Asian shares rose, as fears of a strike on Syria faded and US Q2 growth was revised upwards overnight. However Japanese benchmarks fell on CPI and industrial production data. Jakarta's main index rose 0.8% and the Kospi was 0.5% higher. (Financial Times)
Today: UK mortgage approvals, consumer credit. EU unemployment, CPI. US personal income, Chicago PMI, consumer sentiment.
Japan's 5-year CPI high mostly due to energy: Japan's CPI rose to an annual rate of 0.7% in July, its highest level in almost five years, and more than the 0.6% of consensus forecasts. The headline figure is likely to be viewed with some satisfaction by policy makers trying to overturn deflation in Japan, excluding energy and fresh food means the index is only 0.1% higher. Meanwhile industrial production growth missed expectations at 3.2% versus 3.6% consensus. (Financial Times)(FastFT)
Vodafone nears Verizon Wireless stake sale. "The UK's Vodafone is closing in on a near-$130bn deal to offload its lucrative US wireless stake to joint venture partnerVerizon, underlining the shift of power in the telecoms industry from Europe to the Americas." The deal would be the biggest ever, and Vodafone's second deal topping $100bn. (Financial Times)(Bloomberg)
US-Swiss tax evasion accord reached. While it will give Swiss banks the chance to lay to rest a simmering dispute over their alleged role in helping Americans evade taxes, it will also mean they have to provide the US with details of their cross-border business and, in some cases, also have to pay heavy fines. However the agreement may also pave the way for the large 'category one' banks already under investigation to reach settlements of their own. (Financial Times)
India's central bank may buy gold from citizens to support rupee and curb imports. "A pilot project will be launched soon, a source familiar with the Reserve Bank of India's (RBI) plan told Reuters, although the idea was met with some scepticism." (Reuters)
KPN foundation blocks Carlos Slim's €7.2bn bid: Investors were blind-sided by the independent foundation, which is charged with protecting the telecoms group, rejecting the América Móvil bid, "after a week in which the deal appeared to have cleared significant hurdles". (Financial Times)
The Fed is considering a repo tool to smooth monetary policy. The "fixed-rate, full-allotment overnight reverse repo" facility "has the potential to change the fundamental structure of short-term lending markets; alleviate collateral scarcity; reinforce the push for simpler bank capital regulation; and approximate a Fed backstop for big swathes of US money markets". (Financial Times)(FT Alphaville, earlier)
"Federal Reserve staffers violated in March the central bank's rules for handling the minutes from policy meetings before their public release, the central bank's inspector general said in a report released Thursday." (Wall Street Journal)
COMMENT AND CURIOS:
- The rupee is now the most volatile currency. (Bloomberg)
- And the Shanghai Composite has risen 5.2% in August, amid the EM rout. (Wall Street Journal)
- Sebastian Dullien: The German economic miracle is running out of road. (Financial Times)
- Gillian Tett: The hedge fund succession problem. (Financial Times)
- Investors in UK bonds benefit from dearth of new supply. (Wall Street Journal)
- Norway's oil fund faces reform troubles. (Financial Times)
OVERNIGHT MARKETS: MIXED
Asian markets
Nikkei 225 down -59.16 (-0.44%) at 13,401
Topix down -7.41 (-0.66%) at 1,109
Hang Seng down -13.68 (-0.06%) at 21,691
US markets
S&P 500 up +3.21 (+0.20%) at 1,638
DJIA up +16.44 (+0.11%) at 14,841
Nasdaq up +26.95 (+0.75%) at 3,620
European markets
Eurofirst 300 up +8.49 (+0.71%) at 1,207
FTSE100 up +52.99 (+0.82%) at 6,483
CAC 40 up +25.89 (+0.65%) at 3,986
Dax up +36.65 (+0.45%) at 8,195
Currencies
€/$ 1.32 (1.32)
$/¥ 98.17 (98.34)
£/$ 1.55 (1.55)
Commodities ($)
Brent Crude (ICE) down -0.88 at 114.28
Light Crude (Nymex) down -1.14 at 107.66
100 Oz Gold (Comex) down -3.10 at 1,410
Copper (Comex) up +0.01 at 3.26
10-year government bond yields (%)
US 2.77%
UK 2.82%
Germany 1.86%
CDS (closing levels)
Markit iTraxx SovX Western Europe +0.12bps at 89.42bp
Markit iTraxx Europe -1.8bps at 105.03bp
Markit iTraxx Xover -10.63bps at 424.27bp
Sources: FT, Bloomberg, Markit
