Asian shares rose as the yen weakened and after mixed data from Japan. The Nikkei was 1.5% higher and the Kospi rose 0.8% after South Korea's industrial production rose 0.4% in June, more than expected. (Bloomberg)(Financial Times)
Today: European consumer confidence, business climate. German CPI. US Pending house sales, Case-Shiller home price index. Italy's supreme court is expected to decide whether to uphold Silvio Berlusconi's tax fraud conviction.
Japan's industrial production rate fell the most since the March 2011 earthquake, with a 3.3% decline in output in June from the previous month. Although it far exceeded consensus forecasts for a 1.5% drop, analysts said the June decline was probably temporary and would be offset by a bigger rise in July. The jobless rate was 3.9%, the lowest since 2008, and better than the 4.1% expected, raising hopes for inflationary pressure. (Bloomberg)(Wall Street Journal)
Barclays will today launch a £5bn-plus rights issue, as it seeks to meet British regulatory requirements on leverage, according to two people briefed on the transaction. CEO Anthony Jenkins will also unveil plans to reduce the balance sheet in order to achieve a core tier one capital ratio of around 9.5%. under "fully-loaded" Basel III rules, according to one person briefed on the plans. (Financial Times)
Italian banks' loan books being quietly reviewed: "The Bank of Italy is quietly inspecting the finances of some of the country's top lenders, which could push some Italian banks to sell assets or take other major steps, according to a central-bank document reviewed by The Wall Street Journal." (Wall Street Journal)
JPMorgan Chase was expected to announce a settlement of about $400m with the US Federal Energy Regulatory Commission as early as today, after being formally charged with rigging power markets in California and the Midwest. Ferc said yesterday that the bank's traders had engaged in eight "manipulative bidding strategies" that generated "tens of millions of dollars at rates far above market prices" in 2010 and 2011. An announcement could come as early as mid-morning EDT. (Financial Times)(Reuters)
China's central bank made a net injection via open market operations for the first time since February. Interbank rates have again been rising as the end of the month approaches. (Reuters)
Appetite for subordinated bank debt grows: Global issuance rose 124% in the first half of 2013 compared with the same period last year. According to Moody's, the issuance rebound has been particularly strong in North America, jumping from $2.1bn in the first half of 2012 to $21.7bn.(Financial Times)
US money market funds have nearly doubled their allocations to European banks over the past 12 months, according to Fitch. In the first half of 2013, MMFs allocated about 15% of their $625bn in assets to European bank deposit and securities. (Financial Times)
Apple says it will investigate allegations of underage workers, forced overtime and insufficient wages at Pegatron, a key supplier. New York-based group China Labor Watch found at least 86 labor rights violations while investigating three Pegatron factories from March to July, it said in a report issued today. Pegatron also said it would investigate the allegations. (Bloomberg)
Prince Alwaleed warned US shale gas posed a threat to Saudi oil revenues, in an open letter addressed to oil minister Ali Naimi. (Financial Times)
FT ALPHAVILLE:
Deposing Bernanke.
What to look for from central banks this week.
France shows more esprit than Washington surrender monkeys on pari passu.
COMMENT AND CURIOS:
Michael Pettis on the Chinese growth rate that really matters: median household income. (Financial Times)
- Mike Konczal: Bernanke did well, but the Fed must do better. (Financial Times)
- Analysis: Civil activists pose a growing threat to the Communist party. (Financial Times)
- Banks' physical commodities' businesses: how much will they quit before being pushed? (Reuters)
- Cross-border equity ownership could solve Europe's mal-integration. (Financial Times)
OVERNIGHT MARKETS:
Asian markets
Nikkei 225 up +194.79 (+1.43%) at 13,856
Topix up +20.70 (+1.83%) at 1,149
Hang Seng up +146.17 (+0.67%) at 21,996
US markets
S&P 500 down -6.32 (-0.37%) at 1,685
DJIA down -36.86 (-0.24%) at 15,522
Nasdaq down -14.02 (-0.39%) at 3,599
European markets
Eurofirst 300 up +0.85 (+0.07%) at 1,206
FTSE100 up +5.46 (+0.08%) at 6,560
CAC 40 up +0.07 (0.00%) at 3,969
Dax up +14.12 (+0.17%) at 8,259
Currencies
€/$ 1.32 (1.33)
$/¥ 98.31 (97.94)
£/$ 1.53 (1.53)
Commodities ($)
Brent Crude (ICE) down -0.18 at 107.27
Light Crude (Nymex) down -0.23 at 104.32
100 Oz Gold (Comex) down -1.10 at 1,327
Copper (Comex) down -0.01 at 3.09
10-year government bond yields (%)
US 2.60%
UK 2.33%
Germany 1.67%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.4bps at 92.24bp
Markit iTraxx Europe +0.81bps at 103.31bp
Markit iTraxx Xover +1.4bps at 414.47bp
[CDX IG will be back soon]
Sources: FT, Bloomberg, Markit
