Good morning New York,
FT ALPHAVILLE
When liquidity meets control in China: David notes that China's Shibor rate continues to spike, with something of a squeeze now developing in the market and pushing up banks' funding costs. The question is, is this a temporary dip related to the Dragon Boat Festival holiday season, or potentially something more significant? One thing's for sure, rumours of defaults and auction failures are getting everyone nervous.
NEWS
G8 leaders seek common ground on tax: UK Prime Minister David Cameron will lead a key discussion on tax evasion and avoidance on Tuesday, as Group of Eight leaders tackle an important but complex issue on which progress can be slow moving. (Financial Times)
Obama hints at move for Bernanke: President Barack Obama has suggested he will replace Ben Bernanke, US Federal Reserve chairman, as the US central bank prepares for a two-day meeting where it is expected to discuss the timing in the reduction of its asset purchase programme. (Financial Times)
UK readies Libor charges: Prosecutors plan to file criminal fraud charges against a former trader at UBS and Citigroup who allegedly was at the center of efforts by several banks to manipulate interest rates, people familiar with the plans said. (Wall Street Journal)
European car sales fall to lowest level since 1993: New car sales in the European Union last month fell an annual 5.9 per cent to their lowest level for May since 1993, as demand for new vehicles continued to decline across the EU's biggest economies. (Financial Times)
Third Point's Dan Loeb steps up pressure on Sony: The US hedge fund manager who is urging Sony to spin off its film and music arm, has stepped up pressure on the Japanese group days before its annual shareholders' meeting by revealing that he has increased his already top-ranking ownership stake. (Financial Times)
EasyJet agrees to buy 135 new planes from Airbus: The airline on Tuesday said it had entered into arrangements to purchase 35 A320 aircraft and 100 of the forthcoming revamped version of the short-haul workhorse, the A320neo. (Financial Times)
'Big three' container shipping groups plan alliance: The world's three largest container shipping lines are aiming to set up an operational alliance on three of the busiest trade routes, in a sign of the tough conditions in the sector. (Financial Times)
Co-op Bank plans novel bail-in: Subordinated bondholders—including some retail, or individual, investors—will lose roughly 25 per cent to 30 per cent of their capital, according to WSJ sources, depending on market prices on the debt when the terms of the swap are completed in September. Co-op also plans to raise £500m in fresh capital by selling loans from its portfolio and the disposal of the group's general insurance business. (Wall Street Journal)
Markets: Asian equity markets were somewhat mixed in late trade, with the larger, more liquid exchanges stalling after Monday's gains. Tokyo's Nikkei 225 Average dipped 0.2 per cent after gaining more than 2 per cent in the previous session, while Hong Kong's Hang Seng index was down 0.1 per cent following a gain of 1.2 per cent on Monday. Sydney's S&P/ASX 200 lost 0.2 per cent. Southeast Asia's emerging markets, however, were mostly higher. Markets in Europe looked set for a more subdued session, however, as data releases provided some extra focus. Germany's ZEW economic sentiment survey for June is published later this morning in Frankfurt, where the Xetra Dax has opened 0.4 per cent lower. The CAC 40 in Paris was down 0.5 per cent. In London, the FTSE 100 was down 0.3 per cent, and later in the morning inflation data for May are published.
