Markets: Asia-Pacific equity markets were following US bourses higher after the weak US jobs report propelled hopes that easy money policies will be extended. (Financial Times)
JPMorgan Chase is nearing a $6bn settlement with institutional investors to resolve claims it mis-sold mortgage-backed securities, according to people familiar with the matter. The settlement discussions started almost two years ago but have accelerated recently -- however, one person involved said the settlement was not imminent and the amount could change. The settlement is separate to a $13bn deal that the bank has cut with the Department of Justice. (Financial Times) (WSJ) And, while we're on it, a very decent chunk of that DoJ settlement is tax deductable. (Reuters)
Rabobank is set to face a fine of almost $1bn for the alleged manipulation of Libor and other benchmark interbank lending rates as early as next week. The penalty, confirmed by three people familiar with the situation, is set to be larger than had been expected and would be the second biggest paid by a financial institution in the rate-rigging. "This is quite concerning," said one lawyer. "It would seem to suggest a scaling up of the penalties." (Financial Times)
The Children's Investment Fund, run by Chris Hohn, disclosed a holding of just over 58m Royal Mail shares, worth £280m. The hedge fund is the recently privatised company's largest shareholder after the government, giving it clout in determining the future of the business. Mr Hohn's investment comes as a blow to Vince Cable's aim of ensuring Royal Mail remained in the hands of blue-chip long-term investors such as pension funds and intensifies pressure over the sale of a prime state asset for £3.3bn or 330p a share last week. (Financial Times)
Sir John Major, former Conservative prime minister, piled pressure on David Cameron to act against the "big six" energy companies, suggesting they should be hit with a windfall tax. He said it was "unacceptable" that energy companies were raising prices up to 10 per cent. (Financial Times)
Daniel Loeb's $14bn activist hedge fund has taken a stake in Nokia, in a move that puts pressure on the Finnish company to return cash to shareholders after the sale of its handsets business to Microsoft. Loeb's investor letter did not reveal the size of the stake that Third Point has taken in Nokia, or suggest that Mr Loeb will push for a particular size of cash distribution. (Financial Times)
Hourican to lead Bank of Cyprus: The former head of RBS's investment bank has made a surprise comeback at the helm of crisis-stricken lender Bank of Cyprus. (Financial Times)
Bill Gates has made a big bet on the recovery of Spain's construction sector by becoming the second-largest shareholder in FCC, a Spanish builder hit hard by the collapse of a decade-long property bubble five years ago -- the company said it had sold 6 per cent of its treasury shares to funds connected to Mr Gates for €113.5m. (Financial Times) (WSJ)
Icahn sold more than half his stake in Netflix for nearly $1bn in recent days, he disclosed on Tuesday, saying it was "time to take some chips off the table." (WSJ) He's booking profits of between $700m and $800m. (Reuters)
SAC to shut London office as it cuts staff: "SAC Capital, the US-based hedge fund negotiating a $1bn-plus settlement to insider trading charges, will close its London office by the end of this year, executives told staff on Tuesday." (Financial Times)
HTC "has halted at least one of its four main manufacturing lines, accounting for at least a fifth of total capacity, and is outsourcing production as a sales slump puts pressure on its cash flow, according to sources with direct knowledge of the situation." (Reuters)
"A handful of buyout firms, including Cerberus Capital Management, are exploring a deal for all or part of supermarket chain Safeway, according to people familiar with the matter, in what could potentially shape up to be one of the largest leveraged buyouts since the financial crisis." (Reuters)
"Russian potash producer Uralkali has ramped up output significantly as part of its new strategy, a board member said, despite a possible sale of the company and the fact its chief executive remains under arrest in Belarus on charges stemming from the change in tactics." (WSJ)
COMMENTS & CURIOS
The reality of America's fiscal future (Financial Times)
Just replace "financial institution" with "fast-food outlet" or "supermarket" or "carmaker" to see how peculiar is the suggestion that it would be best if regulation insured no financial institution went bust. (Financial Times)
Of PIK-toggles and other pre-crisis debt products making a comeback (Financial Times)
China's banks must compete to survive (WSJ) while they triple debt write-offs (Bloomberg)
The secret of Shanghai's public secondary schools: there is no secret (NYT)
Banks rack up big fees from Puerto Rico bond deals (WSJ)
Headline watch: "Public Vasectomy With Band-Aid Promotes Family Planning" (Bloomberg)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -167.80 (-1.14%) at 14,545
Topix down -15.71 (-1.29%) at 1,199
Hang Seng down -16.05 (-0.07%) at 23,300
US markets
S&P 500 up +0.16 (+0.01%) at 1,745
DJIA up +75.46 (+0.49%) at 15,468
Nasdaq unchanged 0.00 (0.00%) at 3,930
European markets
Eurofirst 300 up +6.97 (+0.54%) at 1,288
FTSE100 up +41.46 (+0.62%) at 6,696
CAC 40 unchanged 0.00 (0.00%) at 4,295
Dax unchanged 0.00 (0.00%) at 8,947
Currencies
€/$ 1.38 (1.38)
$/¥ 97.53 (98.13)
£/$ 1.62 (1.62)
Commodities ($)
Brent Crude (ICE) down -0.17 at 109.80
Light Crude (Nymex) down -0.47 at 97.83
100 Oz Gold (Comex) unchanged 0.00 at 1,343
Copper (Comex) down -0.01 at 3.32
10-year government bond yields (%)
US 2.50%
UK 2.66%
Germany 1.79%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.23bps at 72.09bp
Markit iTraxx Europe -2.48bps at 83.7bp
Markit iTraxx Xover -8.94bps at 337.36bp
Sources: FT, Bloomberg, Markit
