Asian stocks were mostly higher following encouraging US ISM manufacturing data and European PMIs released on Monday. The MSCI Asia Pacific was 0.7% higher but the Hang Seng fell 0.4%. (Financial Times)(Bloomberg)
TODAY: US factory orders for May; US vehicle sales for June.
Rothschild to advise on RBS split: The US government has moved quickly to appoint advisers on the potential split of RBS, with Rothschild set to be named to run the assessment. Rothschild saw off competition from Deutsche Bank and BAML at presentations last week, and its role could be announced as soon as this week, according to people close to the situation. (Financial Times)
Australia's central bank left rates on hold, as widely expected: The RBA board held the cash rate at 2.75%, with the governor noting the economy was growing "a bit below trend", but the Australian dollar may continue to fall, which would help rebalance the economy. (Statement)
China's credit freeze deliberate, and just badly executed? "The People's Bank of China instigated the cash shortages that catapulted Chinese interest rates to nosebleed highs during the past two weeks because the central bank felt it had no alternative amid what it saw as out-of-control credit growth," says the WSJ, citing an internal PBOC document. However it adds the message was poorly communicated, underlined by the propaganda authorities' efforts to 'tone down' reporting of the cash crunch. (Wall Street Journal)(Financial Times)
Japanese pension fund buys into US electricity: "One of Japan's biggest pension funds has joined a Canadian partner to buy a $2bn electricity plant in Michigan, said people familiar with the deal. The investment, which is the first infrastructure acquisition by a Japanese public pension fund, is a sign that the country's massive pension-fund industry is diversifying outside traditional assets such as government bonds." (Financial Times)
Noble Corporation eyes move to UK: "Noble Corporation, one of the world's largest offshore drilling contractors, plans to relocate from Switzerland to the UK to benefit from its less restrictive corporate law." The company relocated from the US to Switzerland in 2009. (Financial Times)
COMMENT AND CURIOS:
- The Winklevoss Bitcoin Trust. For realz. (FT Alphaville)
- Chinese banks' valuations are close to their lowest on record after the interbank funding crisis. (Bloomberg)
-- Bail-in fears grow for big depositors in euro periphery. (Financial Times)
- LME takes aim at warehousing queues that have helped boost profits of Goldman, Glencore, Trafigura. (Financial Times)
- The JLo/Turkmenistan/China/oil connection. (Wall Street Journal)
- Ruchir Sharma: Back to booms, busts and protests in EMs. (Financial Times)
- Japanese husbands' monthly allowance at lowest level since 1982. (Bloomberg)
- What the AUD's means for commodities. (Financial Times)
- Japan's banks are still addicted to government bonds. (Bloomberg)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +125.28 (+0.90%) at 13,978
Topix up +12.63 (+1.10%) at 1,163
Hang Seng down -81.78 (-0.39%) at 20,722
US markets
S&P 500 up +8.68 (+0.54%) at 1,615
DJIA up +65.36 (+0.44%) at 14,975
Nasdaq up +31.24 (+0.92%) at 3,434
European markets
Eurofirst 300 up +11.41 (+0.99%) at 1,164
FTSE100 up +92.31 (+1.49%) at 6,308
CAC 40 up +28.57 (+0.76%) at 3,767
Dax up +24.70 (+0.31%) at 7,984
Currencies
€/$ 1.31 (1.31)
$/¥ 99.53 (99.65)
£/$ 1.52 (1.52)
Commodities ($)
Brent Crude (ICE) down -0.07 at 102.93
Light Crude (Nymex) down -0.16 at 97.83
100 Oz Gold (Comex) up +0.90 at 1,257
Copper (Comex) unchanged 0.00 at 3.15
10-year government bond yields (%)
US 2.49%
UK 2.44%
Germany 1.72%
CDS (closing levels)
Markit iTraxx SovX Western Europe -1.3bps at 95.1bp
Markit iTraxx Europe -4.79bps at 114.82bp
Markit iTraxx Xover -16.87bps at 459.98bp
Markit CDX IG -3.01bps at 84.49bp
Sources: FT, Bloomberg, Markit
