Japanese stocks rose sharply while other Asian markets were flat or down on bird flu fears. The Nikkei was 2.4% higher and the yen fell as low as 98.85 per dollar, its lowest level since June 2009, after last week's Bank of Japan announcements and news of purchases today. The BoJ today said it would buy Y1tn ($10.3bn) of JGBs with maturities of between five years and 10 years, and Y200bn of bonds with maturities exceeding 10 years. However the MSCI Asia Pacific was 0.5% lower. (Reuters)(Bloomberg)
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)
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)
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)
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)
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)
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)
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)
Manchester Utd signs $240m, 8-year sponsorship deal with Aon: The US insurance broker will sponsor the club's training ground and training kit as it seeks a place in the hearts of the football club's huge Asian fan base. Man Utd's training ground at Carrington will be renamed the Aon Training Complex and Aon replaces DHL as the club's training kit sponsor. (Financial Times)
COMMENT AND CURIOS:
- Abenomics: Now for the hard part. (Financial Times)
- Central banks move into riskier assets. (Financial Times)
- Wolfgang Münchau: The ECB has to get unconventional to help southern Europe. (Financial Times)
- Google's Grand Implant Agenda. (Financial Times)
- The amount of US dollars in circulation has risen 42% in five years. (Financial Times)
- After growing rich on the misfortunes of its neighbours, Cyprus reaches end of the road. (Financial Times)
- Samsung Electronics is spending more on marketing than development for the first time in three years. (Reuters)
- Arvind Subramanian says we're in a golden age of global growth. (Financial Times)
- Peter Orszag: The move to a chained CPI may have less effect than expected. (Bloomberg)
- On outsourcing fragile banking. (Bloomberg)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +309.48 (+2.41%) at 13,143
Topix up +25.32 (+2.37%) at 1,092
Hang Seng up +23.76 (+0.11%) at 21,751
US markets
S&P 500 down -6.70 (-0.43%) at 1,553
DJIA down -40.86 (-0.28%) at 14,565
Nasdaq down -21.12 (-0.65%) at 3,204
European markets
Eurofirst 300 down -18.44 (-1.56%) at 1,162
FTSE100 down -94.34 (-1.49%) at 6,250
CAC 40 down -62.68 (-1.68%) at 3,663
Dax down -158.64 (-2.03%) at 7,659
Currencies
€/$ 1.30 (1.30)
$/¥ 98.54 (97.84)
£/$ 1.53 (1.53)
Commodities ($)
Brent Crude (ICE) up +0.58 at 104.70
Light Crude (Nymex) up +0.25 at 92.95
100 Oz Gold (Comex) up +0.20 at 1,576
Copper (Comex) unchanged 0.00 at 334.00
10-year government bond yields (%)
US 1.70%
UK 1.63%
Germany 1.22%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.75bps at 102.97bp
Markit iTraxx Europe -1.65bps at 118.67bp
Markit iTraxx Xover -1.01bps at 478.37bp
Markit CDX IG -1.08bps at 86.94bp
Sources: FT, Bloomberg, Markit
