Frontrunning: February 3
- Greece's Hazardous Road to Restructuring (WSJ)
- Spain Coaxes Banks to Merge to Purge Losses (Bloomberg)
- Brussels Discovers New €15bn Black Hole in Greece's Finances (Guardian)
- UK Recession Predicted to Return (FT)
- Senate OKs insider trading curbs on lawmakers (Reuters)
- China Limits Mortgages for Foreigners (Bloomberg)
- Villagers scramble for fuel in Europe's big chill (Reuters)
- SNB Head Warns of Political Fallout After Crisis (FT)
- Portugal Bond Rout Overstates Greek Likeness (Bloomberg)
- Bernanke Says He Won’t Trade 2% Inflation-Rate Target for More Job Growth (Businessweek)
- Greece Aiming to Close Swap in Second Bailout Faces Fight to Stay in Euro (Bloomberg)
Overnight Press Digest: WSJ
* After years of delay, U.S. Congress took a big step toward approving new rules to ban lawmakers from trading stocks based on information they pick up in the halls of Capitol Hill -- a move aimed in part at helping repair the institution's low approval ratings.
* Corporate tax receipts as a share of profits are at their lowest level in at least 40 years, leading U.S. companies to book higher profits than ever. Total corporate federal taxes paid fell to 12.1 percent of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office, the lowest level since at least 1972.
* As investors dug into Facebook's freshly released financials Wednesday, analysts and investors began circulating a range of values -- from as little as $50 billion to as much as $125 billion -- for the social-networking website.
* In a world ravenous for natural resources, two of the world's most powerful raw-materials companies, Glencore International AG and Xstrata PLC, both Swiss companies, are in talks to combine into an $80 billion colossus that would play a powerful role in an industry that supplies auto makers, chocolatiers and power companies.
* U.S. prosecutors filed criminal charges against Switzerland's oldest bank, Wegelin & Co, alleging it helped wealthy Americans hide more than $1.2 billion in secret accounts abroad, the latest move in an ongoing crackdown on overseas tax evasion. This is the first time U.S. authorities have charged a bank rather than individuals with helping Americans evade taxes.
* The rainy-day funds that U.S. banks have been tapping to boost their earnings could soon begin to dry up, and that doesn't bode well for bank profits. Many banks have been "releasing" reserves against bad loans since the worst of the crisis passed but with loan-loss cushions now receding toward pre-crisis levels, some analysts doubt banks can afford to keep up the pace of reserve releases.
* A push by Wall Street banks to devise a more transparent way to bet on bond defaults has stalled amid uncertainty over new regulations and difficulties in devising the product.
* CME Group Inc launched a fresh effort to rebuild market confidence damaged by the collapse of MF Global Holdings Ltd, creating a $100 million insurance fund to protect farmers and ranchers.
* The UK economy will fall back into recession in the first half of 2012 and the government should implement a temporary tax cut or spending boost to stimulate demand, a leading economic research group said Friday.
* Google Inc. said it has beefed up security on its Android mobile-device software to better prevent "malicious" software from residing in its app store.
* A unit of China National Petroleum Corp agreed to buy a big slice of a shale-gas play in Canada from Royal Dutch Shell PLC, bolstering Beijing's footprint in North America's energy patch, as two other Chinese companies sealed energy deals in the U.S. and Europe.
* The U.S. Labor Department took steps on Thursday to improve the disclosure of fees paid by millions of participants in 401(k) and other retirement-savings plans. The Treasury Department also proposed regulations designed to make it easier for these plans to offer annuities to employees.
European Economic Highlights:
- Eurozone PMI Composite 50.4 – in line with expectations. Consensus 50.4. Previous 50.4.
- Eurozone PMI Services 50.4 – lower than expected. Consensus 50.5/ Previous 50.5.
- Eurozone Retail Sales -0.4% m/m -1.6% y/y – lower than expected. Consensus 0.3% m/m -1.3% y/y. Previous -0.8% m/m -2.4% y/y. Revised -0.4% m/m -1.5% y/y.
- Germany PMI Services for January 53.7 – lower than expected. Consensus 54.5. Previous 54.5.
- France PMI Services for January 52.3 – higher than expected. Consensus 51.7. Previous 51.7.
- Italy PMI Services for January 44.8 – lower than expected. Consensus 45.4. Previous 44.5.
- Italy CPI (NIC incl. tobacco) for January 0.3% m/m 3.2% y/y – in line with expectations. Consensus 0.3% m/m 3.2% y/y. Previous 0.4% m/m 3.3% y/y.
- Italy CPI - EU Harmonized for January -1.8% m/m 3.4% y/y – lower than expected. Consensus -1.7% m/m 3.6% y/y. Previous 0.3% m/m 3.7% y/y.
- Switzerland UBS Real Estate Bubble Index for Q4 0.8. Previous 0.58.
- UK PMI Services for January 56.0 – higher than expected. Consensus 53.3. Previous 54.0.
- UK Official Reserves (Changes) for January $2477M. Previous -$1943M.
- UK Lloyds Business Barometer for January -11. Previous -23.