From BoFAML: The Institute for Conflict Management has reported that total deaths in terrorism-related violence – including civilians, security personnel and terrorists – have fallen to 885 in 2013 from 5839 in 2001 (Chart 9). Not surprisingly, higher growth is cooling violence. Fatalities are also falling in each of India’s three key theaters of conflict: cross-border terrorism, Maoist rebellion and insurgency in the North East (Chart 10).
Markets: European stocks are opening flat following a mixed session in Asia as investors express wariness over the pace of growth in the world’s biggest economy. Recent soft US data leave the dollar trading at its lowest level this year and this is encouraging funds into government bonds, nudging down yields. Industrial commodities are a touch weaker as “risk appetite” wanes.
Markets: Equity markets are weaker across the Asia-Pacific region. Investors are cautious ahead of interest rate decisions in the eurozone and the UK on Thursday plus a highly-anticipated monthly US jobs report on Friday. The broad losses follow a 0.1 per cent pullback in the S&P 500, after a strong private payrolls survey increased speculation that the Federal Reserve could soon trim back, or “taper”, its stimulus measures known as quantitative easing. (Financial Times)
Oil prices tumbled on Monday after Iran agreed a historic agreement with world powers to halt its uranium enrichment programme but the pact faces stiff opposition || Asia refiners weigh impact of Iran oil insurance deal on imports || Shinzo Abe has challenged China to scrap a planned air defence zone that overlaps with one already operated by Japan || US banks warn Fed interest cut could force them to charge depositors || Big US banks back big new bond trade venue || PSA Peugeot Citroen is interviewing candidates to replace Chief Exec || China Cinda Asset Management has lined up 10 cornerstone investors to take up 44% of IPO funding || And so on…
Markets: Major bourses across Asia Pacific turned downward on Friday after the S&P500 experienced its worst session in more than a month. Stocks headed lower and the US dollar remained under pressure as the government shutdown continued for a third day. (Financial Times) (Reuters) (Bloomberg)
Japan’s government upgraded its economic outlook || State of emergency declared in Egypt || India curbs outward investment to help rupee || US prosecutors filed criminal charges against two former JPM traders || Cisco cuts jobs, sees poor Asia demand continuing || Michigan muni fund lost 5% of assets as Detroit went bust || Chinese regulator may target more sectors for price probes || Exxon wants to sell part of Iraqi oil field stake to PetroChina || RWE to close plants as profit drops || Cisco cuts jobs on ‘inconsistent’ global demand || IAG places $5.4bn order with Airbus for Vueling expansion || Markets wrap
Asian markets fell amid mixed earnings and expectations that lower US jobless claims today will boost the chance of Fed tapering next month. The Nikkei was down 1.7% and the Topix 1.5% lower as sentiment on Japanese stocks was also affected by the finance minister denying a cut to the corporate tax rate was being considered. The Shanghai Composite rose 1.1%. (Bloomberg)(FastFT) Today: China FDI. UK retail sales. US jobless claims, CPI, NY Empire and Philadelphia manufacturing surveys.
China’s June trade data pointed to a deeper slowdown || Saudi Arabia and UAE prop up Egypt regime with offer of $8bn || Brussels sets up clash with Berlin over banks || Bakries offer to sell Bumi stake || J.P. Morgan review finds errors in debt-collection lawsuits || Rupert Murdoch has been summoned to reappear before the culture, media and sport select committee || The BoJ is unlikely to ease further this year || German and French companies to benefit from lower borrowing costs || The US government has officially designated AIG and GE Capital as “systemically important” || Markets wrap || FTAV’s latest
Chinese PMI data comes in weak || Share rout set to delay Chinese banks’ Hong Kong listings || Nokia to pay €1.7bn to buy Siemens out of telecoms joint venture || EU demands answers over claims US bugged its offices || Onyx rejects $10bn takeover proposal || Kuwait plans $5bn UK investment || Apple did not pay UK corporation tax last year || Japonica offers to buy more Greek debt
Bear market for the Nikkei. The index entered bear territory after the strong yen pushed it down more than 1.3 per cent on Friday, bringing the decline since its May 23 peak to around 20 per cent. (Wall Street Journal) The Topix is down 18 per cent from its May high, but remains up 22 per cent for 2013. Japan’s finance minister ruled out immediate intervention in the yen despite its 2.2 per cent jump against the dollar on Thursday and continued strength on Friday. “We are carefully watching, but we don’t have any immediate intention of taking any action, such as intervention,” Taro Aso said. (Bloomberg) The US dollar had at one point on Thursday dipped 3 per cent against the yen, a sell-off attributed to investors reversing views on how long the Fed will maintain QE3. (Financial Times)
Nikkei slump || European regulators have clashed with the US over the timing derivatives reforms || Google is preparing an attack on Apple’s iPhone || Shuanghui agrees $4.7bn deal for Smithfield Foods || Panasonic said it would cut about 5,000 workers || Fiat is in talks for as much as $10 billion in financing to buy rest of Chrysler || Ryanair faces regulatory pressure to sell stake in Aer Lingus || EU agrees to end decades of overfishing || Berkshire Hathaway on Wednesday agreed to buy NV Energy || Blackstone is weighing a bigger than expected withdrawal from SAC Capital || Switzerland has taken a decisive step to resolve its dispute with the US over tax evasion || Brazil’s central bank tightened interest rates 50bps || Markets roundup || FTAV’s latest
The world’s pool of Aaa-rated government debt has fallen 60 per cent since the start of the financial crisis || European regulators to charge banks over derivatives || Cyprus readies capital controls || Fund manager bonuses cap set to be eased || Warren Buffett will become one of Goldman’s largest shareholders || Credit Suisse is to buy Morgan Stanley’s wealth management arm in Europe, the Middle East and Africa || US crackdown on Citi laundering laws || Commodities trading rule call rejected || Improving home prices help drive US economy || Markets wrap || FTAV’s latest
Secret HQ set up in London to fight cyber crime: “Britain’s security services are to open a new unit in London to work with business to protect UK companies from the growing threat of cyber attacks by China, Russia and Iran. The new initiative – formally called the Cyber Security Information Sharing partnership – will be established at an undisclosed location in London, where around a dozen officers from the Government Communications Headquarters and MI5 will work with business representatives to monitor potential threats.” (Financial Times) The world’s pool of Aaa-rated government debt has fallen 60 per cent since the start of the financial crisis. The loss of top ratings by the US, UK, and France have helped shrink the stock of debt deemed Aaa by Fitch, Moody’s and Standard & Poor’s from almost $11tn at the start of 2007 to $4tn in 2013 (Financial Times).
Cypriot authorities rushed to renegotiate the terms of under threat €10bn bailout || Japan’s crippled Fukushima Daiichi nuclear station suffered a power failure on Monday night || Citi to pay $730m in subprime class action deal || Blackstone considering Dell bid || Brussels green light for Italy debt sale || Argentina charges HSBC with money laundering || China’s foreign direct investment rose || Ryanair unveils $15.6bn Boeing order || Contractors reap $138bn from Iraq war || Markets roundup || Alphaville’s latest
Asian shares struggled for traction as some investors locked in profits from the markets’ recent rally. The yen strengthened 0.2% and the Nikkei fell 0.5% after a small rise earlier in the day. Australia’s S&P/ASX 200 index slipped 0.2% due to weakness in financial shares, while South Korea’s Kospi Composite index added 0.1%. The Hang Seng index was down 0.4% and the Shanghai Composite index fell off 0.1%. (Financial Times) UK stagflation spectre looms: “Inflation expectations, as measured by the difference between nominal and inflation-linked bond yields, ticked up to near 3.3 per cent on Tuesday, levels not seen since September 2008.” Separately, the National Institute of Economic and Social Research said the economy continued to flatline in the first two months of 2013. (Financial Times)
ROUND-UP FT markets round-up:“Stocks are struggling for traction as the bull run that has taken many equity barometers to multiyear or, in some cases, record highs endures one of its periodic pauses. The FTSE All-World index is down 0.2 per cent, retreating from its latest four-year peak as the FTSE Eurofirst 300 gained 0.1 per cent and after the Asia-Pacific region shed 0.3 per cent. Wall Street’s S&P 500 is slipping 4 points from its best close in five years of 1,556, while the Dow Jones Industrial Average is trading near its previous record close of 14,447.” (Financial Times)
Rate-fixing scandal rocks three continents || Monte dei Paschi aided by covert loan || UK December industrial output rose in December || Sony hit by quarterly net loss || Credit Suisse raises cost-cutting targets || Dividend hurdle almost derailed Dell deal || Obama orders release of drone details || Murdoch shrugs off Liberty threat to BSkyB || Markets update: Struggling for momentum
US banks squeezed as mortgage profits hit || Hagel grilled by angry Republicans || US challenges AB InBev’s Modelo deal || Explosion at Mexico’s Pemex HQ kills 25 || Wasendorf jailed for 50 years for fraud || Markets update: a tentatively positive start to month
Costs drag Deutsche Bank to €2.2bn loss || FSA targets banks on interest rate swaps || Chinese hackers target New York Times || US economy slips into reverse || Chinese steel mills face tax pressure || Russia concerned over Israeli air strike || Markets update: a pretty meek finish to a very strong month for stocks
Japan probes Boeing battery supplier || West faces ‘decades’ of conflict in N Africa || Obama sworn in for second term || Lower Saxony blow for Merkel re-election || Huawei pledges openness to woo critics || Richemont misses estimates || Cameron’s EU speech to come this week || Markets: European stocks flirting with best levels in nearly two years
Rio Tinto’s chief Tom Albanese has stepped down || Virtually all Boeing 787 Dreamliners have been grounded || Gas workers in Algeria sized by militants || French troops begin Mali ground campaign || UK developers warn of FSA ‘slotting’ rules || Some yen clarification from Japan’s economy minister || HP rebuffs acquisition inquiries || Singapore acts to avert property bubble || Iraq, BP considering Kirkuk field deal || Research rewrites global trade data || Fisher voices doubts on Fed bond buying || Wall St banks put brake on bonuses || Deutsche derivative helped Monte Paschi mask losses || Markets summary
Virtually all Boeing 787 Dreamliners have been grounded by aviation regulators worldwide, after an incident with an ANA flight on Wednesday. US regulator, the Federal Aviation Administration, ordered operators of the super-advanced jet to stop flying until they could prove their batteries were safe. Shortly afterwards, regulators in all regions with airlines that operate Dreamliners — Japan, India, Chile and Europe — also ordered a halt to flights of the model. (Financial Times)(Wall Street Journal) Asian shares declined and the yen strengthened on Thursday. The MSCI Asia Pacific was poised to fall for a second day after touching a 17-month high earlier this week. The Nikkei Stock Average headed for its biggest two-day drop since November 2011 after the yen reversed its losses. (Bloomberg)
UK’s euro trade supremacy under attack || Japan bank chief warns on bond exposure || Chinese property market finds its fizz || China’s manufacturing PMIs showed more expansionary growth || US raises monitoring of Iranian reactor || UBS Is Reported to Be Near a Deal on Rate Rigging || Fitch warns muni investors on downgrades || News Corp’s UK newspaper chief quits || Morgan Stanley trader probed over trades made while at Goldman || Merkel prepared to consider Greek bond losses || Fiscal cliff stalemate as Geithner challenges Republicans on budget || Delta in talks to buy Virgin Atlantic stake || French auto market faces worst year since 1997 || UK manufacturing output worst since late 2009 || Clampdown on tax dodge by multinationals || Markets summary
Chinese growth slows to 7.4% in Q3: China’s economy expanded 7.4 per cent in the third quarter from a year earlier, marking the seventh consecutive quarter of slowing annual growth, reports the FT. But in a positive sign for the world’s second-largest economy, data released on Thursday showed signs that China was close to the bottom of its downturn. Investment, retail sales and industrial production all accelerated at the end of the quarter, leading Premier Wen Jiabao to declare that the worst was probably over.
HSBC came in for a kicking in the Senate Subcommittee on Investigations into anti-money laundering and exposure of the US financial system to drug and terrorism financing. Some of this is old news; as the FT notes, HSBC has not been formally accused of wrongdoing in connection with the most recent investigation, but it has twice been ordered by US regulators to take action on deficient anti-money laundering practices. However investigation by the US Department of Justice, the US Treasury and the Manhattan district attorney, is under way into many of the allegations raised in the Senate report, and some analysts expect fines of up to $1bn to result.
FT Alphaville pal Josh Brown, who blogs as The Reformed Broker, just released his first book, Backstage Wall Street. Here we present a two-part excerpt from Chapter 16, “Tales from the Sell-Side”. The first part describes the moment Josh realised that brokerage analyst research was “a giant joke”, and the second part offers his analysis of why. ——-
On Wednesday, Stratfor head George Friedman sent an earnest email to subscribers attempting to reinvigorate confidence in his research shop after it was embarrassingly hacked by Anonymous — and, we think, he fails badly. To recap, Stratfor was hacked late last year and had its customers’ credit card information stolen. Stratfor had failed to encrypt the credit card data, and the FBI began investigating…