Frontrunning: April 4
- Low cost era over for China's workshops to the world (Reuters)
- The HFT scourge never ends: SEC Probes Ties to High-Speed Traders (WSJ)
- Rehn says Portugal may need "bridge" (Reuters)
- China's GDP likely to have slowed in the first quarter (China Daily)
- Chinese Premier Blasts Banks (WSJ)
- China keen on free trade pact with U.S.: Greenberg (Reuters)
- Martin Wolf - Two cheers for China’s rebalancing (FT)
- Draghi Tested as German Pay Deals Add to Euro Divergence (Bloomberg)
- Eurozone weighs union on bank regulation (FT)
Overnight Media Summary via Reuters
* Chinese Premier Wen Jiabao told a national audience that China's state-controlled banks are a "monopoly" that must be broken up.
* Fitch Group's new CEO Paul Taylor said Credit Suisse dropped the firm's rating from a mortgage-backed security because Fitch took a harsher view than two rivals that assigned triple-A ratings to the deal.
* Fisker Automotive's new CEO Tom LaSorda said the luxury electric-vehicle company is looking at alternatives to building its second model in a former GM plant, raising the possibility of abandoning a plan that had financial backing from the Obama administration.
* Fed officials remained cautious about economic improvement and showed little enthusiasm for launching any additional bond-buying soon.
* Yahoo Inc in a long-expected move, is set to begin laying off staff on Wednesday as the Internet company tries to cut costs and change its focus after years of flat revenue growth and declining use of some of its websites.
* Total SA said Tuesday a specialized team could board the abandoned Elgin North Sea platform as soon as Wednesday evening to begin securing the area in advance of efforts to stem an onboard gas leak.
KING OF MINING M&A QUITS TO FIGHT FINE
Ian Hannam, the London banker dubbed "the king of mining M&A", has resigned from JPMorgan Cazenoze, vowing to fight a 450,000 pounds ($718,700) fine from the UK Financial Services Authority for market abuse.
MURDOCH RESIGNS AS BSKYB CHAIRMAN
James Murdoch on Tuesday stepped down as chairman of British Sky Broadcasting to prevent phone hacking and other scandals at News Corp tainting the UK satellite broadcaster.
BTG PACTUAL IPO TO VALUE BANK AT $15 BILLION
BTG Pactual is set to float later this month in a deal that will value the rapidly growing Brazilian investment bank's equity at up to $15 billion and the shareholdings of a swathe of executives at more than $150 million each.
PENT-UP DEMAND DRIVES US CAR SALES
The U.S. motor industry recorded its best monthly sales for nearly five years in March on the strength of a brightening economy and pent-up demand.
CHINA TO LET IN MORE FOREIGN INVESTMENT
China has almost tripled the amount of money foreign institutions can invest in its capital markets, in the latest move aimed at loosening strict capital controls and internationalising the renminbi.
FED TO FINE MORGAN STANLEY OVER HOME LOANS
Morgan Stanley became the latest U.S. bank to be ensnared by the so-called robosigning scandal, drawing the wrath of the Federal Reserve for the alleged mistreatment of distressed borrowers by a since-sold home mortgage subsidiary, Saxon Mortgage Services.
CAIRN BUYS NORTH SEA EXPLORER FOR $450 MILLION
Cairn Energy has agreed a cash and shares deal with the Rothschild family to acquire Agora Oil, an oil and gas exploration company with assets in the North Sea, for $450 million.
GDF PRESSED TO INCREASE OFFER FOR UK GROUP
GDF Suez of France will have to increase its offer for 30 percent of International Power by at least 15 pence per share, several people involved in the talks have said, after a leading investor in the British-listed company sold almost a third of his holding at about 405 pence per share.
* Airlines and airports are testing a guidance system that could reduce congestion and fuel consumption by allowing planes to take a more direct route to the runway.
* A few investors who will not agree to take losses on their bonds expect Athens and its supporters to pay them back rather than go into default, a move that analysts said could set a dangerous precedent.
* The unusually bold remarks by Prime Minister Wen Jiabao appeared to be a challenge to others in the Communist Party leadership to speed up reforms of the financial system.
* A decision by the New York Court of Appeals put an end to one of the most unusual lawsuits resulting from the Madoff fraud, in which a man was allowed to sue his ex-wife to alter the terms of their divorce.
* Chrysler and Ford Motor Co said their American sales rose last month to the highest level in at least four years, while General Motors said it sold a record number of fuel-efficient cars.
* In responding to Yahoo Inc's original intellectual property lawsuit, Facebook argued that the Web pioneer has violated patents that cover some 80 percent of its revenues last year, amounting to more than $4 billion.
* The Financial Stability Oversight Council will examine the riskiness of some nonbanks in an effort to place stronger regulations on important financial institutions.
* The members of the Federal Reserve's policy-making committee barely discussed the possibility of a fourth round of asset purchases during their most recent meeting in mid-March.
THE GLOBE AND MAIL
- The Harper government is scrambling to salvage its reputation for sound fiscal management after the Auditor-General tore into its multibillion-dollar plan for stealth fighter jets, a project that the Conservatives have championed since coming to power in 2006.
- A new poll has put Alberta's Wildrose Party firmly on track for a majority government, holding a 13-point lead over the incumbent Progressive Conservatives who just months ago were a shoo-in for victory.
Reports in the business section:
- Pent-up demand for vehicles is finally arriving at dealers' lots, propelling U.S. vehicle sales to their best quarter since before the recession and Canadian deliveries to their strongest March in more than two decades.
- As Royal Bank of Canada prepares to defend itself against an explosive lawsuit launched by a U.S. regulator over alleged improper stock trading, authorities in Canada are scrambling to get up to speed on the case.
The Office of the Superintendant of Financial Institutions and Canada Revenue Agency are now probing the allegations of 'wash trades.'
- The Canada Revenue Agency is unable to adequately assess and track potentially millions of tax cheats in the country because of lack of resources, and weak oversight and enforcement practices, the federal Auditor-General said Tuesday.
- Canada's system for monitoring airline safety has major flaws that could result in more accidents unless improvements are made, the government's spending watchdog said on Tuesday.
Reports in the business section:
- Faced with floundering interest in the BlackBerry as the business phone of choice, Research In Motion Ltd took the final step Tuesday towards accepting a reduced role. The company rolled out the full version of a platform that lets corporate BlackBerry networks manage Apple Inc and Google Inc devices.
- Canadian Pacific Railway Ltd's shareholders raised concerns about management's comments that some of its customers had threatened to take their business elsewhere in the event of a management shakeup.
European economic update
- Italy PMI Services 44.3 – lower than expected. Consensus 44.4. Previous 44.1.
- France PMI Services 50.1 – higher than expected. Consensus 50.0. Previous 50.0.
- Germany PMI Services 52.1 – in line with expectations. Consensus 52.1. Previous 51.8.
- Eurozone PMI Composite 49.1 – higher than expected. Consensus 48.7. Previous 48.7.
- Eurozone PMI Services 49.2 – lower than expected. Consensus 48.7 Previous 48.7.
- Italy deficit to GDP (YTD) 3.8%. Previous 4.3%.
- Eurozone Retail Sales -0.1% m/m -2.1% y/y – higher than expected. Consensus -0.2% m/m -1.1% y/y. Previous 0.3% m/m 0.0% y/y. Revised 1.1% m/m -1/1% y/y