Good morning New York,
FT ALPHAVILLE
Paul presents a paper from Achim Dübel of Finpolconsult: Creditor Participation in Banking Crisis in the Eurozone – A Corner Turned? The central charge is that foot-dragging by policy makers allowed a host of at-risk investors in bank debt to pass their pain to Europe's taxpayers, as the crisis gathered pace.
NEWS
Russian opposition leader, and a fierce opponent of Russian president Vladimir Putin, Alexei Navalny was sentenced to 5 years in prison camp after being found guilty of stealing 10,000 tonnes of timber in a court case that will damage his political future. Since April the Lenin district court in the town of Kirov has been trying the case, which has been criticised as a politically motivated attempt to keep Navalny from running for office. He has declared his candidacy for September's mayoral elections. (Financial Times)
JP Morgan in talks over power price settlement worth hundreds of millions: The bank is in discussions with the Federal Energy Regulatory Commission about paying a big fine to settle allegations it manipulated electricity markets in California and the Midwest, according to the FT and WSJ citing people familiar with the matter. The WSJ sources say draft agreements between JP Morgan and FERC would result in fines that would likely exceed the record $435m fine levied by FERC on Tuesday against Barclays. The FT says one source said part of the enforcement action was to involve JPMorgan traders being banned from commodity markets, but the bank rejected it. (Wall Street Journal) (Financial Times)
Greece agrees deal to reform civil service: The Greek parliament has approved controversial reforms of the civil service and tax administration, opening the way for mass dismissals of state employees in return for a €6.8bn aid disbursement by international lenders. The legislation was passed in the early hours of Thursday after the governing coalition secured a narrow majority in 15 separate votes on key clauses in the bill. (Financial Times)
Troika report warns of more uncertainty on Greek debt servicing: "Downside risks have increased significantly compared to the second review, particularly as regards privatization proceeds," the report said. (Bloomberg)
Schäuble flies to Athens with SME loans: The German finance minister travels to Athens today where he will offer €100m ($132m) in loans to small and medium-sized businesses through state-owned lender KfW Group. Yesterday the Greek government scraped through a vote on a bill to sack public sector workers, whose passage was required to unlock nearly €7bn ($9.2bn) in aid from the EU and IMF. (Bloomberg) (Reuters)
Intel has cut its financial forecasts for the rest of the year after concluding that the battered PC market would not see the recovery it had been expecting in the second half of 2013. Meanwhile, IBM raised its full-year outlook and beat estimates on its 2Q operating profits, but said an expected asset sale would be delayed. eBay, also reporting yesterday, blamed conditions in Europe and Korea for lower-than-expected 3Q earnings guidance. (Financial Times)
China's June new home prices rose in all but one city, in the latest official survey of 70 cities. (Bloomberg)
Peltz urges PepsiCo to buy Mondelez: "Nelson Peltz has launched a public campaign to transform PepsiCo, urging the group to first merge its snack business withMondelez in a $60bn deal, and then to spin out its slow-growing soda business to shareholders." (Financial Times)
Cowdery in $600m deal for US insurer: Clive Cowdery, who has twice set up companies called Resolution to consolidate the UK life insurance industry, embarked on a third act in the US with the $600m acquisition of Lincoln Benefit Life. Mr Cowdery's Delaware-incorporated vehicle, Resolution Life Holdings, beat private equity bidders for the 75-year-old insurer, which was put up for sale by its parent Allstate. (Financial Times)
"Dell's special committee of the board is considering delaying the July 18 shareholder vote on the buyout by founder Michael Dell, seeking a higher bid or time to win support for the $24.4 billion deal, said a person with direct knowledge of the situation." (Bloomberg)
China bans GSK finance chief from leaving: Chinese authorities investigating alleged bribery by GlaxoSmithKline have barred the company's finance chief in China, British national Steve Nechelput, from leaving the country, Glaxo said Wednesday. Meanwhile, the UK's Serious Fraud Office is in the preliminary stages of reviewing the bribery allegations Glaxo faces in China, the WSJ says citing people familiar with the matter, based on both an anonymous tipster contacting the SFO directly and the claims made publicly by Chinese authorities. (Wall Street Journal)
Junk bond yields are falling fast: Average yields have fallen by nearly 60 basis points in the past week, and are falling towards the 6% mark. (Financial Times)
Markets: Global markets are once again being driven by local factors, after several days of being in thrall to the words of Ben Bernanke, Federal Reserve chairman. In Tokyo the Nikkei gained more than 1 per cent as the Japanese currency weakened to more than Y100 against the dollar, boosting the country's exporters. European stocks have opened lower, giving back some of the gains from Wednesday's session, although the FTSE Eurofirst 300 soon reversed losses to trade flat, and in London the FTSE 100 turned slightly positive. The mixed picture has left the FTSE All World index of global stocks virtually unchanged. In currency markets, the dollar, which had softened on Wednesday as investors scaled back expectations of US interest rate rises after Mr Bernanke's testimony before Congress, is strengthening. As well as breaking the Y100 mark, the greenback is up 0.2 per cent against the euro and 0.3 per cent against sterling. Gold, however, is up 0.1 per cent in dollar terms to $1,276 a troy ounce writes the FT's Global Markets Overview.
