March, 2011
The derivatives hour for the Japanese yen
Variance swaps strike again!
Did anyone notice that the curious timings in Wednesday yen currency-cross slumps? Societe Generale’s head of currency research, Kit Juckes, certainly did:
Overnight, the news flow out of Japan continued to deteriorate in a high stress environment defined by the 27-40 regime in the VIX.
Markets Live transcript 17 Mar 2011
Markets Live chat transcript for the chat ending at 12:27 on 17 Mar 2011. Participants in this chat were: Neil Hume, FT bryce.elder Tracy Alloway NHGood morning NHFrom Cheltenham
Chinese fuel publicity stunts in action?
There are ongoing reports of fuel shortages across northern Japan.
However, as we pointed out previously, Japan’s inventory stock is actually pretty well positioned to deal with these sorts of shortages.
The unintended consequences of the nuclear scare
This is just the start of it, and one tiny aspect of the rapidly widening impact of Japan’s worsening nuclear crisis.
Not only did the failed attempts by Tepco, operator of Japan’s cripplied Fukushima nuclear power plants,
On top of everything, Mizuho bank is having ATM problems
From Reuters on Thursday:
TOKYO, March 17 (Reuters) – Mizuho Bank said its automatic teller machines failed for a second time Thursday across Japan after a shutdown earlier in the day. A spokesman for the company said its ATM network failed at 0840 GMT,
What’s moving the yen?
The yen reached historic highs against the dollar late Wednesday.
It’s currently hovering around the 79.10 to the USD mark. The chart of recent action is pretty special though. Compared to Wednesday’s drop,
Further reading
Elsewhere on Thursday,
- Curbing the credit cycle.
- The accounting peculiarities of Chinese reverse mergers.
- Trading Pimco.
- Why the Swiss franc rules.
- It pays to fight the SEC and Finra.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Market insight: Yen strength is likely to prove shortlived
Foreign exchange participants have been reviewing the experience of exchange rates following the Kobe earthquake in 1995,
Snap news
Breaking pre-market news on Thursday,
- Legal and General says 2010 operating profit £1bn vs £1.11bn – statement.
- Lufthansa sees economic recovery lifting 2011, 2012 – statement.
- Corporate:
Tin hats at the ready
The futures market is pointing toward another gut-wrenching sell off in Tokyo on Thursday.
Price via IG Index.
“The yen has gone berserk”
… as overheard by the Bloomberg terminal in the FT NY newsroom.
Back to 77.66 at pixel time after hitting 77.33 (a record postwar high against the dollar).
Alg-o’clock anyone?
By John
Markets Live – St Patrick’s Day/Betfair special (updated)
Markets Live is off the races!
On Thursday, FT Alphaville’s daily markets chat will come live from the Cheltenham festival — the most prestigious event in jump racing’s calendar.
To mark the occasion (and celebrate St Patrick’s day) we have secured an interview with Stephen Morana,
Further further reading
For the commute home, otherwise known as your flight to quality,
- A special report from Reuters on the US budget delays.
- A decade of labour market pain, especially for non-public or non-quasi-public sector workers.
Bahrain: Saudis in, violence up and capital out
Further crackdowns took place in Bahrain on Wednesday with the army calling a curfew in parts of Manama and banning gatherings until the situation was “back to normal”, reports the FT on Wednesday.
Günther Oettinger gets lost in translation
Presented without comment.
Dear all,
Please find enclosed additional information on the Statement EU Energy Commissioner Günther Oettinger gave this afternoon in the European Parliament.
He briefed Member of the European Parliament on this proposal for voluntary stress tests for nuclear power plants and in this context expressed his concern about the situation in Japan.
International yen rescue [updated]
Updated (10:04 GMT): Spotted sometime around 10pm GMT, the Yen reaching a record high against the dollar: ¥79.30.
The all-time low of ¥79.78 (set in 1995) is now within spitting distance.
So,
The final COP Tarp report
Because estimates for the ultimate cost of Tarp have been declining continuously for some time now, it’s easy to forget that the CBO once expected the program to cost taxpayers a staggering $356bn.
Now the CBO pegs the final cost at just (erm,
Sovereign wealth, a Gulf ‘supply chain’ risk
As the jackboot comes down hard in Bahrain on Wednesday, it’s worth asking what happened to the ‘modern’ ambitions of the Gulf monarchies who are providing military, financial and political support to the ruling Khalifa family.
Japanese repatriation pressure points
Useful table, this.
It’s from Citigroup and shows the size of foreign investments by Japanese investment trusts — i.e. retail investors. And it’s a bit more detailed than the one we had on Friday:
So,
A fresh (IMF) sovereign contingent liability
Here’s a story that seems to have sneaked past undetected last Friday (albeit understandably).
It’s the final ratification of the IMF’s New Borrowing Arrangements (NAB) deal, complete with fresh details of exactly who is participating and on what terms.
Radioactive contamination – the uninsurable
Here’s a useful breakdown of who pays for what after Japan’s massive earthquake:
Residential losses – Japanese insurers, the Japanese government scheme.
Commercial/industrial losses – covered by private insurers,
Uranium prices, before and after Japan
We know uranium stocks were hit badly by events at Fukushima, but here’s the effect on actual uranium ore prices, as quoted weekly by the Ux Consulting group:
That’s down 9.8 per cent on the week.
That tricky ESM seniority – still tricky
So the International Swaps and Derivatives Assocation had a swift reply to the question of whether a restructuring credit event occurred after Ireland’s bailout.
But don’t expect questions over credit rankings in eurozone bailout policies to go away too soon.
Markets Live transcript 16 Mar 2011
Markets Live chat transcript for the chat ending at 12:36 on 16 Mar 2011. Participants in this chat were: bryce.elder Neil Hume, FT BEGood morning, London. BEWelcome to another Markets Live.
Portugal: finally about the banks
Portugal’s fiscal plight is dire: but unlike in Spain or Ireland, the country’s banks are not major burdens on the sovereign. Where was the big 2000s Portuguese housing bubble, after all. Right?
No.
Goldman sees no earthquake impact on Japan’s GDP
Proving that not even a natural catastrophe and a potential nuclear meltdown can dent Goldman’s unerring global financial optimism — Goldman Sachs has published a Q&A concerning the potential economic effects of Friday’s quake and tsunamis.
Who’s been selling Japanese stocks?
A plea for calm, from Atsushi Saito, president of the Tokyo Stock Exchange:
To All Investors and Trading Participants
The Tokyo stock market has been experiencing sharp drops over the last couple of days.
CDS markets predictably worried
The sovereign CDS market appeared predictably worried on Wednesday.
Japan notably the top concern — notching up the biggest deterioration in its five-year spread overnight — but Bahrain equally not far off with a deterioration of 15.5 per cent.
Japan’s Wednesday bounce: what it says and where it goes
Japan has defied investor logic even more than usual in the past few days.
Even as the sense of crisis deepened around Japan’s stricken Fukushima nuclear plant, with reports of a fresh fire and radioactive leaks,