Frontrunning: February 16
- Europe Demands More Greek Budget Controls in Bid to Forge Rescue (Bloomberg)
- Moody's Warns May Downgrade 17 Global Banks, Securities Firms (Reuters)
- Officials at Fed Split on More Bond Buys (Hilsenrath)
- Greek deal delays pressure periphery (Reuters)
- Talk, but No Action, to Break US Grip on World Bank Job (Reuters)
- Greek Rhetoric Turns Into Battle of Wills (FT)
- Greece Seeks Monday Bailout Deal, EU Questions Remain (Reuters)
- US Lawmakers Announce Payroll Tax-Cut Deal (Reuters)
- China Leader-In-Waiting Xi Woos and Warns US (Reuters)
- China's FDI falls 0.3% in Jan (Reuters)
- Big 4 Banks Lend 30B Yuan During Feb 1-12 (China Daily)
- EU Statement Opens Door to Status (China Daily)
Overnight Media Digest
* Rising gasoline prices are threatening to stall the U.S. economic recovery just as it appears to be gaining momentum.
* Lawmakers late Wednesday finalized an agreement to extend the payroll-tax cut until year-end and renew expiring jobless benefits.
* The legislation could severely curtail the political-intelligence industry, in which hedge funds and other investors benefit from information gathered on Capitol Hill.
* Jean-Claude Juncker, the Luxembourg prime minister, expressed optimism that an accord with Greece could be wrapped up soon, potentially clearing the way for a new bailout and debt restructuring.
* Investors' belief that the worst is over for the U.S. housing market is fueling renewed interest in once-toxic mortgage bonds that were at the heart of the financial crisis.
* A Citigroup Inc unit on Wednesday agreed to pay $158.3 million to settle U.S. claims that it cost the government tens of millions of dollars by submitting faulty loans to a federal mortgage-insurance program.
* Apple Inc asked Amazon.com Inc to remove iPad 2's sold by resellers from its Chinese website, according to people familiar with the matter, who say the request was made because the site is not authorized to sell the device.
* Timothy Mayopoulos, a former top executive at Bank of America Corp who was forced out in 2008, has emerged as the leading internal contender to become chief executive at Fannie Mae, according to people familiar with the matter.
US FED DIVIDED ON ASSET PURCHASES
Several members of the Federal Reserve's interest rate-setting committee said more asset purchases might be necessary "before long", given the risks to the U.S. economy. http://link.reuters.com/pek66s
UBS SUSPENDS TRADERS IN LIBOR PROBE
UBS has suspended some of its most senior traders in connection with an international probe into the possible manipulation of interbank borrowing rates, in the latest controversy to hit the Swiss bank since the financial crisis. http://link.reuters.com/qek66s
GREECE EXCHANGES RHETORIC WITH EU LENDERS
The battle of wills between Athens and its euro zone lenders intensified on Wednesday, with Greece's finance minister accusing "forces in Europe" of pushing his country out of the euro while his German counterpart suggested postponing Greek elections and installing a new government without political parties. http://link.reuters.com/rek66s
NEWS CORP SUSPECTS 'SERIOUS CRIMINALITY'
Investigators looking into alleged corrupt practices at News Corp's UK newspapers suspect that cash payments worth more than 100,000 pounds ($157,000) were made to police officers and other public officials, one person familiar with the investigation said. http://link.reuters.com/sek66s
UK FOREIGN OFFICE PLANS PROPERTY SALE
The British Foreign Office has drawn up plans to sell hundreds of embassies and homes worth nearly a quarter of a billion pounds as it increases its presence in fast-growing countries such as China and Brazil. http://link.reuters.com/tek66s
ECB MOVES TO HELP FUND GREECE BAILOUT
The European Central Bank is preparing to pass profits on its Greek bond holdings to euro zone governments for use in funding Greece's second bailout, senior policymakers have indicated. http://www.ft.com/cms/s/0/df626afc-57e4-11e1-b089-00144feabdc0.html#axzz...
MORGAN STANLEY AND CITI FACE LOSSES
Morgan Stanley and Citigroup face potentially painful losses on two recent European share sales that went awry, highlighting the dangers of the currently aggressive bidding by banks for so-called 'block trade' work. http://link.reuters.com/vek66s
TESCO LOOKS TO PRIORITISE FOOD IN SALES PUSH
Tesco has told investors that it plans to bolster fresh produce and step up the pace of change in its food business in an effort to revive UK sales after January's shock profit warning. http://link.reuters.com/wek66s
ORANGE LOOKS TO OFFER FACEBOOK TO AFRICA
Orange, the French mobile operator, is to provide access to Facebook for all its 70 million mobile phone users in Africa using technology that will allow the normally web-based social media service to be accessible from even the most basic handsets, opening up a huge market for Facebook. http://link.reuters.com/xek66s
* An audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation, according to a report released Wednesday.
* Distrustful of Greek politicians, European leaders considered a plan on Wednesday to hold back a significant share of the $171 billion bailout for the deeply indebted country even if Athens passes the austerity measures demanded by its international lenders.
* Robert Zoellick will step down as president of the World Bank when his five-year term expires on June 30, the Washington-based institution announced on Wednesday.
* Besieged by international sanctions over the Iranian nuclear program including a planned oil embargo by Europe, Iran warned six European buyers on Wednesday that it might strike first by immediately cutting them off from Iranian oil.
* General Motors said Wednesday that its salaried employees would stop accumulating pension benefits later this year as the company tried to narrow a large shortfall in its retirement funds.
* The Federal Reserve is not inclined to begin a round of asset purchases unless economic conditions deteriorate, according to the minutes of the most recent meeting of its policy-making committee. The Fed's leaders did not see evidence that growth is accelerating, according to the minutes of the committee's Jan. 24-25 meeting, released Wednesday. The central bank continued to forecast that the domestic economy would grow only modestly over the next year.
European Economic Highlights
- EU 25 New Car Registrations -7.10%. Previous -6.40%.
- Italy Trade Balance for December (Total) €1447M. Previous -€1581M. Revised -€1583M.
- Italy Trade Balance Eu for December -€577M. Previous -€386M. Revised -€389M.
- Italy Current Account for December €402M. Previous -€3448M.
- Norway GDP s.a. for Q4 0.5% q/q – higher than expected. Consensus 0.4% q/q. Previous 1.4% q/q. Revised 1.1% q/q.
- Riksbank Interest Rate 1.50%. Previous 1.75%.
- Sweden CPI - Headline Rate for January -0.9% m/m 1.9% y/y – lower than expected. Consensus -0.5% m/m 2.3% y/y. Previous 0.2% m/m 2.3% y/y.
- Sweden CPI - CPIF for January -0.7% m/m 0.9% y/y – lower than expected. Consensus -0.5% m/m 1.1% y/y. Previous 0.0% m/m 0.5% y/y.
- Sweden CPI Level for January 311.85 – lower than expected. Consensus 312.97. Previous 314.78.