Most Asian stocks and metals rose, while Treasury yields and the dollar retreated after Ben Bernanke's comments that Fed policy would need to remain accomodative for the foreseeable future. The Hang Seng rose 2.5% and the Kospi was up 2%, but the yen strengthened after the BoJ's statement, pushing the Nikkei and Topix lower. (Bloomberg)
Today: Kuroda's post-BoJ meeting press conference. US initial jobless claims.
The Bank of Japan talked of recovery for the first time since before the 2011 earthquake and tsunami, and maintained its asset purchasing programme as widely expected at its July board meeting ended today. The BoJ maintained its forecast from April that prices would rise 1.9% by April 2015, excluding effects of a planned sales tax hike. (Bloomberg)(Financial Times)
South Korea's central bank kept rates on hold at 2.5%, as widely expected. (Wall Street Journal)
China's big four banks extended a lot of credit so far this month: The banks loaned Rmb170bn in new yuan-denominated credit, the official Shanghai Securities News said today. That compared to an estimated Rmb270bn for all of June, the newspaper said. (Reuters)
How US banks are planning to meet the new leverage ratio: Moving assets between subsidiaries, shortening the duration of derivatives and reducing credit commitments. (Financial Times)
The CFTC is close to a compromise on swaps rules for foreign companies dealing with US banks. A source said an internal split between commissioners is close to being resolved ahead of a Friday deadline for a decision on the issue. (Reuters)
The operator of the train that exploded in Quebec acknowledged that an inadequate number of handbrakes were applied. "A Reuters review of Canadian and U.S. regulations found that rail operators are given considerable leeway to decide how many handbrakes are sufficient for any given train, depending on track conditions and the weight of the cargo." (Reuters)
Chevron said its oil and gas business is set for a year-over-year drop in the second quarter as lower crude prices and equipment maintenance. The second-largest US oil company's interim report, released Wednesday, is seen as a bellwether for the sector. (Wall Street Journal)
COMMENT AND CURIOS:
- John Authers: Deploying the 'three dirty words of finance' in search of yield. (Financial Times)
- Property is crushing hedge funds in the alternative investments category. (Bloomberg)
- Abnormal trading ahead of UK deals has fallen to the lowest level in more than a decade. (Financial Times)
- Editorial: In praise of bank leverage ratios. (Financial Times)
- Ambrose Evans-Pritchard: The wheels are coming off Southern Europe. (The Telegraph)
- Jim O'Neill: Emerging markets are stuck on the Fed's elevator ride. (Bloomberg)
ON FT ALPHAVILLE:
- The real story behind GOFO backwardation.
- China's resurgent cash-for-copper financing.
- Optimism on Abe's third arrow: for and against.
- The real story behind WTI backwardation (not Egypt).
- The Turkish yield curve inversion.
OVERNIGHT MARKETS: MIXED
Asian markets
Nikkei 225 down -90.79 (-0.63%) at 14,326
Topix down -11.34 (-0.95%) at 1,184
Hang Seng up +455.85 (+2.18%) at 21,360
US markets
S&P 500 up +0.30 (+0.02%) at 1,653
DJIA down -8.68 (-0.06%) at 15,292
Nasdaq up +16.50 (+0.47%) at 3,521
European markets
Eurofirst 300 up +1.07 (+0.09%) at 1,190
FTSE100 down -8.12 (-0.12%) at 6,505
CAC 40 down -3.03 (-0.08%) at 3,841
Dax up +8.73 (+0.11%) at 8,066
Currencies
€/$ 1.31 (1.30)
$/¥ 98.67 (99.64)
£/$ 1.51 (1.50)
Commodities ($)
Brent Crude (ICE) down -0.24 at 108.27
Light Crude (Nymex) up +0.05 at 106.57
100 Oz Gold (Comex) up +33.90 at 1,281
Copper (Comex) up +0.08 at 3.18
10-year government bond yields (%)
US 2.59%
UK 2.43%
Germany 1.66%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.43bps at 100.2bp
Markit iTraxx Europe +1.64bps at 113.57bp
Markit iTraxx Xover +9.58bps at 455.56bp
Markit CDX IG +1.12bps at 86.56bp
Sources: FT, Bloomberg, Markit
