Asian stocks fell, led by Japanese shares, and the yen rallied to a six-week high on prospects the nation's central bank will refrain from adding to stimulus at its two-day meeting that began today. The Nikkei fell 2.6% and the MSCI Asia Pacific was 1% lower. (Bloomberg)
Today: Carney gives his thoughts on forward guidance at the BOE inflation report press conference. Claire Jones explains what to look out for on FT Money Supply.
Evans, Lockhart comments support September taper possibility: Chicago Fed president Charles Evans said he "would clearly not rule" out a decision to begin reducing purchases next month September. Evans is a staunch defender of QE and is an FOMC voting member this year. Meanwhile Atlanta Fed president Dennis Lockhart, who is not currently a voting member, told Market News International also suggested tapering could begin next month if data improve. (Bloomberg)(Financial Times)
TPG asks investors for an extra year to spend $3bn: The private equity company's unusual step underscores the difficulty finding good deals in the aftermath of the global recession. (Financial Times)
The US government sued Bank of America on Tuesday, alleging it committed fraud by packing MBS with loans that it knew to be "toxic waste". Separate lawsuits filed by the Department of Justice and the SEC claimed the bank understated the risk in $850m worth of MBS sold in 2008. (Financial Times)
SEC officials won't recommend civil charges be filed against Magnetar Capital, the Illinois hedge fund involved in creating dozens of CDOs. The regulator has for over a year been investigating whether Magnetar violated federal law because of its influence over the selection of assets bundled in one CDO, according to people close to the probe. (Wall Street Journal)
China fines foreign formula makers over pricing probe: "Mead Johnson of the US agreed to pay Rmb203.7m ($33m) to the National Development and Reform Commission, which enforces aspects of China's 2008 antitrust law. New Zealand's Fonterra was fined Rmb4.4m. Neither company intends to contest the fines." Nestle last month said it was cooperating with authorities on the probe, and several companies including Danone are cutting their China formula prices. (Financial Times)
Spain's "bad bank", Sareb, has sold its first package of real estate assets, to private equity group HIG Capital, in a transaction expected to set a precedent for a string of other deals. Sareb said said it had sold 51 per cent of a portfolio including 939 homes to HIG, in a deal valuing the assets at €100m. (Financial Times)
Disney's revenue was in line with expectations and profits were flat at $1.85bn for the three months to June 29. The company will write down up to $190m on its summer flop The Lone Ranger. (Financial Times)
ON FT ALPHAVILLE:
'Luddite' to RBI.
Does the Fed fit the dual mandate?
COMMENT AND CURIOS:
- George Magnus: Forget the taper and worry about China. (Financial Times)
- Frantic fracking sends US natgas prices into freefall. (Financial Times)
- Six things you need to know about Raghuram Rajan. (FT Beyondbrics)
- John McDermott: Britain's zero-hours-work economy. (Financial Times)
- More investors than borrowers in US peer-to-peer lending. (Wall Street Journal)
- More investors than projects in UK infrastructure. (Financial Times)
- China hopes its domestic formula makers get a boost. (Wall Street Journal)
OVERNIGHT MARKETS: DOWN
Asian markets
Nikkei 225 down -382.61 (-2.66%) at 14,018
Topix down -27.83 (-2.33%) at 1,166
Hang Seng down -62.40 (-0.28%) at 21,861
US markets
S&P 500 down -9.77 (-0.57%) at 1,697
DJIA down -93.39 (-0.60%) at 15,519
Nasdaq down -27.18 (-0.74%) at 3,666
European markets
Eurofirst 300 down -4.55 (-0.37%) at 1,221
FTSE100 down -15.37 (-0.23%) at 6,604
CAC 40 down -17.40 (-0.43%) at 4,033
Dax down -98.65 (-1.17%) at 8,300
Currencies
€/$ 1.33 (1.33)
$/¥ 97.26 (97.74)
£/$ 1.53 (1.53)
Commodities ($)
Brent Crude (ICE) down -0.22 at 107.96
Light Crude (Nymex) up +0.05 at 105.35
100 Oz Gold (Comex) down -5.70 at 1,278
Copper (Comex) unchanged 0.00 at 3.17
10-year government bond yields (%)
US 2.64%
UK 2.50%
Germany 1.70%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.26bps at 88.03bp
Markit iTraxx Europe +1.02bps at 95.49bp
Markit iTraxx Xover +3.07bps at 395.05bp
Sources: FT, Bloomberg, Markit
