Markets: Wall Street’s steepest decline since November reverberated through Asia, with Japanese stocks leading the way downward. In Tokyo the Nikkei 225 average was down 2.1 per cent, on pace for its biggest drop since October 25, as Japanese markets reopened after Monday’s public holiday. (FT’s Global Markets Overview)
Those rascal short sellers are at it again, daring to ask awkward questions of the European project. This time the manifesto comes from New York based Tortus, who have a plan to “rehabilitate” Portugal. (H/T @Pawelmorski and @IyerC). Before rehabilitation, however, there must come acceptance, and Tortus is short “certain Portugese sovereign bonds” because it does not think the status quo is sustainable.
Note: This is the last email from FT Alphaville that will bother you for a few days. This Xmas thing is happening. We’ll make a brief reappearance next Monday and then we’ll be off for New Year. Full-ish service resumes on January 2, hopefully, maybe. Thanks for reading. Team Alphaville. Markets: Most Asia-Pacific equities shrugged off jitters in the Chinese interbank market to echo gains in US markets on Friday, but stocks in Japan were kept in check by a rise in the yen against the US dollar. Hong Kong’s Hang Seng index rose 0.7 per cent while China’s Shanghai Composite edged up 0.2 per cent. Other Asia Pacific markets rose in lockstep, with South Korea’s Kospi Composite rising 0.7 per cent and Taiwan’s Taiex advancing 0.7 per cent. (Financial Times)
Stanley Fischer is reportedly slated to be nominated for Fed vice chair, and it’s impossible to think of anyone more qualified for the gig (for any central banking gig, really). A number of instant profiles are already circulating, and of course Fischer was honoured at an IMF research conference on crises last month.
For those lucky enough not to recognise the FX shorthand… that’s a weak pun involving the overvalued and pegged Ukrainian hryvnia. It’s alluding to the idea that Ukrainian households might, as protests over the rejection of an EU free trade deal last month continue, decide to start converting their deposits into FX. They have form. That would put a whole load of pressure on already skimpy FX reserves — which at about $20bn are down to covering about two and a half months of imports, below the fairly arbitrary three months that makes the IMF all sweaty.