Asian markets rose on Monday, bouyed by the better than expected US jobs data on Friday. The MSCI Asia Pacific index excluding Japan advanced 0.9%, with Australia’s S&P 200 index 0.6% higher and Hong Kong’s Hang Seng index rising 1%. Markets in Japan and Thailand were closed for a public holiday. Malaysia’s currency rallied after the ruling coalition won re-election. (Bloomberg)(Financial Times)
China’s services sector growth slowed sharply in April, according to the HSBC/Markit services PMI survey. The April PMI was 51.1, a big fall from 54.3 in March and the lowest figure since August 2011. Staffing levels in the sector were below 50 for the first time since January 2009. (Reuters)
“Brussels is increasing efforts to clamp down on tax avoidance by wealthy investors, including private equity partners and hedge funds, by forcing all 27 EU members to share confidential information on individuals’ investment income and capital gains for the first time.” (Financial Times)
Think-tank calls for ‘Tell Syd’ style RBS and Lloyds sell-off: George Osborne’s favourite think-tank, the Policy Exchange, will this month urge him to reprivatise RBS and Lloyds Banking Group through a mass share distribution to the public. Senior Conservatives, who believe it will help prepare public opinion for a big share handout before the 2015 general election. (Financial Times)
Malaysia’s ruling Barisan Nasional coalition won re-election on Sunday, fending off a strong challenge from a resurgent opposition. Investors on Monday cheered the election victory by sending the country’s stock market up by over 7% at the open amid the prospect of political continuity and the extension of the government’s gradual economic reforms. (Financial Times)
The Obama administration has signalled support for more plants to export liquefied natural gas, as the US embraces its surging energy production as a key new element of its national security policy. Only one plant has been approved to export LNG to non-FTA countries, but another 19 applications for approval have been made and are being opposed by some US manufacturers and chemicals sectors who fear it will raise gas prices. Geopolitics is becoming an increasingly important consideration in domestic energy policy. (Financial Times)(Wall Street Journal)
Forex trades give investment banks an information edge. A study by the Cass Business School in London has shown that investment banks can make windfall profits by copying customers’ foreign exchange trades, raising fresh concerns about the lack of transparency in the $4tn, mostly-over the counter forex market. “Using historical data on customers’ trades at UBS, the authors of the study, which was published by the Bank for International Settlements, found that if a bank developed a portfolio to mimic clients’ trades it would make an average of 10 per cent a year.” (Financial Times)
No big news at Berkshire Hathaway’s annual meeting: Warren Buffett was probed on succession by a bearish invitee, short seller Doug Kass of Seabreeze Partners, but remained insistent that his son would become non-executive chairman, and that a decision had been made on who would replace Buffett senior himself, although it wouldn’t be revealed. Buffett said he remained uninterested in gold despite its recent falls. (Financial Times)(Wall Street Journal)(Bloomberg)
Greek finance minister Yannis Stournaras said “the worst is over” and that the country had turned a corner, ahead of the release of an IMF report today which local media reports say will praise improvements in tax collection. Stournaras told Greek newspapers on the weekend the country could be in a position to return to international debt markets by May 2014. (The Telegraph)
“Ten of thousands of far-left French protesters marched to denounce economic austerity on Sunday to mark the end of President Francois Hollande’s first year in office.” (Reuters)
COMMENT AND CURIOS:
- British skyline gap: More cranes in London than rest of the country put together. (Financial Times)
- John Authers: The energy efficiency ‘mega trend’. (Financial Times)
- Treasuries bears have been wrong-footed this year, again. (Wall Street Journal)
- Non-QE growth is needed to curb asset distortion. (Financial Times)
- Wolfgang Münchau: Don’t expect a substantial departure from austerity in Europe. (Financial Times)
- Ruchir Sharma: The oil and gold booms are both over. (Bloomberg)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 down -105.31 (-0.76%) at 13,694
Topix down -5.09 (-0.44%) at 1,153
Hang Seng up +219.60 (+0.97%) at 22,910
US markets
S&P 500 up +16.83 (+1.05%) at 1,614
DJIA up +142.38 (+0.96%) at 14,974
Nasdaq up +38.01 (+1.14%) at 3,379
European markets
Eurofirst 300 up +12.07 (+1.00%) at 1,219
FTSE100 up +60.75 (+0.94%) at 6,521
CAC 40 up +54.19 (+1.40%) at 3,913
Dax up +160.58 (+2.02%) at 8,122
Currencies
€/$ 1.31 (1.31)
$/¥ 99.06 (99.04)
£/$ 1.56 (1.56)
Commodities ($)
Brent Crude (ICE) up +0.55 at 104.74
Light Crude (Nymex) up +1.02 at 96.63
100 Oz Gold (Comex) up +11.20 at 1,476
Copper (Comex) down -2.25 at 329.10
10-year government bond yields (%)
US 1.74%
UK 1.73%
Germany 1.24%
CDS (closing levels)
Markit iTraxx SovX Western Europe -3.16bps at 90.47bp
Markit iTraxx Europe -4.03bps at 91.52bp
Markit iTraxx Xover -9.67bps at 377.71bp
Markit CDX IG -2.79bps at 71.48bp
Sources: FT, Bloomberg, Markit