Good morning New York,
FT ALPHAVILLE
Pop go Geneva house prices: Looks like Geneva property is finally turning into a buyer's market, especially on the high value side. Izzy examines some of the reasons for the move.
Gold, paper, scissors, lizard, e-money: Miles Kimball, economics professor at the University of Michigan who blogs at Confessions of a Supply-Side Liberal, is fast becoming the poster child for the movement to introduce an e-money solution to overcome the ZLB problem. Izzy runs through his latest thoughts on how such a system could be implemented.
NEWS
Optimism grows for developed economies: Yields on sovereign debt, which move inversely to prices, broke above key levels in Europe and the US, even after Mario Draghi, the European Central Bank president, warned about the fragility of the eurozone's nascent economic recovery. Yields on two-year US Treasuries rose above 0.5 per cent for the first time since June 2011 and markets priced in the first US Federal Reserve interest rate rise as early as December next year. In the UK, 10-year government bond yields rose above 3 per cent for the first time in two years. (Financial Times)
Summers would face key 'no' votes for Fed: At least three Democrats on the Senate Banking Committee are expected to oppose Larry Summers if he's nominated to chair the Federal Reserve. "Democrats hold a two-vote majority on the 22-member panel, so the loss of three Democrats would make it impossible" for Summers to get to the full Senate vote unless some Republicans on the Committee provide backing. (Wall Street Journal)
IMF warns over Norwegian housing bubble: In its latest assessment of the oil-rich Nordic country, the IMF increased its estimate of how much Norwegian house prices are overvalued from 15-20 per cent in its previous report in 2011. (Financial Times)
UK interest rate expectations rise: The market is speculating that the Bank of England will disregard its "forward guidance" and hike the 0.5 per cent rate in the final months of 2014 or the beginning of 2015 rather than in the back end of 2016, after strong data has transformed the economic outlook. (Financial Times)
ICAP in talks to settle US, UK rate probe: "Regulators leading the world-wide investigation into interest-rate manipulation are in advanced talks with ICAP to settle a civil probe into the brokerage firm's alleged involvement in the scandal, according to people familiar with the negotiations." (Wall Street Journal)
Apple probes work conditions at China factory: Apple is investigating fresh allegations of poor working conditions at a Chinese factory said to be producing a cheaper iPhone, expected to be unveiled next week. (Financial Times)
Blockbuster Verizon bond sale to test debt appetite: With Verizon likely to seek more than $20bn of financing from US investors in the coming weeks, the company and the banks underwriting the sale will soon discover whether that sharp jump in yields since May means that this debt package can attract buyers, who have not done well since Apple's offering. (Financial Times)
Watchdog launches Batista investigation: Brazil's market regulator, CVM, has launched a formal investigation into the dealings of Eike Batista and executives at OGX as anger grows among investors over the near-collapse of his flagship oil company. CVM said on Thursday it had opened an inquiry into whether Brazil's former richest man had broken market rules regulating the disclosure of information. (Financial Times)
Yuan volatility decreases: Volatility in the yuan was near a three-year low after PBOC Governor Zhou Xiaochuan said China has ample measures to cope with any halt in quantitative easing policies. (Bloomberg). "Trading in the Chinese currency, also known as the renminbi, has more than tripled over the past three years, to $120 billion a day in 2013, the BIS said, referencing survey data from April. Daily U.S. dollar trading in 2013 has averaged $4.65 trillion." (Wall Street Journal)
Trading in yen soars (from 19 per cent in 2010 to 23 per cent this year) on "Abenomics" drive: A triennial survey from the Bank for International Settlements found trading in foreign exchange markets averaged $5.3tn a day in April 2013, up from $4tn three years ago – with the rising popularity of FX forwards and options accounting for almost a quarter of the growth. (Financial Times)
Markets: Stocks were mixed and US benchmark borrowing costs were hovering near two-year highs as traders waited to see if US jobs data would reinforce expectations for a shift in Federal Reserve policy. Lingering wariness over the possible geopolitical fallout of any US strike on the Syrian regime was adding to investors' reticence to make bold bets. Brent crude was up 19 cents at $115.45 a barrel and gold was up $1 to $1,368 an ounce as the dollar index dipped 0.2 per cent. Equity moves were meagre. The FTSE All-World equity index was barely changed as Europe's Stoxx 600 traded fractionally lower after the FTSE Asia Pacific index lost less than 0.1 per cent. US index futures showed Wall Street's S&P 500 easing 1 point to 1,654, though that could change significantly depending on the outcome of the US non-farm payrolls report, due for release at 1330 BST. (Financial Times)
