate of losses from litigation to $6.8bn on top of reserves, from $6bn last quarter. (Financial Times)

Cargill expands in physical energy markets as banks retreat: “The US-based company better known as the world’s largest trader of agricultural commodities has long participated in energy markets. But this was predominantly based on derivative contracts, not physical cargoes.” Cargill discussed expanding its energy trading beyond securities after reporting annual profit almost doubled to $2.31bn. (Financial Times)

Vale’s profits plunge as real weakens: Profits at the world’s biggest iron ore producer fell more than 80% in Q2, after currency losses and lower sales led to one of its worst results in a decade. Net income for the three months ended June 30 fell 84 per cent to $424m, compared with a profit of $2.64bn a year earlier. (Financial Times)

European junk debt sales soar in US: Sales are up 70% so far this year to $29bn, according to Dealogic. (Financial Times)

Shinzo Abe says Tepco isn’t up to the task of containing the Fukushima nuclear disaster, and has ordered the government to step in an assist with the clean-up. “At least 300 tons of water laced with strontium and other radioactive particles is getting into the ocean each day, according to the Ministry of Economy, Trade and Industry at a briefing in Tokyo yesterday.” (Bloomberg)(Reuters)

COMMENT AND CURIOS:

- Charles Goodhart on the UK productivity puzzle. (Financial Times)

- Scott Sumner: Larry Summers is the wrong choice for the Fed. (Financial Times)

- Mark Carney may regret putting his credibility on the line. (Wall Street Journal)

- Arvind Subramanian: Pressures on Rajan will be intense at RBI. (Financial Times)

- New Treasury issuance will test investors amid taper pricing. (Financial Times)

OVERNIGHT MARKETS: UP

Asian markets
Nikkei 225 up +145.97 (+1.06%) at 13,971
Topix up +5.72 (+0.50%) at 1,161
Hang Seng up +166.39 (+0.77%) at 21,755

US markets
S&P 500 down -6.46 (-0.38%) at 1,691
DJIA down -48.07 (-0.31%) at 15,471
Nasdaq down -11.76 (-0.32%) at 3,654

European markets
Eurofirst 300 down -3.25 (-0.27%) at 1,218
FTSE100 down -93.00 (-1.41%) at 6,511
CAC 40 up +5.92 (+0.15%) at 4,038
Dax down -39.25 (-0.47%) at 8,260

Currencies
€/$ 1.33 (1.33)
$/¥ 96.73 (96.29)
£/$ 1.55 (1.55)

Commodities ($)
Brent Crude (ICE) up +0.39 at 107.83
Light Crude (Nymex) up +0.47 at 104.84
100 Oz Gold (Comex) up +7.50 at 1,294
Copper (Comex) unchanged 0.00 at 3.18

10-year government bond yields (%)
US 2.60%
UK 2.49%
Germany 1.69%

CDS (closing levels)
Markit iTraxx SovX Western Europe +0.96bps at 88.99bp
Markit iTraxx Europe +1.03bps at 96.52bp
Markit iTraxx Xover +5.06bps at 400.11bp

Sources: FT, Bloomberg, Markit