The 6am London Cut | FT Alphaville

The 6am London Cut

Markets: Asian stocks rose, with Japan’s benchmark index reaching a one-month high, and the yen weakened after Tokyo was selected to host the 2020 Olympics. Metals rallied and the won gained on improving Chinese exports and easing concerns over a reduction in U.S. stimulus. (Bloomberg) (Financial Times)

Benign inflation adds to sense Chinese economy recovering: Consumer prices rose 2.6 per cent from a year earlier, just a touch below July’s 2.7 per cent pace, the statistics bureau said on Monday. The data follow good trade figures released on Sunday that beat expectations and improving producer price inflation. (Financial Times)

Trading in shares of China’s dominant oil producer PetroChina was suspended on Monday, the second halt in two weeks, as the company said a report by the China Business News that five executives, including vice president Sun Longde and director Wang Guoliang, had been detained, was inaccurate. (Reuters) (FastFT)

US investors have pumped more money into European equities than at any time since 1977. Pension funds and other big US groups invested $65bn in European stocks in the first six months of 2013, the highest in 36 years over that time period, according to research compiled by Goldman Sachs’ European strategy team from US Treasury data. (Financial Times)

Europe’s corporate bond market has raised a total of nearly $29bn over the past two weeks, a dramatic surge after one of the quietest summer lulls on record. There were a total of 39 issues, according to figures from Dealogic. (Financial Times)

Sir John Vickers, the chief architect of Britain’s post-crisis regulatory reforms believes banks’ capital levels should be at least twice as high as the level recommended two years ago by the government-appointed commission he led — he said that in a “blue-skies” world banks’ core tier one capital ratios would now be 20 per cent, rather than the 10 per cent recommended by the Independent Commission on Banking, that has already become the norm for UK lenders. (Financial Times)

Neiman Marcus up for sale with $6bn price tag: Neiman’s private equity owners TPG and Warburg Pincus are close to an agreement with Ares Management and Canadian Pension Plan Investment Board on the terms of a deal. Several people close to the sale said they expected the trophy asset would go to a more traditional private equity player, such as the venerable KKR, which had originally worked with Saks, the department store chain, to look at Neiman. (Financial Times)

Alibaba is prepared to scrap plans for a $60bn share sale in Hong Kong and switch its listing to New York if the senior management cannot nominate a majority of board directors, said people close to the company. Founder Jack Ma and top executives own just over 10 per cent of the company and Hong Kong listing rules explicitly ban dual-class shares that give more voting power to a small group of owners. (Financial Times)

Japan’s second quarter economic growth has been revised up to 0.9 per cent quarter on quarter from 0.6 per cent on the back, in part, of stronger capital expenditure than initially reported. (FastFT)

Japan anticipates Olympic boost, but Fukushima shadows linger: “The economic impact of the win was estimated by the Tokyo bid committee at more than 3 trillion yen (19 billion pounds) with the creation of 150,000 jobs. If the Nikkei stock index follows the examples of the London and Athens bourses after those cities won the games, it could see a one to three-month rally.” (Reuters)

“Pressure from disappointed investors is forcing hedge funds to roll back their fees, putting the standard charge of 2% of assets under management and 20% of investment profits on the endangered list… Today, the average hedge fund charges an annual management fee of about 1.6% of assets, while claiming around 18% of investment gains.” (Wall Street Journal)

Peña Nieto waters down Mexico tax reforms: Mexico’s faster-than-expected economic slowdown forced Enrique Peña Nieto, the country’s president, to dilute key tax reform plans, shying away from slapping a widely expected sales tax on food and medicine that could have intensified a wave of popular protests. (Financial Times)

South Korean financial regulators are “investigating whether Goldman Sachs sold foreign bonds in the domestic market through its Hong Kong unit, which does not have any license to sell such products directly in South Korea, the source told Reuters on Monday.” (Reuters)


A trap of the president’s making (Financial Times)

Events disrupt the Fed’s timetable – Davies (Financial Times)

China will stay the course on sustainable growth – Li Keqiang (Financial Times)

The arithmetic of Germany’s election points to instability (Financial Times)

Tony Abbott gets on his bike as Australia coalition’s work begins (Financial Times)

Net neutrality in the courts again (Wall Street Journal)

India in reverse (New York Times)

China’s solar zombies being forced into the light (Bloomberg)


Asian markets
Nikkei 225 up +305.64 (+2.21%) at 14,166
Topix up +24.86 (+2.17%) at 1,173
Hang Seng up +166.07 (+0.73%) at 22,787

US markets
S&P 500 up +0.09 (+0.01%) at 1,655
DJIA down -14.98 (-0.10%) at 14,923
Nasdaq up +1.23 (+0.03%) at 3,660

European markets
Eurofirst 300 up +6.18 (+0.51%) at 1,230
FTSE100 up +14.89 (+0.23%) at 6,547
CAC 40 up +42.39 (+1.06%) at 4,049
Dax up +40.69 (+0.49%) at 8,276

€/$ 1.32 (1.32)
$/¥ 99.65 (99.10)
£/$ 1.56 (1.56)

Commodities ($)
Brent Crude (ICE) down -0.03 at 116.09
Light Crude (Nymex) down -0.28 at 110.25
100 Oz Gold (Comex) up +1.20 at 1,388
Copper (Comex) up +0.02 at 3.28

10-year government bond yields (%)
US 2.95%
UK 2.99%
Germany 1.95%

CDS (closing levels)
Markit iTraxx SovX Western Europe -0.01bps at 90.49bp
Markit iTraxx Europe -1.06bps at 104.54bp
Markit iTraxx Xover -2.19bps at 412.79bp

Sources: FT, Bloomberg, Markit