Good morning New York,
FT ALPHAVILLE
Cut-out-n-keep guide to Bernanke's testimony: Bernanke is starring today at the House Financial Services committee, and his comments there and at the Senate Banking committee tomorrow are probably his best communication opportunity for some time, as the FT's Robin Harding points out — there being no July FOMC press conference scheduled. Plus, there has been all that, er, confusion and consequent attempts to clarify/smooth things over since the June FOMC meeting. So Kate has assembled here some what-to-look-for highlights from the FT, WSJ, and Goldman Sachs, plus a few others.
NEWS
Barclays fined $470m over US power prices: The US electricity market's overseer has slapped Barclays with a record $470m penalty over manipulating power prices, in the latest heavy regulatory sanction against the UK bank. The Federal Energy Regulatory Commission's fines matched the amount proposed last year when it accused four former Barclays traders of manipulating physical power prices in California and other western US states in order to fraudulently boost financial derivative positions. (Financial Times)
Mark Carney got everyone on the MPC to vote to maintain QE at its current level of £375bn at the Bank of England's 3/4 July meeting. Sterling did this on Wednesday after the minutes were released:
Also of interest since it seems that the committee has fallen in behind the forward guidance plan with QE taking a backseat:
[As expected] On 7 August, alongside the release of the Inflation Report at 10.30, the Committee will respond to the Chancellor's request for its assessment of the use of thresholds and forward guidance, as well as its view of the trade off between growth and inflation. Any announcement regarding the implementation of thresholds and forward guidance will be made then, rather than immediately after the Committee's next policy meeting on 1 August.
The EU is proposing to cap card transaction fees: A draft plan seen by the FT would introduce a ceiling for charges on all consumer debit and credit card transactions, and would require payment card schemes and the entities that process transactions to be legally separated – a forced split that would remake the business model for the main payment groups. (Financial Times)
Chinese premier Li Keqiang said he would keep economic growth, employment and inflation within limits, avoiding "wide fluctuations", in his first comments since the GDP release on Monday. According to an official summary of a speech made yesterday, Li talked of "scientific macroeconomic policy framework" to offer markets "stable predictability". Bloomberg says the comments "signal he won't let expansion slow too much, without indicating any immediate plans for stimulus". (Bloomberg)
China has vowed to step up its fight against bribery, just days after police revealed details of a wide-ranging investigation into UK drugmaker GlaxoSmithKline . The Chinese commerce ministry on Wednesday said the government "stands firmly against any form of commercial bribery" and would punish any foreign or domestic company found to be violating the law. (Financial Times)
Yahoo's sales fell 7% to $1.2bn in Q2 and the company cut its full-year revenue guidance, as acquisitions and product overhauls failed to boost revenue. The company's 2013 sales guidance was $4.45bn to $4.55bn, down from $4.5bn to $4.6bn previously, and guidance for Q3 revenue $1.06bn to $1.1bn was slightly below analysts' forecasts. (Financial Times)(Reuters)
BHP's iron ore production beats expectations: Output from its most profitable Western Australian mines was 19% higher in the June quarter on a sequential basis, and full-year output was up 7% to June 30, exceeding company guidance. Quarterly copper output rose 8.5%, also beating forecasts, however petroleum output for the year rose 6%, slightly missing full-year targets. (Financial Times)
Singapore's exports fell further in June: Exports were 8.8% lower than a year earlier, the fifth month of consecutive falls. (Bloomberg)
Chevron back in Argentina: Chevron agreed to invest $1.24bn in the Vaca Muerta shale formation of Argentina, making it the first international oil company to invest in the country since the government nationalised YPF, its largest energy group, last year." (Financial Times)
Google has recently approached media companies about licensing their content for an Internet TV service that would stream traditional TV programming, people familiar with the matter say. (Wall Street Journal)
Markets: Stocks are mixed but the dollar is strengthening as investors await testimony on Capitol Hill from Federal Reserve chairman Ben Bernanke later today. Indications of stronger economic growth and job creation in the US economy are paving the way for the Fed to throttle back its easy monetary policy. That should eventually allow traders to focus on economic fundamentals, rather than reading the runes of central bank officials. But until the Fed successfully negotiates an exit, markets are likely to remain in thrall to the words of Mr Bernanke. European equity markets opened broadly higher, but key Asian indices were mixed, and the FTSE All World index has not broken out of Tuesday's trading range at all so far this session. Overnight, the S&P 500 narrowly failed to set a new closing high, ending the session 0.4 per cent lower. . The dollar has resumed its strengthening trend, up 0.1 per cent against the euro and 0.5 per cent against the yen, while gold has fallen 0.4 per cent to $1,287 a troy ounce. But as with stocks, the two major currency pairs and gold have not broken out of Tuesday trading ranges according to the FT Global Market Overview.
