Good morning New York,
FT ALPHAVILLE
Why so calm JGB's: An interesting aside to the consumption tax argument from BNP Paribas' Ryutaro Kono — why have JGB markets been so calm? It was only recently that their flighty side was being discussed. So why has there been so little reaction to reports that Abe et al might change the timing or scale of the consumption tax?
Boron Group Metals pricing update: Rio Tinto's problems with its aluminium business are well documented. But, as Neil notes, things could have been worse without all that warehousing shenanigans from Goldman et al.
NEWS
América Móvil in €7.2bn KPN bid: Carlos Slim's América Móvil has made a bid to acquire KPN, the 160-year-old former Dutch telecoms monopoly, in a cash offer for the 70 per cent not already owned by the Mexican group. América Móvil, the telecoms company controlled and chaired by the billionaire, has offered €2.40 per share for KPN, which represents a 20 per cent premium to the closing price on Thursday of €2. (Financial Times) Shares in KPN opened up 18 per cent on Friday at €2.38 in Amsterdam. Before that rise, the shares had lost half their value in the past year.
China's consumer inflation steady. CPI rose 2.7% in July from a year earlier, the same pace as in June and still well below Beijing's 3.5% upper annual limit. Producer price inflation declined for the 17th consecutive month, at -2.3% year-on-year compared to -2.7% in June. The rates were close to consensus forecasts from Reuters survey, of 2.8% for CPI and -2.2% for producer prices. "The latest figures will add weight to calls from some economists and officials for China to cut interest rates to help boost slowing growth in the world's second-largest economy." (Financial Times)(Reuters)
News Corp Australia chief resigns after less than two years: Kim Williams, the head of News Corp's Australian business, has resigned after less than two years in the job and will be replaced by a former newspaper executive. News Corp said Mr Williams would be succeeded by Julian Clarke, a former chairman of its Herald and Weekly Times division, which publishes Australia's biggest selling paper, Melbourne's Herald Sun. (Financial Times)
Lending to UK landlords is surging to a near five-year high, helped by low interest rates and government policies such as the Help to Buy scheme. Over £5bn of buy-to-let mortgages were advanced by UK lenders in the second quarter of the year, up 21 per cent from the previous quarter and nearly a third higher than a year ago. (Financial Times)
JPMorgan in talks with the SEC over a rare admission of wrongdoing over the London Whale losses, after decades of settlements allowing defendents to neither admit nor deny wrongdoing. "People familiar with discussions between the bank and regulators including the Securities and Exchange Commission said JPMorgan had conceded it would have to pay some amount of money and acknowledge failures around disclosure and controls ." (Financial Times) "A pact could come as soon as this fall, according to people briefed on the case, who added that the agency had not threatened to charge JPMorgan executives in the case." (NYT Dealbook)
Norway's $760bn SWF is stepping up its efforts to be a more active investor by appointing a corporate governance advisory board. "(T)he vehicle is seeking to play a bigger role in selecting board directors at its biggest shareholdings such as Sweden's Volvo Group. It's appointing three British corporate governance and financial experts to its board: Peter Montagnon, formerly of the Association of British Insurers; John Kay, a Financial Times columnist and author of a UK review into long-term decision-making in equity markets; and Tony Watson, a director at Vodafone,Lloyds Banking Group and Hammerson, and a former chief executive of investor Hermes.(Financial Times) The fund "raised the share of equity holdings to 63.4 percent from 62.4 in Q1, marking an almost 4 percentage point jump from a year earlier." (Reuters)
"U.K. supermarket chain Tesco is in talks with China Resources Enterprise to form a joint venture in China, where foreign retailers have struggled to expand market share." (Wall Street Journal)
Italy plans more austerity, lower company tax. Economy minister Fabrizio Saccomanni said the slow growth wasn't enough enough to return to pre-crisis levels, and acknowledged that political tensions could complicate the government's plans to push a new round of reforms in the autumn. (Wall Street Journal)
Dutch turning against austerity: A trade union rally yesterday "marks a slow but significant shift, as this prosperous Calvinist country, once strongly committed to austerity, has gradually turned against it. " (Financial Times)
Australia's central bank cuts its forecast for this year's growth to 2.25% from 2.5% in May; but said the the fall in the AUD could help the country shift away from its recent dependence on commodities. (FastFT)
"The U.S. Department of Justice has stepped up a probe in recent weeks into Bear Stearns mortgage dealings in the run-up to the financial crisis, adding to JPMorgan Chase & Co's legal problems, according to three sources familiar with the situation." (Reuters)
"BlackBerry Ltd is warming up to the possibility of going private, as the smartphone maker battles to revive its fortunes, several sources familiar with the situation said." (Reuters)
Mark Carney played down scepticism on rates. "The move in markets is very marginal in terms of the expected rise . . . measured in terms of months – that's the first thing," Mr Carney told Sky News on Wednesday, adding that the BoE had provided "as much clarity as we can". (Financial Times)
Vale says Chinese steel output will grow 10% this year. (Bloomberg)
Markets: Moves across asset classes are generally mild and fairly muddled in the week's final session, however, as traders remain wary of holiday-thinned markets – at the height of the northern hemisphere summer many countries are also on holiday for the end of Ramadan – and some dealers exhibit caution ahead of a potential shift in Federal Reserve policy. The dollar index is barely changed as the euro rises just 2 pips to $1.3381. The 10-year US bond yield is adding 1 basis point to 2.60 per cent, and gold is falling $3 to $1,309 an ounce. The FTSE All-World equity index is marginally firmer at 248.3 – fewer than 2 points below its best closing level since June 2008 – as the FTSE Eurofirst 300 gains 0.2 per cent at the open. Asian bourses were mixed, leaving the FTSE Asia-Pacific index down 0.2 per cent. US index futures suggest the S&P 500 in New York will open flat at 1,697.5, leaving the benchmark less than 1 per cent below the record close hit a week ago writes the FT's Global Markets albatross Jamie Chisholm.
