Asian stocks rose after positive manufacturing data from the US and Europe yesterday, with the Nikkei and Topix both surging more than 2.5%. The yen weakened. (Bloomberg)
Today: Day 2 of Jackson Hole. US new home sales.
Three-hour Nasdaq outage raises fresh fears about exchange fragility; SEC calls meeting. Trade resumed 35 minutes before the close. Officials "shared few of their findings with trading firms or the public during regular trading hours, sowing confusion across Wall Street and leaving many investors frustrated". In March, the SEC proposed a rule to require big market participants, including exchanges and self-regulatory organisations, to "design, develop, test, maintain and surveil systems that are integral to their operations". New SEC chair Mary Jo White hasn't weighed in on the rule and her views are not known, but she has called a meeting with exchange executives. (Financial Times)(Wall Street Journal)(Bloomberg)(FastFT)
Moody's may downgrade biggest US banks: "Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo could be downgraded, the rating agency said on Thursday. The ratings of Bank of America and Citigroup are also under review, but with "direction uncertain", Moody's said. The review follows a similar statement from rival Standard & Poor's in June.
Brazil's central bank announced a $60bn currency programme to ensure liquidity and reduce volatility in the nation's foreign exchange market. It will start today and be conducted through currency swap and repurchase agreements. While initially welcomed by the Brazilian government, the real's rapid depreciation against the USD has started to make policy makers nervous it could boost inflation. (Financial Times)
John Lewis staff get £40m after years of holiday pay miscalculations. "The £40m charge will take a chunk out of first-half profits, which will be announced in September, and John Lewis stressed that it would not raid the staff bonus pool to cover the costs." (Financial Times)
Chinese FDI rises more rapidly: "China drew $71.4 billion in foreign direct investment (FDI)in the first seven months of 2013, up 7.1 percent from the same period of 2012, the Commerce Ministry said." The growth rate in July alone was much higher, at 24.1%, compared to 20.1% in June. (Reuters)
CFTC readies HFT road-map: The regulator's road map could be released as early as next week and could pave the way to more direct scrutiny of high frequency trading, says commissioner Scott O'Malia. The report runs more than 100 pages and will address issues ranging from how to control runaway trading algorithms that can wreak havoc in the market to whether high-frequency firms should register with the government.
ON FT ALPHAVILLE:
Nasdaq takes extended lunch break.
What to expect from Jackson Hole.
Reading those creaking EM positions.
COMMENT AND CURIOS:
- Gillian Tett: Central banks should master the art of storytelling. (Financial Times)
- Bernanke, the audacious pragmatist. (New York Times)
- A 10% equities correction = Yellen gets the Fed job. (Financial Times)
- Zombie borrowers are haunting China's shadow banks. (Reuters)
- The escalating role of central banks in EM currency. (Wall Street Journal)
- Goldman et al should be forced to incur losses on mistaken trades, says Myron Scholes. (Financial Times)
- Samuel Brittan: Productivity matters, but it's not everything. (Financial Times)
- Editorial: Fed could be slightly more concerned at market reaction to tapering. (Financial Times)
- UK banks made commissions of up to 60% on mis-sold credit card insurance. (Financial Times)
- Former Alphavillain John McDermott has a new blog. (FT Off Message)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 up +338.32 (+2.53%) at 13,703
Topix up +28.16 (+2.52%) at 1,148
Hang Seng up +115.67 (+0.53%) at 22,011
US markets
S&P 500 up +14.16 (+0.86%) at 1,657
DJIA up +66.19 (+0.44%) at 14,964
Nasdaq up +38.92 (+1.08%) at 3,639
European markets
Eurofirst 300 up +11.32 (+0.94%) at 1,219
FTSE100 up +56.03 (+0.88%) at 6,447
CAC 40 up +44.03 (+1.10%) at 4,059
Dax up +112.48 (+1.36%) at 8,398
Currencies
€/$ 1.33 (1.34)
$/¥ 98.99 (98.71)
£/$ 1.56 (1.56)
Commodities ($)
Brent Crude (ICE) up +0.32 at 110.22
Light Crude (Nymex) up +0.03 at 105.06
100 Oz Gold (Comex) up +4.00 at 1,375
Copper (Comex) unchanged 0.00 at 3.33
10-year government bond yields (%)
US 2.91%
UK 2.74%
Germany 1.92%
CDS (closing levels)
Markit iTraxx Europe -2.84bps at 103.11bp
Markit iTraxx Xover -11.78bps at 420.56bp
Markit CDX IG (Returning soon)
Sources: FT, Bloomberg, Markit
