Asian stocks rose, although gains were pared by disappointing China trade data. The Nikkei was 0.1% higher, the Hang Seng and ASX rose 0.4%, while the Kospi fell 0.2%. (Bloomberg)
TODAY: FOMC minutes, and Bernanke speaks at an NBER conference. Two-day BoJ board meeting commenced today.
China's June trade data pointed to a deeper slowdown. Exports fell 3.1% year-on-year, compared to consensus forecasts of 3.7% growth. Imports also fell, by 0.7%. The month-on-month picture was worse; exports fell 4.6% from May, while imports decreased 9.3%. A customs spokesman said the country "is facing serious challenges in foreign trade at present". (Financial Times)(Reuters)
EU set for German clash on bank resolution: The European Commission will propose itself as the single authority for winding down banks in the eurozone, despite German insistence that such a move would breach EU treaties. EU commissioner Michel Barnier is to lay out his final proposal for a single bank resolution mechanism today. German Finance Minister Wolfgang Schaeuble yesterday said he "would strongly ask" the Commission "to be very careful" in its interpretation of the treaty. (Wall Street Journal)(Bloomberg)
Rupert Murdoch has been summoned to reappear before the culture, media and sport select committee following remarks he made in relation to police investigations into press abuses. (Financial Times)
The BoJ is unlikely to ease further this year, according to forecasters: Signs that inflation may eventuate from its actions so far have led to changes in forecasts. "Thirteen of 20 economists in a Bloomberg News survey completed July 8 saw no extra loosening in the next six months, a reversal from a poll in May." The BoJ's July policy board meeting begins today and ends tomorrow. (Bloomberg)
German and French companies to benefit from lower borrowing costs while their peripheral counterparts will continue to struggle. Of a total €42bn reduction in total corporate debt payments over the next five years due to low ECB interest rates, €14bn would go to German companies and €9bn to French. Yet Spain and Portugal will see slightly higher interest rates, according to FT analysis of ECB data. (Financial Times)
The US government has officially designated AIG and GE Capital as "systemically important" financial institutions that will have to hold higher capital reserves. Prudential Financial is appealing against such a designation. (Financial Times) The Fed and FDIC proposed yesterday that the largest US banks hold capital equivalent to 5% of assets, higher than the Basel III standard of 3%. (Financial Times)
COMMENT AND CURIOS:
- Global assets under management exceed 2007-08 levels. (Financial Times)
- John Kay: QE and the curious case of the leaking bucket. (Financial Times)
- The beginning of Libor's rehabilitation. (Financial Times)
- Martin Wolf: Why China won't buy the world. (Financial Times)
- Lex: Bond fund outflows. (Financial Times)
- Japan's government plans to move to 'core CPI' in contrast to BoJ. (Reuters)
- The challenge for Petrobras of 'pre-salt' reserves. (Financial Times)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +14.79 (+0.10%) at 14,488
Topix up +0.70 (+0.06%) at 1,198
Hang Seng up +89.24 (+0.43%) at 20,772
US markets
S&P 500 up +11.86 (+0.72%) at 1,652
DJIA up +75.65 (+0.50%) at 15,300
Nasdaq up +19.43 (+0.56%) at 3,504
European markets
Eurofirst 300 up +9.27 (+0.79%) at 1,189
FTSE100 up +63.01 (+0.98%) at 6,513
CAC 40 up +19.73 (+0.52%) at 3,844
Dax up +89.21 (+1.12%) at 8,058
Currencies
€/$ 1.28 (1.28)
$/¥ 101.01 (101.14)
£/$ 1.49 (1.49)
Commodities ($)
Brent Crude (ICE) down -0.02 at 107.79
Light Crude (Nymex) up +0.75 at 104.28
100 Oz Gold (Comex) down -1.30 at 1,245
Copper (Comex) down -0.02 at 3.05
10-year government bond yields (%)
US 2.64%
UK 2.45%
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
