Asian stocks rose for a fourth day and the yen neared 100 to the dollar. The MSCI Asia Pacific Index gained 1.1 percent, the Nikkei rose 1.2% and the Kospi was just 0.1% higher after the Bank of Korea kept borrowing costs steady. (Bloomberg)
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. (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)
Cyprus debt sustainability analysis document leaked: The gold sale was contained in the leaked bailout document, which also showed Nicosia's own contribution has almost doubled to €13bn, and the total price tag of the bailout has risen to €23bn from €17bn in the initial proposal. (FT Brussels Blog)
A second eurozone sovereign restructuring? The DSA's assertion that 1bn in domestic-law sovereign debt would be rolled over via a "voluntary sovereign bond exchange" has echoes of the Greek PSI. (FT Alphaville)
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)
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 EU about EU holders of bank accounts in the country. (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 $300m with the bond, which was five times subscribed, will yield a 7.65% coupon. "The bond issue is the latest sign that the traditionally employee-owned commodity trading industry is opening up to new sources of capital, as European banks scale back their lending activities in the sector just as traders need more credit." (Financial Times)
COMMENT AND CURIOS:
- Merkel a shoo-in; austerity set to remain popular in Germany. (Financial Times)
- Sanofi's attempts to shut down a French factory. (Wall Street Journal)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +162.45 (+1.22%) at 13,451
Topix up +17.79 (+1.59%) at 1,139
Hang Seng up +185.98 (+0.84%) at 22,221
US markets
S&P 500 up +19.12 (+1.22%) at 1,588
DJIA up +128.78 (+0.88%) at 14,802
Nasdaq up +59.39 (+1.83%) at 3,297
European markets
Eurofirst 300 up +20.82 (+1.79%) at 1,186
FTSE100 up +74.16 (+1.17%) at 6,387
CAC 40 up +72.99 (+1.99%) at 3,744
Dax up +173.12 (+2.27%) at 7,811
Currencies
€/$ 1.31 (1.31)
$/¥ 99.56 (99.77)
£/$ 1.53 (1.53)
Commodities ($)
Brent Crude (ICE) down -0.18 at 105.61
Light Crude (Nymex) down -0.33 at 94.31
100 Oz Gold (Comex) up +1.00 at 1,559
Copper (Comex) unchanged 0.00 at 341.40
10-year government bond yields (%)
US 1.81%
UK 1.80%
Germany 1.31%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.2bps at 101.95bp
Markit iTraxx Europe -4.98bps at 110.02bp
Markit iTraxx Xover -20.44bps at 449.8bp
Markit CDX IG -2.79bps at 82bp
Sources: FT, Bloomberg, Markit
