Markets: Asian markets were mixed, with Japanese stocks dropping from a six-year high, while China stocks outperformed. Overall, most bourses weakened as investors stayed on the sidelines ahead of important data due out later this week, including Friday's US jobs report from November. (Financial Times)
"China's services industry grew at a steady pace in November, a private survey showed on Wednesday, a further indication of strength in the world's second-largest economy as the government embarks on a sweeping restructuring drive. The HSBC/Markit services PMI stood at 52.5 in November, little changed from October's 52.6..." (Reuters)
India's service sector slowed for a fifth straight month in November, highlighting broad weakness around the country. The HSBC/Markit survey was little changed last month at 47.2, up from 47.1 in October. (FastFT)
Australia's economy grew 2.3 per cent in the third quarter. That was below forecasts and the country's worst quarterly expansion rate this year. (FastFT)
"Japanese Prime Minister Shinzo Abe is readying a $182 billion economic package this week in his latest bid to pull the economy out of deflation, but the new measures will not require the government to sell more debt. The package, to be approved by Abe's government on Thursday, will have a headline value of 18.6 trillion yen ($181.6 billion), people familiar with the process said on Wednesday." (Financial Times)
Pro-European protesters in Ukraine vowed on Tuesday to continue mass demonstrations in Ukraine after the government survived a no-confidence vote in parliament over its withdrawal from an integration agreement with the EU. But as government agitation mounted over the protests, Prime Minister Mykola Azarov insisted he was "ready for dialogue" with protesters' representatives and opposition leaders over the government's stance on the Europe agreement. Ukraine's president was absent from Kiev on Tuesday, making a previously scheduled trip to China for talks on potential Chinese loans and investments. (Financial Times)
Stakes escalate for Biden in Beijing: He's "scheduled to hold back-to-back meetings with President Xi Jinping on Wednesday before dining with the Chinese leader [and] preceded the visit with a tone that was firm but cordial—apparently aimed at avoiding a public fight while at the same time assuring jittery allies that the U.S. was weighing in on the territorial dispute." (WSJ) But he "should not expect any substantial headway if he comes simply to repeat his government's previous erroneous and one-sided remarks", the official English-language China Daily, often used by China to get its message across to the outside world, said in a strongly worded editorial." (Reuters)
"The Obama administration is privately raising concerns with officials in South Korea about their plans to let a Chinese telecommunications giant develop the country's advanced wireless network, expanding a quiet campaign to warn key allies against integrating the Chinese technology into their systems. The U.S. effort in South Korea, which followed a similar push with close ally Australia, shows the extent to which the Obama administration is concerned about the expansion of China's Huawei Technologies Co. in building critical telecommunications networks for key allies." (WSJ)
US regulators on Tuesday said they plan to meet on Dec 10 to vote on the long-awaited Volcker rule, which sceptics believed would not get done by the end of the year deadline. The Fed, the CFTC, and the FDIC are among the regulators that will meet on December 10 to consider the rule aimed at banning banks from trading from their own accounts. (Financial Times) (WSJ)
Europe to unleash heavy rate-fixing fines: Brussels will unveil hefty fines as soon as Wednesday on global banks that allegedly formed cartels to rig two global interest rate benchmarks, in a settlement that is set to break European antitrust enforcement records. Some banks – JPMorgan, HSBC and Crédit Agricole – have been involved in the talks but were last month balking at signing a joint Euribor settlement. (Financial Times)
Boom-era credit deals poised for comeback: Last month Citigroup placed an unusual job advertisement. The bank was seeking an analyst able to crunch the numbers on an obscure financial security: synthetic collateralised debt obligations. Four weeks later, job applicants would find the position filled. Such has been the clamour among investors for the higher yields from higher-risk products that big banks including Citi, JPMorgan Chase and Morgan Stanley are turning once again to the more esoteric parts of the financial markets. Hence the need to hire. (Financial Times)
Six major insurance companies will announce plans on Wednesday to invest £25bn into UK infrastructure as ministers seek to put the bellows under the government's programme of building projects. The pledge will form the centrepiece of a relaunched "National Infrastructure Plan" designed to deliver more than £375bn of energy, transport, flood, waste and water schemes in the coming decades. (Financial Times)
UK prime minister David Cameron has risked angering the Chinese government by launching a robust defence of GlaxoSmithKline as the UK drug company steps up its battle to save its reputation in the country. GSK is facing prosecution from Chinese authorities over allegations of bribery, while dozens of its local employees and a UK man it used as a corporate investigator remain in detention. (Financial Times)
On the back of Chinese reforms, Hong Kong IPO market springs back to life: In spite of missing out – at least for now – on the blockbuster listing of Alibaba, Hong Kong's market for initial public offerings has sprung back to life. After a nervous few months, deal flow has picked up, guaranteeing that 2013 will better last year's moribund haul. In the year to date, $12bn has been raised in the city, beating last year's total of $11.4bn, according to Dealogic. (Financial Times)
"U.S. oil prices vaulted to a one-month high on news that the southern leg of the Keystone pipeline would begin carrying crude oil to Texas refineries next month, helping reduce domestic stockpiles." (WSJ)
All three of the big US carmakers achieved domestic sales beyond analysts' most bullish expectations last month – as falling fuel prices, cheap finance and improved model ranges helped them to seize market share. (Financial Times)
COMMENTS & CURIOS
China must not copy the Kaiser's errors (Financial Times Wolf)
Rising bond yields point to China's coming transition (Financial Times)
CITIC Pacific has finally loaded its maiden shipment of iron ore from its Australian venture – four years behind schedule and $8bn over budget (Financial Times)
A call for rocket insurance in China (Reuters)
Fed's Williams: Cutting rate on banks' reserves 'would make sense' (Reuters)
Smaller mortgage lenders lead field in US (WSJ)
"Rules for the capture of hostages by terrorists" in Russia (Financial Times)
Britain needs to face up to its household debts (Financial Times)
London's mayor is half right on envy, greed and inequality (Financial Times)
OVERNIGHT MARKETS
Asian markets
Nikkei 225 down -316.46 (-2.01%) at 15,433
Topix down -20.62 (-1.63%) at 1,242
Hang Seng down -106.10 (-0.44%) at 23,804
US markets
S&P 500 down -5.75 (-0.32%) at 1,795
DJIA down -94.15 (-0.59%) at 15,915
Nasdaq unchanged 0.00 (0.00%) at 4,037
European markets
Eurofirst 300 down -19.84 (-1.53%) at 1,281
FTSE100 down -62.90 (-0.95%) at 6,532
CAC 40 down -113.37 (-2.65%) at 4,172
Dax down -178.56 (-1.90%) at 9,223
Currencies
€/$ 1.36 (1.36)
$/¥ 102.53 (102.49)
£/$ 1.64 (1.64)
€/£ 0.829 (0.829)
Commodities ($)
Brent Crude (ICE) up +0.21 at 112.83
Light Crude (Nymex) up +1.15 at 97.19
100 Oz Gold (Comex) up +0.20 at 1,222
Copper (Comex) up +0.01 at 3.21
10-year government bond yields (%)
US 2.78%
UK 2.83%
Germany 1.73%
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.09bps at 63.22bp
Markit iTraxx Europe +2.93bps at 80.92bp
Markit iTraxx Xover +9.57bps at 324.05bp
Markit CDX IG +0.96bps at 70.52bp
Sources: FT, Bloomberg, Markit
