COMMENT AND CURIOS
- The rise in US 10-year treasury yields is not just about the Fed.
- Malcolm Gladwell on Albert O Hirschman and the power of failure.
- Abenomics, Japan's debt, and privatisation.
- A truce between monetarists and fiscalists?
- Detroit takes aim at its pensioners.
- 15 scenes from the Wolf of Wall Street.
ROUND-UP
EU-US trade talks launched amid French fury with Brussels: "Barack Obama and European leaders on Monday launched talks on "the biggest bilateral trade deal in history" , an initiative that the US president has put at the heart of his second-term economic agenda. Mr Obama announced that talks on a transatlantic trade and investment deal would begin in Washington next month. While EU leaders admit the negotiations will be "difficult", they believe they can be wrapped up within two years." (Financial Times)
Co-operative Bank outlines restructuring plan to raise £1.5bn: "A sweeping debt restructuring by The Co-operative Group has marked the end of an era for Britain's biggest mutual, with a forced share listing of its banking subsidiary heralding the last days of pure-mutual status for the operation. Under the measures, needed to bridge a £1.5bn capital hole, about £300m of new Co-op Bank shares will be listed on the London Stock Exchange in a bitter blow to the government's advocacy of mutuals as a more sustainable alternative to discredited listed banks." (Financial Times)
UK agrees EU deal on City regulation: "The UK has reached an agreement with European Union member states that will potentially limit Brussels' influence on the way the City of London regulates trading on its financial markets. A deal between the countries reviewing the EU's key markets legislation, known as the Markets in Financial Instruments Directive (Mifid), represents a significant step forward after 30 months of fierce negotiations between the UK, France and Germany, as well as banks and exchanges." (Financial Times)
Brazilian economic protests spread: "Brazil's student bus fare protests spread through the country's major cities late on Monday with hundreds of protesters invading areas of the national Congress complex in Brasília. Brazilian television showed protesters occupying the roof of the modernist Congress building, designed by the country's late architect Oscar Niemeyer, as the protests widened to become a general expression of discontent with the nation's political class. " (Financial Times)
Private equity-run brands' tax bills spark ire: "Alliance Boots has accumulated a tax credit on £5bn of profit in the past six years, prompting calls by unions and MPs for an overhaul of the tax advantages enjoyed by private equity. The revelation came from an analysis by the Financial Times of the corporation taxes paid by some of Britain's best-known brands under private equity control." (Financial Times)
Bolton retires after failing to crack China: "Anthony Bolton, one of the UK's best-known and most successful fund managers, is to retire from running the Fidelity China Special Situations investment trust, admitting it had proved more difficult to make money from China than he had anticipated. Mr Bolton came out of semi-retirement – at his request – in 2010 to set up and run the China-focused fund. He had made his name running the UK-focused Fidelity Special Situations fund, which enjoyed a compound annual rate of return of 19.5 per cent during his 28 years at the helm." (Financial Times)
Peña Nieto pledges transformational reform of Pemex: "Enrique Peña Nieto, the Mexican president, vowed to press ahead with what he claimed would be a "transformational" reform of Pemex, the state-owned oil monopoly, a controversial move widely expected to unleash billions of dollars of foreign investment. Mr Peña Nieto said the need to liberalise Pemex was already agreed under the so-called Pact for Mexico, a coalition between the country's three main political parties, and that a more detailed proposal would be forthcoming within "two to three months."" (Financial Times)
Samaras buckles in wake of ruling over ERT: "Greece's fractious political leaders have agreed to overhaul their coalition agreement, ending a six-day stand-off over the closure of the state broadcaster that had threatened to bring down the government and force a snap election. A deal was struck Monday night after an interim ruling by the council of state, the highest legal body, calling for Hellenic Radio and Television (ERT) to resume broadcasting immediately." (Financial Times)
Czech PM Petr Necas quits over spying and bribery scandal: "Petr Necas resigned as Czech prime minister on Monday over a growing bribery and spying scandal, taking his government down with him and plunging the country into the latest in a succession of political crises. The scandal erupted on Thursday after about 400 police from the organised crime unit raided the prime minister's office, several ministries, and the residences of various lobbyists. They reportedly turned up €4m-€5m in cash and several kilos of gold." (Financial Times)
UK prepares charges against Libor trader: "UK authorities are preparing to file criminal fraud charges against Tom Hayes, the former UBS and Citigroup trader, in connection with the global Libor rate-rigging scandal, two people familiar with the matter said." (Financial Times)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -22.98 (-0.18%) at 13,010
Topix up +2.99 (+0.28%) at 1,088
Hang Seng down -152.83 (-0.72%) at 21,073
US markets
S&P 500 up +12.31 (+0.76%) at 1,639
DJIA up +109.67 (+0.73%) at 15,180
Nasdaq up +28.57 (+0.83%) at 3,452
European markets
Eurofirst 300 up +8.44 (+0.72%) at 1,184
FTSE100 up +22.23 (+0.35%) at 6,330
CAC 40 up +58.50 (+1.54%) at 3,864
Dax up +87.77 (+1.08%) at 8,216
Currencies
€/$ 1.34 (1.34)
$/¥ 94.88 (94.49)
£/$ 1.57 (1.57)
Commodities ($)
Brent Crude (ICE) up +0.05 at 105.52
Light Crude (Nymex) up +0.01 at 97.78
100 Oz Gold (Comex) down -0.90 at 1,382
Copper (Comex) unchanged 0.00 at 3.20
10-year government bond yields (%)
US 2.17%
UK 2.10%
Germany 1.52%
CDS (closing levels)
Markit iTraxx SovX Western Europe +0.06bps at 90.51bp
Markit iTraxx Europe -1.26bps at 108.14bp
Markit iTraxx Xover -10.29bps at 442.38bp
Markit CDX IG -1.28bps at 82.08bp
Sources: FT, Bloomberg, Markit
