Good morning New York,
ALPHAVILLE
Finland has a swap… that's a bit pointless: Somehow — was it the ludicrous secrecy, maybe? — you could tell this was coming. On Wednesday, Jan Hurri at Taloussanomat took advantage of the Finnish government's recent doc dump in order to reach a conclusion about its deal for 'collateral' on Greek bailout loans: It's almost worthless. Joseph's post runs you through the reasons.
The Nikkei is off 5 per cent on Thursday morning, its biggest fall since last week's 7.3 per cent hit. As noted, there are a fair few reasons for the Nikkei's fall — ranging from no buyers left *duh*, worries about Abenomics follow-through outside of the monetary zone to mixed messages from the BoJ, missing the Fed and heavy profit taking alongside a stronger yen — but nobody knows how long the move down will be maintained or what this means for Abenomics in the longer run.
NEWS
European regulators have clashed with the US over the timing derivatives reforms, in a letter urging further delays to "cross border guidance", which would which would outline how the US would keep tabs on banks and hedge funds whose international swap trading could have a direct impact on the US economy. The European Commission in a letter sent on Tuesday urged the CFTC to extend an exemption for foreign market participants until leaders of the Group of 20 countries have agreed international principles on cross-border swap rules. (Financial Times)
Google is preparing an attack on Apple's iPhone with a device that is more aware of its surroundings and smart enough to anticipate how it will be used next, according to the head of the internet company's Motorola subsidiary. (Financial Times)
Shuanghui agrees $4.7bn deal for Smithfield Foods: China's biggest meat processor has offered $4.7bn in cash for Smithfield Foods, in what will be the largest Chinese takeover of a US company if completed. Shuanghui International said the agreed deal with Virginia-based Smithfield, the world's largest pork producer, would bolster its ability to feed China's growing middle class while also addressing persistent concerns about food safety in the world's most populous country. The deal will face scrutiny in Washington. But because Shuanghui has no US operations, it may be difficult for opponents to argue that the deal should be blocked on antitrust grounds or poses a threat to national security. (Financial Times) "Under the terms of its deal, Smithfield has 30 days to continue talks with possible bidders Bangkok-based Charoen Pokphand Foods Pcl (CPF) and Sao Paulo-based JBS SA, according to a person familiar with the matter who asked not to be named because the deliberations are private." (Bloomberg)
Panasonic said it would cut about 5,000 workers from its automotive and industrial division, which employs a total of 110,000, in a bid to bolster its operating profit margin to at least 5% over the next three years. (Reuters)
"Fiat is in talks for as much as $10 billion in financing from a pool of banks to buy the Chrysler Group LLC stake it doesn't own and refinance the two automakers' debt, people familiar with the matter said." (Bloomberg)
"Sprint Nextel Corp and Japan's SoftBank Corp said on Wednesday they had reached a national security agreement with U.S. authorities, overcoming a major hurdle for the Japanese company's $20.1 billion bid to control the wireless carrier. Even with that approval, there are still a number of regulatory, congressional and investor hurdles facing SoftBank before it can close on its plan to break into the U.S. market. One influential U.S. senator said on Wednesday he was "carefully examining" the approval to see if it eased his security concerns." (Reuters)
Ryanair faces regulatory pressure to sell stake in Aer Lingus: Ryanair faces the prospect of being forced to sell its 30 per cent stake in Aer Lingus following a ruling by the UK's Competition Commission. In a provisional ruling published on Thursday, the commission found allowing Ryanair to maintain its stake in its Irish rival could reduce competition on routes between the UK and Ireland and hinder Aer Lingus's ability to be acquired or merge with another airline. (Financial Times)
EU agrees to end decades of overfishing: The EU agreed on Thursday to put an end to decades of overfishing and rebuild dwindling stocks by 2020, as part of a deal to overhaul the bloc's fisheries policy. The agreement will put an end to annual haggling over catch quotas by EU ministers in Brussels, widely blamed for putting short-term economic interests above the long-term health of Europe's fish stocks. (Financial Times)
"Berkshire Hathaway on Wednesday agreed to buy NV Energy, a power company serving customers in Nevada, for $5.6bn, saying the deal would help develop the state's renewable energy resources. The all-cash offer from MidAmerican Holdings, a Berkshire subsidiary that provides power in the midwest and Rocky Mountain regions, values NV at $10bn, including debt." (Financial Times)
Blackstone is weighing a bigger than expected withdrawal from SAC Capital. Ahead of a Monday deadline for SAC clients, Blackstone is planning to withdraw up to $400m, people familiar with the matter said, which would be double the amount expected early this month. (Wall Street Journal)
"Morgan Stanley has told investors that its underperforming fixed-income unit will have to be a lot smaller than rivals' businesses in order to earn decent profits. The shift, disclosed by a senior executive at a dinner earlier this month, marks a twist in Morgan Stanley's decadelong struggle to become a force in the trading of bonds, currencies and commodities, a profit driver for many Wall Street firms." (Wall Street Journal)
"Switzerland has taken a decisive step to resolve its dispute with the US over tax evasion unveiling plans to relax its once untouchable bank secrecy laws to allow banks to make individual settlements with the US over their role in helping Americans evade taxes." (Financial Times)
Brazil's central bank tightened interest rates 50bps to 8% despite growth slowing in Q1. (Financial Times)
Markets: Stocks and the dollar are weaker as the market continues to absorb adjusted expectations for the duration of Federal Reserve support and sentiment is hit by another heavy burst of selling in Tokyo. Gold has broken back above $1,400 an ounce and highly-rated sovereign bond prices are inching higher, nudging yields lower, as risk appetite fractures.The FTSE All-World equity index, which last week hit an intraday near five-year high of 252, is down 0.4 per cent to 243.7 as the FTSE Eurofirst 300 opens with a 0.2 per cent decline and US index futures suggest Wall Street's S&P 500 will fall another 4 points from its two-week closing low of 1,648 writes the FT's Global Markets Admiral of the fleet Jamie Chisholm.
