April, 2011
EU probing CDS market for collusion — full statement [updated]
Friday’s stunning announcement from the EU Commission below:
The European Commission has opened two antitrust investigations concerning the Credit Default Swaps market. CDS are financial instruments meant to protect investors in the event a company or State they have invested in default on their payments.
Further further reading
A friendly reminder that FT Alphaville is off on Friday to celebrate an odd ritual whose meaning escapes its American correspondent. (We kid, people, relax.)
Monday, of course, is a bank holiday. We’ll be on alert in case something huge breaks,
More on Q1 GDP
Our thoughts are below, but for reference you can click to enlarge these two charts. The first, via RQD Economics, shows the change in each of the categories that contribute to the GDP number:
The second,
Reflections on Bernanke
The following was written by Gavyn Davies and is also posted at his blog. We’d like to again thank Gavyn for having joined FT Alphaville yesterday for our special edition of Markets Live.
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Following yesterday’s live blog on FT Alphaville,
Copper, the re-export factor
We’ve already referred to the latest Reuters Metals Insider report on Thursday, but somehow we feel that the following is worth a special mention of its own.
That is, what happens when the government attempts to rein in innovative Chinese financing schemes like those using copper as collateral?
In one (hyphenated) word:
A Greek buyback boondoggle
Not quite a Greek restructuring or re-profiling, but a big warning sign that we’re now very close.
First a little background…
The section of the International Capital Markets Association that looks after eurozone debt made an unusual request last month.
Chinese bonded warehouses’ copper inventories still rising
Having flagged the problem in the first place, it was natural for Standard Chartered to follow up on the state of China’s bonded warehouse copper inventories this month.
And what they found — surprise,
US real GDP was 1.8% in Q1
Maybe you’ve been watching with increasing anxiety as the Q1 forecasts kept dropping.
Well, the revised estimates turned out to be mostly right. (Yes, we know, economists also think much of the deceleration is likely due to temporary factors:
“Mostly meaningless blurbs”
Oh deary me.
Someone at a major European investment bank (known for its foreign exchange services) is possibly a touch red-faced right about now.
We’re not going to name names, but it seems the following personal note was sent out by accident on Thursday to the entire distribution list of the senior director in question:
Markets Live transcript 28 Apr 2011
Markets Live chat transcript for the chat ending at 11:24 on 28 Apr 2011. Participants in this chat were: Neil Hume, FT bryce.elder Joseph Cotterill, FT NHHola markets Rabble NHand welcome to Markets Live
Japan’s ‘stunning’ stats: Yosano’s new nightmare
As variously predicted, the “3/11 effect” on Japan’s economy is starting to kick in. And true to warnings that the impact could be far worse than feared, the latest batch of data is reasonably horrible.
Fleeing the sovereigns, racing to capital
The sovereign bank cycle in Europe will not die — chart via the Morgan Stanley analysts Huw van Steenis and Alice Timperley:
The long-running mechanism here is that sovereign risk has left peripheral banks unable to raise funding without prohibitively high rates,
And now for Chinese zinc shenanigans
FT Alphaville has already alluded to the fact that it isn’t just copper that has been subject to Chinese inventory financing shenanigans.
Other commodities, especially base metals, are supposedly also being used for such purposes.
Meanwhile in China…
…. another big move in Shanghai B shares overnight:
At one point the index of China’s foreign currency denominated shares was down as much as 7 per cent, before recovering to close 2.8 per cent weaker — but still at a five-month low.
Further reading
Elsewhere on Thursday,
- Bernanke “wimps out”.
- Why is enough never enough?
- Japan’s energy crisis, not as bad as feared…
- .. But the ‘Cool Biz’ campaign starts early.
- The stock market is not the economy.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Glencore’s debt to China’s women
Simon Murray is a straight talker. That is the best that can be said for the interview given by the new chairman of the Switzerland-based commodities company Glencore this week,
Snap news
Breaking pre-market news on Thursday,
- Deutsche Bank reports first quarter 2011 net income of €2.1bn; but results from Banco Santander disappoint — statement and statement.
- BSkyB adds 51,000 net subscribers in Q3;
Further further reading
For the commute home, where the only press conference is on finally ironing your own shirts,
- From idea to $20bn startup in twelve weeks.
- From $0 to $10bn in assets under management in eighteen months.
The dollar-battering Bernanke presser
To quote (again) a pint-sized musical firecracker from Minneapolis, this is what it sounds like when doves cry:
At pixel time the US dollar index was at its lowest point in nearly three years against a basket of currencies.
US Markets Live transcript 27 Apr 2011
Markets Live chat transcript for the chat ending at 19:27 on 27 Apr 2011. Participants in this chat were: Cardiff Garcia John McDermott Gavyn Davies Neil Hume, FT CGEvening gents, we’re just getting a few things sorted and then we’ll begin
FOMC statement – 27 April 2011
Call it a bland appetiser before the tastier main course.
Full release below. As to changes, there were only two — these two lines, in the first and second paragraphs respectively:
Inflation has picked up in recent months,
Reminder: US Markets Live today at 2pm EDT / 7pm BST
We’ll be kicking off 15 minutes before the start of Bernanke’s press conference and, of course, will be joined by our colleague Gavyn Davies. See our earlier post for more detail.
After a markets update and a quick review of the FOMC statement (to be released at 12:30 EDT),
ECB bond-buying, 2010-2011: in memoriam
There is no body, but we fear the Securities Market Programme (current holdings: €75bn) has been killed off.
Something to inscribe on the tombstone:
Those are TradeWeb charts of bid-offer spreads on Portuguese and Irish bonds,
Bye, bye Cushing syndrome (possibly)
By now, anyone following oil markets will be familiar with Cushing syndrome. The one-way flow problem which affects the Cushing delivery point for Nymex WTI futures in Oklahoma preventing oil that’s gathered there to travel to alternative domestic or sea-borne markets where demand is higher.
US earnings: Q&A with Doug Cliggott
The last time we checked in with Doug Cliggott, chief US equity strategist at Credit Suisse, he was joining us for the launch of US Markets Live in early March.
At the time he thought the market was modestly overvalued and had a year-end target for the S&P 500 of 1250.
Markets Live transcript 27 Apr 2011
Markets Live chat transcript for the chat ending at 11:25 on 27 Apr 2011. Participants in this chat were: Neil Hume, FT Joseph Cotterill, FT NHHola markets Rabble NHthe bug has gone