Asian stocks fell for a second day after weaker than expected growth in US ADP payrolls and manufacturing. The yen rose, curbing the earnings outlook for Japanese exporters. The Nikkei fell more than 1%. (Bloomberg)
Expectations are high for an ECB rate cut today to 0.5% from 0.75%. The rate decision is due at 11:45am GMT, and the news conference at 12.30pm. (Reuters)
Irish president urges EU to reform ECB: Michael Higgins told the Financial Times the EU should drop its “hegemonic” economic model and reform the ECB, or risk social upheaval and a loss of popular legitimacy. (Financial Times)
Osborne allies ready to sell bank shares before election, even if shares prices remain lower. “Conservatives close to the chancellor argue that Alistair Darling, his Labour predecessor, paid too much for shares in RBS and Lloyds when he injected nearly £66bn into the banks’ bailouts.” (Financial Times)
Facebook’s ad revenue growth gained momentum in the three months to March 31, helped by mobile growth and better advertising tools. The company beat revenue expectations but profits fell just short, with 12 cents per share on a pro forma basis compared to forecasts of 13 cents. (Reuters)(Financial Times)
Fed could raise QE: “In a new line added to its regular statement, the rate-setting Federal Open Market Committee said it could move the rate of asset purchases up as well as down depending on what happens to prices and jobs.” (Financial Times)(Wall Street Journal)(Statement)
Japan’s monetary base soared to a record in April, the Bank of Japan said today. In April, the average monetary base was a record Y149.6tn ($1.54tn), 23.1% higher than the same period in 2012. (Reuters)
Apple’s bond issue helps avoid $9bn in potential tax. Experts estimate the company would need to repatriate $26bn in order to generate in the US the equivalent of $17bn raised in its debt issue this week, which is going towards a $55bn share buyback programme. (Financial Times)
Thai government wants big rate cut to stop baht strengthening: “Appreciation of the baht, the best performer this year among the 11 most actively-traded Asian currencies tracked by Bloomberg, is hurting exports and may slow economic growth, Commerce Minister Boonsong Teriyapirom said yesterday in an interview. The Bank of Thailand has held the policy rate at 2.75 percent for the past four meetings.” (Bloomberg)
The Pentagon plans to request a break from sequester cuts: “The request may be sent to the House of Representatives’ Appropriations Committee as early as next week, a House Republican aide said on Wednesday.” (Reuters)
Greece to sell lottery stake: In the country’s biggest privatisation deal to date, a controlling stake in the gaming monopoly OPAP will be sold to a group of Greek and eastern European investors for €712m. (Financial Times)
“Goldman Sachs has named Julian Salisbury to become head of its Global Special Situations Group, as current head Jason Brown retires, according to memos sent on Wednesday that were obtained by Reuters.” (Reuters)
Tablet shipments boom as PCs decline: IDC research shows global tablet shipments rose 142% year-on-year, while PC shipments slumped 14%. (Financial Times)
COMMENT AND CURIOS:
- Reinhart and Rogoff: Austerity is not the only way to tackle a debt problem. (Financial Times)
- US companies should use cash piles for capital expenditure, or risk becoming uncompetitive. (Financial Times)
- Gold’s bull run may indeed be over as analysts expect it to finish the year lower. (Bloomberg)
- Abe’s push for constitutional changes are much less popular than his economic plan. (Bloomberg)
- John Gapper: Western companies should work to avoid more Bangladesh factory tragedies. (Financial Times)
- North Sea investment approaches a record as easy oil and gas is almost gone. (Financial Times)
- For Germany, there is no euro alternative. (Bloomberg)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -147.02 (-1.07%) at 13,652
Topix down -7.55 (-0.65%) at 1,151
Hang Seng down -67.18 (-0.30%) at 22,670
US markets
S&P 500 down -14.87 (-0.93%) at 1,583
DJIA down -138.85 (-0.94%) at 14,701
Nasdaq down -29.66 (-0.89%) at 3,299
European markets
Eurofirst 300 up +0.87 (+0.07%) at 1,202
FTSE100 up +21.17 (+0.33%) at 6,451
CAC 40 down -11.93 (-0.31%) at 3,857
Dax up +40.21 (+0.51%) at 7,914
Currencies
€/$ 1.32 (1.32)
$/¥ 97.28 (97.38)
£/$ 1.56 (1.56)
Commodities ($)
Brent Crude (ICE) up +0.03 at 99.98
Light Crude (Nymex) up +0.07 at 91.10
100 Oz Gold (Comex) up +9.70 at 1,456
Copper (Comex) up +1.50 at 309.75
10-year government bond yields (%)
US 1.63%
UK 1.68%
Germany 1.21%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.67bps at 93.93bp
Markit iTraxx Europe +1.51bps at 100.3bp
Markit iTraxx Xover +5.58bps at 402.93bp
Markit CDX IG +2.77bps at 77.77bp
Sources: FT, Bloomberg, Markit