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Capital City - Live
Human-curated capital markets social media
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IFR's daily digest of views & news for capital markets professionals
What is it about Morgan Stanley and fixed-income?
IN A WEEK that witnessed the remarkable spectacle of Anshu Jain, Deutsche Bank’s co-CEO, delivering his speech to the annual shareholders’ meeting in German – a painfully strangled version of the language of Goethe according to native speakers but hats off to him nevertheless for the ballsy effort – Morgan Stanley perhaps produced the bigger splash as the firm’s veteran head of fixed-income sales and trading Ken deRegt upped sticks and left the firm – again.
Nikkei nosedive not just a correction
SO THE VERSION of events being touted by Japan bulls is that last week’s one-day 7.3% plunge in the Nikkei represented simply a pullback for a market that had put in its most supercharged performance over six months since 1953. This presents a major buying opportunity for those who believe “Abenomics” and the newly pugilistic Bank of Japan will drag Japan out of its two lost decades – or so the story goes.
Scary is as scary does
NOT LONG AGO (though well before it was in all the papers) I commented on the slow but persistent revival of the CLO business. In a way, I’m not surprised. To call yields on vanilla credit anaemic would be generous. At the end of the day, no pension or annuity payout has been funded by beating some fatuous benchmark index. It is paid out of hard cash and what investors therefore need is a hearty inflow of dividends and coupons.
Guest Comment: The European Turnaround
The ECB has achieved some successes over the past two years. Its liquidity injections stopped the bleeding in bank deposits, narrowed the gap in core-periphery bond yields, and made markets more resilient to shocks like Cyprus or Italy’s inconclusive elections.
IFR Comment: ECB - Keep an eye on excess liquidity
We are now edging closer to a scenario where the reduction in excess liquidity could become an issue for the ECB.
DERIVATIVES: QE tapering plans drive rates sell-off
Rising expectations that the US Federal Reserve will pare back its asset purchase programme in the coming months have driven a sell-off across the rates market. But some believe the magnitude of such shifts may have rushed ahead of fundamentals, which paint a more uncertain picture about any imminent tapering in quantitative easing.
Revenge of the markets
For months, markets have been dancing to central bankers’ tune, but that may now be changing. It must have been fun to be a central banker in the early part of 2013: You say “jump” and Mr. Market says “how high?”
DERIVATIVES: Liffe faces battle for Euribor futures
Large structural changes afoot in the Europe’s exchange landscape are set to drive one of the biggest shake-ups as new and incumbent players vie to win market share across some of the most liquid futures contracts. At the heart of the battle is the 4.5m of open interest in three-month Euribor futures contracts – a market currently controlled by NYSE Liffe.
IFR Brief: IFO breakdown positive for German Q2 growth
The most positive aspect to the IFO report is the breakdown related to the service sector.
What next for Abenomics and Asia?
Prime Minister Shinzo Abe prepares to woo Myanmar with newly-minted yen, and the country braces for key monthly data. Reuters correspondent Wayne Arnold tells us what to look for in a crucial week ahead for Japan.
Malaysia tycoon plans IPO of football club Cardiff City
(Reuters) Malaysian billionaire Vincent Tan is exploring an IPO of UK football team Cardiff City as early as this year, people with knowledge of the matter told Reuters, in a deal that would follow the team’s recent promotion to the Premier League.
IFR Comment: Tapering QE in the context of dual mandate
When it comes to the tapering debate what we have is a picture of a Fed that lacks consensus. The most important core group led by Bernanke plays a pivotal role in mapping out a strategy and the testimony highlights that based on the Fed’s dual mandate there is some distance before the conditionality of tapering QE is met.
German bad bank to raise international profile with explicit guarantee
German bad bank FMS-Wertmanagement is set to become the latest agency to benefit from an explicit guarantee from the German government, which analysts believe will increase appetite for its bonds among international investors.
DERIVATIVES: Gold fall spurs hedging re-think
The recent sharp drop in the price of gold may encourage miners that are feeling the squeeze on their margin production costs to undertake a dramatic u-turn and open up hedge books once again, although bank overtures are likely to meet stern resistance from clients after years of shunning hedging programmes.
Japan joins global risk parade
The Nikkei’s drop is an overdue correction, says Breakingviews, but the sell off is down to US and China concerns. Being a safe haven has its drawbacks.
Goldman unveils checks on conflicts in bid to fix image
(Reuters) - After dozens of meetings with executives and regulators, 100,000 hours of employee training and an immeasurable amount of public grief, Goldman Sachs Group Inc CEO Lloyd Blankfein claimed success in putting his bank and his legacy back on track.
US HY issuers turn to risky structures as investors snap up deals
As investors continue to snap up US junk bonds in their quest for yield, issuers are taking advantage to bring some riskier structures.
On sequels, selloffs, tightening cycles and the Force
Same movie, different script? The one way traffic which we have been watching for the best part of six months suddenly hit the buffers in a twelve-hour period with some unsettling words from Federal Reserve President Ben Bernanke and a less than sparkling HSBC Manufacturing PMI out of China which, at 49.6, indicates actual contraction. However, it was the Nikkei that took it on the nose.
Bankers demand faster action on European banking union
Bankers called Thursday for faster implementation of the proposed banking union in Europe, saying the delay is stalling the region’s recovery and hampering its financial sector.
IFR Comment: Too many one-way bets, tapering/China an excuse
In an attempt to rationalise the price action it is easy to blame the data out of China overnight, Fed tapering debate or even the lack of any new initiatives from BoJ. But the simple truth is likely to be that the market was positioned one-way and it creating a scramble to cut exposure making a correction look a lot more frightening.
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DERIVATIVES: Sinking yields see exotic yen products return
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UK regulator fines JP Morgan £3m for bad advice
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BONDS: Malaysia leads way in Basel III debt
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Japan rates may torpedo recovery
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IFR Comment: BoJ - Flexibility and frequency
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Portugal plunders pension fund to tackle debt cliff
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On the EU, Swiss secrecy, Soviet-style sins and Apple
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UK regulator says satisfied with Lloyds, RBS capital plans
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IMF urges Britain to do more to boost growth
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US judge says ex-strategist can sue UBS as whistleblower
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Bank of Japan vows market steps to curb bond turbulence
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No more easy pickings in Russia's banking market
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JPM shows shareholders alive and kicking
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IFR Comment: Fed tapering bar higher than thought
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Comment: Waiting for the real Japan story to unfold
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Equity block trades or how to lose your shirt in a heartbeat
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Bernanke’s dangerous optimism
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On good times, great runs and the gender of bonds
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IFR Comment: Inflation relief provides flexibility for BoE
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Credit Suisse turns more optimistic on Brazil IPOs this year
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Goldman exits China's ICBC, 7 years and billions later
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IFR Comment: An argument against negative ECB depo rate
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FINANCIALS WRAP: Market prepares for Deutsche Tier 2 'bonanza'
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Update: JPMorgan shareholders support Dimon's dual roles in vote
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Joost rules the roost
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IFR Comment: The Fed needs to cushion negative "tapering" feedback
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UK should get on front foot with City
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On European Whits, UKIP and oily decisions
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European securitisation event plans return to pre-crisis home
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IFR Comment: Gold/silver support USD-strength expectation
