Markets: Asian equity markets got off to a weak start after Japanese companies signalled worries ahead and a first-look survey of China's manufacturing sector fell to a three-month low. (Financial Times)
Republicans line up for new battle over the need to lift America's borrowing limit early next year, raising concerns that the fiscal truce established in last week's bipartisan budget deal may be shortlived. Paul Ryan, Republican chairman of the House budget committee, said his party planned to demand concessions from the White House in exchange for raising the country's debt ceiling. Republicans would meet in January to discuss the options. (Financial Times)
The EU has halted efforts to revive a landmark integration deal with Ukraine, amid growing doubts any deal can be done with the country's president Viktor Yanukovich and his current government. Brussels and protesters in Kiev fear Ukraine will now move closer to Russia on Tuesday, when senior officials from the two countries are expected to sign a "strategic agreement" to improve trade links – potentially inflaming demonstrators. (Financial Times)
Rules for failing banks raise prospect of eurozone red-tape burden: The latest proposals for the eurozone's new banking regime could see up to 126 people being consulted on how to wind up a bank, even though agreement might need to be reached over the course of a weekend while financial markets are closed. Some senior officials are warning the proposals are too cumbersome. (Financial Times)
ECB official Asmussen quits to serve in German coalition as a junior mininster: His support for Mario Draghi, the ECB president, during the worst days of the eurozone crisis last year gave crucial German backing for the central bank's aggressive measures. He is expected to be replaced by Sabine Lautenschläger, vice-president of the Bundesbank, which has opposed Mr Draghi's efforts – including last year's sovereign bond-buying scheme, which many analysts credit for ending the worst of the crisis. Her views on monetary policy are not clear. (Financial Times)
Angela Merkel has chosen Ursula von der Leyen as Germany's first-ever female defence minister in an unexpected move that enhances her reputation as the chancellor's most likely potential successor. (Financial Times)
Japanese companies are signalling caution for the quarter ahead, even as optimism is at its highest level for six years, buoyed by a weaker yen and consistently strong consumer spending. Forecasts weakened in Monday's quarterly "Tankan" survey, and plans for capital expenditure – a tangible barometer of confidence – dipped. Sluggish export demand and the coming consumption tax weighed on minds. (Financial Times)
Chinese manufacturing sector slightly less busy this month, according to HSBC's closely followed purchasing managers' index. The bank's preliminary survey of Chinese manufacturing activity for December saw the PMI fall to a three month low of 50.5, from 50.8 in November. (FastFT)
Treasury on hunt in boardrooms for Whitehall finance chief to inject corporate-style rigour into Whitehall's management of public finances. Danny Alexander, chief Treasury secretary, will on Monday announce the creation of a senior post, akin to a company CFO, with a brief to look beyond departmental fiefdoms and make strategic judgments about spending priorities across the whole of government. Government insiders said there was "a strong possibility" that the appointment would go to a senior executive at a FTSE 100 company, rather than a career civil servant. (Financial Times)
RSA to hold talks on credit rating in a bid to avert a downgrade that could further erode the scandal-hit insurer's financial stability. Chairman Martin Scicluna is fighting to preserve RSA's crucial A rating after the group, one of Britain's largest insurers and owner of the More Than brand in the UK, revealed last week that losses in its Irish business were greater than previously thought. The accounting scandal has prompted some investors to call on the board to consider a possible sale of the entire group. (Financial Times)
British pharmaceutical giant GlaxoSmithKline is upping its stake in its separately listed Indian pharmaceuticals unit as part of its long-standing plan to gain greater exposure to the country's growing demand for healthcare products. Glaxo has offered to up its stake in the Indian unit, GlaxoSmithKline Pharmaceuticals Limited, from 50.7 per cent to 75 per cent. The offer, priced at 3,100 rupees per share, is worth around INR64 bn (£629m). (FastFT)
"American International Group is in advanced talks to sell its jet-leasing business to AerCap Holdings for $3 billion in cash and a minority stake in the smaller, Netherlands-based company, said people with knowledge of the talks. The minority stake in AerCap is currently worth about $2 billion, the people said Sunday, bringing the total price under discussion to roughly $5 billion." (WSJ)
"Charter Communications is preparing an offer letter to acquire Time Warner Cable for less than $135 a share, according to a person with knowledge of the matter. Charter will offer cash and stock, in a so-called bear-hug letter to Time Warner Cable as early as next week, according to the person..." (Bloomberg)
Trafigura, one of the world's top commodity trading houses, has posted record profits of $2.2bn, boosted by the sale of a stake in Puma Energy, its oil terminals and petrol station business. The disposal helped the privately owned group, based in Geneva and Singapore, to distribute just over $850m to its owner-shareholders during the course of the year, according to its annual results. (Financial Times)
COMMENTS & CURIOS
Summers: why stagnation might prove to be the new norm (Financial Times)
Podesta's appointment and why if Obama wanted an adviser untainted by money, his shortlist would have stopped at Pope Francis (Financial Times)
The Treasury's futile quest for the holy grail of economic policy (Financial Times)
Bloomberg Associates, offering Michael Bloomberg's statesmanly services to those cities in most need of them (Financial Times)
North Korea may now be more of a danger than ever before (Financial Times)
Christmas in China: The season when Beijing punishes the families of dissidents (WSJ)
China Everbright admits to interbank-loan default (WSJ, China Real Time)
Africa's richest man Dangote plans $16bn push (Bloomberg)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -164.00 (-1.06%) at 15,239
Topix down -11.78 (-0.95%) at 1,227
Hang Seng down -134.18 (-0.58%) at 23,112
US markets
S&P 500 down -0.18 (-0.01%) at 1,775
DJIA up +15.93 (+0.10%) at 15,755
Nasdaq up +2.57 (+0.06%) at 4,001
European markets
Eurofirst 300 down -1.98 (-0.16%) at 1,243
FTSE100 down -5.29 (-0.08%) at 6,440
CAC 40 down -9.41 (-0.23%) at 4,060
Dax down -10.54 (-0.12%) at 9,006
Currencies
€/$ 1.38 (1.37)
$/¥ 102.81 (103.21)
£/$ 1.63 (1.63)
€/£ 0.8435 (0.8428)
Commodities ($)
Brent Crude (ICE) up +0.40 at 109.23
Light Crude (Nymex) down -0.27 at 96.33
100 Oz Gold (Comex) up +0.20 at 1,236
Copper (Comex) at 3.35
10-year government bond yields (%)
US 2.85%
UK 2.90%
Germany 1.83%
CDS (closing levels)
Markit iTraxx SovX Western Europe at 62.78bp
Markit iTraxx Europe -1.03bps at 79.01bp
Markit iTraxx Xover -5.15bps at 317.79bp
Markit CDX IG -0.26bps at 69.99bp
Sources: FT, Bloomberg, Markit
