Markets: Equity markets across Asia-Pacific were mixed as investors weighed the negative impact of a continued shutdown in Washington against the positive effect of the White House confirming its next pick to head up the Federal Reserve. Japan's Nikkei 225 index was up 0.4 per cent and the Shanghai Composite was 0.2 per cent higher, but Hong Kong's Hang Seng index suffered a 0.7 per cent decline. Markets in South Korea were closed for a public holiday. (Financial Times)
Obama to formally nominate Yellen as Fed chair at a ceremony at the White House on Wednesday. But she may still face a difficult confirmation, with a senior Republican on the Senate banking committee, Bob Corker, suggesting he would vote against her. (Financial Times) (WSJ) This news also acts as a reminder that next year's Fed will have several other open holes to fill. (FTAV)
Obama steps up pressure on Republicans: Obama said he is "exploring all contingencies" in the event Congress fails to increase the country's borrowing limit, but warned that there was no "magic wand" to brush away the threat of a default on US debt, shrugging off the possibility that the White House could use creative solutions – from invoking the 14th amendment of the constitution to minting a $1tn coin – to keep borrowing." (Financial Times) (NYT) He said he would accept even a short-term increase in the borrowing limit to give lawmakers time to negotiate. (WSJ)
IMF tells nations to raise their game: Launching its twice-yearly forecasts amid rising tensions over the US government shutdown, the fund trimmed its predictions of global expansion for 2013 and 2014 with all of the downgrade stemming from weaker prospects in emerging economies." (Financial Times)
Alcoa kicked off the earnings season by describing the debt ceiling threat as a "giant Taser" (Financial Times) and posting a "net profit of $24 million, or two cents a share, largely as a result of cost-cutting efforts in its smelting operation and gains in specialty products, compared with a loss of $143 million, or 13 cents a share, during the same quarter last year." (WSJ)
"Wal-Mart and its Indian partner Bharti Enterprises are breaking up their joint venture and will independently own and operate separate businesses in the country, the companies said in a joint statement on Wednesday... India last year allowed foreign supermarket companies to own up to 51 percent of their local operations, but no company has applied to enter the country under the rule." (Reuters)
"J.P. Morgan Chase is looking to scale back lending to pawn shops, payday lenders, check cashers and certain car dealerships as it seeks to tighten controls in a period of heightened regulatory scrutiny, said people close to the situation." (WSJ)
China has overtaken the US to become the world's largest net oil importer, according to US estimates, as its steady increase in imports has crossed over with the steep decline in America. (Financial Times)
CNOC, "China's primary offshore oil company on Tuesday invited foreign companies to bid on an unprecedented number of deep-water blocks off Chinese shores as the country attempts to firm up domestic oil output, which has grown slowly over the past decade even as China's energy demand has surged." (WSJ)
"Some banks in the U.K. are talking with regulators and drawing up internal plans on how they would cope if the U.S. fails to increase its borrowing limit [with some saying] they have been stockpiling cash and avoiding Treasury bills nearing maturity." (WSJ)
Yum shares hit after the company reported a 68 per cent drop in third-quarter earnings and reduced its annual outlook as it continues to be hit by challenges in China. The company, which operates the KFC and Pizza Hut chains, said it was no longer likely that China sales would turn positive during the fourth quarter. (Financial Times)
Dublin has won approval from its bailout masters to ease back on €3.1bn in planned austerity measures in its 2014 budget as long as it meets existing deficit targets in its programme. (Financial Times)
"Proxy advisory group ISS has urged Twenty-First Century Fox shareholders to vote against the reelection of Chairman Rupert Murdoch and some other board members at an annual shareholders meeting this month, criticizing the company's adoption of a poison pill." (Reuters)
Newcrest Mining, Australia's biggest gold miner, has appointed Peter Hay as chairman, with Don Mercer stepping down in December. The appointment comes just two months after NM posted its first annual loss in more than a decade. (FastFT)
"Chesapeake Energy Corp has slashed its workforce by 1,200 jobs this year, the country's second-largest natural gas producer said on Tuesday, and the cutting has accelerated under new chief executive Doug Lawler... The company's size has been reduced by 10 percent so far this year, and its stock price has risen by 20 percent since Lawler took over." (Reuters)
"A Goldman Sachs unit has bought a 50 percent stake in privately-held British motor insurer Hastings, in a deal that values the company at 700 million pounds ($1.13 billion)." (Reuters)
"Singapore Exchange, Southeast Asia's biggest bourse, faces calls from investors to add circuit breakers after a plunge in shares of three commodity companies erased $6.9 billion in value over three days." (Bloomberg)
COMMENTS & CURIOS
Justin Wolfers is "very happy about Janet Yellen" (Bloomberg)
"I understand Wall Street makes their money on trading these Treasuries, but Main Street? This has no impact on them." (Financial Times)
Sugar daddy shutdown and the fact that only "one of the 63 employees at the Office of Government Ethics has been required to show up." (Financial Times)
Bill comes due for Brazil's middle class (WSJ)
A conversation about SME banking, even if the answers seem lacking (Financial Times)
China's bad banks and their profits (Bloomberg)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 up +85.75 (+0.62%) at 13,980
Topix up +10.89 (+0.95%) at 1,161
Hang Seng down -131.71 (-0.57%) at 23,047
US markets
S&P 500 down -20.67 (-1.23%) at 1,655
DJIA down -159.71 (-1.07%) at 14,777
Nasdaq down -75.54 (-2.00%) at 3,695
European markets
Eurofirst 300 down -9.82 (-0.79%) at 1,231
FTSE100 down -71.45 (-1.11%) at 6,366
CAC 40 down -32.05 (-0.77%) at 4,134
Dax down -35.69 (-0.42%) at 8,556
Currencies
€/$ 1.36 (1.36)
$/¥ 97.32 (96.86)
£/$ 1.61 (1.61)
Commodities ($)
Brent Crude (ICE) down -0.07 at 110.09
Light Crude (Nymex) up +0.01 at 103.50
100 Oz Gold (Comex) unchanged 0.00 at 1,324
Copper (Comex) down -0.02 at 3.26
10-year government bond yields (%)
US 2.63%
UK 2.72%
Germany 1.81%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.43bps at 81.63bp
Markit iTraxx Europe +1.78bps at 100.16bp
Markit iTraxx Xover +5.45bps at 396.73bp
Sources: FT, Bloomberg, Markit
