Markets: A record-high close for the S&P 500 in the US did little to support markets in Asia, which were mostly adrift in the absence of fresh economic data. (Financial Times)
Ukraine: Riot police encircled central Kiev on Monday night, raising fears the authorities were preparing a crackdown on anti-government protesters just hours after Ukraine's president said he was prepared to hold talks with opposition leaders. (Financial Times)
Mark Carney said on Monday that he favours initially using tools other than interest rates to help control the UK's economic recovery and to prevent the housing market rapidly moving from "stall speed to warp speed". In a dovish speech, the governor of the Bank of England indicated he was minded not to pull the lever on interest rate rises if unemployment falls quickly. (Financial Times)
Jump in mortgage borrowing a good for US consumption: The US has reached an important milestone in its recovery from the financial crisis after the first rise in outstanding mortgage debt since the beginning of 2008. After reducing debt for 21 consecutive quarters, US households increased their net mortgage liabilities at an annualised rate of 0.9 per cent in the third quarter of 2013, according to new data from the US Federal Reserve. (Financial Times)
"Federal Reserve Bank of St. Louis President James Bullard, a voter on policy this year, said the odds of tapering bond purchases have risen along with gains in the labor market, and any reduction should be modest to account for low inflation." (Bloomberg)
Draft Volcker rule gives leeway on hedging: Banks will have to set up ways for "ongoing recalibration of the hedging activity" to prove "specific, identifiable" risks, the draft says. But it does not explicitly prohibit hedging, which banks had feared, as long as it is done under certain conditions. (Financial Times)
Frank says Wall St attempts to derail Volcker will fail: Wall Street's efforts to overturn the Volcker rule, which regulators are due to ratify on Tuesday, will fail in the courts, according to Barney Frank, who spearheaded the US post-crisis overhaul of financial regulations. Even before Tuesday's vote, banks and their critics were preparing for fresh skirmishes over the Volcker rule, one of the most significant attempts to restrict banks' activity by prohibiting proprietary trading. (Financial Times)
Abenomics datapoint du jour: "Money managers in Japan bought a net ¥2.6 trillion ($25 billion) of foreign bonds in November, data from the Ministry of Finance showed Monday. During five consecutive months of net buying, they scooped up ¥9.1 trillion of bonds overseas, the largest buying spree since a ¥14 trillion binge in the nine months to January of this year." (WSJ)
US sells last of its General Motors stake (Financial Times)
EADS is to cut 5,800 jobs at its defence businesses and close sites in Paris, Munich, Spain and Britain as it tries to lift its lagging profit margins and deal with the steep reduction in European defence spending. The cuts, which represent about 4 per cent of the company's workforce, are less drastic than unions had feared. They will be made over the coming three years and will be voluntary, making it more likely EADS will gain the approval of unions and politicians, which is particularly important in Germany. (Financial Times)
Sysco buys rival US Foods for $3.5bn: "The two biggest U.S. food-distribution companies announced a merger that will create a giant with about $65 billion in annual revenue and enhanced clout over purchasing by institutions ranging from restaurants and hotels to hospitals and schools." (WSJ)
"Nokia Oyj is ready to pay at least 355 million euros ($487 million) to India's tax authorities to enable the transfer of a factory in the country to Microsoft, according to two people familiar with the matter... The assets were frozen by India in September because of a tax dispute." (Bloomberg)
Nomura "plans to hire about 20 bankers in the U.S., part of efforts to regain lost share of the world's largest mergers and acquisitions advisory market." (Bloomberg)
"Central Huijin Investment, the sovereign investor that holds stakes in China's biggest banks, received approval to trade on the interbank bond market, giving the government another way to support the nation's lenders." (Bloomberg)
"China, the world's biggest shipbuilding nation, will increase cash subsidies for scrapping obsolete ships by 50 percent to help cut overcapacity and emissions." (Bloomberg)
"Three state-owned Gulf firms are considering a joint bid for a minority stake in Occidental Petroleum Corp's Middle East and North Africa (MENA) unit, a deal that could be worth between $8 billion and $10 billion, three banking sources said. Abu Dhabi's Mubadala Development, Qatar Petroleum and Oman Oil Co have formed a consortium and have picked Citigroup to advise them, the sources with knowledge of the matter said on Monday." (Reuters)
COMMENTS & CURIOS
Low inflation is becoming a major headache (Financial Times Davies)
The west is losing faith in its own future (Financial Times Rachman)
Britain is entering an age of clashing ideologies (Financial Times)
Kim Jong Un seems more like an overgrown spoiled child lacking adult supervision (Financial Times)
Ex-Goldman Sachs banker jailed in UK in Nigerian corruption case (Reuters)
Madoff's victims (WSJ)
How a 48-year-old cop wife exposes Argentine bond risk (Bloomberg)
Foreign banks warn over China lending limit rules (Financial Times)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -32.38 (-0.21%) at 15,618
Topix up +0.44 (+0.04%) at 1,256
Hang Seng down -40.32 (-0.17%) at 23,771
US markets
S&P 500 up +3.28 (+0.18%) at 1,808
DJIA up +5.33 (+0.03%) at 16,026
Nasdaq up +6.23 (+0.15%) at 4,069
European markets
Eurofirst 300 up +2.05 (+0.16%) at 1,272
FTSE100 up +7.49 (+0.11%) at 6,559
CAC 40 up +4.73 (+0.11%) at 4,134
Dax up +22.76 (+0.25%) at 9,195
Currencies
€/$ 1.38 (1.37)
$/¥ 103.23 (103.27)
£/$ 1.65 (1.64)
€/£ 0.8356 (0.836)
Commodities ($)
Brent Crude (ICE) up +0.45 at 109.84
Light Crude (Nymex) up +0.32 at 97.66
100 Oz Gold (Comex) up +7.80 at 1,243
Copper (Comex) at 3.29
10-year government bond yields (%)
US 2.84%
UK 2.92%
Germany 1.84%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.14bps at 64.14bp
Markit iTraxx Europe -2.83bps at 77.84bp
Markit iTraxx Xover -8.87bps at 316.92bp
Markit CDX IG -1.97bps at 67.45bp
Sources: FT, Bloomberg, Markit
