Good morning New York,
FT ALPHAVILLE
Are we entering the peak "end of an era" research era? Contrarian signal or straight warning? Izzy notes that the volume of "end of an era" research flooding our inboxes has reached a new high and presents a recent selection.
Cyprus, where the vicious circle stopped: Joseph's post brings you the two long-awaited reports from Alvarez and Marsal into what caused the two largest Cypriot banks to collapse so completely. The ECB's 3 year LTROs had something to do with it...
NEWS
Portugal announces fresh austerity cuts to offset court ruling: Portugal's prime minister Pedro Passos Coelho said the government would have to cut spending on health, education and social security to meet requirements of the country's bailout programme, after the country's constitutional court on Friday night ruled that cuts to state pensions and public sector wages were unconstitutional. The proposed pension and wages cuts were estimated to account for about a fifth of the €5bn savings targeted from austerity measures this year, in order to comply with an adjustment programme and efforts to regain international bond market access by September. However the new cuts are likely intensify opposition pressure on the government to resign, potentially opening the way to an early general election.(Financial Times) (Wall Street Journal)
Lew to press Europe leaders over growth, austerity: Jacob Lew began his first trip to Europe as US Treasury secretary on Sunday, " a four-city tour in which he is expected to try to persuade finance ministers to pursue a little more growth and a little less austerity" (New York Times)
Alcoa kicks off US earnings season today; its Q1 underlying earnings per share are expected to fall to $0.08 from $0.10 last year. (Wall Street Journal) (Financial Times)
North Korea suspends Kaesong operations and may conduct nuclear tests: "North Korea said it would withdraw all of its workers from an industrial park jointly run with South Korea and consider shuttering the complex permanently. The move brings the last remaining symbol of inter-Korean cooperation close to collapse and exacerbates tensions on the Korean peninsula." (Wall Street Journal) "North Korea may detonate a nuclear device and carry out a missile test together as early as this week, South Korea's government said, as the totalitarian regime defies international concern including from ally China." (Reuters)
Luxembourg hints at relenting on bank secrecy: "There is an international trend towards an automatic exchange of information," Luc Frieden, the Luxembourg finance minister, said in an interview with the weekly Frankfurter Allgemeine Sonntagszeitung. "In contrast to the past, we no longer strictly reject doing this."" (Wall Street Journal)
MUFG in talks to buy Deutsche US loans: Japan's Mitsubishi UFJ Financial Group is "in advanced talks to buy US commercial property loans from Deutsche Bank worth about $3.7 billion (2.4), a source familiar with the matter said on Monday". (Reuters)
Greece's NBG-Eurobank merger suspended: "National Bank's plan to absorb Eurobank to form Greece's biggest banking group will be suspended until both are recapitalised, and a state bank support fund will decide if the they should merge, a Finance Ministry official said on Sunday." (Reuters)
Xi vows to protect foreign business: China President Xi Jinping has promised to protect the interests of global companies amid rising concern among foreign businesses about discriminatory policies that hurt their operations in China. "We will protect the lawful rights and interests of foreign-invested companies in accordance with [the] law, and ensure their rights to equal participation in government procurement and independent innovation," Mr Xi said on Monday. "China will never close its door to the outside world." (Financial Times)
China's local government debt could be twice as big: "China's local governments may have more than 20 trillion yuan ($3.2 trillion) of debt, former Finance Minister Xiang Huaicheng said, almost double the figure given in a 2011 report by the National Audit Office." (Bloomberg)
China opens Aussie dollar direct trading: Direct currency trading between the Australian dollar and the renminbi will begin this week, Julia Gillard, Australian prime minister, said on Monday. The Australian dollar will become only the third currency to trade directly with the Chinese currency, alongside the US dollar and the Japanese yen, after ANZ and Westpac were given trading clearance by the Chinese central bank. (Financial Times)
IMF welcomes Bank of Japan policies: Christine Lagarde said on Sunday that loose monetary policies and "unconventional measures" had helped boost global growth and "the reforms just announced by the BoJ are another welcome step in this direction". (Financial Times)
UK welfare spending cuts difficult without targeting pensioners: Research by the Social Market Foundation shows that the big driver of welfare spending in the next five years will be growing numbers of elderly people and the consequent rise in pensions and universal benefits, rather than working age benefits. (Financial Times)
Markets: The yen has slipped to a near four-year low, helping push Tokyo stocks close to their best levels since August 2008 after the Bank of Japan cranked up its dramatic monetary easing measures. But elsewhere trading is more mixed with worries about North Korean rockets, Chinese birds, European debt and US jobs all delivering a cautious start to the week. The FTSE All-World equity index is up 0.2 per cent as the FTSE Eurofirst 300 opens with a gain of 0.6 per cent (helped by Wall Street coming well off its lows late on Friday) and after the FTSE Asia-Pacific index (excluding Japan) dipped 0.3 per cent. US index futures suggest the S&P 500 in New York will be barely changed at 1,553, leaving the benchmark a little more than 1 per cent below last week's record high writes the FT's Tyrion Lannister of Global markets, Ser Jamie Chisholm.
