Asian markets rose, led by strong performance by Japanese exporters' shares as the yen weakened against the dollar. The Nikkei was 2.1% higher and the Hang Seng was little changed while the Shanghai Composite fell 0.4% after the earthquake in Sichuan province which killed at least 188 people. The MSCI Asia Pacific rose 0.6%. (Bloomberg)(Financial Times)
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 impact . (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 have put a damper on George Osborne's hopes that an expansion of the Funding for Lending Scheme will spark a rush of credit to small and medium-sized companies as the chancellor finalises plans to revamp the programme. An extension of the scheme will be announced within the next two weeks, which banks welcomed but warned would be insufficient, on its own, to clear the credit bottleneck. (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)
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)
COMMENT AND CURIOS:
- Gavyn Davies: Little sign that policy-makers are listening to the IMF's warnings. (Financial Times)
- The composition of this year's stock market rally is unusually defensive. (Wall Street Journal)
- UK manufacturers become the luddites of Europe, with many too small to invest in robotics. (Financial Times)
- Bernanke won't be attending Jackson Hole this year because of a scheduling conflict. (Reuters)
- New research backs climate hockey stick graph. (Financial Times)
- India's water scarcity presents massive costs for governments and corporations. (Bloomberg)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +275.38 (+2.07%) at 13,592
Topix up +21.28 (+1.89%) at 1,148
Hang Seng up +8.10 (+0.04%) at 22,022
US markets
S&P 500 up +13.64 (+0.88%) at 1,555
DJIA up +10.37 (+0.07%) at 14,548
Nasdaq up +39.70 (+1.25%) at 3,206
European markets
Eurofirst 300 up +5.81 (+0.51%) at 1,153
FTSE100 up +42.92 (+0.69%) at 6,287
CAC 40 up +52.60 (+1.46%) at 3,652
Dax down -13.77 (-0.18%) at 7,460
Currencies
€/$ 1.31 (1.31)
$/¥ 99.80 (99.77)
£/$ 1.52 (1.52)
Commodities ($)
Brent Crude (ICE) up +0.37 at 100.02
Light Crude (Nymex) up +0.41 at 88.42
100 Oz Gold (Comex) up +26.30 at 1,422
Copper (Comex) down -1.55 at 313.60
10-year government bond yields (%)
US 1.72%
UK 1.66%
Germany 1.25%
CDS (closing levels)
Markit iTraxx SovX Western Europe -1.99bps at 98.99bp
Markit iTraxx Europe -0.57bps at 113.49bp
Markit iTraxx Xover -3.61bps at 458.04bp
Markit CDX IG -1.23bps at 83.75bp
Sources: FT, Bloomberg, Markit
