Good morning New York,
FT ALPHAVILLE
Aluminium is still in full carry: Bored with zero interest in the bank? The world's aluminium oversupply burden has created some excellent carry opportunities in the off-market storage space over the last few years. If you're quick you could still get a 6-12 month deal, says Izzy.
How and why the Fed props up rates: Izzy refers to the remarks of Simon Potter, the head of the NY Fed's markets group, to explain how and why it is that the Fed is actually propping up short-term rates.
NEWS
Nelson Mandela dies: The inspirational former South African president who guided his nation through the dramatic transition that marked the end of apartheid, died on Thursday. He had spent nearly three months in hospital following his admission in June. (Financial Times)
The US "Volcker rule", which bans banks from proprietary trading, will leave a grey area for regulators to police as they see fit, according to a senior Treasury official. He said the rule itself would be quite short, leaving room for regulators' discretion. (Financial Times) It will also "require CEOs guarantee compliance… The inclusion of so-called CEO attestation is intended to help increase accountability at firms by ensuring that top executives know what types of trades are occurring at their firms, these people said." (WSJ)
Gazprom, the Russian energy group, has denied that Russia would cut the price it charges Ukraine for its gas if Kiev joined a Moscow-led economic bloc, dismissing such an idea as "naive and primitive". Viktor Yanukovich, Ukraine's president, was expected on Friday to stop in Moscow on his way home from a visit to China, though officials declined to confirm the trip would definitely still happen. (Financial Times)
WTO deal stalls as India holds firm going in to final day: People close to the negotiations said discussions overnight between director-general of the WTO Azevêdo, India's Anand Sharma, US Trade Representative Michael Froman and others had failed to yield a compromise. At issue are the terms of a "peace clause" designed to give negotiators more time to draft an agreement on the WTO rules that apply to government programmes to offer subsidised food to the poor. (Financial Times)
Shell ditches plans for US gas-to-liquids plant amid concerns over the costs of the $20bn-plus project. Shell had touted the possible GTL plant in the Gulf of Mexico region as a way to exploit the arbitrage opportunities that have opened between cheap and abundant US shale gas and expensive crude oil. However, with shale oil production also now booming in North America, putting downward pressure on US crude prices, that argument looks less compelling. (Financial Times)
The SEC "is looking into J.C. Penney's controversial offering of about $800 million in stock this fall. In a securities filing Thursday, Penney said it received a letter of inquiry from the SEC seeking information about the offering, as well as details of the company's liquidity, cash position and debt and equity financing. Penney said it is cooperating with regulators." (WSJ)
Palantir Technologies, a big data company which works for the US intelligence services, has been valued at about $9bn, after keen investor interest in the software maker that was first funded by the CIA's( not for profit venture cap firm) In-Q-Tel. It is set to announce a $58m fundraising from anonymous backers, which the person said would probably increase to $100m. (Financial Times)
"Citigroup and Wells Fargo were accused of discriminatory mortgage lending by the city of Los Angeles, which seeks damages for reduced property tax revenue and the costs of maintaining foreclosed properties. [They] have been engaged in discriminatory lending to minority borrowers since at least 2004, which placed the borrowers in loans they couldn't afford and caused a high number of foreclosures in minority neighborhoods, Los Angeles said." (Bloomberg)
"General Motors has decided to pull out of vehicle production in Australia as early as 2016, local media reported on Friday, in what would be a major blow to the struggling industry. Citing unnamed senior government sources, the Australian Broadcasting Corp said an announcement on the decision to close was supposed to have been made this week but had been put off until early next year. A GM spokesman in Detroit declined to comment on the reports." (Reuters)
Berkeley concerned about tax plans for overseas home buyers: Homebuilder Berkeley has expressed its concerns over the "increased uncertainty" surrounding taxes imposed on international buyers of its properties. Chancellor George Osborne announced on Thursday as part of his Autumn Statement that from April 2015, homeowners who are non-resident in the UK for tax purposes would become liable for capital gains tax on any increase in property values after that date. (Financial Times)
Markets: Markets were displaying typical caution ahead of crucial US jobs data which may hold the key for when the Federal Reserve starts reducing its stimulus. The prices of many highly rated government bonds were nudging lower, pushing implied borrowing costs to fresh highs, a trend that was damaging selected emerging market assets. The dollar index was up 0.1 per cent as the buck gained against the yen, while industrial commodities were firm, with Brent crude up 57 cents to $111.35 a barrel and copper holding at $3.26 a pound. Moves in equities were mostly tentative. The FTSE Eurofirst 300 was up 0.4 per cent after the Asia-Pacific, Japan aside, was generally soft. A 0.3 per cent fall for the yen to 102.015 per dollar allowed Tokyo to outperform, the Nikkei 225 rising 0.8 per cent and recouping a portion of the 3.6 per cent lost over the previous two sessions.
