Asian stocks fell, the yen strengthened and Australian bank shares headed for their largest weekly drop in a year after comments from Bank of Japan's governor suggested the central bank wouldn't increase its bond buying. The Nikkei fell 1.3%, reversing earlier gains. The ASX fell more than 2% and the MSCI Asia Pacific was 0.4% lower. (Bloomberg)
BoJ governor says stable JGB market '"extremely desirable'; will work to head off volatility in bond yields. "As far as the markets for long-term government securities are concerned, in which the Bank of Japan is directly involved through its market operations, it is extremely desirable for them to move stably," Haruhiko Kuroda said today during a seminar on Asia's economic future. (Wall Street Journal)
Proctor & Gamble brings back AG Lafley: The world's biggest consumer product maker has returned Lafley, who led the company from 2000 to 2009, as CEO. He replaces embattled Bob McDonald, who will retire next month. Lafley's return comes amid a $10bn restructuring launched in February 2012, and about a year after activist investor Bill Ackman took a stake in P&G and began agitating for change. (Financial Times)(Reuters)
Spanish banks will need to provision up to another €10bn to cover loans that borrowers will struggle to repay, according to an internal estimate by the Bank of Spain. It is the first official assessment of the likely impact of the central bank's new approach towards more than €200bn of loans that were rolled over before they were due to expire, often because of doubts over corporate borrowers' ability to repay. (Financial Times)
Draghi wants UK to become 'more European': "I cannot say which of the two sets of arguments is stronger, the economic or the political ones, neither am I going to enter into a domestic policy debate, but what I can say is that Europe needs a more European UK as much as the UK needs a more British Europe," Draghi said in a speech met with applause at the City of London Corporation last night. (Financial Times)
German shale industry takes on shale gas: "Germany's brewers have warned Berlin that permitting unconventional gas exploration in Europe's biggest economy could put the purity of the country's celebrated beer at risk." (Financial Times)
"The US Federal Trade Commission has begun an informal inquiry into Google's display advertising business, opening a new front in the internet search company's antitrust battles just months after it appeared to resolve earlier investigations on both sides of the Atlantic." (Financial Times)
Gold is having a good week: Prices are headed for the highest weekly performance in a month amid worries about monetary stimulus. (Bloomberg)
COMMENT AND CURIOS:
- Abe's big agenda is constitutional change, not economics. (Reuters)
- Martin Wolf: Osborne should not be so complacent about IMF criticism. (Financial Times)
- The day the UK had six hours of gas left. (Financial Times)
- Martin Wolf: Austerity's failure was predictable, and predicted. (Financial Times)
- Market bulls run into the sand. (Financial Times)
- Nick Butler: Carbon market collapse more than just a technical matter. (Financial Times)
- How Chinese brokerages deal with regulators: 'kissing asses'. (Financial Times)
- How US banks deal with regulators: write the legislation themselves. (NYT Dealbook)
- Ford stops making 'Mad Max' style cars, blaming Aussie dollar. (Bloomberg)
- Four senior executives of SAC Capital have been subpoenaed. (NYT Dealbook)
OVERNIGHT MARKETS: MIXED
Asian markets
Nikkei 225 down -177.96 (-1.23%) at 14,306
Topix down -6.67 (-0.56%) at 1,182
Hang Seng down -45.47 (-0.20%) at 22,624
US markets
S&P 500 down -4.84 (-0.29%) at 1,651
DJIA down -12.67 (-0.08%) at 15,295
Nasdaq down -3.88 (-0.11%) at 3,459
European markets
Eurofirst 300 down -26.34 (-2.10%) at 1,230
FTSE100 down -143.48 (-2.10%) at 6,697
CAC 40 down -83.96 (-2.07%) at 3,967
Dax down -178.91 (-2.10%) at 8,352
Currencies
€/$ 1.29 (1.29)
$/¥ 102.21 (102.01)
£/$ 1.51 (1.51)
Commodities ($)
Brent Crude (ICE) down -0.08 at 102.36
Light Crude (Nymex) down -0.33 at 93.92
100 Oz Gold (Comex) unchanged 0.00 at 1,392
Copper (Comex) unchanged 0.00 at 329.95
10-year government bond yields (%)
US 2.03%
UK 1.93%
Germany 1.44%
CDS (closing levels)
Markit iTraxx SovX Western Europe +2.78bps at 79.19bp
Markit iTraxx Europe +4.71bps at 91.94bp
Markit iTraxx Xover +18.08bps at 386.24bp
Markit CDX IG +1.73bps at 73.29bp
Sources: FT, Bloomberg, Markit
