Frontrunning: January 17

  • Greece Running Out of Time as Debt Talks Stumble (Bloomberg)
  • China Economic Growth Slows, May Prompt Wen to Ease Policies (Bloomberg)
  • Spain Clears Short Term Debt Test, Bigger Hurdle Looms (Reuters)
  • U.S. Market Shrinks for First Time Since 2009 (Bloomberg)
  • IMF, EU May Need to Give E. Europe More Help (Bloomberg)
  • Securities Regulator to Relax Rules on Listing (China Daily)
  • Monti Seeks German Help on Borrowing (FT)
  • Draghi Questions Role of Ratings Companies After Downgrades (Bloomberg)
  • S&P Downgrades Eurozone Bail-Out Fund (FT)
  • Romney Unscathed From Debate Attacks (Reuters)
  • Bank of Korea Chief Says Interest Rates Still ‘Accommodative’ (Bloomberg)

Press digest:

WSJ

* Pembina Pipeline Corp agreed to buy natural-gas-liquids infrastructure company Provident Energy Ltd for 3.2 billion Canadian dollars (US$3.1 billion) in stock, in what would create Canada's third-largest energy-infrastructure company.

* German car makers Volkswagen AG and BMW AG said Monday they are recalling more than 500,000 vehicles due to possible technical problems.

* Royal Bank of Scotland Group agreed to sell its aircraft-leasing business to a group led by Japan's Sumitomo Mitsui Financial Group Inc for around $7.3 billion.

Sumitomo Mitsui already has an extensive aircraft-finance business and beat competition in the final stages of the auction for RBS Aviation Capital from China Development Bank Corp.

* China's GDP growth slowed to 8.9 percent in the last quarter of 2011, compared with a year earlier, showing that the world's fastest engine of growth is downshifting.

* Federal prosecutors are stepping up their investigation of Standard & Poor's ratings of troubled mortgage securities during the financial crisis, according to former analysts questioned by prosecutors.

* Asian stock markets rose Tuesday as China reported faster-than-expected economic growth in the fourth quarter. The Nikkei climbed 0.8 percent.

* Standard & Poor's downgraded its long-term credit rating on Europe's rescue fund to double-A-plus from triple-A, following its move last Friday to lower ratings on a number of euro-zone states.

* Responding to a difficult environment for Wall Street, Morgan Stanley plans to tell employees this week that bonuses will drop sharply, with cash payouts capped at $125,000, according to people familiar with the matter.

Some top executives will receive nothing now, deferring their 2011 payouts until the end of this year.

* Investigators on the hunt for an estimated $1.2 billion in customer money missing since MF Global Holdings Ltd collapsed are zeroing in on the securities firm's back-office operations in Chicago, people familiar with the situation said.

European Economic News

  • EU 25 New Car Registrations -6.40%. Previous -3.50%.
  • Eurozone CPI Core 1.6% y/y – in line with expectations. Consensus 1.6% y/y. Previous 1.6% y/y.
  • Eurozone CPI 0.3% m/m 2.7% y/y – lower than expected. Consensus 0.4% m/m 2.8% y/y. Previous 0.1% m/m 3.0% y/y.
  • Germany ZEW Survey (Current Situation) for January 28.4 –higher than expected. Consensus 24.0. Previous 26.8.
  • Germany ZEW Survey (Econ. Sentiment) for January -21.6 – higher than expected. Consensus -49.2. Previous -53.8.
  • Sweden PES Unemployment Rate for December 4.7% - higher than expected. Consensus 4.6%. Previous 4.4%.
  • UK DCLG UK House Prices for November -0.3% y/y. Previous -0.4% y/y.
  • UK CPI for December 0.4% m/m 4.2% y/y – in line with expectations. Consensus 0.4% m/m 4.2% y/y. Previous 0.2% m/m 4.8% y/y.
  • UK Core CPI for December 3.0% y/y – in line with expectations. Consensus 3.0% y/y. Previous 3.2% y/y.
  • UK Retail Price Index for December 239.4. Previous 238.5.
  • UK RPI for December 0.4% m/m 4.8% y/y – lower than expected. Consensus 0.3% m/m 4.7% y/y. Previous 0.2% m/m 5.2% y/y.
  • UK RPI Ex Mort Int. Payments for December 5.0% y/y – higher than expected. Consensus 4.9% y/y. Previous 5.3% y/y.