Good morning New York,
FT ALPHAVILLE
Will this be the ZLB/repo/collateral-scarcity solution we've been waiting for? Cardiff analyses the chances of a considerable change in how the Federal Reserve conducts monetary policy thanks to a little noticed paragraph in the FOMC minutes to the July meeting. As he notes, Simon Potter of the New York Fed discussed with the committee a possible addition to the Fed's set of tools for tightening policy when the time comes — a "fixed-rate, full-allotment overnight reverse repurchase agreement facility". It's a technical move that could address the collateral scarcity problem.
Nothing screams shadow banking quite like a leveraged loan ETF: They are billed as a quick and easy way for investors to gain access to higher-yielding assets while still providing some protection if interest rates start to rise. Tracy takes us through the weird and wonderful world of ETFs which track portfolios of (floating-rate) bank loans.
NEWS
MPs step up campaign for break-up of RBS: In a letter in Tuesday's Financial Times, the influential Parliamentary Commission on Banking Standards has said it is "important for all the options for [RBS's] future structure to be examined as a matter of urgency". It is believed in Westminster that RBS and Treasury officials will try to scupper a good bank-bad bank split. (Financial Times)
India's reserves squeezed as investors shun rupee assets: India's foreign exchange reserves have dropped by nearly $14bn since the end of March and are set to dwindle further as international investors shun the rupee and other emerging market assets in favour of the US dollar, according to economists and market analysts. (Financial Times)
Blavatnik wins $50m in JPMorgan lawsuit: Len Blavatnik, the billionaire investor, has won a claim for breach of contract in a lawsuit against JPMorgan Chase, delivering a fresh blow against a bank at the centre of a legal firestorm. (Financial Times)
US Treasury to hit debt limit in mid-October: The Treasury Department said it would hit its borrowing limit in mid-October and be unable to pay all of its bills soon after that time, narrowing the window the White House and Congress have to maneuver on budget talks. The deadline, which is sooner than many on Capitol Hill had expected, gives a sobering jolt to a number of fiscal discussions that have faltered for months. (Wall Street Journal)
Nationwide steps back from SME loans: Nationwide, the UK's largest building society, has delayed its launch into the small business banking market until 2016, dealing a blow to the government's efforts to boost lending to these customers. (Financial Times)
Ackman puts JC Penney stake up for sale: Bill Ackman has put his stake in JC Penney up for sale as the hedge fund manager prepares to end three years as the biggest shareholder in the department storewhere he has lost at least 40 per cent of his original investment. (Financial Times)
Foxtons sets out plans for IPO: The UK estate agent confirmed its intention to launch an initial public offering as it set out plans to offer new shares and raise £55m in order to pay down the remainder of its debt. (Financial Times) (Bloomberg)
HKEx picks Garry Jones to head LME: Garry Jones, former chief executive of NYSE Liffe, has been appointed head of the London Metal Exchange. (Financial Times)
Emerging Europe resists EM sell-off: Stock markets in Central and Eastern Europe are up 1.2 per cent in the past three months, compared with a 7.5 per cent drop in emerging markets overall, according to index provider MSCI. These markets have risen 2.3 per cent when Russian companies, which have been hard hit by falling commodity prices, are excluded. (Wall Street Journal)
Markets: Stocks were under pressure as investors took some growth-focused bets off the table amid fretting over possible western military intervention in Syria's civil war. Brent crude was up 26 cents to $110.99 a barrel, flirting with its most expensive level in nearly five months as worries built about disruption in supplies. Gold was holding near three-month highs and some emerging market assets are again suffering heavy selling. Weakness in banks and miners helped push the FTSE Eurofirst 300 down 0.5 per cent after the FTSE Asia Pacific index lost 0.6 per cent. Both regions were tracking a late sell-off on Wall Street on Monday, where equities turned tail following a televised address from US secretary of state John Kerry, who said President Barack Obama would hold Syria's government accountable for the "moral obscenity" of using chemical weapons. US index futures suggested the S&P 500 would fall a further 3 points to 1,654 when the starting bell rings on Tuesday.
