Fannie Mae & Freddie Mac
Markets: Disappointing economic data from Japan and a further decline in China’s currency had Asian equities falling out of favour on Friday. The renminbi, which is tightly guided by the Chinese central bank, has fallen as much as 0.83 per cent against the US dollar. This is the currency’s ninth day of declines. (FT’s Global Markets Overview and FastFT)
Japanese wages fall for 19th month || London Underground workers begin 48-hour strike || The US budget deficit will fall to 3 per cent of economic output this year || Microsoft banks on the cloud under Nadella || Muddy Waters rode shorting wave on Blinkx || Morgan Stanley restates Q4 earnings || JPM resolves civil mortgage claim by paying $614m || Small, and oft weak, banks face TARP hit || Russian oligarchs take battle to NY court || Deutsche Bank fires currency traders || Sony in talks to sell Vaio
Markets: Asian markets’ half-hearted efforts at a relief rally soon fizzled out as investors remain cautious and fleeting early gains failed to bring indices anywhere close to the levels seen before the emerging market turmoil began. Signs of stability are plentiful, however. Three of the hardest hit currencies in recent weeks – the Turkish lira, the South African rand and the Hungarian forint – led a rebound overnight, strengthening 1.9 per cent, 1.7 per cent and 1.6 per cent respectively against the dollar. (FT’s Global Markets Overview)
Nigeria intends to set up a mortgage finance company along the lines of the US agency Fannie Mae, according to Bloomberg, who were informed by the government’s PR agency, Mercury. Details of the Nigeria Mortgage Refinance Co., which will sell bonds and provide long-term financing to mortgage lenders, as well as helping to standardise lending practices, will be announced today.
OK, one country can print in its own currency, while the other can’t. There is also no suggestion of an intimate circle of support in the US by which banks and the government prop each other up (as that’s what the Federal Reserve is for). But after the FT’s story that the ECB is poised to get tough on Sovereign Bond Risk, an interesting chart arrives from Huw Van Steenis and the Morgan Stanley banks team:
Markets: Asian markets declined, reacting to better than expected US gross domestic product data that increased speculation that the US Federal Reserve will pare back its monetary stimulus before March 2014. Data released on Thursday showed that the US economy grew 2.8 per cent in the third quarter, against expectations of 2 per cent. (Financial Times)
Credit Suisse to overhaul interest rates trading business || Pinterest value leaps 52% to $3.8bn || UK peer-to-peer lender targets the US || US Congress moves to tighten money laundering laws || US jury rules against BoA in mortgage trial || Draghi warns that some European banks need to fail a series of ECB health checks || UK car output tops 1.5m for first time since 2008 || Alcoa and Rusal Are beneficiaries of warehouse logjam || Angela Merkel’s mobile phone may have been the target of US surveillance || Markets
Resurgent nervousness about looming military action in Syria and a lack of strong economic or corporate data pushed Asian equities into the red. Japan’s Nikkei 225 was down 0.7 per cent, with the Topix down 0.4 per cent. In greater China, Hong Kong’s Hang Seng lost 0.5 per cent while Taipei’s Taiex was down 0.2 per cent. South Korea’s Kospi Composite was off 0.2 per cent and in Indonesia the Jakarta Composite was down 0.9 per cent. (Financial Times) Today: UK and Eurozone Markit services PMI; EU GDP; US Trade balance, Beige book and vehicle sales.
From a note this morning by economists at Barclays: The US federal budget deficit has been improving at a dramatic pace in recent months. As a percent of GDP, the deficit peaked at 10.2% of GDP in the four quarters ending in Q4 09; over the past four quarters, it has totaled 4.2% of GDP, down from 7.7% one year earlier.
Crédit Agricole appeared to post Q2 results early – and they beat, apparently || HSBC acknowledges US mortgage payout could cost $1.6bn || Sony rejected Daniel Loeb’s proposal || Standard Chartered took a $1 billion hit on the value of its Korean business || RBA cut its official rate to a record low || UK manufacturing bounces back || Private-equity firms are adding debt to companies they own to fund payouts to themselves at a record pace || CNOOC mulls $3bn dollar-bond || Indian rupee sank to a fresh record low || BP denied allegations it manipulated US natural gas prices in the aftermath of a 2008 hurricane || Neiman Marcus hired banks to work on an initial public offering || Markets wrap || FTAV’s latest
Asian stocks fall || Crédit Agricole reveals Q2 results early || HSBC’s US mortgage penalty may be $1.6bn || Sony rejects Loeb entertainment sale proposal; shares fall || Australia’s central bank cuts to 2.5% || BP denies manipulating US natgas prices after 2008 hurricane || On Jeff Bezos and the Washington Post || Analyst round-up of China debt views
Japan’s CPI rose the most since 2008 in June || U.S. indicts hackers in biggest cyber fraud case in history || Activision CEO leads $8.2bn buyout || Halliburton to plead guilty over Gulf spill || Cutifani unveils shake-up at Anglo American || Samsung Electronics said smartphone would slow in Q3 || FHFA reaches $885m UBS settlement; more banks in regulators’ sights || GSK replaces China operations head || Greece clears last bailout hurdle || Activision to buy back most of Vivendi’s controlling stake || CFTC mulled metals warehousing investigation for two years || Fabrice Tourre said he “deeply” regretted a tasteless email || Markets
Sweeping victory for Japan’s LDP || Deutsche plans to shrink balance sheet by up to a fifth || Fed reconsidering banks’ physical commodities activities || GlaxoSmithKline says Chinese laws may have been violated || At least six other global pharma companies used the Chinese travel agency implicated in GSK bribery claims || UBS agrees to settle US housing claims || BoJ governor says more stimulus is an option || Portugal’s prime minister ruled out calling a snap general electio || BP failed in its attempt to freeze compensation payments || US vulture funds swoop on Co-op debt || British fraud investigator held in China || Markets wrap || FTAV’s latest
Banks warn of risk at clearing houses || HTC’s profit drops 83% in Q2 || Perry Capital sues US Treasury over Fannie and Freddie dividends || French firms cut back on investments || ETFs close in record numbers despite industry boom || Glaxo probes tactics used to market Botox in China || Bovis rises to highest since August 2007 on H1 profit || Chinese cash squeeze to create credit hole || China life assurer Ping An buys Lloyd’s Building for £260m || Dollar Index reaches July 2010 high || Markets
Michael Cloherty of RBC Capital Markets makes an interesting point in a short note today about the role played by market structure in pushing interest rates higher than the Fed expected when Bernanke telegraphed the eventual tapering strategy. Yes, Cloherty writes, markets might have overreacted — but they are more jittery than in normal times because financial markets have increased their sensitivity to reabsorbing credit risk: