Asian stocks fell, led by Japan, and the yen strengthened slightly. The MSCI Asia Pacific Index was 0.3% lower and the yen climbed 0.2% to 97.29 per dollar. (Bloomberg)
Osborne warns BoE not to curb growth in pursuing stability: “George Osborne urged the Bank of England not to undermine recovery through an overzealous focus on banking stability, in an attempt to put growth at the heart of the new governor’s mandate. The chancellor told the bank’s Financial Policy Committee to give “due weight to the impact of its actions on the near-term economic recovery” when carrying out its primary job of maintaining financial stability.” (Financial Times)
The Fed is considering a stricter cap on bank leverage, targeting largest lenders. People familiar with the matter say Fed officials have discussed increasing the amount of required equity capital above the 3% of assets level agreed internationally. The move comes amid growing concern that risk-weighting of assets will undermine Basel III goals. (Financial Times)
China’s manufacturing growth slows further: China’s official PMI fell to 50.6 in April from 50.9 in March. The slowdown in manufacturing growth appeared to be driven mostly by a slump in new export orders, which fell into contraction territory with a reading of 48.6 in April, compared to 50.9 in March. (Financial Times)
Bain and Golden Gate leadin BMC bid: “A private equity group made up of Bain Capital LLC and Golden Gate Capital Corp has emerged as the lead contender to buy BMC Software Inc for more than $6.5 billion, three people familiar with the matter said on Tuesday.” (Reuters)
ENRC listing faced 11th-hour hitch: “The controversial London flotation of Eurasian Natural Resources Corporation in 2007 faced an 11th hour hurdle after lawyers and auditors found evidence that financial records at the Kazakhstan-based miner had been falsified or destroyed, according to people familiar with the matter.” (Financial Times)
COMMENT AND CURIOS:
- Martin Wolf: The Baltic states are no model for larger European economies. (Financial Times)
- The incredibly large remuneration of Spain’s top bankers. (Financial Times)
- Where are the smartphone productivity gains? (Wall Street Journal)
- Gazprom’s European customers gain leverage via shale-displaced US coal. (Wall Street Journal)
- May Day in Europe, with 26m unemployed. (Financial Times)
- Jacob Weisberg: How Amazon relented on US state sales tax. (Financial Times)
- Elysée Palace reconfigures wine cellar, plans to give proceeds to state coffers. (Financial Times)
- US Mint gold coin sales are really high. (Bloomberg)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -54.03 (-0.39%) at 13,807
Topix down -5.90 (-0.51%) at 1,159
Hang Seng up +156.24 (+0.69%) at 22,737
US markets
S&P 500 up +3.96 (+0.25%) at 1,598
DJIA up +21.05 (+0.14%) at 14,840
Nasdaq up +21.77 (+0.66%) at 3,329
European markets
Eurofirst 300 down -2.23 (-0.19%) at 1,201
FTSE100 down -27.90 (-0.43%) at 6,430
CAC 40 down -11.93 (-0.31%) at 3,857
Dax up +40.21 (+0.51%) at 7,914
Currencies
€/$ 1.32 (1.32)
$/¥ 97.31 (97.41)
£/$ 1.55 (1.55)
Commodities ($)
Brent Crude (ICE) down -0.93 at 101.44
Light Crude (Nymex) down -0.43 at 93.03
100 Oz Gold (Comex) up +2.40 at 1,475
Copper (Comex) down -0.85 at 317.90
10-year government bond yields (%)
US 1.67%
UK 1.69%
Germany 1.21%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.69bps at 94.6bp
Markit iTraxx Europe -1.65bps at 98.79bp
Markit iTraxx Xover -10.49bps at 397.35bp
Markit CDX IG -1.28bps at 75bp
Sources: FT, Bloomberg, Markit