COMMENT AND CURIOS
- America's economy: the stealth boom.
- Jonthan Portes on UK immigration.
- Breakthrough with Honduran charter cities.
- What is neoclassical economics?
- David Beckworth's proposal for fiscalist and monetarist cooperation.
- Sympathy for the Luddites.
ROUND-UP
Bond sales dry up as interest rates rise: "The number of companies tapping the bond market has collapsed as a result of rising interest rates, threatening to halt a global refinancing wave that helped companies boost earnings and strengthen balance sheets. Bond investors have retrenched in the face of increasing market volatility since Fed chairman Ben Bernanke hinted on May 22 at a possible "tapering" of US quantitative easing. This has left companies unable to raise financing on previously beneficial terms." (Financial Times)
Fear Hester exit will speed RBS defections: "The ousting of Stephen Hester as Royal Bank of Scotland's chief executive has sent staff confidence to "rock bottom" and is set to accelerate a recent wave of defections from the group's investment bank, senior insiders have warned. Shares in the bank, which is 82 per cent state-owned, initially fell 8 per cent on Thursday morning, with investors taking fright at the prospect of greater political interference in RBS's management as well as a likely delay of its reprivatisation timetable. The shares later recovered to close down 3 per cent at 315p." (Financial Times)
House prices in England and Wales top pre-credit crunch high: "House prices in England and Wales rose to a record last month, beating their pre-recession peak, as government measures to boost home ownership started to stimulate the market. A month-on-month rise of 0.4 per cent in May, to £233,061, took the annual growth rate to 2.7 per cent, according to the LSL/Acadametrics house price index, which the Financial Times helped set up." (Financial Times)
Rupert Murdoch filed for divorce. Mr Murdoch's marriage with Wendi Deng Murdoch, his third wife, had "broken down irretrievably for a period of more than six months". Ms Murdoch does not have equity in News Corp, and has no voting rights. (Financial Times)
Ashley Bacon is JPMorgan's new head of risk. Bacon, a Jamie Dimon favourite, survived the heat of a recent Senate hearing into the London Whale trades, having been brought in to deal with the debacle. John Hogan will move from chief risk officer to "chairman of risk" on the bank's operating committee, but is ultimately likely to step down from the group of executives that run JPMorgan. (Financial Times)
"Naturally occurring" human genes cannot be patented, the Supreme Court ruled. However, the decision also said that patents could be valid for synthetic DNA modified in a lab. The case involved patents by Myriad Genetics, a Utah biotech company, on two genes whose mutations have been linked to breast and ovarian cancer. "A naturally occurring DNA segment is a product of nature and not patent-eligible merely because it has been isolated," Justice Clarence Thomas wrote in the unanimous ruling. (Financial Times)
Brazil acts after real hits four-year low: "Brazil has reduced a financial transactions tax on currency derivatives to zero after its currency, the real, hit four-year lows against the dollar on Wednesday. The measure was the second such move in a week to dismantle currency controls as the government sounds a rapid retreat from its earlier "currency war" against foreign capital inflows." (Financial Times)
Hopes for G8 trade and tax deals dented: "Hopes of a deal to boost the world economy at next week's Group of Eight summit were in the balance on Thursday night, as France and Canada resisted a last-minute push for an ambitious trade and tax package. France's refusal to include its film industry in EU-US trade negotiations has thrown into doubt plans to launch talks on Monday, when European leaders meet Barack Obama, US president, at the summit in Northern Ireland." (Financial Times)
Germany seeks to halt EU-Turkey talks over handling of protests: "Germany is seeking to delay EU membership talks with Turkey scheduled for this month, in response to Ankara's crackdown on mass demonstrations that have shaken the government of Recep Tayyip Erdogan. The prospect that the negotiations – a potential turning point in the long and troubled relationship between Ankara and the bloc – could be put on hold came as the Turkish prime minister delivered a "final warning" to protesters that they were no longer safe to remain in Istanbul's Gezi Park, epicentre of the demonstrations." (Financial Times)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 up +298.97 (+2.40%) at 12,744
Topix up +25.02 (+2.40%) at 1,069
Hang Seng up +206.46 (+0.99%) at 21,094
US markets
S&P 500 up +23.84 (+1.48%) at 1,636
DJIA up +180.85 (+1.21%) at 15,176
Nasdaq up +44.93 (+1.32%) at 3,445
European markets
Eurofirst 300 down -0.81 (-0.07%) at 1,174
FTSE100 up +5.18 (+0.08%) at 6,305
CAC 40 up +4.28 (+0.11%) at 3,798
Dax down -47.88 (-0.59%) at 8,095
Currencies
€/$ 1.33 (1.34)
$/¥ 94.91 (95.36)
£/$ 1.57 (1.57)
Commodities ($)
Brent Crude (ICE) down -0.15 at 104.80
Light Crude (Nymex) up +0.06 at 96.75
100 Oz Gold (Comex) up +6.30 at 1,384
Copper (Comex) up +0.03 at 3.21
10-year government bond yields (%)
US 2.15%
UK 2.15%
Germany 1.56%
CDS (closing levels)
Markit iTraxx SovX Western Europe +1.35bps at 90.9bp
Markit iTraxx Europe +0.51bps at 112.72bp
Markit iTraxx Xover +0.95bps at 471.98bp
Markit CDX IG -5.14bps at 82.22bp
Sources: FT, Bloomberg, Markit
