Frontrunning: June 1
- Germany shifts, gives Spain more time on deficit (Reuters)
- Europe must prepare an emergency plan (FT)
- EU Spain reveals €100bn capital flight (FT)
- Spain’s Guindos says future of Euro at stake in Spain (Bloomberg)
- ECB, EU officials warn euro’s survival at risk (Reuters)
- China can ‘cope’ if Greece exits Euro, NDRC Researcher says (Bloomberg)
- Japan Warns Against Rising Yen (WSJ)
- Global stocks investors head for exits (FT)
- Hot Copper Shorts Burning Commodity Firms (Caixin)
- Too much gloom over British productivity (FT)
- Mutual Funds Group Urges Limits on Hedge Fund Advertising (Bloomberg)
Overnight media digest
* Up to $100 billion is tied up in aging, largely dormant buyout funds that continue charging management fees even as hopes of profiting from their remaining assets have faded.
* The nascent market in Hong Kong for yuan denominated bonds, known as "dim sum" bonds, has hit the brakes in recent months: Trading volumes have fallen as investors fret over European turmoil, and new issues of the securities have slowed.
* The economies of Asia, both the emerging markets and the more developed countries, are being hit by a double whammy of slowing domestic growth and the impact of the European debt crisis on Asian exports and finance.
* Manufacturing activity in China and across a wide swath of Asia slowed in May, heightening fears that the turmoil in Western economies is dragging down one of the few remaining engines of global growth.
* After denial, anger, bargaining and depression, investors seem ready to enter the final stage of grief over low yields: acceptance.
* The U.S. grew slower during the first quarter than previously thought and continued weakness in the job market and elsewhere suggests the economy is struggling to gain traction.
* Federal regulators delayed new rules to establish standards for the mortgage-lending industry, a move that could further hold back the thin market in mortgage-backed securities not supported by the federal government.
OSBORNE SUES TO DETER EU OVERREACHING
British finance minister George Osborne is suing the European Union, contending proposed rules that would limit or ban the short-selling of financial products are an overreach for the EU. http://www.ft.com/cms/s/0/bdd3f980-ab47-11e1-a2ed-00144feabdc0.html#axzz...
GULF MERCHANT BANK TO MAKE BID FOR PLUS EXCHANGE
Dubai-based Gulf Merchant Bank has entered a bid for Plus Stock Exchange, the junior London financial market, which might scuttle its planned sale to interdealer broker ICAP. http://www.ft.com/cms/s/0/ad09296a-ab40-11e1-b675-00144feabdc0.html#axzz...
WORLD BANK PRESIDENT CALLS FOR EUROPE LEADERS TO READY BIG STEPS
World Bank President Robert Zoellick writes that European leaders must be ready to step in to recapitalise banks and provide funding to countries like Spain in the event of a Greek exit from the euro zone. http://www.ft.com/cms/s/0/c3200410-aa6b-11e1-899d-00144feabdc0.html#axzz...
ITALY'S OFFSHORE OIL SITES SET TO RESUME
Offshore oil and gas developments in Italy are expected to be given the green light on Friday to resume, reversing legislation that banned future exploration and production. http://www.ft.com/cms/s/0/257aafb0-ab2b-11e1-b675-00144feabdc0.html#axzz...
SPAIN FEARS RISE AFTER 100 BILLION EURO CASH FLIGHT
Almost 100 billion euros in capital has left Spain in the first three months of the year. The head of the European Central Bank criticized the country over its handling of troubled lender Bankia. http://www.ft.com/cms/s/0/25c39204-ab01-11e1-b875-00144feabdc0.html
* Many companies pay Facebook to generate ads when users click to "like" their brands or reference them in some other way.
* Even after the Stuxnet computer worm became public, President Obama accelerated cyber attacks against Iran that had begun in the Bush administration, temporarily disabling 1,000 centrifuges.
* A cheaper renminbi makes Chinese exports more competitive in overseas markets, but it could worsen trade friction with Europe and particularly the United States.
* Wal-Mart Stores Inc holds its annual meeting Friday, celebrating 50 years in business but also having to deal with shareholder opposition to board members and some corporate policies.
THE GLOBE AND MAIL
- Canada is withdrawing from the United Nations World Tourism Office, a move it said was formalized this week over the agency's recognition of Zimbabwean leader Robert Mugabe.
Reports in the business section:
- British oil giant BP Plc says it could unload 50 percent share of TNK-BP in a move that could fetch at least $15 billion.
- Canadian plane-crash investigators have been called in by the National Transportation Safety Board and the Federal Aviation Administration - the two main U.S. air-safety agencies - after a fatal mid-air collision this week near Washington, D.C., that, bizarrely, involved pilots from the NTSB and the FAA themselves.
- Finance Minister Jim Flaherty says Research In Motion is an important company for Canada but suggests it won't get a bailout from the federal government.
European economic Summary
- Sweden PMI 49.0 – lower than expected. Consensus 49.3. Previous 50.2.
- Norway PMI 54.9 – higher than expected. Consensus 54.0. Previous 53.7. Revised 53.6.
- Spain Manufacturing PMI 42.0 – lower than expected. Consensus 43.0.
- Switzerland Manufacturing PMI 45.4 – lower than expected. Consensus 47.4. Previous 46.9.
- Italy Manufacturing PMI 44.8 – higher than expected. Consensus 43.4. Previous 43.8.
- France Manufacturing PMI 44.7 – higher than expected. Consensus 44.4. Previous 44.4.
- Germany Manufacturing PMI 45.2 – higher than expected. Consensus 45.0. Previous 45.0.
- UK Manufacturing PMI 45.9 – lower than expected. Consensus 49.7. Previous 50.5. Revised 50.2.
- Eurozone Unemployment Rate 11.0% - in line with expectations. Consensus 11.0%. Previous 10.9%. Revised 11.0%.