Markets: Equity markets in Asia were trading as if the chances of the Federal Reserve pulling back on its bond-buying programme are somewhere between small and nil. (Financial Times)
Eurozone finance ministers have reached a tentative agreement that would create a backstop to the EU's new bank rescue system in case it runs out of money in an emergency. The "common position" will allow governments in need of extra funding to recapitalise or wind-down failing banks to access financing outside new bank-financed rescue funds – a key demand by a Paris-led group of eurozone countries that was resisted by Germany. Senior officials said the agreement is broken into two, with one backstop agreed for the "transition period" while a common EU bank rescue fund is built up – which could take as long as 10 years – and another for the "steady state" once the fund is in place. (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)
"New home prices in the four Chinese cities defined as first-tier by the government rose, with Shenzhen posting the biggest gain in almost three years, as property measures by local governments failed to deter buyers. Shenzhen and Guangzhou posted increases of 21 percent from a year earlier, while prices climbed 18 percent in Shanghai and 16 percent in Beijing, data from the National Bureau of Statistics showed today. Prices rose from a year earlier in 69 of 70 cities tracked by the government last month, it showed." (Bloomberg)
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)
JPM was sued on Tuesday by Mississippi Attorney General Jim Hood over alledged credit card misconduct: He "accused the largest U.S. bank of violating state consumer protection laws in its alleged pursuit of delinquent payments by credit card customers. The lawsuit followed an 18-month probe, according to Hood, and adds to a long list of legal problems facing JPMorgan." (Reuters)
"The Justice Department is preparing to file civil fraud charges against Citigroup Inc and Bank of America's Merrill Lynch unit over their sale of flawed mortgage securities ahead of the financial crisis, according to people familiar with the probes." (Reuters)
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)
Microsoft will pick new CEO in "early part" of 2014: John Thompson, a board member who has been leading the search, said, "We identified over 100 possible candidates, talked with several dozen, and then focused our energy intensely on a group of about 20 individuals, all extremely impressive in their own right. As you would expect, as this group has narrowed, we've done deeper research and investigation, including with the full Board. We're moving ahead well, and I expect we'll complete our work in the early part of 2014." (FastFT)
Diversified industrial manufacturer 3M joined the growing list of US companies launching big capital returns, boosting its shares, Reuters reports. Shares in the group rose 2.92 per cent to close at $131.39, after it said it would buy back up to $22bn in stock in the five years to 2017 and raised its quarterly dividend by a third and affirmed its outlook. (Financial Times)
"Kraft Foods Group, the North American packaged-foods company with brands including Maxwell House coffee and Velveeta cheese, authorized a $3 billion stock repurchase program. The buyback plan is Northfield, Illinois-based Kraft Foods' first since it became an independent company in October 2012. " (Bloomberg)
"AT&T, the biggest U.S. phone company, said on Tuesday that it would sell its wireline operations in Connecticut to regional telephone operator Frontier Communications for $2 billion in cash, to help fund network upgrades. Frontier shares rose more than 8 percent after it said the deal would boost its dividend payout ratio, generate savings and improve its adjusted free cash flow." (Reuters)
"William Morris Endeavor Entertainment LLC is close to an agreement to buy rival talent and marketing agency IMG Worldwide Inc. for about $2.4 billion, according to people familiar with the matter." (WSJ)
"IMS Health Inc has hired JPMorgan Chase & Co Inc to lead a proposed initial public offering that could value the private equity-owned healthcare information company at close to $10 billion, according to people familiar with the matter." (Reuters)
Shares of INTL FCStone, widely used by commodities traders, plunged 7.9 per cent on Tuesday after the futures broker disclosed accounting errors that may have overstated past profits. (Financial Times)
Private equity firm Centerbridge "backed out of a deal to acquire LightSquared Inc., the telecommunications firm in bankruptcy proceedings, amid uncertainty over when federal regulators would clear the way for the company to build out its wireless network, said people familiar with the matter" (WSJ)
"Omnicom and Publicis will win unconditional European Union regulatory approval for their $35.1 billion merger to create the world's biggest advertising agency, two people familiar with the matter said on Tuesday." (Reuters)
COMMENTS & CURIOS
Why Abenomics will disappoint (Financial Times Wolf)
Dectaper, maybe (Financial Times)
'Fragile five' countries face taper crunch (Financial Times)
Sajid Javid warns on 'too big to fail' risk (Financial Times)
Gold rushed (Bloomberg)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 up +280.52 (+1.84%) at 15,559
Topix up +15.64 (+1.27%) at 1,248
Hang Seng up +115.58 (+0.50%) at 23,185
US markets
S&P 500 down -5.54 (-0.31%) at 1,781
DJIA down -9.31 (-0.06%) at 15,875
Nasdaq down -5.84 (-0.14%) at 4,024
European markets
Eurofirst 300 down -10.01 (-0.80%) at 1,248
FTSE100 down -36.01 (-0.55%) at 6,486
CAC 40 down -51.24 (-1.24%) at 4,069
Dax down -78.44 (-0.86%) at 9,085
Currencies
€/$ 1.38 (1.38)
$/¥ 102.87 (102.66)
£/$ 1.63 (1.63)
€/£ 0.8457 (0.8463)
Commodities ($)
Brent Crude (ICE) up +0.04 at 108.48
Light Crude (Nymex) up +0.16 at 97.38
100 Oz Gold (Comex) unchanged 0.00 at 1,231
Copper (Comex) down -0.01 at 3.36
10-year government bond yields (%)
US 2.84%
UK 2.88%
Germany 1.82%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.16bps at 62.49bp
Markit iTraxx Europe -0.34bps at 78.07bp
Markit iTraxx Xover +0.12bps at 313.89bp
Markit CDX IG +0.6bps at 69.97bp
Sources: FT, Bloomberg, Markit
