Japanese stocks led Asian markets lower as the yen rose to a one-month high against the dollar after an unexpected slowdown in US manufacturing, and the yen continued to rise ahead of a much-anticipated BoJ board meeting on Thursday. (Financial Times)
Slight easing of Cyprus bailout terms: A draft copy of the loan agreement by the eurozone and the IMF seen by the WSJ gives Cyprus until 2017 -- one year longer than previously negotiated -- to reach a 4% primary budget surplus. "Putting public finances on a sustainable path is of overriding importance in order to stabilize the economy and to restore the confidence of companies, citizens and foreign investors in the longer-term economic prospects of Cyprus," the draft agreement says. (Wall Street Journal)
The post-FSA era begins for UK finance sector: Today the Prudential Regulation Authority, an arm of the BoE, will begin supervising 1,700 banks, insurers and large investment firms. Also today the Financial Conduct Authority begins oversight of the same firms, plus taking sole responsibility for another 25,000 businesses, mostly brokers. (Financial Times)
Central Bank of Cyprus governor Panicos Demetriades tried to calm fears of a deposit flight once capital controls end. Demetriades told the FT the controls should be lifted "gradually". "I can't really tell you if it will be seven or 14 days before capital controls end." He denied there would be a run on deposits. "Once people realise how well capitalised the banks are there is little reason why there will be deposit flight." (Financial Times)
US banks are weighing tactics to mitigate the effect of EU bonus caps. ""We are not thinking of transferring people from London to Dubai tomorrow," said one US banker. "But future growth in Africa could be led out of the Middle East or South Africa." Other approaches include restructuring remuneration packages. "JPMorgan is among the banks to have considered the introduction of "allowances" that could be increased or decreased annually, according to bank insiders." (Financial Times)
The US has gained 387,000 managers and lost almost 2m clerical jobs since 2007, BLS data show. Employment growth came from healthcare, management, computing and food service jobs, but salaries for many of the fast-growing occupations are lower than for those they are replacing. (Financial Times)
COMMENT AND CURIOS:
- Jeffrey Sachs: Obama should think longer-term on economic policy. (New York Times)
- Rumours of a cheap energy jobs boom remain just that. (New York Times)
- Except maybe for European companies... (Washington Post)
- 'Airpocalypse' drives expats from Beijing. (Financial Times)
OVERNIGHT MARKETS:
Asian markets
Nikkei 225 down -100.20 (-0.83%) at 12,035
Topix down -3.95 (-0.39%) at 996.62
Hang Seng up +3.40 (+0.02%) at 22,303
US markets
S&P 500 down -7.02 (-0.45%) at 1,562
DJIA down -5.69 (-0.04%) at 14,573
Nasdaq down -28.35 (-0.87%) at 3,239
European markets
Eurofirst 300 up +4.86 (+0.41%) at 1,189
FTSE100 up +24.18 (+0.38%) at 6,412
CAC 40 up +19.78 (+0.53%) at 3,731
Dax up +6.22 (+0.08%) at 7,795
Currencies
€/$ 1.29 (1.28)
$/¥ 92.79 (93.21)
£/$ 1.52 (1.52)
Commodities ($)
Brent Crude (ICE) down -0.24 at 110.84
Light Crude (Nymex) down -0.27 at 96.80
100 Oz Gold (Comex) up +2.60 at 1,603
Copper (Comex) down -0.75 at 336.00
10-year government bond yields (%)
US 1.84%
UK 1.78%
Germany 1.29%
CDS (closing levels)
Markit iTraxx SovX Western Europe +0.51bps at 105.22bp
Markit iTraxx Europe -2.83bps at 125.59bp
Markit iTraxx Xover -5.69bps at 485.6bp
Markit CDX IG -0.8bps at 90.01bp
Sources: FT, Bloomberg, Markit
