Good morning New York,
FT ALPHAVILLE
- The eurozone's second sovereign restructuring: Joseph goes through the draft debt sustainability analysis for Cyprus and concludes it's rather a grim read. Though he points out there is some interesting talk of actions the Cypriot government will need to take to make ends meet, without disturbing the €10bn limit set on how much its creditors will stump up.
- Robots, China and demographics: Izzy notes a recent paper which concludes computers haven't been taking our jobs but China has. She wonders how that's likely to change as China itself becomes more automated? For now unemployment versus robot adoption rates are inconclusive in terms of clear patterns or correlations, but she notes a lot has been changing since 2008. Watchout for the humanoid manufacturer robot!
NEWS
China's forex reserves and credit grow sharply: China is once again facing heavy capital inflows after its forex reserves rose $130bn to $3.44tn in the first quarter, helping to fuel a surge in credit growth amid concerns about the level of debt in the economy. It's the biggest quarterly increase since the second quarter of 2011 and marks a sharp reversal from last year when money exited China. Total new financing in the economy grew 58% to Rmb6.2tn ($1tn) compared to the same period in 2012, faster than consensus expectations. (Financial Times)(Bloomberg)
Lagarde warns of three speed world that risks crisis: "We do not expect global growth to be much higher this year than last. We are seeing new risks as well as old risks," Ms Lagarde told an audience in New York on Wednesday. "In far too many countries, improvements in financial markets have not translated into improvements in the real economy." (Financial Times)
Kuroda says BoJ has done all it can for now: The Bank of Japan's Haruhiko Kuroda said the stimulus measures announced at his first meeting as governor last week is enough to achieve a 2% inflation goal. "The central bank has taken all "necessary" and "possible" measures, Kuroda told reporters in Tokyo yesterday. While officials will change policy as needed, he doesn't expect adjustments each month, he said. The BOJ chief reiterated a pledge to do what's needed to meet the target in two years." (Bloomberg)
Cyprus has agreed to sell gold worth €400m from its reserves as part of its contribution to the bailout, roiling the precious metal markets as investors feared it could set a precedent for other troubled eurozone countries. Gold prices fell 1.65% on the news, which would see 10 tonnes sold from the Cypriot central bank's total holdings of 13.9 tonnes. It would be the first such sale by a country seeking international assistance since the Asian financial crisis in 1997-98, when South Korea asked the public to donate jewellery to the central bank for the good of the nation. (Financial Times)(Reuters)
PC sales in free fall: The personal computer is in crisis, according to research firm IDC, which issued an alarming report saying world-wide shipments of laptops and desktops fell 14 per cent in the first quarter from a year earlier. That is the sharpest drop since IDC began tracking this data in 1994. (Wall Street Journal)
BP investors plan to protest chiefs' pay: Three of the company's biggest investors said they would abstain from key votes on the company's remuneration report and the re-election of chairman Carl-Henric Svanberg and remunerations committee chairman Antony Burgmans. "These investors said they had concerns about Mr Svanberg's decision to take up the chairmanship ofVolvo, and, more broadly, about his stewardship of BP since the 2010 Deepwater Horizon disaster." (Financial Times)
M&S investors target Bolland over sales: The retailer's final-quarter update today is expected to contain a fresh fall in clothing sales, and several of the company's biggest investors are seeking greater clarity on CEO Marc Bolland's strategy to address concerns over current trading in the division. (Financial Times). Separately, M&S has played down speculation that it was a bid target for Qatar. The company has also posted fourth-quarter sales figures that show no improvement in its struggling clothing operation, but which were nonetheless better than expected.
Dimon apologies again over Whale: "Five pages of Mr. Dimon's 30-page annual letter to shareholders, released Wednesday, outlined "lessons learned" from the incident, which damaged Mr. Dimon's standing as the best risk manager on Wall Street." (Wall Street Journal)
FOMC minutes released early went to bank staff: The accidental release of the rate-setting meeting minutes 19 hours early on Tuesday went to Congressional staffers and also to staff at Fifth Third, Barclays, Regions Financial, Wells Fargo, Citi, UBS, US Bancorp, Goldman, JPMorgan and PNC Financial. "The potential damage may have been limited by the fact that the minutes contained no explosive revelations. It showed participants were ready to slow the QE3 programme of asset purchases in the summer or early autumn. Weak payrolls data, however, may already have changed plans." (Financial Times)
Luxembourg said it would exchange information with the rest of the EUabout EU holders of bank accounts in the country. The move, announced by Prime Minister Jean-Claude Juncker in a state-of-the-nation address on Wednesday, is politically significant but its impact is unclear. (Wall Street Journal)
Trader who received KPMG tips issues apology: Bryan Shaw, a trader who said he received insider tips from fired KPMG LLP partner Scott London, apologised and said he's been cooperating with the Justice Department and US Securities and Exchange Commission. Shaw said he "profited substantially" from trades based on non-public information and, "I cannot begin to apologize for my incredibly stupid actions." (Bloomberg)
Trafigura raises $500m with perpetual bond: The trading house initially targeted $300m with the bond, which was five times subscribed, will yield a 7.65% coupon. "The bond issue is the latest sign that the traditionally employee-owned commodity trading industry is opening up to new sources of capital, as European banks scale back their lending activities in the sector just as traders need more credit." (Financial Times)
Markets: A record high for Wall Street was underpinning bullish sentiment, helping global stocks to fresh cyclical peaks. Investors continue to welcome the support provided by central bank asset purchase programmes, while evidence that the Chinese economy may pick up pace was further bolstering risk appetite. The FTSE All-World equity index was up 0.4 per cent to 240.1, its best level since June 2008, after the Asia-Pacific region climbed 1.5 per cent and as the FTSE Eurofirst 300 added 0.1 per cent, following a 1.8 per cent pop in the previous session. The main reason for the All-World's near five-year high was the recent performance of US shares. Index futures suggested the S&P 500 would open on Thursday barely changed from its record close of 1,588. Bulls reckon Wall Street is in a sweet spot, where growth in the world's biggest economy is sufficiently meagre that it will not prompt the Federal Reserve to start removing its ultra-accommodative monetary policy soon. (Financial Times)
