Good morning New York,
FT ALPHAVILLE
Here's something that wasn't prepared earlier: Paul presents a number of last-minute rewrite gems from the analyst community, all the product of the Fed's unforeseen non-taper move.
Bernanke walks it back: Cardiff notes that Bernanke has struggled to convince markets that decisions regarding QE are state-contingent rather than predetermined, and more to the point that monetary policy would be accommodative for as long as necessary. But did he finally manage to get his message across by delaying the widely expected taper? It's possible that he did.
Markets Live does the non-taper: How it all went down at the press conference, and what FT Alphaville's immediate reactions were.
NEWS
Fed holds the line on bond buying: Just in case you didn't notice… The Fed cut its growth forecast and confounded expectations that it would start to slow its third round of quantitative easing as the rate-setting Federal Open Market Committee said it would "await more evidence that progress will be sustained before adjusting the pace of its purchases". (Financial Times)
JP Morgan braced for action over 'whale'; $900m+ fine mentioned: People familiar with the situation said the actions of a London-based executive were likely to receive the most serious scrutiny, with an accusation from the UK's FCA that he did not act in good faith in dealing with officials' inquiries. (Financial Times) The fine will be "more than $900 million… according to a person familiar with the settlement talks." (Wall Street Journal)
CBI says UK business gets Carney guidance: CBI director John Cridland said the BOE's message had sunk in with business. "Most entrepreneurs believe that interest rates are not going up in a hurry," he said. "I think the City has misread the labour market." (Financial Times)
India's Palaniappan Chidambaram stands firm on tax reforms: India's finance minister, who has announced numerous reforms since he retook the finance portfolio last year, said the government wanted the winter session of parliament to pass a long-awaited bill to introduce a goods and services tax, as well as a law allowing foreign investors to increase their stakes in Indian insurance companies. Reform in the energy sector is also expected. (Financial Times)
Indian's rupee jumped 2.5 per cent in the first minutes of Mumbai trading, as part of a broader rally in emerging market currencies against the US dollar as the Fed failed to taper (FastFT)
Mexico hedges oil at highest price ever: Latin America's biggest oil producer bought options to lock in a minimum price of just over $90 per barrel for its 2014 exports, according to two people familiar with the transaction. Mexico's oil hedging programme – the largest of its kind in commodity markets – is keenly awaited by traders and brokers, as it creates significant downward pressure on futures prices. (Financial Times)
BlackBerry to slash workforce by up to 40%: "BlackBerry is preparing for deep staff cuts—up to 40% of its employees—by the end of the year, people familiar with the matter said… BlackBerry had 12,700 employees as of March, the last time it disclosed a total number." (Wall Street Journal)
SNB says franc ceiling 'essential' to protect economy: The Swiss National Bank (SNBN), led by President Thomas Jordan, kept its ceiling on the franc at 1.20 per euro and vowed to defend it with unlimited currency interventions. Officials also left the band for the benchmark interest rate unchanged at zero percent to 0.25 per cent (Bloomberg).
FX firm Ordered to pay restitution, fines: The CFTC and the NFA have ordered a New York fx trader, FXDirectDealer, to pay $3.8m in restitution and fines for allegedly using a pricing advantage over its customers. (WSJ)
Sharp to raise up to $1.67bn: "Sharp said it plans to raise as much as $1.67 billion in new capital through a share issuance and investments from a diverse set of business partners… to provide some short-term relief to the Japanese electronics maker's strained balance sheet, weighed down by nearly $12 billion in interest-bearing debt." (WSJ)
Markets: Global equities were jumping to fresh five-year highs, with emerging market assets particularly chipper, after the Federal Reserve surprised most investors by saying it would continue to pump money into the US bond market at a pace of $85bn a month. "Markets have responded strongly to the dovish announcement," said analysts at Barclays. "Equity and bond markets rallied, breakevens [inflation gauges] rose, gold prices increased and the US dollar sold off across the board. In Asia trading today, high-yielding EM bonds and currencies have been the largest beneficiaries, a theme we think will continue." Industrial commodities were firm, with copper adding 1.5 per cent to $3.33 a pound, while Treasury yields near six-week lows and the dollar index languishing at its weakest in seven months. (
Financial Times)
