Markets: Riskier assets lost favour as the holiday season approaches and investors locked in gains. Equity markets were soft across Asia. (Financial Times)
US budget negotiators on Tuesday night struck a bipartisan deal to set spending levels until 2015, breaking the latest fiscal logjam in Congress and stopping a cycle of crisis-driven economic policy making in Washington. The agreement is small in size – worth $85bn – but may herald the return of an era in which Congress can perform basic functions without the political brinkmanship that has repeatedly threatened the US economic recovery in recent years. (Financial Times) (WSJ)
Ukrainian riot police launched a surprise raid on Kiev's protest camp early on Wednesday morning, beginning an hours-long stand-off with protesters that showed little sign of abating by morning. Police began descending on Kiev's central Independent Square around midnight local time, just hours after President Viktor Yanukovich met EU foreign policy chief Lady Ashton and vowed to continue talks over Ukraine's further integration with the EU. The standoff between police and protestors has been relatively peaceful so far. (Financial Times)
Volcker vote ushers in new world order for banks: The largest US banks were facing a new world order on Tuesday as regulators voted through the Volcker rule, which will make it harder for Wall Street to make risky gambles that could once again endanger the financial system. The rule dramatically curbs the way banks do business, banning them from making bets using their own accounts in what is known as proprietary trading, and also holding their chief executives more accountable. But it gives regulators a lot of room for interpretation. (Financial Times)
EU finance ministers on Wednesday framed the political bargain for the eurozone's next big step towards banking union, but put off the fight over the crucial details of sharing bank failure costs until next week. A marathon negotiating session in Brussels produced a draft compromise, broadly based on Germany's revised position, which sets out how eurozone countries cede power to a central bank resolution authority and establish a common funding network. (Financial Times)
"China has stripped dozens of powers away from central government ministries as it bids to cut red tape and prevent Beijing's army of bureaucrats from micromanaging the world's second-largest economy. China's cabinet, the State Council, announced on Tuesday that it was removing 82 powers from a number of central government ministries, including the powerful National Development and Reform Commission (NDRC) and the Ministry of Environmental Protection." (Reuters)
JPMorgan files patent for Bitcoin-style payment system: JPMorgan Chase has filed a US patent application for a computerised payment system that resembles some aspects of Bitcoin, the controversial virtual currency. Like Bitcoin, JPMorgan's proposed system would allow people to make anonymous, electronic payments over the internet, without having to reveal their name or account numbers or pay a fee, according to the patent application. (Financial Times)
Nathan Bostock, the recently appointed finance director of Royal Bank of Scotland, is leaving after 10 weeks in the job for a new role with Santander, dealing a significant blow to the state-backed bank's attempts to clean up its business. Mr Bostock is to become deputy chief executive of Santander UK, a division of the Spanish bank, with a view to potentially replacing Ana Botin as chief executive, according to people close to the process. (Financial Times)
"Santander, Spain's largest bank, is to buy HSBC's 8 percent stake in Bank of Shanghai, just as many international rivals are beginning to sell out of China." (Reuters)
BHP Billiton is to invest $4bn a year to step up output from its US shale reserves and expects the business to generate $3bn of cash annually by the end of the decade, helping the world's largest mining group by market capitalisation to justify expensive bets placed on the assets two years ago. BHP said US shale production would break even from 2016 and by the following year would reach 500,000 barrels per day, 70 per cent higher than today. (Financial Times)
Australia on Wednesday cleared the way for China's Yanzhou Coal Mining to take full control of its local unit, offering reassurance that the country remains open to foreign investment. Treasurer Joe Hockey's move follows his high profile rejection of a A$2.8bn ($2.6bn) takeover of GrainCorp by US agribusiness giant Archer Daniels Midland, which spawned fears the recently elected conservative government would take a more protectionist stance on foreign investment. (Financial Times)
First Group, the UK bus and rail group, is under attack from US activist: Sandell Asset Management, a hedge fund with a stake of about 3 per cent, has written to the FirstGroup board to urge it to consider the sale of Greyhound, the trans-American bus service, and its school bus division. FirstGroup acquired both businesses in a $3.6bn takeover of Laidlaw in 2007. (Financial Times)
General Motors has said it will pull out of manufacturing in Australia by four years' time, with the loss of 2900 jobs. The US car giant partly blamed the strong Australian dollar and high labour costs for its decision. (FastFT) Part of the general revival plan (Financial Times) with new CEO Mary Barra. (Reuters)
Cinda "raised HK$18.5 billion ($2.4 billion) in Hong Kong's biggest initial public offering in a year as it prepares to take on more distressed assets. The company sold 5.3 billion shares at HK$3.58 each, the top of the price range, Beijing-based Cinda said in a statement to the Hong Kong stock exchange today. The stock will start trading tomorrow, it said. The HK$18.5 billion is the company's net proceeds, according to the statement." (Bloomberg)
Shipping benchmark hits three-year high, arguments about whether that actually says much similarly elevated: The Baltic Dry index, which reflects the daily charter rate for vessels carrying cargoes such as iron ore, coal and grain, rose 2.5 per cent to 2,237 points, the highest level it has reached since November 2010. (Financial Times)
COMMENTS & CURIOS
Asset managers could blow us all up (Financial Times Wolf)
Haldane: moar securitisation (Financial Times)
Lessons from prehistoric financial options (Financial Times)
Passports for sale in the EU (Financial Times)
Your wireless spectrum goldrush (WSJ)
Edward Lucas: How the west lost Ukraine to Putin (WSJ)
China's "six-part documentary on the Soviet Union's collapse" -- It was Gorbachev that done it (WSJ)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -116.55 (-0.75%) at 15,495
Topix down -3.86 (-0.31%) at 1,252
Hang Seng down -309.15 (-1.30%) at 23,435
US markets
S&P 500 down -5.75 (-0.32%) at 1,803
DJIA down -52.40 (-0.33%) at 15,973
Nasdaq down -8.26 (-0.20%) at 4,060
European markets
Eurofirst 300 down -9.45 (-0.74%) at 1,263
FTSE100 down -36.17 (-0.55%) at 6,523
CAC 40 down -42.96 (-1.04%) at 4,091
Dax down -80.73 (-0.88%) at 9,114
Currencies
€/$ 1.38 (1.38)
$/¥ 102.73 (102.82)
£/$ 1.64 (1.64)
€/£ 0.8369 (0.8366)
Commodities ($)
Brent Crude (ICE) down -0.02 at 109.36
Light Crude (Nymex) down -0.07 at 98.44
100 Oz Gold (Comex) down -2.50 at 1,260
Copper (Comex) at 3.30
10-year government bond yields (%)
US 2.81%
UK 2.88%
Germany 1.83%
CDS (closing levels)
Markit iTraxx SovX Western Europe -1.02bps at 63.12bp
Markit iTraxx Europe -0.08bps at 77.76bp
Markit iTraxx Xover +1.71bps at 318.63bp
Markit CDX IG +0.33bps at 67.78bp
Sources: FT, Bloomberg, Markit
