The 6am Cut

6am Cut London Posted 2013-04-02 05:49:52 by Kate Mackenzie Japanese stocks led Asian markets lower as the yen rose to a one-month high against the dollar after an unexpected slowdown in US manufacturing, and the yen continued to rise ahead of a much-anticipated BoJ board meeting on Thursday. (Financial Times) Slight easing of Cyprus bailout terms: A draft copy of the loan agreement by the eurozone and the IMF seen by the WSJ gives Cyprus until 2017 -- one year longer than previously negotiated -- to reach a 4% primary budget surplus. "Putting public finances on a sustainable path is of overriding importance in order to stabilize the economy and to restore the confidence of companies, citizens and foreign investors in the longer-term economic prospects of Cyprus," the draft agreement says. (Wall Street Journal) The post-FSA era begins for UK finance sector: Today the Prudential Regulation Authority, an arm of the BoE, will begin supervising 1,700 banks, insurers and large investment firms. Also today the Financial Conduct Authority begins oversight of the same firms, plus taking sole responsibility for another 25,000 businesses, mostly brokers. (Financial Times) Central Bank of Cyprus governor Panicos Demetriades tried to calm fears of a deposit flight once capital controls end. Demetriades told the FT the controls should be lifted "gradually". "I can't really tell you if it will be seven or 14 days before capital controls end." He denied there would be a run on deposits. "Once people realise how well capitalised the banks are there is little reason why there will be deposit flight." (Financial Times) US banks are weighing tactics to mitigate the effect of EU bonus caps. ""We are not thinking of transferring people from London to Dubai tomorrow," said one US banker. "But future growth in Africa could be led out of the Middle East or South Africa." Other approaches include restructuring remuneration packages. "JPMorgan is among the banks to have considered the introduction of "allowances" that could be increased or decreased annually, according to bank insiders." (Financial Times) The US has gained 387,000 managers and lost almost 2m clerical jobs since 2007, BLS data show. Employment growth came from healthcare, management, computing and food service jobs, but salaries for many of the fast-growing occupations are lower than for those they are replacing. (Financial Times) COMMENT AND CURIOS: - Jeffrey Sachs: Obama should think longer-term on economic policy. (New York Times) - Rumours of a cheap energy jobs boom remain just that. (New York Times) - Except maybe for European companies... (Washington Post) - 'Airpocalypse' drives expats from Beijing. (Financial Times) OVERNIGHT MARKETS: Asian markets Nikkei 225 down -100.20 (-0.83%) at 12,035 Topix down -3.95 (-0.39%) at 996.62 Hang Seng up +3.40 (+0.02%) at 22,303 US markets S&P 500 down -7.02 (-0.45%) at 1,562 DJIA down -5.69 (-0.04%) at 14,573 Nasdaq down -28.35 (-0.87%) at 3,239 European markets Eurofirst 300 up +4.86 (+0.41%) at 1,189 FTSE100 up +24.18 (+0.38%) at 6,412 CAC 40 up +19.78 (+0.53%) at 3,731 Dax up +6.22 (+0.08%) at 7,795 Currencies €/$ 1.29 (1.28) $/¥ 92.79 (93.21) £/$ 1.52 (1.52) Commodities ($) Brent Crude (ICE) down -0.24 at 110.84 Light Crude (Nymex) down -0.27 at 96.80 100 Oz Gold (Comex) up +2.60 at 1,603 Copper (Comex) down -0.75 at 336.00 10-year government bond yields (%) US 1.84% UK 1.78% Germany 1.29% CDS (closing levels) Markit iTraxx SovX Western Europe +0.51bps at 105.22bp Markit iTraxx Europe -2.83bps at 125.59bp Markit iTraxx Xover -5.69bps at 485.6bp Markit CDX IG -0.8bps at 90.01bp Sources: FT, Bloomberg, Markit
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US Personal Income (MoM)

Location: United States

Date: 29/03/2013

Time: 12:30 - 13:30

Strength: 2/3

Previous: -3.6% / Consensus: 0.8%

Notes: The Personal Income released by the Bureau of Economic Analysis, Department of Commerce measures the total income received by individuals, from all sources including wages and salaries, interest, dividends, rent, workers' compensation, proprietors' earnings, and transfer payments. This figure can provide insight on the US employment situation. A high reading is positive for the USD, whereas a low reading is negative.

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US Core Personal Consumption Expenditure - Prices Index (YoY)

Location: United States

Date: 29/03/2013

Time: 12:30 - 13:30

Strength: 3/3

Previous: 1.3%

Notes: The Core Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average amount of money that consumers spend in a month. "Core excludes seasonally volatile products such as food and energy in order to capture an accurate calculation of the expenditure. It is a significant indicator of inflation. A high reading is bullish for the USD, while a low reading is bearish.

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US Personal Spending

Location: United States

Date: 29/03/2013

Time: 12:30 - 13:30

Strength: 2/3

Previous: 0.1% / Consensus: 0.6%

Notes: Personal spending, released by Bureau of Economic Analysis, Department of Commerce, measures purchases of goods and services by households and by nonprofit institutions that serve households from private business.

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US Core Personal Consumption Expenditure - Price Index (MoM)

Location: United States

Date: 29/03/2013

Time: 12:30 - 13:30

Strength: 2/3

Previous: 0.1% / Consensus: 0.2%

Notes: The Core Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average amount of money that consumers spend in a month. "Core excludes seasonally volatile products such as food and energy in order to capture an accurate calculation of the expenditure. It is a significant indicator of inflation. A high reading is bullish for the USD, while a low reading is bearish.

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US Gross Domestic Product Annualized

Location: United States

Date: 28/03/2013

Time: 12:30 - 13:30

Strength: 3/3

Previous: 3.1% / Consensus: 0.4%

Notes: The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the USD, while a low reading is negative.

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US Core Personal Consumption Expenditures (QoQ)

Location: United States

Date: 28/03/2013

Time: 12:30 - 13:30

Strength: 2/3

Previous: 0.9% / Consensus: 0.9%

Notes: The Real Personal Consumption Expenditure released by the Bureau of Economic Analysis, Department of Commerce is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation. Generally speaking, a high reading is bullish for the USD, while a low reading is bearish.

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US Personal Consumption Expenditures Prices (QoQ)

Location: United States

Date: 28/03/2013

Time: 12:30 - 13:30

Strength: 2/3

Previous: 1.5% / Consensus: 1.5%

Notes: Personal Consumption Expenditures, released by US Department of Commerce, measures price changes in consumer goods and services. Personal consumption expenditures consist of the actual and imputed expenditures of households; the measure includes data pertaining to durables, non-durables and services. It is essentially a measure of goods and services targeted toward individuals and consumed by individuals.

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US Initial Jobless Claims

Location: United States

Date: 28/03/2013

Time: 12:30 - 13:30

Strength: 2/3

Previous: 336K / Consensus: 340K

Notes: The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the USD.

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US Gross Domestic Product Price Index

Location: United States

Date: 28/03/2013

Time: 12:30 - 13:30

Strength: 3/3

Previous: 0.9% / Consensus: 0.9%

Notes: The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise. 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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DE Unemployment Change

Location: Germany

Date: 28/03/2013

Time: 8:55 - 9:55

Strength: 3/3

Previous: -3K / Consensus: -4K

Notes: The Unemployment Change released by the Bundesagentur f�r Arbeit and published by the German Statistics Office is a measure of the change in the number of unemployed people in Germany. A rise in this indicator has negative implications for consumer spending which encourages economic growth. Generally, a high reading is seen as negative (or bearish) for the EUR, while a low reading is seen as positive (or bullish).

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DE Unemployment Rate s.a.

Location: Germany

Date: 28/03/2013

Time: 8:55 - 9:55

Strength: 2/3

Previous: 6.9% / Consensus: 6.9%

Notes: The Unemployment Rate released by the Bundesagentur f�r Arbeit and published by the German Statistics Office shows , in a percent basis, the amount of unemployed people in Germany. A decrease in this indicator has positive implications for consumer spending which stimulates economic growth. Normally, a decrease of the figure is bullish for the EUR, while an increase is bearish.

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The 6am Cut

6am London Cut Posted 2013-03-28 05:50:03 by FT Alphaville Cyprus imposed severe capital controls: "Cyprus is to become the first eurozone country ever to apply capital controls – with limits on credit card transactions, daily withdrawals, money transfers abroad and the cashing of cheques – intended to prevent a vast outflow of euros when its banks open on Thursday. Under drastic measures that some analysts say are incompatible with monetary union, depositors would be able to withdraw no more than €300 in cash each day, said people familiar with the move. Transfers over €5,000 would require permission of the central bank." (Financial Times) Chevron cuts senior executives' pay: "Chevron, the US oil group, is cutting the pay of its chief executive and other senior executives after high-profile safety failures. The board has decided to cut stock awards and cash bonuses for 2012 by about 10 per cent, according to a person familiar with the decision." (Financial Times) RBS and Lloyds must raise extra £9bn: "Britain's two part-nationalised banks account for as much as £20bn of a £25bn capital shortfall across the sector identified by the UK's new financial ­stability regulator, people close to the process said. The Financial Policy Committee announced yesterday that UK banks were overstating their capital by £52bn, after it scrutinised their balance sheets with tougher measures of risk and factored in looming fines and expected losses." (Financial Times) Google eyewear to be 'made in USA': "Google will manufacture Project Glass, its futuristic digital eyewear, in Silicon Valley, in a high-profile example of the return of electronics manufacturing to the US. Google is working with Hon Hai Precision Industry, the Taiwanese contract manufacturer better known as Foxconn, to assemble the sci-fi headset at a facility in Santa Clara, California, according to people familiar with the company's plans." (Financial Times) Blacktone is open to keeping Michael Dell on as CEO if it gains control of Dell. Mr Dell began the current bidding war for the company with an offer to take it private alongside Silver Lake Partners, but his fate as founder and largest shareholder is likely to be key to any rival deal. Blackstone sees Mr Dell as a "potential ally" for securing control of the company if its bid succeeds. (Wall Street Journal) American Airlines' $11bn merger with US Airways received a bankruptcy judge's approval. However, Judge Sean Lane objected to a clause giving a $20m severance package to AMR's outgoing chief executive, Tom Horton (Reuters). The two airlines announced the merger plan in February, with the backing of creditors (Bloomberg). COMMENT AND CURIOS - Single supervisor? Not so fast. (Brussels blog) - Icahn unleashed. (Forbes) - Next stop for wealthy Russians: New York. (Guardian) - Personality hunger and the regulation of consumptive choice. (L'Hote) - Atheist-branded packages. (Marginal Revolution) - Faster smartphones or better battery life? (Slate) OVERNIGHT MARKETS: MIXED Asian markets Nikkei 225 down -173.29 (-1.39%) at 12,321 Topix down -14.93 (-1.43%) at 1,032 Hang Seng down -250.21 (-1.11%) at 22,215 US markets S&P 500 down -0.92 (-0.06%) at 1,563 DJIA down -33.49 (-0.23%) at 14,526 Nasdaq up +4.04 (+0.12%) at 3,257 European markets Eurofirst 300 down -4.51 (-0.38%) at 1,184 FTSE100 down -11.81 (-0.18%) at 6,388 CAC 40 down -37.00 (-0.99%) at 3,712 Dax down -90.58 (-1.15%) at 7,789 Currencies €/$ 1.28 (1.28) $/¥ 94.16 (94.43) £/$ 1.51 (1.51) Commodities ($) Brent Crude (ICE) up +0.24 at 109.93 Light Crude (Nymex) up +0.04 at 96.62 100 Oz Gold (Comex) down -1.10 at 1,605 Copper (Comex) up +1.35 at 344.85 10-year government bond yields (%) US 1.84% UK 1.75% Germany 1.27% CDS (closing levels) Markit iTraxx SovX Western Europe +2bps at 104.71bp Markit iTraxx Europe +5.3bps at 128.42bp Markit iTraxx Xover +9.22bps at 491.29bp Markit CDX IG +2.08bps at 92.49bp Sources: FT, Bloomberg, Markit
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DE Retail Sales (YoY)

Location: Germany

Date: 28/03/2013

Time: 7:00 - 8:00

Strength: 2/3

Previous: 2.4% / Consensus: 0.4%

Notes: The Retail Sales released by the Statistisches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. 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. The positive economic growth anticipates "Bullish for the EUR, while a low reading is seen as negative, or bearish, for the EUR.

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UK Nationwide Housing Prices n.s.a (YoY)

Location: United Kingdom

Date: 28/03/2013

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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