Asian stocks were weaker and Treasury yields remained elevated after yesterday's US jobless claims and CPI data raised expectations Fed taperin would begin next month. The Nikkei was down 0.7% and the Topix fell 0.6%, but Shanghai Composite surged more than 3%, prompting the exchange to say it is investigating a spike. The NZ dollar fell after a 6.2 magnitude earthquake was reported near Wellington. (Reuters)(Bloomberg)
Today: EU trade, current account, CPI. US housing starts. Reuters/University of Michigan Consumer Sentiment Index.
A tense quiet settled over Cairo as the city braced for new protests by supporters of the ousted president, Mohamed Morsi, after the Friday Prayer. By last night, health officials had counted 638 dead and nearly 4,000 injured, but the final toll was expected to rise further. (New York Times) The UN Security Council held an emergency meeting on Thursday evening to discuss the situation in Egypt. Diplomats said the council was unlikely to issue a statement after the meeting. (Financial Times)
China and Japan led a record outflow of Treasuries in June: The two countries accounted for nearly all of $40.8bn of net foreign selling of Treasuries. It was the fifth straight month that foreign investors sold off the broader category of long-term US securities, "but the specific selling of long-term government bonds was the big turnaround as foreigners had bought $11.3bn of Treasuries in May". (Reuters)
UK zombie bank builds brand: State-owned UK Asset Resolution, responsible for winding down Northern Rock and Bradford & Bingley mortgages, is rebranding the websites of the two nationalised banks. Although UKAR will not start to sell products, it hopes that by raising its profile, its mortgage holders will be encouraged to pay down their debt. (Financial Times)
Foreign banks in talks over Chinese bad bank: Goldman Sachs, Deutsche Bank and Morgan Stanley have held talks with one of China's biggest "bad banks", Huarong, about investing in its $1.5bn stake sale ahead of a planned Hong Kong listing next year, according to people close to the process. The move is one sign that the Chinese government rely more on market driven remedies than state bailouts for the next round of problem loans emerging from China's credit boom. (Financial Times)
China may probe US tech giants: "China's Ministry of Public Security and a cabinet-level research center are preparing to probe IBM Corp, Oracle Corp and EMC Corp over security issues, the official Shanghai Securities News said on Friday." (Reuters)
Chinese copper premiums reached a record level: The closely-watched spread between physical and benchmark futures prices has more than tripled since the start of the year to more than $200 a tonne, traders say. (Financial Times)
Singapore house prices are falling, and its streak of employment growth is about to slow down. (Wall Street Journal)(Bloomberg)
The importance of separating immigration from employment status.
Spot the difference, Herbalife edition.
What we think about the Hindenburg Omen.
Divorce, a 'fantastic charade', and offshore finance.
The history of the robot future's future history.
COMMENT AND CURIOS:
- Fears over risky links between China's banks and its "childlike" bond markets. (Wall Street Journal)
- Find out if you'd have passed A-level economics. (Financial Times)
- Tim Harford: How the wealthy keep themselves on top. (Financial Times)
- Mark Roe: Will whale indictments just create a false sense of safety? (Financial Times)
- Deflating housing bubble is getting the Dutch down. (Financial Times)
- The Buffett fan making big returns on Chinese stocks. (Bloomberg)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -92.95 (-0.68%) at 13,660
Topix down -7.33 (-0.64%) at 1,144
Hang Seng up +122.66 (+0.54%) at 22,662
US markets
S&P 500 down -24.07 (-1.43%) at 1,661
DJIA down -225.47 (-1.47%) at 15,112
Nasdaq unchanged 0.00 (0.00%) at 3,606
European markets
Eurofirst 300 down -12.51 (-1.01%) at 1,228
FTSE100 down -104.09 (-1.58%) at 6,483
CAC 40 down -21.00 (-0.51%) at 4,093
Dax down -61.83 (-0.73%) at 8,376
Currencies
€/$ 1.33 (1.33)
$/¥ 97.57 (97.47)
£/$ 1.56 (1.56)
Commodities ($)
Brent Crude (ICE) up +0.12 at 109.72
Light Crude (Nymex) up +0.03 at 107.36
100 Oz Gold (Comex) up +9.40 at 1,371
Copper (Comex) up +0.02 at 3.36
10-year government bond yields (%)
US 2.77%
UK 2.68%
Germany 1.88%
CDS (closing levels)
Markit iTraxx SovX Western Europe +1.16bps at 89.49bp
Markit iTraxx Europe +4.58bps at 99.23bp
Markit iTraxx Xover +17.5bps at 412.73bp
Markit CDX IG returning soon.
Sources: FT, Bloomberg, Markit
