The 6am Cut

6am Cut London Posted 2013-03-26 03:32:40 by FT Alphaville Cyprus banks to stay closed for days: "Cypriot banks will remain closed until Thursday, the government announced on Monday night, as President Nicos Anastasiades acknowledged that the country had come 'a breath away from economic collapse' before its last-minute bailout. Speaking after he agreed a €10bn international rescue that includes the restructuring of the island's two biggest lenders with losses for bigger depositors, Mr Anastasiades also said capital controls would be imposed but as a 'very temporary measure that will be gradually relaxed'." (Financial Times) Dell founder set to explore deal options: "Michael Dell has said he is willing to "explore in good faith" the possibility of working with Blackstone or Carl Icahn, after they each moved to top the $24.4bn buyout bid he made with Silver Lake Partners for the company he founded. Dell's special committee said it had not yet determined if either Blackstone's offer of at least $14.25 a share for the whole company or Mr Icahn's offer of $15 for 58 per cent of the company constituted a superior proposal to the one on the table." (Financial Times) IPO fundraising jumps 50 per cent: "A bumper start to the year in the global market for new equity issues has seen funds raised through initial public offerings jump by 50 per cent so far, marking a shift in investor sentiment after years of declining deal volumes and high profile failures. Some $23bn worth of fresh equity has been raised in IPOs this year, up from $15bn in the same period last year, according to data from Dealogic." (Financial Times) Boeing flight-tests Dreamliner batteries: "Boeing took a key step to returning its 787 to commercial service when it undertook on Monday the first flight of an aircraft fitted with new batteries adapted to minimise the risk of overheating. A Dreamliner took off at 12:11pm Pacific time from the airfield at Boeing's main production plant in Everett, Washington, for the 'functional test flight' and returned two hours later." (Financial Times) Berezovsky death 'consistent with hanging': "Russian oligarch Boris Berezovsky, whose body was found in the locked bathroom of his luxury mansion near London over the weekend, died by hanging, British police said on Monday." (Reuters) COMMENT AND CURIOUS - Liberals find themselves in spending trap. (Gerald Seib) - For the first time since 1998, emerging market stocks are underperforming in a global rally. (Bloomberg) - Robots aren't the problem: it's us. (Richard Florida) - Private RMBS take first steps to US comeback. (Reuters) - A new online course on the Mexican economy. (Marginal Revolution) OVERNIGHT MARKETS: DOWN Asian markets Nikkei 225 down -29.54 (-0.24%) at 12,517 Topix down -1.39 (-0.13%) at 1,046 Hang Seng down -130.77 (-0.59%) at 22,120 US markets S&P 500 down -5.20 (-0.33%) at 1,552 DJIA down -64.28 (-0.44%) at 14,448 Nasdaq down -9.70 (-0.30%) at 3,235 European markets Eurofirst 300 down -2.99 (-0.25%) at 1,186 FTSE100 down -14.38 (-0.22%) at 6,378 CAC 40 down -42.31 (-1.12%) at 3,728 Dax down -40.45 (-0.51%) at 7,871 Currencies €/$ 1.29 (1.29) $/¥ 94.32 (94.15) £/$ 1.52 (1.52) Commodities ($) Brent Crude (ICE) down -0.10 at 108.07 Light Crude (Nymex) down -0.06 at 94.75 100 Oz Gold (Comex) unchanged 0.00 at 1,605 Copper (Comex) unchanged 0.00 at 343.50 10-year government bond yields (%) US 1.92% UK 1.83% Germany 1.34% CDS (closing levels) Markit iTraxx SovX Western Europe -0.33bps at 101.5bp Markit iTraxx Europe +3.33bps at 122.31bp Markit iTraxx Xover +7.35bps at 480.83bp Markit CDX IG +0.55bps at 91.13bp Sources: FT, Bloomberg, Markit
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UK Nationwide Housing Prices n.s.a (YoY)

Location: United Kingdom

Date: 26/03/2013

Time: 7:00 - 8:00

Strength: 2/3

Previous: 0.0% / Consensus: 0.9%

Notes: The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK's economy. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).

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US Fed's Bernanke Speech

Location: United States

Date: 25/03/2013

Time: 17:15 - 18:15

Strength: 3/3

Previous:

Notes: The fed Governor Ben Shalom Bernanke was born in 1953. He graduated from Harvard University and a Ph.D. in economics in 1979 from the Massachusetts Institute of Technology. In 2006 he became the Chairman of the Federal Reserve System. He gives a press conference as to how the Fed observes the current U.S. economy and the value of USD. His comments may determine a short-term positive or negative trend.

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UK BBA Mortgage Approvals

Location: United Kingdom

Date: 25/03/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: 32.3K / Consensus: 33.6K

Notes: The Mortgage Approvals published by the British Bankers' Association (BBA) measure the number of home loans issued by the BBA during the previous quarter. It is considered as a leading indicator of the UK Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall UK economy. Normally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish)

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The 6am Cut

6am Cut London Posted 2013-03-25 05:40:16 by Kate Mackenzie EU ministers this morning approved a deal reached by Cyprus with international bailout negotiators, that should be enough to unlock a €10bn EU bailout and save the country from bankruptcy. The agreement will see depositors with accounts worth less than €100,000 protected. But those above those levels in Laiki Bank, the second largest and most troubled financial institution, would be severely cut and the losses on large deposits in Bank of Cyprus, which will survive as a much smaller entity, are also yet to be decided, but could be as high as 40 per cent. The eurogroup agreement will come as a relief, since rescue deals struck by the Troika have been unpicked by ministers in the past. (Financial Times) Financial stocks led Asian markets higher on news of the Cyprus deal. The Nikkei was 1.9% higher, the Kospi 1.4% and the Hang Seng rose 0.6%. The MSCI Asia Pacific was 0.9% higher. However analysts expect the rally to be short-lived as the EU still faces a lot of work to hammer out the specifics of the financial aid. (Financial Times)(Bloomberg) Bankers' pay premium narrowing: "Investment bankers still get paid much more than other professionals, including doctors and engineers, but for the first time in a generation, the gap is narrowing." The multiple they receive of average private sector pay has fallen from 9.5 times in 2006 to 5.8 times last year, according to research compiled by PwC for the FT. (Financial Times) England and Wales house prices posted their biggest month-on-month gain in three years in March, driven by London, a survey by Hometrack showed. Prices rose 0.3% from February, the fastest increase since March 2010. In year-on-year terms house prices were flat, the first time they have not fallen since September 2010. (Reuters) Plan to crack down on banks' capital regulation arbitrage: A plan for hefty charges on banks that use pricey CDS to cut their capital requirements outlined in a highly technical consultation announced on Friday by the Basel Committee on Banking Supervision takes aim at banks that have been exploiting a regulatory loophole by buying credit protection on risky loans but deferring or spreading out the premiums for several years. (Financial Times) Markets expect Chinese easing cycle to end: "China's swap market is signaling interest-rate increases for the first time since 2011 after inflation accelerated to a 10-month high and the housing market defied government cooling efforts. Two-year contracts that exchange the People's Bank of China's 3% savings benchmark for a fixed payment rose eight basis points this month to 3.03%, data compiled by Bloomberg show." (Bloomberg) US Congress reviews tax break for corporate interest payments: Kenny Marchant, a Texas Republican, and Jim McDermott, a Democrat from Washington state, leaders a working group on "debt, equity and capital" in the House of Representatives ways and means committee, the powerful tax-writing panel, are evaluating a move that would reduce the tax code's bias towards debt and encourage equity funding instead. The Senate finance committee is also exploring limiting the interest payment deductions, aides said. (Financial Times) Dell evaluating alternative offers: "A special committee of Dell's board is evaluating separate takeover proposals from Blackstone Group and billionaire investor Carl Icahn to decide whether either or both are likely to trump an existing $24.4 billion take-private deal, a source familiar with the discussions said on Sunday." Icahn offered $15 per share for 58% of Dell, while Blackstone proposed paying more than $14.25 per share, the source said. Both offers would leave some Dell stock publicly traded, in contrast to the Silver Lake group deal already agreed, which would see all of Dell bought for $13.65 per share.(Reuters) Xi to focus on trade in Africa speech: Chinese president Xi Jinping's speech in Dar es Salaam today, on his first overseas trip as president, is expected to focus on trade relations in a move to ease local fears China was in Africa purely for its resources. (Reuters) COMMENT AND CURIOS: - European bankers pursue Russians preparing to quit Cyprus. (Financial Times) - The meaningless Cypriot natural gas numbers. (Reuters) - Gavyn Davies: The four precedents set by Cyprus. (Financial Times) - Wolfgang Münchau: Cyprus fiasco an illustration of eurozone's failure at collective action. (Financial Times) - Morgan Keegan case signals more scrutiny of fund directors. (Wall Street Journal) - Senior CMBS investors face missed payments. (Financial Times) OVERNIGHT MARKETS: UP Asian markets Nikkei 225 up +229.93 (+1.86%) at 12,568 Topix up +12.05 (+1.16%) at 1,051 Hang Seng up +140.21 (+0.63%) at 22,256 US markets S&P 500 up +11.09 (+0.72%) at 1,557 DJIA up +90.54 (+0.63%) at 14,512 Nasdaq up +22.40 (+0.70%) at 3,245 European markets Eurofirst 300 down -1.28 (-0.11%) at 1,189 FTSE100 up +4.21 (+0.07%) at 6,393 CAC 40 down -4.56 (-0.12%) at 3,770 Dax down -21.16 (-0.27%) at 7,911 Currencies €/$ 1.30 (1.30) $/¥ 94.86 (94.49) £/$ 1.52 (1.52) Commodities ($) Brent Crude (ICE) up +0.59 at 108.25 Light Crude (Nymex) up +0.48 at 94.19 100 Oz Gold (Comex) up +1.60 at 1,608 Copper (Comex) unchanged 0.00 at 345.40 10-year government bond yields (%) US 1.97% UK 1.85% Germany 1.38% CDS (closing levels) Markit iTraxx SovX Western Europe +1.28bps at 101.83bp Markit iTraxx Europe +0.01bps at 118.98bp Markit iTraxx Xover -4.14bps at 473.48bp Markit CDX IG -0.48bps at 90.58bp Sources: FT, Bloomberg, Markit
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DE IFO - Business Climate

Location: Germany

Date: 22/03/2013

Time: 9:00 - 10:00

Strength: 2/3

Previous: 107.4 / Consensus: 107.6

Notes: This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).Review Alex Nekritin's Article - Trading Euro with IFO Report

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DE IFO - Current Assessment

Location: Germany

Date: 22/03/2013

Time: 9:00 - 10:00

Strength: 2/3

Previous: 110.2 / Consensus: 110.4

Notes: The IFO Current Assessment released by the CESifo Group is closely watched as an indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).Review Alex Nekritin's Article - Trading Euro with IFO Report

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DE IFO - Expectations

Location: Germany

Date: 22/03/2013

Time: 9:00 - 10:00

Strength: 2/3

Previous: 104.6 / Consensus: 104.9

Notes: The IFO Expectations released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations for the next six months, where firms rate the future outlook as better, same, or worse. An optimistic view of those 7,000 business leaders and senior managers is considered as positive, or bullish for the EUR, whereas a pessimistic view is considered as negative, or bearish.Review Alex Nekritin's Article - Trading Euro with IFO Report

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The 6am Cut

6am Cut London Posted 2013-03-22 05:32:49 by Kate Mackenzie Asian stocks fellamid concerns about Cyprus. The MSCI Asia Pacific Index lost 0.3% and the index looks set to close today with the biggest weekly decline since October. (Bloomberg) Cypriot parliament debates banking bill today: The parliament in Nicosia is due this morning to debate legislation to enable it to qualify for a bailout and prevent the ECB from cutting off emergency liquidity for the country's banks on Monday. The 61-page bill would guarantee deposits up to €100,000 and put Laiki into resolution, and fold deposits above €100,000 into the Laiki 'bad bank'. The government has also tabled seven other bills, including one to to restrict cashing cheques and various other transactions. The eurogroup issued a statement Thursday night saying finance ministers expected a proposal from Cyprus "as rapidly as possible". In Nicosia on Thursday queues formed outside ATMs and several hundred protestors, many of them bank employees, jostled with riot police. (Financial Times)(Bloomberg)(FT Alphaville)(Eurogroup statement)(Reuters) Top StanChart executives called before US regulators: "The top three executives of Standard Chartered, including its chairman, were summoned to Washington for an unprecedented meeting with US regulators to explain a recent statement playing down the bank's violations of US sanctions laws, a person familiar with the matter said." Chairman Sir John Peace, CEO Peter Sands and finance director Richard Meddings met yesterday with senior Department of Justice officials and Cy Vance, the Manhattan district attorney. This follows the humiliating apology issued to the bank's staff and investors by chairman Sir John Peace on Thursday morning over comments made on March 5. (Financial Times) Help to Buy scheme could help existing homeowners refinance: "The Treasury's small print makes clear that borrowers cannot use it to remortgage with their existing lender, but adds: "A borrower remortgaging with a new lending institution would, however, still be able to benefit from the scheme." One person close to the government admitted the scheme could help many people who had borrowed at the height of the boom with little or no deposit." (Financial Times) "The US House of Representatives eliminated the threat of a government shutdown next week, approving on Thursday a stop-gap funding bill that temporarily eases partisan tensions after months of bitter fights over budgets." (Reuters) BBVA plans $3.5bn Mexican push: The Spanish bank announced the biggest investment by its Latin American subsidiary to date, saying that it would funnel $3.5bn into its BBVA Bancomer Mexico arm over the next three years – $1.3bn to upgrade bank branches, $1.5bn in new technology and the remaining $700m on its corporate headquarters in Mexico City. (Financial Times) Hedge fund revival: "The first quarter is likely to be one of the strongest ever for some hedge funds, in spite of a host of macroeconomic concerns worrying many mainstream investors. European equity-focused hedge funds have fared particularly well." (Financial Times) CVC in Matahari share sale: "Private-equity firm CVC Capital Partners has raised around US$1.3 billion from selling nearly half of its stake in Indonesian retailer Matahari Department Store, people with knowledge of the deal said Friday." (Wall Street Journal) Blackberry chief confident as Z10 enters US market: "Thorsten Heins, BlackBerry's chief executive, acknowledged on Thursday that the company faces a particularly tough battle in the US market, which he described as the "the most competitive" in the world." (Financial Times) COMMENT AND CURIOS: - Dijsselbloem's role in the Cyprus mess. (New York Times) - Essential reading on the Wednesday eurogroup conference call, in case you missed it. (Reuters) - Chris Giles wins review of ONS decision. (Financial Times) - The two numbers determining Jamie Dimon's fate. (Financial Times) - Inside Putin's central bank governor surprise. (Reuters) - US government to expand cyber security programme into private sector. (Reuters) - The iTunes Australia price. (Bloomberg) OVERNIGHT MARKETS: DOWN Asian markets Nikkei 225 down -187.31 (-1.48%) at 12,448 Topix down -12.39 (-1.17%) at 1,046 Hang Seng down -86.19 (-0.39%) at 22,140 US markets S&P 500 down -12.91 (-0.83%) at 1,546 DJIA down -90.24 (-0.62%) at 14,421 Nasdaq down -31.59 (-0.97%) at 3,223 European markets Eurofirst 300 down -8.16 (-0.68%) at 1,191 FTSE100 down -44.15 (-0.69%) at 6,389 CAC 40 down -54.71 (-1.43%) at 3,775 Dax down -69.46 (-0.87%) at 7,933 Currencies €/$ 1.29 (1.29) $/¥ 94.89 (94.88) £/$ 1.52 (1.52) Commodities ($) Brent Crude (ICE) up +0.23 at 107.70 Light Crude (Nymex) up +0.18 at 92.63 100 Oz Gold (Comex) unchanged 0.00 at 1,614 Copper (Comex) up +1.90 at 344.20 10-year government bond yields (%) US 1.92% UK 1.86% Germany 1.36% CDS (closing levels) Markit iTraxx SovX Western Europe -1.35bps at 100.55bp Markit iTraxx Europe +0.49bps at 118.97bp Markit iTraxx Xover +0.22bps at 477.62bp Markit CDX IG +1.63bps at 91.06bp Sources: FT, Bloomberg, Markit
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US Housing Price Index (MoM)

Location: United States

Date: 21/03/2013

Time: 13:00 - 14:00

Strength: 2/3

Previous: 0.6% / Consensus: 0.7%

Notes: The Housing Price Index released by the Office of Federal Reserve Housing Enterprise Oversightprovides an estimated value of housing market conditions. It is an important indicator as the housing market is considered as a sensitive factor to the US economy. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).

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UK Retail Sales ex-Fuel (YoY)

Location: United Kingdom

Date: 21/03/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: 0.2% / Consensus: 1.2%

Notes: The Retail Sales ex-fuel released by the National Statistics is a measure of changes in sales of the British retail sector excluding fuel. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the Pound, while a low reading is seen as negative (or bearish).

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UK Public Sector Net Borrowing

Location: United Kingdom

Date: 21/03/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: -�9.861B / Consensus: �8.250B

Notes: The Net Borrowing released by the National Statistics captures an amount of new debt held by the U.K. governments (the financial deficit in the UK national accounts). Generally speaking, if the Net Borrowing is negative, it means the UK Accounts are surplus, and that should be positive for the GBP. While a deficit is generally unfavorable for the economy, a growth in the Net Borrowing is considered as negative, or bearish for the GBP.

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UK Retail Sales (YoY)

Location: United Kingdom

Date: 21/03/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: -0.6% / Consensus: 0.5%

Notes: The retail Sales released by the National Statistics measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.

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DE Markit Manufacturing PMI

Location: Germany

Date: 21/03/2013

Time: 8:28 - 9:28

Strength: 2/3

Previous: 50.3 / Consensus: 50.5

Notes: The Manufacturing Purchasing Managers Index (PMI) released by Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in Germany. Normally, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.

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DE Markit Services PMI

Location: Germany

Date: 21/03/2013

Time: 8:28 - 9:28

Strength: 2/3

Previous: 54.7 / Consensus: 55.0

Notes: The Services PMI released by Markit Economics interviews German executives on the status of sales, employment, and their outlook. Because the performance of the German service sector is extremely consistent over time, services does not impact final GDP figures as much as the more volatile figure on the manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction.

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