Asian stocks meandered. The Nikkei turned negative after Shinzo Abe's latest reform announcement, dropping as much as 1.3 per cent after the Japanese prime minister's speech. Australian shares dropped 1.4 per cent, hitting a four-month low on weak growth. (Reuters)
Apple could face a US import ban on certain iPhone and iPad models after a trade panel said they infringed Samsung patents. AT&T variants of the iPhone 4, 3GS and 3G, as well as the original iPad and iPad 2 could be affected by the ruling of the International Trade Commission, which said its decision was final. Apple may still appeal what would otherwise be a significant victory for Samsung in its legal disputes with the company. (Financial Times, Reuters)
Abenomics latest: a 3 per cent annual growth target for incomes. Prime Minister Shinzo Abe unveiled the plans for gross national income per capita in a speech overnight, fleshing out the so-called "third arrow" of his strategy for Japan's economic revival. Incomes would rise by ¥1.5m in ten years under the targe.t (Reuters) Supply-side reforms are also on the agenda, but Abe faces scepticism that they amount to anything more than tinkering. (Financial Times)
Brazil got rid of its tax on foreign investment in domestic bonds. Tuesday's cut in the 'IOF' rate from 6 per cent to zero showed official concern that the real is weakening too quickly against the dollar. The tax was originally a key weapon in Brazil's 'currency war' against inflows caused by the Fed's easy policy. (Financial Times)
Australian growth disappointed in the first quarter. The 0.6 per cent quarterly expansion, below expectations of 0.7 per cent, fed speculation that the Reserve Bank of Australia will cut rates again in August. The economy grew 2.5 per cent compared to a year earlier. (Bloomberg)
Japanese hedge funds have ploughed into the country's small-cap stocks as Abenomics takes hold. Daily trading volumes by the Jasdaq index have more than doubled this year compared to 2012, partly aided by changes to margin trading. (Bloomberg)
More signs of ECB wariness ahead of Thursday's meeting. The central bank is unwilling to do more to boost cross-border lending because political foot-dragging over a eurozone banking union may encourage fragmentation anyway. (Wall Street Journal)
JPMorgan and Morgan Stanley are designing new synthetic CDOs. The return and size of the deals remain unclear, but their design follows investor requests that the two banks create the products. (Wall Street Journal)
HSBC has been landed with a civil lawsuit from the state of New York, alleging that the bank failed to file paperwork in foreclosure cases where it could have settled with homeowners. The suit seeks recovery of unfair mortgage charges. (Financial Times)
MF Global is effectively out of bankruptcy after Louis Freeh, its trustee, stepped down, handing control of the broker's liquidation to a new panel. (Reuters)
COMMENT AND CURIOS
- Well, what would you have done, Martin Wolf asks the Fed's critics. (Financial Times)
- The "Karl Rove and Henry Kissinger rolled into one" advising Xi Jinping. (Wall Street Journal)
- 'Shareholder value' alone can't justify tax avoidance, says John Kay. (Financial Times)
- Apple's new HQ: 2.8m square feet, 6,000 trees, 9,200 construction jobs. (Bloomberg)
- John Gapper notes the "purgatory" of Steve Cohen. (Financial Times)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -54.79 (-0.40%) at 13,478
Topix down -13.25 (-1.18%) at 1,112
Hang Seng down -176.20 (-0.79%) at 22,109
US markets
S&P 500 down -9.04 (-0.55%) at 1,631
DJIA down -76.49 (-0.50%) at 15,177
Nasdaq down -20.11 (-0.58%) at 3,445
European markets
Eurofirst 300 up +3.69 (+0.31%) at 1,211
FTSE100 up +33.46 (+0.51%) at 6,558
CAC 40 up +5.16 (+0.13%) at 3,925
Dax up +10.16 (+0.12%) at 8,295
Currencies
€/$ 1.30 (1.30)
$/¥ 100.19 (99.61)
£/$ 1.53 (1.53)
Commodities ($)
Brent Crude (ICE) up 0.12 at 103.36
Light Crude (Nymex) up 0.42 at 93.73
100 Oz Gold (Comex) up 8.70 at 1,405
Copper (Comex) unchanged at 3.37
10-year government bond yields (%)
US 2.15%
UK 2.06%
Germany 1.54%
CDS (closing levels)
Markit iTraxx SovX Western Europe at 86.71bp
Markit iTraxx Europe -2.8bps at 103.9bp
Markit iTraxx Xover -12.5ps at 424.1bp
Markit CDX IG +3.1bps at 81.5bp
Sources: FT, Bloomberg, Markit
