Markets: Asian equity markets were mixed as monetary conditions in China tightened in October. The below-stimate new loan figures are the final Chinese economic data to be released before the ruling Communist party leaders conclude their third plenum. (Financial Times) (Bloomberg)
Shadow banks reap Fed rate reward with three specialist categories increasing their assets by almost 60 per cent since the height of the financial crisis. The amount of assets held by US business development companies (BDCs), specialist finance companies and real estate investment trusts (Reits) has jumped from $779bn in 2008 to $1.22tn in the second quarter of 2013, according to data compiled by SNL Financial for the Financial Times.
"Hedge funds are making a large bet on municipal debt, bringing aggressive tactics to a $3.7 trillion market long known as humdrum. The strategies include demanding high interest rates in return for financing local governments, buying the debt of struggling municipalities on the cheap, and trying to profit on rising volatility as many mom-and-pop investors who have dominated the municipal-bond market for decades flee amid deepening fiscal problems in many U.S. cities and states." (WSJ)
International regulators have added Industrial and Commercial Bank of China to a list of banks that face higher capital requirements to counter the risk they pose to the financial system. The biggest bank in the world by market capitalisation, ICBC was the sole new entrant on the latest table of "globally systemically important banks" from the Financial Stability Board. (Financial Times)
Western governments presented a united front over Iran on Monday and played down reports that France had been the main obstacle in weekend talks that failed to secure an agreement over Iran's nuclear programme. The US and the UK both backed up assertions from Paris that it was the Iranians who blocked an agreement at the talks in Geneva, rather than the public objections raised by Laurent Fabius, the French foreign minister. (Financial Times)
"Brazilian shipbuilder OSX Brasil SA filed for bankruptcy protection on Monday, becoming the second company controlled by former billionaire Eike Batista to seek court protection from creditors in just over a week." (Reuters)
"U.S. prosecutors and the Securities and Exchange Commission's internal watchdog recently probed the personal financial holdings of some SEC employees in New York, a move that could again shine a spotlight on the agency's internal compliance efforts, people familiar with the situation said." (WSJ)
America's jobs recovery is proceeding on two separate tracks: "Youth unemployment, for example, nearly always improves after recessions more slowly than that of prime-age workers, those between 25 and 54. Following the 2001 recession, it took six months for the gap between the youth and prime-age unemployment rates to return to its long-run average. After the early 1990s recession, it took 30 months. This time, it has been 52 months, and the gap has hardly narrowed." (WSJ)
"Freddie Mac and Bank of America are in settlement talks to resolve disputes over more than $1.4 billion in faulty mortgages Freddie has said Bank of America should have to take back, according to people familiar with the matter. The deal would be the second such agreement between Bank of America and Freddie since 2011. It would largely shield the bank from any future repurchase demands from Freddie stemming from loans sold before 2012." (WSJ)
"India's biggest jump in foreign-exchange reserves in two years offers the nation greater ammunition to support the rupee as U.S. policy makers debate when to pare back monetary stimulus. The reserves rose $6.7 billion in October to $283 billion, the steepest monthly increase since 2011, after central bank Governor Raghuram Rajan offered concessional dollar-swaps for lenders to spur inflows." (Bloomberg)
COMMENTS & CURIOS
Philippines: Grim toll rises amid ruin and chaos (WSJ)
The French as "gun-slinging frogs" (Financial Times)
The massive political potential of Help to Buy (Financial Times)
Jack Lew on a "U.S.-Asia agenda for growth" (WSJ)
Russia versus the EU in Eastern Europe (Financial Times)
Why the Twitter launch left $1.5bn on the table (Financial Times)
The theft of malrial drugs in Africa (WSJ)
It's good to be the Ayatollah (Reuters h/t Nobby)
The Amazon: from paradise to inferno (Reuters)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 up +285.58 (+2.00%) at 14,555
Topix up +16.75 (+1.41%) at 1,202
Hang Seng down -130.63 (-0.57%) at 22,939
US markets
S&P 500 up +1.28 (+0.07%) at 1,772
DJIA up +21.32 (+0.14%) at 15,783
Nasdaq unchanged 0.00 (0.00%) at 3,920
European markets
Eurofirst 300 up +3.35 (+0.26%) at 1,299
FTSE100 up +19.95 (+0.30%) at 6,728
CAC 40 up +29.70 (+0.70%) at 4,290
Dax up +29.58 (+0.33%) at 9,108
Currencies
€/$ 1.34 (1.34)
$/¥ 99.54 (99.15)
£/$ 1.60 (1.60)
€/£ 0.8379 (0.8383)
Commodities ($)
Brent Crude (ICE) down -0.23 at 106.17
Light Crude (Nymex) down -0.27 at 94.87
100 Oz Gold (Comex) unchanged 0.00 at 1,281
Copper (Comex) at 3.26
10-year government bond yields (%)
US 2.76%
UK 2.81%
Germany 1.76%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.59bps at 64.39bp
Markit iTraxx Europe -1.42bps at 81.56bp
Markit iTraxx Xover -5.35bps at 341bp
Sources: FT, Bloomberg, Markit
