Good morning New York,
FT ALPHAVILLE
Sterling to Carney: Paul notes that sterling is now appreciating too much and that any further substantial appreciation could pose additional risks to the balance of demand growth and to the recovery…
Stanley Fischer actually agrees with the Fed about forward guidance: Cardiff notes that a closer inspection of Fischer's comments about forward guidance underline the importance of the Fed's shift at the end of last year.
FOMC Markets Live: Taper yay or taper nay, FT Alphaville will be hosting a special edition of Markets Live this afternoon starting at 2:20pm EST (7:20pm in London). You can find us atthe usual place.
NEWS
EU agrees deposit guarantee scheme deal: The EU is to finance better the guarantees offered to depositors under a long-delayed deal that will increase the levies that banks must pay to cover the costs of a lender failing. (Financial Times)
UK to introduce plastic wipe-clean banknotes in 2016: Crumpled fivers and tenners are set to be consigned to history after the Bank of England announced the introduction of wipe-clean plastic notes. The first plastic tender will be the new £5 note, which will feature an image of Winston Churchill and enter circulation in 2016. This will be followed shortly after by a £10 note featuring Jane Austen. (Financial Times)
China bans new Bitcoin deposits: China has blocked the country's Bitcoin exchanges from accepting new inflows of cash, a move that imperils the much-hyped virtual currency in its biggest market. The head of BTCChina, the world's largest Bitcoin exchange by trading volume, said he had received word at midday on Wednesday that his platform would no longer be able to accept renminbi from would-be Bitcoin (Financial Times).
Reserve Bank of India holds steady: The RBI held its benchmark repo rate at 7.75 per cent, held the cash reserve ratio at 4 per cent, and held the reverse repo rate at 6.75 per cent. Economists were divided on whether the RBI would cut rates or hold steady, after recent inflation figures surged. Wholesale prices and consumer prices rose 7.5 and 11.2 per cent, respectively, from a year ago last month. (FastFT)
Ukraine: Viktor Yanukovich, Ukraine's president, took a decisive step towards Moscow's orbit on Tuesday when he agreed to a massive bailout of his country via Russian investment of $15bn in Ukrainian bonds and a cut in gas prices worth $4bn. But the move risked inflaming pro-European protests – now in their fourth week – in Kiev and other cities and exacerbating what is already Ukraine's worst political crisis since independence from the Soviet Union in 1991. (Financial Times)
JPMorgan sued FDIC for more than $1bn, striking back against the government weeks after agreeing to pay $13bn to resolve claims that it mis-sold mortgage securities. The largest bank in the US said it was trying "to recover substantially in excess of a billion dollars" from the FDIC, which managed the receivership of Washington Mutual after the bank failed during the crisis and then sold most of its assets to JPMorgan. (Financial Times)
House of Fraser is in advanced talks to be acquired by Galeries Lafayette, the French department store chain. The exclusive talks come as the British retailer prepares to float on the London Stock Exchange early next year, in a move that could value it at £350m. (Financial Times)
The first sale of state-owned shares in Lloyds Banking Group resulted in a £230m loss for taxpayers, even though investors paid more for their stake than the government did in 2009, according to an analysis by the National Audit Office. The loss factored in about £350m of funding costs incurred since the government raised the money to buy its stake in 2009. (Financial Times)
Markets: Stocks were mostly chipper but there was likely to be a fair bit of thumb-twiddling across dealing rooms for much of the global session as traders wait to see if the Federal Reserve would start reducing its $85bn-a-month stimulus programme. Bottom-up equity investors with a long-term view may roll their eyes at the broader market's obsession with central bank policy, but for many others the significance of a strategic shift by the Fed carries great weight, for it may signal the dismantling of a crucial asset support mechanism. Adding to the tension is a lack of clear consensus about whether the Fed will do anything at all, or leave policy alone like it did in September, when its inaction wrongfooted the market. The FTSE All-World equity index was up 0.4 per cent as the FTSE Eurofirst 300 gained 0.8 per cent and US index futures suggested the S&P 500 would add 4 points to 1,785, leaving Wall Street's benchmark just 1.3 per cent below its record high hit this month. (Financial Times)
