Good morning New York,
ALPHAVILLE
QE on steroids in Japan: Our guest writer Philip Pilkington argues that if we look to history it's not at all clear whether QE episodes in Japan have led to sustained yen weakness or falls in the CPI level.
Ron Johnson out of town: It was only in May last year that Bill Ackman was super enthusiastic about the Ron Johnson's chances at JC Penney. But so much has changed so quickly, notes Cardiff.
A cybernetic ledger: Izzy argues Bitcoin may be a game changer but the digital currency will never disrupt the established system in its current incarnation. It is nothing more than a cybernetic cult, complete with foundation myth, based on mutual mistrust.
Labour force participation, kill the old edition: The over 55 year olds TOOK ALL OUR JOBS!
NEWS
Bernanke says stress tests are great: ""The resilience of the U.S. banking system has greatly improved since [2009], and the more intensive use and greater sophistication of supervisory stress testing, as well as supervisors' increased emphasis on the effectiveness of banks' own capital planning processes, deserve some credit for that improvement." (Reuters)(Speech text)
BlackRock urges Fed to rein in QE3: One of Wall Street's biggest money managers has called on the Federal Reserve to rein in its programme of quantitative easing, saying its bond-buying tactics are a "large and dull hammer" that have distorted markets and risk stoking inflation. Rick Rieder, who oversees $763bn in fixed income investments for BlackRock, spoke out as the Fed debates how long to persist with the unorthodox measures it has used to stimulate the US economy. His comments add BlackRock to the growing list of Fed critics who are warning of trouble ahead for the bond market. (Financial Times)
Brokers at ICAP in CFTC rate swaps probe: The US futures regulator is investigating allegations of manipulation of a popular derivatives benchmark and has issued subpoenas to market participants including ICAP and several global banks, people familiar with the matter said. ICAP, the interdealer broker, manages a benchmark for interest rate swaps known as the ISDAFIX, which is derived from submissions from 16 of the world's largest banks. Before 11am in New York, each bank provides the rate at which it would buy and sell a benchmark swap with a notional value of $50m. (Financial Times)
Chinese inflation slows in March: "Consumer prices rose 2.1% in March from a year earlier, below expectations and down from a ten-month high of 3.2% in February when China celebrated its Lunar New Year. Food price inflation, which had surged to 6% year on year in February, fell back to a pace of 2.7%. Looking past the seasonal rise and fall in prices caused by the holiday, Chinese inflation has remained mild this year. The average increase in consumer prices in the first quarter was 2.4 per cent, up only a little from the final quarter of 2012. Analysts said the subdued inflation was a reflection of how the Chinese economic recovery has been steady but unspectacular." (Financial Times)
North Koreans didn't show up for work today at Kaesong industrial park near the border, effectively shutting down the factory complex operated with South Korea for the first time since shipments began in 2004. Pyongyang's decision to halt work there coincides with speculation it plans to carry out a missile launch, or even another nuclear test. (Reuters) North Korea has urged foreigners in South Korea to leave the country to ensure their safety in the case of war, as tensions escalate on the Korean peninsula. "We do not wish harm on foreigners in South Korea should there be a war," the official KCNA news agency quoted Pyongyang as saying on Tuesday. (Financial Times)
GE agreed to buy Lufkin Industries, an oil and gas pumpmaker, for $3.3bn. The cash deal values Lufkin at 38% above its closing price on Friday. (Financial Times)
KPMG has accused the partner in charge of its audit practice in Los Angeles of passing on confidential information about its clients to an alleged insider trader. As well as firing the as-yet unnamed person, the US arm of the world's fourth-biggest accountant and consultant by fees said it was resigning as auditor to two companies after deciding that its independence had been compromised. (Financial Times)
Tesco counts cost of failed US venture: Britain's biggest supermarket by market share began a strategic review last December into the future of the US chain that has sucked in £1bn of capital and racked up losses of about £850m. Philip Clarke, chief executive, will confirm when the group updates the market next week that it is abandoning the venture, according to people familiar with the matter. (Financial Times)
Hanglong Group's botched $1.2bn bid for Australia's Sundance Resources brings China's mining deal failures to $45bn. (Bloomberg)
Ron Johnson is out at JCPenney. Ron Johnson, the Apple veteran who was recruited to revive JC Penney, was replaced by his predecessor on Monday after presiding over a disastrous fall in sales. The department store chain said Mike Ullman would return to lead the company immediately. Mr Ullman was chief executive from 2004 until 2011 but the company had begun to stagnate by the end of his reign. JC Penney shares initially surged as much as 10 per cent in after-hours trading when Mr Johnson's departure was first reported by CNBC, but they tumbled when Mr Ullman's return was announced. (Financial Times)
Markets: Stocks and industrial commodity prices are gaining ground after benign Chinese inflation data eased concerns about possible monetary tightening in the world's second biggest economy and as focus turns to the US earnings season. However, the yen has balked at breaching the Y100 mark versus the dollar, triggering a retreat by Japanese stocks from near five-year intraday highs. Still, European bourses are reacting positively to Wall Street's strong finish into Monday's close, with the FTSE Eurofirst 300 opening up 0.4 per cent. Despite the optimistic tone, fixed income remains well bid, with 10-year Treasury yields down 1bp to 1.73 per cent. Gold is up $2 to $1,575 an ounce as the dollar index falls 0.1 per cent, reflecting a slightly firmer euro at $1.3024. US index futures suggest the S&P 500 will advance another 3 points to 1,566 when trading begins later in the day according to the FT's Global Markets icebreaker Jamie Chisholm.
