Markets: China's stock market is rallying after a closely watched manufacturing index jumped beyond forecasts to a six-month high, offering further evidence that Beijing's efforts to engineer a soft landing are having the intended effect. The Shanghai Composite opened half a per cent higher on Monday after an extended holiday weekend. Trading on Hong Kong markets was delayed due to a storm. (Financial Times) (Bloomberg)
Merkel heading for big personal victory in German election: "Merkel's Christian Democratic bloc took 41.5 percent to 25.7 percent for the Social Democrats of Peer Steinbrueck in yesterday's election, according to results from all 299 districts. That leaves her short of a majority and needing a coalition partner to govern Europe's biggest economy." (Bloomberg) The outcome amounts to a powerful endorsement of the chancellor's handling both of the eurozone crisis, and of the domestic economy, during the past four years. But the poor performance of the FDP, which slumped below the minimum 5 per cent needed to win any parliamentary seats, leaves considerable uncertainty over the composition of an alternative coalition. (Financial Times)
China Flash PMI climbs to six-month high of 51.2: The Markit/HSBC Flash Manufacturing PMI rose to 51.2, ahead of forecasts at 50.9 and better than August's 50.1 score. Anything above 50 suggests growth. (FastFT)
Twitter seeks pre-IPO credit line hat could run into hundreds of millions of dollars, giving the internet company extra flexibility ahead of its initial public offering. (Financial Times)
Blow for Citi as trading revenues drop: Those familiar with Citi's discussions with its investors said the bank had highlighted a market-wide slowdown in activity. Some investors believe revenues will fall by significantly more than 10 per cent. (Financial Times)
Goldman Sachs has radically restructured its electronic bond trading platform in a last-ditch effort to lure customers to the struggling system and comes as markets participants strive to improve liquidity in the $9.2tn market for US companies' debt. However, investors remain distrustful of "single-dealer" trading venues controlled by one bank. (Financial Times)
Fidelity challenges companies on long-term incentives warning 400 companies it invests in to reform pay policy or face votes against remuneration at annual meetings. In particular, Fidelity wants companies to increase the time executives must hold shares from three years to five before they are allowed to sell. (Financial Times)
IPOs in UK head for best year since crisis reaching $7.16bn this year – more than eight times the amount raised by the same stage in 2012, according to Dealogic. (Financial Times)
BlackBerry executives spent several million dollars to buy a private jet for the company earlier this year, just months before announcing a near-$1bn loss and a massive redundancy programme. (Financial Times) It's cool though: Blackberry is in "a risky, last-ditch bet that it can hang on to rapidly eroding ground in the market it pioneered. The plan appears to be to position the company as the go-to provider of systems to manage smartphone use for employers like the government and banks, where the need to ensure security is at a premium." (WSJ)
China court sentences former party chief Bo Xilai to life in jail: The harsh sentence, which Bo will serve in the notorious Qincheng political prison on the outskirts of Beijing, suggests China's leaders felt they had to make sure the 64-year-old Bo could not be released early and return to politics in the future. According to people familiar with the matter, the sentence was ultimately decided by President Xi Jinping and the other members of the seven-member standing committee of the politburo. (Financial Times)
Hong Kong braced for biggest storm in decades: Hong Kong Observatory, the government weather agency, said the "severe typhoon" made landfall in Guangdong province on Sunday evening. It was moving northwest at 22km an hour, and was expected to skirt 100km north of Hong Kong on Monday morning. (Financial Times)
Wanda to invest $8.2bn in park: "Dalian Wanda Group, founded by China's richest man Wang Jianlin, said it plans to invest 50 billion yuan ($8.2 billion) to build an entertainment park in the eastern Chinese city of Qingdao." (Bloomberg)
"Italian Economy Minister Fabrizio Saccomanni will resign if the fragile coalition government flouts European Union deficit spending limits in favor of tax cuts, he told Corriere della Sera newspaper on Sunday." (Reuters)
"Private equity firm JC Flowers has approached Britain's Lloyds Banking Group about a bid for the TSB business that was split from the part state-owned bank earlier this month, the Sunday Telegraph said without citing sources." (Reuters)
COMMENT & CURIOS
Complacency over economy biggest danger for German winner (Financial Times) And why Merkel's difficulties start now (Financial Times)
On the Fed's painful transperency (Financial Times - Davies)
And why it's wrong to put off the return to normality (Financial Times)
A US detente with Iran could be game-changing (Financial Times)
"Iran must not be allowed to repeat North Korea's ploy to get nuclear weapons" - Israel (NYT)
Congress is putting the future of the dollar in peril (Financial Times)
Hilsenrath on a Yellen Fed - potentially a bit 'Mad Men' apparently (WSJ)
Colombia grapples with aftermath of protests by farmers (Financial Times)
OVERNIGHT MARKETS:
Asian markets
Nikkei 225 down -23.76 (-0.16%) at 14,742
Topix up +3.50 (+0.29%) at 1,219
Hang Seng unchanged 0.00 (0.00%) at 23,503
US markets
S&P 500 down -12.43 (-0.72%) at 1,710
DJIA down -185.46 (-1.19%) at 15,451
Nasdaq down -14.66 (-0.39%) at 3,775
European markets
Eurofirst 300 down -3.34 (-0.26%) at 1,263
FTSE100 down -28.96 (-0.44%) at 6,596
CAC 40 down -2.38 (-0.06%) at 4,204
Dax down -18.45 (-0.21%) at 8,676
Currencies
€/$ 1.35 (1.35)
$/¥ 99.11 (99.31)
£/$ 1.60 (1.60)
Commodities ($)
Brent Crude (ICE) down -0.01 at 109.21
Light Crude (Nymex) up +0.02 at 104.77
100 Oz Gold (Comex) down -12.80 at 1,320
Copper (Comex) down -0.04 at 3.28
10-year government bond yields (%)
US 2.74%
UK 2.92%
Germany 1.95%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.62bps at 87.99bp
Markit iTraxx Europe n/abps at 99.16bp
Markit iTraxx Xover n/abps at 393.56bp
Sources: FT, Bloomberg, Markit
