Asian stock markets rose after better than expected official China PMIs and Fed reassurances about the pace of bond-buying. The MSCI Asia Pacific rose 1%. Shanghai Composite rose 0.9% and the Nikkei was 1.5% higher. (Bloomberg)(Financial Times)
Today: BOE rates decision (Reuters preview) ECB decision, statement and press conference (FT Alphaville preview). US ISM manufacturing survey. Lloyds, Shell, BAE Systems, AstraZeneca reporting.
China's July PMIs paint a conflicting picture: The official manufacturing PMI rose to 50.3, from 50.1 in June, defying expectations for a sub-50 reading. However HSBC/Markit's final PMI for July was 47.7, in line with its earlier flash reading. "The discrepancy between the two readings will renew speculation that Beijing is trying to present a more optimistic picture of the economy in order to shore up confidence in slowing Chinese growth," writes the FT.
Portugal to ask lenders for leniency: "Lisbon is expected to press international lenders for permission to ease up on austerity after a month of political turmoil that threatened to bring down the coalition government and derail the country's €78bn bailout programme." A senior western diplomat in Lisbon said on Wednesday the government was certain to ask the EU and IMF for more leeway on fiscal targets, something analysts have been anticipating since fractures in the ruling coalition over austerity policies caused political turmoil in the past month. (Financial Times)
"S.& P. has been giving higher grades than its big rivals to certain mortgage-backed securities just as Wall Street is eagerly trying to revive the market for these investments, according to an analysis conducted for The New York Times by Commercial Mortgage Alert, which collects data on the industry. " (NYT DealBook)
BP has reversed course on the sale of its US wind farm assets, which had been seen as part of the oil and gas group's wider retreat from alternative energy. The planned sale was announced in April when the 16 farms in nine states were expected to fetch $1.5bn. The company told the FT it received several bids, but gave no reason for pulling the sale. Values for wind assets have generally been declining. (Financial Times)
"Shipping giant China Cosco is considering selling key property assets to its state-owned parent as part of the company's plans to return to profit this year, people familiar with the situation said, with a deal likely as soon as late August," says the WSJ. If completed the deal would be Cosco's third asset sale this year as it seeks to avoid a third consecutive year of losses, which would lead to an automatic delisting in Shanghai.
Australian manufacturing slumped in July, with the AIG PMI falling to 42 from 49.7 a month earlier. (Bloomberg)
Earlier: IMF warns of €11bn Greek bailout shortfall (Financial Times) EADS to be renamed Airbus in shakeup (Financial Times)
COMMENT AND CURIOS:
- Is the ECB learning how to manage its message? (FT Money Supply)
- Look! Facebook shares are approaching their IPO price. (Wall Street Journal)
- David Pilling: The perils of riding China's coattails for LatAm countries. (Financial Times)
- Five key charts from the US GDP makeover. (Financial Times)
- Big banks are still struggling with bond rate rises. (Wall Street Journal)
- John McDermott: After 15 years, the UK minimum wage is an example of good policy. (Financial Times)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +214.65 (+1.57%) at 13,883
Topix up +23.22 (+2.05%) at 1,155
Hang Seng up +126.61 (+0.58%) at 22,010
US markets
S&P 500 down -0.23 (-0.01%) at 1,686
DJIA down -21.05 (-0.14%) at 15,500
Nasdaq up +9.90 (+0.27%) at 3,626
European markets
Eurofirst 300 up +1.99 (+0.16%) at 1,208
FTSE100 up +50.11 (+0.76%) at 6,621
CAC 40 up +6.08 (+0.15%) at 3,993
Dax up +4.95 (+0.06%) at 8,276
Currencies
€/$ 1.33 (1.33)
$/¥ 98.30 (97.86)
£/$ 1.52 (1.52)
Commodities ($)
Brent Crude (ICE) up +0.19 at 107.89
Light Crude (Nymex) up +0.40 at 105.43
100 Oz Gold (Comex) up +7.30 at 1,320
Copper (Comex) up +0.02 at 3.14
10-year government bond yields (%)
US 2.59%
UK 2.37%
Germany 1.67%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.39bps at 91.53bp
Markit iTraxx Europe +0.07bps at 99.99bp
Markit iTraxx Xover +2.49bps at 404.17bp
(CDX IG levels will return soon)
Sources: FT, Bloomberg, Markit
