Markets: An 18-month high in China's pace of manufacturing plus a series of positive economic reports across Asia failed to cheer investors after US equity markets fell for a second straight day. (Financial Times)
China manufacturing data surges to strongest reading in 18 months: The official PMI came in at 51.4 in October, compared with 51.1 in September, according to the China Federation of Logistics and Purchasing. (Financial Times) HSBC's reading for South Korea was above the expansion-contraction dividing line of 50 for the first time since May and Taiwan's PMI rose to 53 from 52. An Australian index also advanced. (Bloomberg)
RBS is set to outline a plan on Friday to siphon off tens of billions of pounds of its riskiest assets including Irish property and commercial real estate loans. The assets will be put into an internally managed "bad" bank as part of its efforts to clean its balance sheet and pave the way for a return to private ownership. New chief executive Ross McEwan, who took over in late September, is expected to signal a repositioning of RBS's traditional UK retail and business lending back to the core of its operations. (Financial Times) The bank has also suspended two traders in its foreign exchange division in another sign that the global probe by regulators into the suspected manipulation of the currency market is rapidly gaining traction. (Financial Times)
AIG announced it had completed its first share buyback since its $182bn government bailout during the financial crisis, as the insurance group posted improved third-quarter profits on Thursday. Net income rose to $2.2bn, or $1.46 a share on a diluted basis, in the third quarter, up from $1.9bn, or $1.13 a share, a year earlier. (Financial Times)
"Fannie Mae sued nine of the world's largest banks on Thursday, accusing them of colluding to manipulate interest rates and seeking more than $800 million of damages." (Reuters)
Credit Suisse dismisses London trader over 'unusual trading' losses: "Credit Suisse said a London trader within its investment bank racked up nearly $6 million in losses that haven't previously been made public. The incident has sparked an investigation and attracted scrutiny from British regulators, according to people familiar with the matter." (WSJ)
Wells Fargo strikes deal on bad mortgages: The largest US bank by market value, has quietly settled claims from the Federal Housing Finance Agency that it mis-sold mortgages in the run-up to the financial crisis, said people familiar with the matter. The pricetag is considerably lower than the $5.1bn paid by JPMorgan Chase in a landmark settlement agreed last week, these people said. (Financial Times)
"The Commodity Futures Trading Commission is so cash-starved that the agency is being forced to delay cases, shelve certain probes and decided not to file charges against two former traders over J.P. Morgan Chase's "London whale" trading mess, a top official said. In an interview, David Meister, who stepped down this week as the CFTC's enforcement chief, said the agency is "absolutely undersized" for the sprawling futures and options markets it must police." (WSJ)
Squeezed margins in the global refining industry are hurting the world's largest oil companies, as Royal Dutch Shell, Total and ExxonMobil all blamed poor quarterly earnings on a decline in their downstream businesses. Results from Shell were the most disappointing Thursday, as its profit dropped almost a third to $4.5bn. ExxonMobil's profit fell 18 per cent to $7.87bn, while Total's declined almost a fifth to €2.72bn. (Financial Times)
Barrick Gold has launched plans to raise nearly $3bn through a placing of shares to help pay down debt after announcing plans to suspend work on a multibillion-dollar flagship mining project in Chile. If fully subscribed, the world's leading gold producer by volume hopes to raise $3.3bn to pay down $2.6bn of its debt. (Financial Times)
Google, Samsung, Huawei sued over Nortel patents: "Rockstar, the consortium that bought the Nortel patents for $4.5 billion, sued Samsung Electronics, HTC Corp, Huawei and four other companies for patent infringement in U.S. District Court in Texas. Rockstar is jointly owned by Apple, Microsoft, Blackberry, Ericsson and Sony. Google is accused of infringing seven patents [that] cover technology that helps match Internet search terms with relevant advertising..." (Reuters)
"Avon's shares plunged more than 20% after the cosmetics company said federal regulators are seeking much larger-than-expected penalties to resolve a long-running bribery probe." (WSJ)
"China's benchmark money-market rate dropped to the lowest level in more than a week after the central bank injected cash into the financial system... The seven-day repurchase rate, a gauge of funding availability in the banking system, declined 41 basis points, or 0.41 percentage point, to 4.64 percent in Shanghai..." (Bloomberg)
Eike Batista to sit on both sides of debt talks: "Creditors of Brazilian businessman Eike Batista's failed oil enterprise OGX will have an unlikely competitor for any proceeds paid out from the group's debt restructuring talks – the industrialist himself. Mr Batista's oil services company OSX is one of the biggest contractors of OGX with claims estimated at up to $2.6bn. The group has included $900m of this in its estimated liabilities of $5.1bn, but if the full amount was realised it would take the total to $6.8bn." (Financial Times)
COMMENTS & CURIOS
UBS – We will not rest (until we have made the crassest, creepiest video ever) (Financial Times Business Blog)
America's misplaced lecture to Germany (Financial Times)
How much state money? We can only "suck it and see". (Financial Times)
Energy boom drives demand for tankers (WSJ)
Mexico's theology of oil (NYT)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -173.91 (-1.21%) at 14,154
Topix down -11.01 (-0.92%) at 1,183
Hang Seng down -14.36 (-0.06%) at 23,192
US markets
S&P 500 down -6.77 (-0.38%) at 1,757
DJIA down -73.01 (-0.47%) at 15,546
Nasdaq down -10.91 (-0.28%) at 3,920
European markets
Eurofirst 300 up +5.16 (+0.40%) at 1,293
FTSE100 down -46.27 (-0.68%) at 6,731
CAC 40 up +25.78 (+0.60%) at 4,300
Dax up +23.65 (+0.26%) at 9,034
Currencies
€/$ 1.36 (1.36)
$/¥ 97.94 (98.35)
£/$ 1.60 (1.60)
Commodities ($)
Brent Crude (ICE) up +0.38 at 109.22
Light Crude (Nymex) up +0.12 at 96.50
100 Oz Gold (Comex) down -0.60 at 1,323
Copper (Comex) unchanged 0.00 at 3.29
10-year government bond yields (%)
US 2.56%
UK 2.65%
Germany 1.67%
CDS (closing levels)
Markit iTraxx SovX Western Europe -237.98bps at 72bp
Markit iTraxx Europe -1.38bps at 83.35bp
Markit iTraxx Xover -3.63bps at 340.85bp
Sources: FT, Bloomberg, Markit
