Asian stocks fell and the euro weakened as investors fretted about an unprecedented levy was announced on all Cyprus bank deposits. The single currency fell fell 1.3% against the dollar and reached a three-week low against the yen. All major Asian benchmarks were lower, with the MSCI Asia Pacific falling 1.6%, with the Hang Seng recording a 2.1% decline and the Nikkei falling 1.9%. The Kospi was 0.5% lower. The dollar lost 0.7% against the yen. Treasury yields fell as did JGBs, Australian and Singaporean government bond yields. (Bloomberg)(Financial Times)
Cypriot authorities attempt to revise deposit levy deal: Cyprus' embattled president was on Sunday in talks with Brussels and political rivals to ease the terms of a planned levy on smaller deposit holders as he tried to scrape together a parliamentary majority for a €10bn bailout for the debt-laden island. President Nicos Anastasiades is still intending to raise €5.8bn from Cypriot bank accounts to help fund the bailout, but alternatives are being discussed to the deal struck on Friday, which would levy a 6.75% tax on all accounts under €100,000, and 6.75% on smaller deposits. Officials involved in Sunday night's talks said the levy on larger accounts could rise to as much as 12.5% and the smaller levy could fall to 3.5%. The country's 56-member parliament is scheduled to vote on the measure this afternoon, and success is far from assured. The government controls 28 of 56 seats. Anastasiades made a dramatic address to the nation calling for political backing of the €5.8bn levy and warning that the country faces a painful default without the €10bn tied to the levy. (Financial Times)(Reuters)(Wall Street Journal)
Osborne to concede another debt target delay in Budget: "Having originally committed to bring the burden of public debt down by 2015-16 at the latest, the chancellor extended that target by a year in Decemberand is now preparing to concede another delay to 2017-18." (Financial Times)
HSBC is gearing up to cut thousands more jobs. The bank is set to outline the next stage in its strategic overhaul at an investor day in two months' time. "There is no fantastical new strategy out there," said one person familiar with the bank's planning. "But there's still huge potential to be more efficient." (Financial Times)
Insurers dodge bank-style capital surcharges: "The International Association of Insurance Supervisors will make its decision public when it unveils plans to deal with "systemically important insurers" on Wednesday, three people familiar with the plans told the Financial Times." (Financial Times)
European parliament wants to restrict bonuses that exceed salaries for Ucits fund managers. "The parliament's draft negotiating position, seen by the Financial Times, would enforce a maximum 1:1 ratio of bonus to salary and requires up to 60 per cent of the variable element to be deferred and largely paid in units of the fund the manager runs." (Financial Times)
Former PBoC chairman to be Chinese securities regulator: "Mr Xiao, who also worked at the central bank for 15 years, has had a lower profile than Mr Guo, raising questions about whether he will be as forceful in trying to bring change to China's markets." Meanwhile PBoC governor Zhou Xiaochuan will remain in his role despite reaching the retirement age of 65. (Financial Times)
WSJ China bribery allegations: "The Justice Department last year opened an investigation into allegations that employees at The Wall Street Journal's China news bureau bribed Chinese officials for information for news articles. A search by the Journal's parent company found no evidence to support the claim, according to government and corporate officials familiar with the case." (Wall Street Journal)
COMMENT AND CURIOS:
- What happened in Brussels on Friday night... (Financial Times)
- Analysts' reactions to the Cyprus deal: All over the place. (Wall Street Journal)
- Editorial: Europe botches another rescue. (Financial Times)
- Wolfgang Munchau: Europe is risking a bank run. (Financial Times)
- John Gapper: SAC case could discredit entire hedge fund industry. (Financial Times)
- Chinese local government debt default figures spark worries. (Bloomberg)
- UK banks rush to thicken capital cushions. (Wall Street Journal)
- Analysts expecting Apple to raise dividend 50%. (Bloomberg)
- JP Morgan, among others, is tinkering with its risk models. (Reuters)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -241.08 (-1.92%) at 12,320
Topix down -18.94 (-1.80%) at 1,033
Hang Seng down -478.11 (-2.12%) at 22,055
US markets
S&P 500 down -2.53 (-0.16%) at 1,561
DJIA down -25.03 (-0.17%) at 14,514
Nasdaq down -9.86 (-0.30%) at 3,249
European markets
Eurofirst 300 down -4.82 (-0.40%) at 1,203
FTSE100 down -39.76 (-0.61%) at 6,490
CAC 40 down -27.55 (-0.71%) at 3,844
Dax down -15.52 (-0.19%) at 8,043
Currencies
€/$ 1.29 (1.30)
$/¥ 94.73 (94.16)
£/$ 1.51 (1.51)
Commodities ($)
Brent Crude (ICE) down -1.20 at 108.62
Light Crude (Nymex) down -0.89 at 92.56
100 Oz Gold (Comex) up +13.60 at 1,606
Copper (Comex) down -8.80 at 342.00
10-year government bond yields (%)
US 1.92%
UK 1.94%
Germany 1.45%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.17bps at 98.42bp
Markit iTraxx Europe +0.96bps at 104.96bp
Markit iTraxx Xover +1.3bps at 404.15bp
Markit CDX IG +0.49bps at 78.74bp
Sources: FT, Bloomberg, Markit
