"Asian stocks dropped for a second day, credit risk climbed and oil rose on concern the U.S. will take military action against Syria. Australia's dollar weakened, while U.S. stock futures gained." The MSCI Asia Pacific fell 1.6%, with emerging economies falling most, including the Philippines benchmark which dropped as much as 5.7% in morning trade, and Indonesia which fell 3%. (Bloomberg)(FastFT)
Today: Mark Carney speaks (FT preview). US pending home sales for July. EU money supply.
US demands $6bn JP Morgan MBS penalty: Authorities are demanding the bank pay more than $6bn to settle allegations it mis-sold securities to government-backed mortgage companies in the run-up to the financial crisis, according to people familiar with the discussions. It relates to legal action by the Federal Housing Finance Agency launched against 18 banks in 2011, which alleged JP Morgan falsely claimed that loans backing $33bn of MBS. The bank is resisting the payment, which would be one of the biggest post-crisis settlements of any bank. (Financial Times)
'London whale' penalties put at $500m - $600m. The settlement that could wrap up as soon as next month, according to people close to the situation. However the investigation involves numerous US regulators, the Department of Justice, and the UK's Financial Conduct Authority, and not all have agreed to final numbers. (Wall Street Journal)
Nationwide buys back securities to boost capital: Building society "has launched an offer to buy back up to £715m in bond-like instruments in an attempt to shore up its capital base after a multibillion pound shortfall." However Nationwide said it hadn't launched the buyback of permanent interest bearing shares at the behest of the PRA, which said in June the building society fell short of the 3% leverage ratio. (Financial Times)
Brent oil rose 3.3% to a six-month high of $114.35 a barrel as the prospect of western military intervention in Syria unsettled investors. (Financial Times)
Currency pairs show end of month surge pattern: "The same pattern -- a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal -- occurred 31 percent of the time across 14 currency pairs over two years, according to data compiled by Bloomberg." (Bloomberg)
Fonterra contamination didn't contain botulism-causing bacteria, say NZ authories. (Reuters)
NYT, Twitter, HuffPost hacked by Syrian group: "Media companies including the New York Times, Twitter and the Huffington Post lost control of some of their websites Tuesday after hackers supporting the Syrian government breached the Australian Internet company that manages many major site addresses." (Reuters)
ON FT ALPHAVILLE:
- Argentine roulette.
- What is the value of the unique?
COMMENT AND CURIOS:
- Central bankers are tired of trying to reason with you people. (Financial Times)
- Is the fall in US corporate debt issuance just a seasonal lull? (Financial Times)
- John Plender: Has the Fed's QE hurt emerging markets more than it helped the US? (Financial Times)
- EM rout's selectivity shows investors can distinguish between developing countries. (Wall Street Journal)
- Matthew Klein: EMs should quit whining. (Bloomberg)
- The new M&A bottleneck: regulation in numerous countries. (Financial Times)
- Editorial: Every shareholder and manager should be an activist. (Financial Times)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -256.38 (-1.89%) at 13,286
Topix down -27.28 (-2.41%) at 1,107
Hang Seng down -380.49 (-1.74%) at 21,494
US markets
S&P 500 down -26.30 (-1.59%) at 1,630
DJIA down -170.33 (-1.14%) at 14,776
Nasdaq down -79.05 (-2.16%) at 3,579
European markets
Eurofirst 300 down -21.16 (-1.73%) at 1,202
FTSE100 down -51.13 (-0.79%) at 6,441
CAC 40 down -98.40 (-2.42%) at 3,969
Dax down -192.59 (-2.28%) at 8,243
Currencies
€/$ 1.34 (1.34)
$/¥ 97.02 (97.02)
£/$ 1.55 (1.55)
Commodities ($)
Brent Crude (ICE) up +2.62 at 116.98
Light Crude (Nymex) up +2.93 at 111.94
100 Oz Gold (Comex) down -3.10 at 1,418
Copper (Comex) unchanged 0.00 at 3.33
10-year government bond yields (%)
US 2.73%
UK 2.80%
Germany 1.85%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.75bps at 88.23bp
Markit iTraxx Europe +6.53bps at 107.16bp
Markit iTraxx Xover +25.17bps at 437.17bp
Markit CDX IG +1.12bps at 86.56bp
Sources: FT, Bloomberg, Markit
