Help to Buy
Camp Alphaville reminder: Requests to bring drones to the afterparty will be considered on an individual basis. (Details here) Markets: Most Asian indices were drifting lower in spite of a third consecutive positive session for Wall Street, although Japanese markets continued to climb. The mixed performance followed a somewhat positive session in the US, where the S&P 500 rose 0.2 per cent and the yield on 10-year US Treasuries rose 6 basis points to 2.66 per cent. However, there were some concerns that robust inflation figures could elicit a more hawkish stance from the Federal Reserve which concludes a two-day meeting on monetary policy later on Wednesday. (FT’s Global Markets Overview) An FOMC scenario analysis from Nomura:
Camp Alphaville, July 2: We guarantee it won’t rain*. Details here. Markets: Asia-Pacific equities are poised to finish the week with solid gains. But in spite of another record high on Wall Street achieved in the face of poor GDP data showing the US economy contracted by an annualised 1 per cent, the mood has turned after fresh data provided mixed signals for Japan’s economy. (FT’s Global Markets Overview)
When Morgan Stanley’s Huw Van Steenis and his colleague Charles Goodhart ventured into these pink pixels last September, arguing that Britain needed a housebuilding and house-buying support scheme if the economy was going to achieve ‘escape velocity,’ the analytical duo probably didn’t count on getting dragged through the august columns of the FT editorial page. But that’s what happened…
Markets: Asian equity markets were mixed as monetary conditions in China tightened in October. The below-stimate new loan figures are the final Chinese economic data to be released before the ruling Communist party leaders conclude their third plenum. (Financial Times) (Bloomberg)
It’s Help to Buy 2 launch day. Or, extend mortgages and warehouse them until the UK government supplies its guarantee for a portion of the money in January, launch day. The scheme’s complete rules are here if you missed all 66 pages. Note the lending policy questionnaire. So, reflecting on some HTB bits and pieces floating around on Tuesday…
White House rejects demands to negotiate on shutdown || Alexander rejects MPs’ criticism of Help to Buy || CME takes on LME with aluminium contract || China and Japan warn US on default || National Grid warns on UK winter power supply || Alcatel-Lucent cuts 10,000 jobs worldwide || Argentina suffers setback in battle with ‘holdout’ creditors || Markets
Markets: Japanese stocks wilted on Prime Minister Shinzo Abe’s plan to raise consumption tax and introduce new fiscal stimulus. The benchmark Nikkei 225 index is down 0.7 per cent, a day after Mr Abe confirmed plans to raise the national sales tax and blunt any economic damage from it with a new Y5tn ($51bn) stimulus package. But he delayed providing full details of the stimulus package until later in the year. (Financial Times) US takes ‘extraordinary’ measures to pay bills: “The US has begun implementing the “final extraordinary measures” to pay the nation’s bills ahead of an October 17 deadline for Congress to approve new government borrowings, Treasury secretary Jack Lew told congressional leaders on Tuesday.” (Financial Times)
In contrast I am an optimist. I believe in free markets. –George Osborne, Conservative party conference 2013 Details TBC, of course. But UK banks will be lending mortgages with a five per cent deposit in the very near future, under the rushed-forward Help to Buy 2 scheme. And that means the UK government will be guaranteeing them — not the borrower — the next 15 per cent of mortgage value. Hence the fee paid by lenders for the guarantee (90bps for a 95 per cent loan to value, less for lower LTVs, apparently).
George Osborne acts over housing boom fears || Japan CPI grows fastest in almost 5 years || Alitalia approves €100m capital increase || Swaps rules worry industry || Dimon at DoJ for $11bn JPMorgan settlement talks over mortgage securities || Obama and Republicans remain poles apart as twin crises loom || Rabobank to settle over Libor || Regling questions need for debt forgiveness in Greece || Irish house prices rise at fastest pace since property crash || Maersk calls bottom of trade cycle || JC Penny to raise $1bn || US money market funds in French surge || Markets
América Móvil in €7.2bn KPN bid || China’s consumer inflation steady || News Corp Australia chief resigns after less than two years || Lending to UK landlords is surging to a near five-year high || JPMorgan in talks with the SEC over a rare admission of wrongdoing over the London Whale losses || Norway’s $760bn SWF is stepping up its efforts to be a more active investor and increased its equity holdings by 4pps || Tesco is in talks with China Resources Enterprise to form a joint venture in China || Italy plans more austerity, lower company tax || Dutch turning against austerity || Australia’s central bank cuts its forecast for this year’s growth || US DoJ has stepped up a probe in recent weeks into Bear Stearns mortgage dealings || Bberry warming up to the possibility of going private || Mark Carney played down scepticism on rates || Vale says Chinese steel output will grow 10% this year || Markets wrap
Asian stocks were mixed as investors await Chinese industrial production data, with the Nikkei flat despite a 15% fall in Nikon’s shares as it lowered its full-year operating profit guidance from ¥85bn to ¥65bn. (Bloomberg)(FastFT) China’s consumer inflation steady. CPI rose 2.7% in July from a year earlier, the same pace as in June and still well below Beijing’s 3.5% upper annual limit. Producer price inflation declined for the 17th consecutive month, at -2.3% year-on-year compared to -2.7% in June. The rates were close to consensus forecasts from Reuters survey, of 2.8% for CPI and -2.2% for producer prices. “The latest figures will add weight to calls from some economists and officials for China to cut interest rates to help boost slowing growth in the world’s second-largest economy.” (Financial Times)(Reuters)
SocGen’s bathed-bear Albert Edward has been forced by overwhelming rage to look past the rich vein of Abenomics to the UK’s George Osborne. It’s the Chancellor’s latest meddling with the housing market that has got Edwards so inflamed: George Osborne in his March budget proposed an unusually misguided piece of government interference in the housing market.
Yahoo buys Tumblr for $1bn || Portuguese banks fear ‘Cyprus virus’ || Chesapeake taps Anadarko executive Lawler as CEO || The yen gained as much as 1.1% || Chinese house price data raises overheating fears || Concern is growing that US banks are making risky corporate loans || King warns Osborne on Help To Buy risk || Cohen is subpoenaed || Silver is at its lowest price level in more than two and a half years || M&A lending remains meagre despite low interest rates || Co-op’s retiring chief skips meeting || Markets summary || FTAV’s latest
Asian shares rise || Yen strengthens on economy minister’s comments || Yahoo to buy Tumblr || Portuguese banks warn of Cyprus ‘virus’ || Chinese house prices rise || Fears grow over US corporate lending risk || Steve Cohen subpoenaed || Co-op’s Marks skips AGM || George Magnus on Chinese local governments
Asian shares firmer after US retail data beats expectations || Cameron rushes to EU referendum || CFTC queries a million exchange of futures for swaps || Help to Buy scheme already boosting UK housing || Big European clothing retailers sign binding garment worker accord || France looks to tax smartphones to support local content