The US economy will officially become 3% bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties, R&D spending, and other intangible assets. A BEA official said it would be the biggest change since computer software was included in GDP in 1999. The revision, equivalent to adding a country as big as Belgium to the estimated size of the world economy, will make the US one of the first adopters of a new international standard for GDP accounting. (Financial Times)
Italian president Giorgio Napolitano was re-elected on Saturday and is expected to propose a a bipartisan cabinet supported by the two main, centre-left and centre-right forces, as had been anticipated after the national elections two months ago which resulted in a deadlock. Meanwhile Giorgio Squinzi, head of the country's main business lobby Confindustria, urged politicians to form a coalition government or risk condemning the country to a prolonged recession. (Wall Street Journal) (Financial Times)
Banks pull back from risky regions: Some of the world's biggest commercial banks are pulling back from selected operations in fast-growing markets in the Middle East and parts of Asia, fearing they may fall foul of tightening rules on anti-money laundering. Citigroup and JPMorgan are among the US banks to have retreated from a number of so-called correspondent banking relationships across several countries in the Middle East, Africa and Asia, aware that they cannot vouch for the integrity of local partners. (Financial Times)
BaFin puts Reits in turmoil: The German financial regulator has proposed that German Reits should be regulated as investment funds under the EU's Alternative Investment Fund Managers Directive, due to come into effect in July. This would bar many equity funds from investing in Reits and deter investments from countries such as China. (Financial Times)
U.S. box office heroes proving mortal in China: "In the first quarter this year, ticket sales for American movies in China — including films as prominent as "The Hobbit: An Unexpected Journey" and "Skyfall" — fell 65 percent, to about $200 million, while sales for Chinese-language films rose 128 percent, to well over $500 million, according to the online publication Chinafilmbiz.com." (New York Times)
China's slower Q1 growth is a 'normal' effect of structural reforms, PBoC governor Zhou Xiaochuan said. "China's undergoing economic restructuring, which sometimes is not in lockstep with growth," he told reporters on Saturday after the G20 meeting. "We need to sacrifice short-term growth for the purposes of reforms and structural adjustments." (Bloomberg)
Three more executives leave ENRC: Three senior executives have resigned and a fourth has taken leave of absence from the Kazakh mining group that controlling shareholders are considering removing from the FTSE 100 via a buyout. The departures come ahead of a board meeting on Tuesday where sharp divisions are expected to emerge between members associated with controlling shareholders and directors independent of them. (Financial Times)
G4S to quit key Israel contracts amid protests: "G4S, the world's biggest security company by revenues, has confirmed it is planning to quit key contracts in Israel amid protests against its involvement in settlements within occupied Palestinian territories." (Financial Times)
Audit regulator calls for end to anonymity: James Doty, head of the US audit regulator PCAOB, has made a fresh call for senior auditors to be stripped of their anonymity as details continued to emerge from the KPMG insider trading scandal. "Investors really want this. They don't see why they shouldn't have it," he told the FT. (Financial Times)
ABB, the Swiss engineering conglomerate, is to buy US renewable energy company Power-One for $1.03bn in cash, in an effort to boost its position in solar energy. Under the terms of the deal, which will see ABB take on Power-One's $266m in net cash, the Swiss group will pay Power-One's shareholders $6.35 a share, a 57 per cent premium to Friday's undisturbed closing price. (Financial Times)
Betfair rejects £910m CVC approach: Betfair has rejected a takeover approach from a consortium led by private equity group CVC Capital Partners, arguing the £910m offer undervalued the online gambling group. The complex cash and share offer valued each Betfair share at 880p, a 9 per cent premium to Friday's closing price and 25 per cent higher than the bookmaker's share price before CVC declared an interest in it earlier this month. (Financial Times)
Markets: Investors are displaying an appetite for "risk" products after the G20 waved through Japan's attempts to stimulate its economy. The FTSE All-World equity index is gaining 0.2 per cent as the FTSE Eurofirst 300 pops 0.4 per cent and after the Asia-Pacific region advanced 0.7 per cent. US index futures suggest Wall Street's S&P 500 will add 5 points to 1,560. Additional optimism is being generated by developments in Italy, which finally elected a new president over the weekend. The euro is trading at $1.3040 after changing hands at $1.3050 late on Friday. Rome's implied two-year borrowing costs have fallen to a record low of 1.27 per cent, while 10-year yields are down 10 basis points to 4.12, the lowest since November 2010, writes the FT's Global Markets magpie Jamie Chisholm.
