Chinese interbank rates eased after reports of central bank support. The one-day repo rate receded 3.84 percentage points to 7.9 per cent, its biggest drop since 2007, while the seven-day rate fell 3.51 percentages points from the record high it set on Thursday (Bloomberg).
Fed casualties watch: Pimco's Total Return Fund is now down 2.2 per cent for the year, the worst performing of large US total return funds (Bloomberg); Having fallen below $1,300, gold's 23 per cent slump this year is on course to be its worst since 1981 (Bloomberg); Thursday's bond sell-off saw ETFs' discounts to underlying asset values widen sharply, with cash redemptions halted for some (Financial Times).
The ESM has been authorised to 'directly recapitalise' eurozone banks but only if governments make their own investments in stricken lenders first, and with retroactive application of the new powers to be decided on a 'case by case' basis. Eurozone financial ministers also confirmed the size of the direct recap funds to be €60bn, unless later expanded by the ESM board. The ESM expects the tool to become operational in the second half of 2014 (Financial Times).
Oracle's revenue growth stagnated for another quarter. Revenues from new software licenses and cloud offerings increased by only 1 per cent in the second quarter. Oracle shares fell 8 per cent after the close, despite a doubling of its dividend and authorisation for a $12bn stock buyback (Wall Street Journal).
The IMF has warned eurozone creditors of gaps in financing Greece's bailout, placing its distribution of aid in July in doubt. National eurozone central banks' refusal to roll over their maturing holdings of Greek bonds has compounded the €3bn-€4bn shortfall (Financial Times).
Softbank's chief executive revealed the ambition behind its $21.6bn bid for Sprint Nextel. "We want to be the world's No.1 company in various terms including profit, cashflow and market value," Masayoshi Son told shareholders on Friday (Bloomberg).
UK prosecutors alleged that former Libor trader Tom Hayes conspired with employees at eight banks and interdealer brokers. The companies named at a court appearance by Hayes, who has been charged with eight counts of "conspiring to defraud", included Tullett Prebon. The broker said on Thursday that it has been asked to provide information to investigators, but that it has not been told that it or its employees are being investigated (Wall Street Journal).
COMMENT AND CURIOS
- Did Bernanke just let down an asset bubble?, asks John Authers. (Financial Times)
- Investors won't get fooled again by Russian growth, Sergei Guriev says. (Financial Times)
- The real central bank exit to worry about might be the ECB's... (Financial Times)
- Why triathlon-going 'middle aged men in Lycra' should take it easy. (Bloomberg)
- Brazil's protests are pretty unlike elsewhere. (Reuters)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -63.97 (-0.49%) at 12,950
Topix down -13.30 (-1.22%) at 1,078
Hang Seng down -305.59 (-1.50%) at 20,077
US markets
S&P 500 down -40.74 (-2.50%) at 1,588
DJIA down -353.87 (-2.34%) at 14,758
Nasdaq down -78.56 (-2.28%) at 3,364
European markets
Eurofirst 300 down -36.22 (-3.07%) at 1,143
FTSE100 down -189.31 (-2.98%) at 6,159
CAC 40 down -140.41 (-3.66%) at 3,694
Dax down -268.60 (-3.28%) at 7,928
Currencies
€/$ 1.323 (1.325)
$/¥ 97.29 (96.92)
£/$ 1.55 (1.555)
Commodities ($)
Brent Crude (ICE) up +0.42 at 102.57
Light Crude (Nymex) up +0.17 at 95.31
100 Oz Gold (Comex) up +1.2 at 1,287
Copper (Comex) up 0.01 at 3.07
10-year government bond yields (%)
US 2.42
UK 2.29
Germany 1.66
CDS (closing levels)
Markit iTraxx Europe +12.3bps at 119bp
Markit iTraxx Xover +45bps at 484.7bp
Markit CDX IG +5.3bps at 92.6bp
Sources: FT, Bloomberg, Markit
