"Asian stocks swung between gains and losses as a rally in Chinese shares offset declines fueled by concern that Cyprus's rejection of a bailout plan shows Europe will struggle to contain its debt crisis." The MSCI Asia Pacific was 0.1% higher. Japanese markets were closed for a holiday. (Bloomberg)
Cyprus seeks Russian assistance after rejecting bail-out vote: Cyprus's finance minister arrived in Moscow on Tuesday night to try to wrest assistance from the Kremlin as his country's parliament rejected a €10bn EU-led bailout that requires €5.8bn to be seized from Cypriot bank accounts. The 11th-hour attempt to tap funds from Russia as an alternative to the deposit levy stunned leaders in Brussels, who said they were taken aback by the resistance of Cypriot lawmakers to shifting the tax's burden to large deposits, many of which are held by wealthy Russians. What happens next is not clear. "The ball is now really in Cyprus's court," eurogroup president Jeroen Dijsselbloem said on Dutch television. The Cyprus government is working with European officials on measures to contain a possibly crippling deposit outflow when banks reopen, including imposing limits on daily withdrawals and capping the amount of money that can be taken out of the country. (Financial Times)(Wall Street Journal)
Osborne orders £2.5bn in Budget cuts: "George Osborne ordered ministers to come up with £2.5bn of extra spending cuts, as he scrambled for money in what was expected to be one of the bleakest British Budgets in years. The chancellor was expected to spend about £1bn to hit the coalition's target of raising the personal tax allowance to £10,000 in 2014, a year ahead of schedule, and to defer a planned rise in fuel duty." (Financial Times)
Visa may have to buy Visa Europe: "The European banks that own Visa Europe may soon decide to sell the card-payments organization to U.S.-based Visa Inc. and set up a rival system in Europe, people familiar with the matter said." The sources said a decision won't be made until a Visa Europe board meeting, schedule for April. (Wall Street Journal)
"MF Global has reached an agreement with JPMorgan Chase that will result in more than $500m being returned to the bankrupt brokerage's former customers. The deal will bring to a close one protracted chapter in MF Global's complex and often contentious cross-border bankruptcy proceedings."(Financial Times)
JP Morgan downgraded in confidential regulator scorecard: The bank's rating from the Office of the Comptroller of the Currency "fell one notch last July to a level that signifies oversight "needs improvement," following the revelation of what are known as the "London whale" trading losses, said people familiar with the regulatory assessment." (Wall Street Journal)
Liberty media in $2.6bn cable bet: Confirms plans to buy a 27.3% stake in the 4th-largest US cable operator, Charter Communications. (Financial Times)
Sweeping ECB powers to regulate all EU banks agreed: "A deal was struck after EU member states agreed to give greater powers than the commission previously envisaged to the European Parliament over the appointment of top officials at the new single supervisor." (Financial Times)
FCC plans to offload €2bn of assets: The Spanish construction group will today announce a plan to sell more than €2bn of assets as it girds itself for a further three to four years of contraction in Spain's crisis-hit building sector. (Financial Times)
Volkswagen recalled almost 400,000 vehicles in China to replace defective gearboxes that may result in loss of power, a move that may cost the company more than $600m. "While Volkswagen was unable to immediately comment on the costs, research firm LMC Automotive estimates replacements will cost between 3,000 yuan ($483) to 10,000 yuan per vehicle." (Bloomberg)
UBS said it would leave the panel that sets the benchmark Euribor rate, following exits by follows exits by Dutch lender Rabobank, Austria's Raiffeisen Bank International, and Germany's Bayerische Landesbank. (Wall Street Journal)
Freddie Mac sues over Libor losses: More than a dozen banks and the British Bankers Association targeted in lawsuit alleging "substantial losses" as a result of Libor manipulation. The government-controlled mortgage company has already joined class action lawsuits against banks over Libor losses. (Financial Times)
COMMENT AND CURIOS:
- Martin Wolf: Cyprus shows how banking is dangerous everywhere, and threatens the eurozone's survival. (Financial Times)
- Editorial: Nicosia should let losses come through restructuring. (Financial Times)
- Cyprus' high stakes ECB gamble. (Wall Street Journal)
- Analysis: Traders fear the ghosts of 1994 with return of the rate rise. (Financial Times)
- Do recent bank bailout surprises mean the capital structure is being subverted? (Financial Times)
- South Korea wrestles with housing-binge-induced slump. (Bloomberg)
- Gold sales booming in Argentina. (FT Beyondbrics)
OVERNIGHT MARKETS: MIXED
Asian markets
Hang Seng up +142.91 (+0.65%) at 22,185
US markets
S&P 500 down -3.76 (-0.24%) at 1,548
DJIA up +3.76 (+0.03%) at 14,456
Nasdaq down -8.49 (-0.26%) at 3,229
European markets
Eurofirst 300 down -4.83 (-0.40%) at 1,195
FTSE100 down -16.60 (-0.26%) at 6,441
CAC 40 down -49.72 (-1.30%) at 3,776
Dax down -62.91 (-0.79%) at 7,948
Currencies
€/$ 1.29 (1.29)
$/¥ 95.05 (95.13)
£/$ 1.51 (1.51)
Commodities ($)
Brent Crude (ICE) up +0.45 at 107.90
Light Crude (Nymex) up +0.29 at 92.45
100 Oz Gold (Comex) down -1.30 at 1,610
Copper (Comex) down -0.90 at 338.65
10-year government bond yields (%)
US 1.90%
UK 1.86%
CDS (closing levels)
Markit iTraxx SovX Western Europe +2.5bps at 100.92bp
Markit iTraxx Europe +3.45bps at 108.41bp
Markit iTraxx Xover +9.22bps at 413.37bp
Markit CDX IG +1.67bps at 81.92bp
Sources: FT, Bloomberg, Markit
