June, 2010
What is it with SocGen types and alleged market abuse?
Jean-Pierre Mustier, SocGen’s former head of investment banking and the man who called Jérôme Kerviel a liar, has been fined for insider trading by the French market regulator.
Background: Mustier quit SocGen in August 2009 after France’s Autorité des marchés financiers opened proceedings against him,
Will derivatives reform take us from CCPs to GSEs?
Confused about just how the Dodd-Frank Act would actually change derivatives markets? Happily, Barclays Capital’s Rajiv Setia and team have tried an answer.
Not so happily, the answer is a bit disconcerting.
These aren’t the facilities you’re looking for
On the day surplus liquidity (potentially) died, the ECB also made the following announcement about its covered bond purchase programme:
Which should come as no surprise, since we knew the ECB was only prepared to buy up to €60bn worth of paper until June 30,
Leaving UK GDP down the back of the sofa
Next time you’re thinking about reacting to the first print of some important UK economic data — please bear in mind this press release from the Office of National Statistics, released on Wednesday:
Quarterly National Accounts (Q1 2010) scheduled for publication on 30 June 2010 at 9.30am has been postponed by the Office for National Statistics.
The cost of normalisation
So — the ECB’s 3-month liquidity operation saw less demand than expected on Wednesday. Approximately €132bn versus consensus expectations of some €250bn, to be exact, which left markets and the euro to rally after the announcement.
Parsing the post-ECB tender bounce
European bank stocks were up, up and away on Wednesday, after far less liquidity was demanded from the European Central Bank’s latest three-month tender than predicted. It’s a good sign that the system as a whole doesn’t face a funding crisis.
Markets Live transcript 30 Jun 2010
Markets Live chat transcript for the chat ending at 11:20 on 30 Jun 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHhola NHIt’s 11.03 am NHand time for another Markets Live
The not-so-big roll-over, banks take €132bn at ECB’s 3M LTRO
That’s very much below the consensus roll-over estimate of about €220bn – 250bn.
Which means (shock) eurozone banks are doing relatively alright, on the whole.
So, not with a bang, but a whimper come the results of the European Central Bank’s three-month Long-Term Refinancing Operation (LTRO) — the liquidity op meant to replace its €442bn 12-month LTRO,
Every little helps (updated)
It’s not every day a company the size of Tesco – the UK’s biggest retailer – gets taken to task over its accounting policies — but it happened on Wednesday.
Citigroup reckons the supermarket giant has a more aggressive policy than its peers with regard to:
What’s up with commodity currencies?
Having warned about increasingly negative sentiment towards the euro, Bank of New York Mellon’s Simon Derrick takes a stab at commodity currencies on Wednesday.
In a nutshell, they are behaving oddly.
Reasons not to worry about the European roll-over
There is quite a bit to worry about at the moment – deflation, a double dip, China’s property market, a jobless US recovery – but the expiry of the ECB’s €442bn Long-Term Refinancing Operation (LTRO) is not one of them.
Further reading
Elsewhere on Wednesday,
- The crowd discovers energy MLPs.
- Hedge funds and liquidity.
- The IMF in a transformed world.
- Warning signals of a double-dip recession.
- The CLO hangover,
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: This global game of ‘pass the parcel’ cannot end well
Was the summit of the Group of 20 leading economies in Canada over the weekend a step forward towards co-operation or a step backwards towards disagreement? The answer seems to be both,
Snap news
Breaking pre-market news on Wednesday,
- Standard Chartered to invest $500m in Agbank IPO — statement.
- Takeover rules breached in Scott Wilson bid — statement.
- Nationwide says UK house prices up 0.1% in June — report.
Sell!
A poor day for US financial markets, all round:
Related links:
Fresh fears over European bank sector – FT
Bout of nerves sparks rush to havens – FT
Stressful European bank spoilers
Not more European bank stress-test leaks. Although at least this particular indiscretion, centred on German banks, hints at how the actual tests will be received.
As Bloomberg reported on Tuesday:
Random Reasons to be Bearish
Take your pick in explaining the generalised bloodbath across major equity markets on Tuesday:
Evidence that the ECB is losing control of the European financial system;
A shocking decline in the closely followed Conference Board Consumer Confidence Index ® for June in the US;
Depressant or stimulant?
The inflation/deflation debate has recently morphed into a new form: The austerity/stimulus deadlock.
Some (Paul Krugman, ahem) believe rushing into austerity measures at this point could be a dangerous move.
Quis custodiet ipsos custodes? Or, the FSA on auditors
Here’s a discussion paper to strike fear into the hearts of prompt debate among audit firms — another analysis of their failings in the banking crisis, carried out by the UK’s financial regulator, the FSA.
That ‘Monster QE, markets-on-a-cliff-edge,’ RBS note
What more can we say about RBS’s ‘Monster QE’ note that hasn’t already been said by Ambrose Evans-Pritchard, of the Telegraph? Well, for a (facetious) start we can note some media-bank symbiosis:
* Monster QME coming.
ECB fixed-term deposit FAIL
Oof.
The European Central Bank’s latest attempt to sterilise its government bond purchases has landed with a resounding thud. Results from the ECB’s Tuesday one-week fixed-term deposit (FTD) auction,
Agua caliente at the ECB
A certain FT story has caused a bit of a stir in European markets on Tuesday.
It regards the fact that Spanish banks are lobbying the European Central Bank “to act to ease the systemic fallout from the expiry of a €442bn ($542bn) funding programme this week”
Markets Live transcript 29 Jun 2010
Markets Live chat transcript for the chat ending at 11:14 on 29 Jun 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHGood morning NHand welcome to Markets Live
Fantasy oil major M&A
Fred Lucas of JP Morgan has been gazing into his crystal ball:
It is early February 2011 in Irving (TX) and Rex Tillerson, CEO of Exxon Mobil, has just concluded a marathon board meeting ahead of the corporation’s Q4 results.
Numbers for LTRO-watchers
Just two days to go until the July 1 expiry of the European Central Bank’s one-year LTRO.
The Long-Term Refinancing Operation added €442bn in liquidity back in June 2009. And now — much to some banks’ chagrin — it’s due to come to an end with no matching-maturity replacement.
Stampeding to the lifeboats
Early morning chaos on European bourses on Tuesday:
Which has followed an interesting flight to safety across the Atlantic overnight.
Yields on 10-year Treasuries fell below 3 per cent in Asian trading on Tuesday,