Good morning New York,
FT ALPHAVILLE
Is the UK facing a fiscal crisis? Paul doesn’t mean to scare-monger, but notes that the UK is just one of just two countries where fiscal stress has worsened this year — the other being Slovenia.
Alphachat: that dang negativity edition in which Izzy, David and Simon chat about negative rates and whether they are a sensible policy option or a one way ticket down the rabbit hole.
NEWS
Dual-track Libor replacement lined up: “The scandal-plagued Libor benchmark is likely to be replaced by a dual-track system with survey-based lending rates running alongside transaction-linked indices as soon as next year. Martin Wheatley, the UK regulator leading efforts to reform the London Interbank Offered Rate, told the Financial Times that a parallel system would provide continuity for holders of $350tn in existing contracts that reference Libor while also paving the way for a new benchmark tied more closely to objective data.” (Financial Times)
Top hedge funds bet on Greek banks: “Some of the world’s leading hedge funds are pouring money into the Greek banking sector in expectation of huge potential returns, even as the country struggles to right its economy in the face of deep government spending cuts.” (Financial Times)
Schäuble warns EU bank rescue agency needs treaty changes:“Germany’s finance minister has warned that a single EU bailout agency and rescue fund for ailing banks is legally untenable until the bloc’s treaties have been overhauled. In today’s Financial Times, Wolfgang Schäuble calls for a “two-step approach” that would leave bank rescues in the hands of “a network of” national authorities until treaty changes can take place.” (Financial Times)
U.S. companies are on track to raise the most money through initial public offerings since before the financial crisis: “Already this year, 64 U.S.-listed public offerings have raised $16.8 billion, according to Dealogic. In the same period in 2012, the biggest year in dollars since the financial crisis, 73 companies raised a total of $13.1 billion. Last week alone brought 11 U.S.-listed IPOs, making it the busiest week for such deals since December 2007.” (Wall Street Journal)
G7 reaffirms commitment on currency depreciation: “The world’s leading finance ministers gave their tacit approval to the soaring US dollar and plunging Japanese yen at the weekend, but international divisions over economic strategy and European banking union remained unresolved. After an informal gathering of the Group of Seven rich economies outside London, participants reaffirmed their commitment not to use economic policy to seek weaker currencies and did not conclude Japan was breaking that pact yet.” (Financial Times)
Bloomberg alerted to access issue in 2011: “Bloomberg knew in 2011 about the privacy issue that has concerned powerful clients including Goldman Sachs, JPMorgan Chase and the Federal Reserve, but failed to close the loophole until Goldman’s recent complaint that reporters had kept track on its partners using private terminal data. Executives at the financial data company, whose terminals sit in trading floors, hedge fund offices, law firms and central banks around the world, were alerted to reporters’ ability to see when clients log on to their terminals and which functions they use when a reporter mentioned the practice on Bloomberg TV, people familiar with the situation said.” (Financial Times)
Mittal urges EU to protect itself against China imports: “Lakshmi Mittal has urged Europe to erect trade barriers to protect its manufacturers as the Indian steel tycoon attacked policy makers for stifling demand through tough austerity measures. The owner of the world’s biggest steelmaker by sales said the future of EU manufacturing depended on politicians in Brussels helping industry face what he said was unfair competition from China.” (Financial Times)
Bischoff to take his leave from Lloyds: “Sir Win Bischoff, who has overseen a radical restructuring and return to profitability at Lloyds Banking Group, is stepping down as chairman of the part-nationalised bank this year. Sir Win, who took up the role in September 2009, will announce his decision ahead of Thursday’s annual shareholder meeting, said people familiar with the plan. He is said to feel he has accomplished the task of stabilising Lloyds, having brought in a strong executive team.” (Financial Times)
Esure hit by fallout over ex-HBOS director: “Esure has been accused of downplaying in the run up to its recent London stock market launch the role that one of its directors played at HBOS before the lender collapsed. The insurance group has been criticised for failing to point out in the prospectus for its flotation that Tony Hobson, who oversees Esure’s investment strategy, chaired HBOS’s audit committee between 2001 and 2008.” (Financial Times)
Markets: Japanese stocks hit a fresh five-year high but the mood elsewhere is more cautious as some investors contemplate the global market with less central bank assistance. Industrial commodities are mixed, as are Treasuries and Bunds, while the dollar index is up 0.1 per cent and the euro gains 10 pips to $1.2969. The FTSE All-World equity index is flat, after the Asia-Pacific region, excluding Japan, fell 0.7 per cent and as the FTSE Eurofirst 300 sees a 0.2 per cent dip. There are two standout features at the start of the week: both are related to monetary policy, and feature the world’s first- and third-biggest economies. US index futures are suggesting Wall Street’s S&P 500 will slip 7 points from Friday’s record close of 1,634 as traders react to reports that the US Federal Reserve will wind down its $85bn bond-buying programme writes the FT’s Global Markets Khal Jamie Chisholm.
