Japanese equities rebounded after Monday's losses linked to disappointment over the Q2 GDP data, while a weaker yen and a report prime minister Shinzo Abe called for a study into cutting corporate tax. The Nikkei rose 1.6% and the Kospi was up 1.2%. Chinese shares retreated on profit-taking. (Financial Times)(Bloomberg)
Today: UK CPI, PPI, Retail Price index, ONS House Price index. EU Industrial production. German CPI, ZEW Economic sentiment. US fetail sales, import prices, business inventories.
Japan's core machinery orders rose 4.9% in June from a year earlier, exceeding economist estimates for a 2.6% gain. (Bloomberg)
The BoJ minutes were cautiously optimistic, referring to the recovery beginning as with last week's meeting statement, but also warning of uncertainty's for the country's economy, "including the prospects for the European debt problem, developments in the emerging and commodity-exporting economies, and the pace of recovery in the U.S. economy". (FastFT)(Statement)
German regulator to order Deutsche Bank to tighten controls after Libor review: Bafin "is expected to submit a finished report to the bank later this week, addressing failings and ordering improvements as it starts to conclude its investigation into alleged rigging of interest rates, according to a person close to the investigation." (Wall Street Journal)
The CFTC has subpoenaed companies including Goldman Sachs, JPMorgan Chase and Glencore as it ramps up its probe into the metals warehousing industry. (Financial Times) "The source... said the CFTC's enforcement division has asked the firm that has received the subpoena to send, by August 23, every document, communication, voice recording, correspondence and external and internal emails related to the LME since January 2010." (Retuers)
UK government faces pressure to drop Help to Buy extension: "Experts say the government should consider abandoning the second stage of the Help to Buy scheme, set to launch next year, which critics fear will further boost demand for housing without increasing supply." Loans to first-time buyers were up sharply in July from a year earlier, but house prices have already topped their previous 2008 peak, according to the LSL/Acadametrics Index, while CML's data shows first-time buyers are already having to borrow more because of the recent growth in house prices.
Former Goldman managers start Asia hedge fund: "Three former managing directors of Goldman Sachs' Japan business plan to start an Asia multi-strategy hedge fund early next year, according to two people with knowledge of the matter. Koji Gotoda and Takayuki Kasama have incorporated Golvis Investment Pte in Singapore, said the people [...]" (Bloomberg)
Tesla founder unveils Hyperloop concept. However Elon Musk has no plans to build it himself. (Financial Times)
Blackstone raises bet on US rental property: The private equity group is buying into a portfolio of 80 buildings in a deal with GE Capital. "The deal valuing the portfolio at about $2.7bn will give Blackstone a majority stake in apartment complexes with roughly 30,000 units in the southern United States, according to people familiar with the matter. It was not immediately clear how much equity the firm will put forward." (Financial Times)
ON FT ALPHAVILLE:
Mohammed El-Erian: Bond market sees yesterday's FRBSF Economic Letter as support for tapering.
Does China have too many unpopular cities?
The great Chinese collateral trade, illustrated.
COMMENT AND CURIOS:
- Sterling strength is unlikely to last. (Financial Times)
- How the crisis made Yellen harden her stance on bank regulation. (Wall Street Journal)
- Roger Altman: The Fed needs Summers' firefighting skills. (Financial Times)
- Today's bank chiefs are boring. (Wall Street Journal)
- Asian banks could be caught napping over junior bond issuance. (Financial Times)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +220.65 (+1.63%) at 13,740
Topix up +13.87 (+1.22%) at 1,148
Hang Seng up +161.55 (+0.73%) at 22,433
US markets
S&P 500 down -1.95 (-0.12%) at 1,689
DJIA down -5.83 (-0.04%) at 15,420
Nasdaq up +9.84 (+0.27%) at 3,670
European markets
Eurofirst 300 up +0.45 (+0.04%) at 1,230
FTSE100 down -9.05 (-0.14%) at 6,574
CAC 40 down -4.87 (-0.12%) at 4,072
Dax up +20.94 (+0.25%) at 8,359
Currencies
€/$ 1.33 (1.33)
$/¥ 97.30 (96.85)
£/$ 1.55 (1.55)
Commodities ($)
Brent Crude (ICE) up +0.01 at 108.98
Light Crude (Nymex) up +0.04 at 106.15
100 Oz Gold (Comex) up +1.10 at 1,336
Copper (Comex) unchanged 0.00 at 3.31
10-year government bond yields (%)
US 2.63%
UK 2.48%
Germany 1.71%
CDS (closing levels)
Markit iTraxx SovX Western Europe returning soon
Markit iTraxx Europe -0.2bps at 95.66bp
Markit iTraxx Xover -2.09bps at 398.03bp
Markit CDX IG returning soon
Sources: FT, Bloomberg, Markit
