June, 2010
Drowning in euros
Sovereign debt worries are lapping around eurozone governments’ feet, European banks are facing a liquidity chasm, and economic confidence is treading water.
But can a sea of devalued euros save Europe?
After all,
Getting around the UK bank levy, by UBS
UBS might expect Tuesday’s UK Budget bank levy to trim up to 8 per cent of normalised bank earnings, but it also thinks the tax’s net impact to be reduced by some clever, err, ‘balance sheet management.’
Fresh from the Swiss bank — this note:
Chinese floating exchange rate? There’s an ETF for that
Call the global ETF industry what you want, but you can’t deny that they’re not quick to react to changing investor demands.
Not even a week since news broke that China would consider some flexibility in its exchange rate,
Markets Live transcript 23 Jun 2010
Markets Live chat transcript for the chat ending at 11:05 on 23 Jun 2010. Participants in this chat were: Paul Murphy Neil Hume, FT PMHi there PMOld guard taken over NHhang on
Portrait of an oil company in distress
It was widely reported that Tony Hayward, the chief executive of BP, was a prominent no-show at this week’s World National Oil Companies Congress, which was being held in London.
Steve Westwell, the company’s chief of staff,
Flight to safety? Follow the US Treasuries
Here’s an interesting data point from the US Treasury market overnight.
Some $40bn of two-year notes were sold at a record low yield of 0.789 per cent on Tuesday, with a bid to cover ratio of 3.45 — the highest since October 2009,
A split Sentance, UK monetary policy dissent
The first to break ranks among the UK’s Monetary Policy Committee is one Andrew Sentance.
From the Bank of England’s just-released MPC meeting minutes:
The Governor invited the Committee to vote on the proposition that:
Gilt trip
With time to read through Tuesday’s British austerity Budget, it looked like the gilt market was happy with the government’s fiscal plans, after all:
The yield on the 10-year is now back to October 2009 lows.
July 1 could be the day liquidity dies
We’ve mentioned July 1 a couple times before.
That’s the day the European Central Bank’s first and largest 12-month Long Term Refinancing Operation (LTRO) will run out. It’s also the day Barclays US money market analyst Joseph Abate expects three-month dollar Libor to start rising,
Further reading
Elsewhere on Wednesday,
- Visualising the UK budget.
- Oh the humanity! An investment banker on the AgBank IPO.
- Get thee (CEO) to a TV interview.
- Shale gas is a colossal fracking mess.
Pink picks – UK Budget special
Comment, analysis and other offerings from Wednesday’s FT — including special commentary on Britain’s austerity Budget,
Martin Wolf: A bloodbath none were prepared for
Fortune favours the brave, or so George Osborne,
Snap news
Breaking pre-market news on Wednesday,
- BASF agrees to buy Cognis for €3.1bn, including debt – statement.
- Agricultural Bank of China to price Hong Kong portion of its £23bn IPO at not less than HK$2.80 a share – report.
[MoneyTech] Google and Twitter v the investment banks
How do Wall Street’s lawyers and lobbyists find the time?
Somehow, while fending off the complaints of munis burnt by derivatives, contending with proposals to overhaul the US financial system and worrying about the SEC poking around,
[UK Austerity Budget] Analysts react on debt and inflation
It was billed as the austerity budget. But Marc Ostwald of Monument Securities says Chancellor George Osborne’s fiscal outlook for the UK has been revealed to be rather rosy in one respect:
…the fundamental problematic remains that the GDP forecasts look to be too optimistic by roughly 0.3% to 0.5% per annum,
[UK Austerity Budget] Osborne’s retailer therapy
Chancellor George Osborne introduced a VAT hike to 20 per cent from 17.5 per cent on Tuesday, effective from January 4 2011.
And yet… UK retailers rallied on the news:
While it might seem counter intuitive,
[UK Austerity Budget] More UK tax bombshells — and gilt cuts
More tax increases from Britain’s Chancellor George Osborne, including on the thorny issue of capital gains tax.
Flashes, via Reuters:
RTRS-UK’S OSBORNE – HIGHER RATE TAXPAYERS WILL PAY 28 PCT ON CAPITAL GAINS FROM MIDNIGHT
RTRS-UK’S OSBORNE – EXPECT TO RECEIVE EXTRA 1 BLN STG FROM CGT TAX RISE
That leaves the UK with the second-highest capital gains tax in the world at the flat rate,
[UK Austerity Budget] The Chancellor’s VAT bombshell
This one got some parliamentary boos as Chancellor George Osborne presented his austerity Budget: a rise in the UK’s value-added tax rate.
Via Reuters:
RTRS-UK’S OSBORNE – VAT TO RISE TO 20 PCT FROM 17.5 PCT ON JAN.
[UK Austerity Budget] Osborne’s £2bn bank tax (updated)
Not much joy for Britain’s bankers in one measure from the UK’s austerity budget.
Although it is not as bad as it could have been – the bank levy will raise just £2bn a year, not upwards of £3bn as had been rumoured in some publications.
[UK Austerity Budget] George goes green
Continuing FT Alphaville’s traditional coverage of Budget Day neckwear:
What does the colour of Chancellor George Osborne’s tie mean?
Green shoots? Recovery? Incredible Hulk-style fiscal bashing? You tell us.
[UK Austerity Budget] Osborne wields the axe, gilts react
Britain’s Chancellor George Osborne set out his government’s tough austerity budget on Tuesday — including measures to strip back the UK’s fiscal deficit.
Initial flashes, via Reuters:
RTRS-UK’S OSBORNE
US Housing Bubble v2.0, charted
It’s no secret that the US government is trying to prop up house prices.
Its various programmes, Hamp, MHA, tax incentives, etc., have been explicitly linked to higher house prices before — most notably in Sigtarp’s first-quarter report to Congress.
Credit Agricole names its Greek pain
Shares in Credit Agricole were down 4.84 per cent in Paris at pixel time:
For which you can probably blame Emporiki, the French bank’s Greek subsidiary.
Credit Agricole gave a presentation on Tuesday to analysts on the problems — and charges — that face Emporiki amid Grecece’s austerity-hit economic climate.
Anatomy of an emergency unwind
The case of Socgen’s rogue trader Jerome Kerviel heads into its tenth day, with ever more insightful snippets of information being unveiled regarding the bank’s trading practices.
On Tuesday, for example,
Markets Live transcript 22 Jun 2010
Markets Live chat transcript for the chat ending at 11:26 on 22 Jun 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHand welcome to Markets Live
News Corp’s long wait
Chase Carey, News Corporation’s chief operating officer, reckons regulators could clear a bid for satellite broadcaster BSkyB in six months.
Nobody else does.
Credit Suisse’s media analysts held a conference call with a senior competition lawyer on Friday night,
The summer doldrums
The World Cup, Wimbledon and the emergency budget. Market professionals have plenty of excuses to sit on the sidelines at the moment — and they are taking it.
On Tuesday morning, the most actively traded stock on the London market was Stanelco,