Frontrunning: July 2

  • The Real Victor in Brussels Was Merkel (FT)
  • German Dominance in Doubt after Summit Defeat (Spiegel)
  • Euro defeat for Merkel? Only time will tell (Reuters)
  • The Twilight Zone has nothing on Europe: European Banks Bolster Capital With Shunned Bonds (Bloomberg)
  • Krugman is baaaaaack and demands even more debt: Europe’s Great Illusion (NYT)
  • Republicans See Way to Repeal Obamacare (FT)
  • Hollande Ready to Tackle Public Finances (FT)
  • China’s Manufacturing Growth Weakens as New Orders Drop (Bloomberg)
  • Protesters March in Hong Kong as Leung Vows to Fight Poverty (Bloomberg)
  • Asia’s Home Prices Rebound as Low Interest Rates Boost Sales (Bloomberg)
  • Mexico's Old Rulers Claim Presidential Election Win (Reuters)
  • U.S Manufacturing Probably Grew At Slowest Pace In Eight Months (Bloomberg)

Overnight media digest:


* The chairman of Barclays Plc, Marcus Agius, will step down amid fallout from the bank's $453 million settlement of an interest-rate manipulation probe, according to three people close to the bank.

* Mexico's former ruling party, promising to put the country back in the big leagues of emerging economies, claimed a presidential victory Sunday, appearing to cap a remarkable comeback for a party once called "the perfect dictatorship" for its long grip on power.

* Apple Inc will pay $60 million to settle a trademark dispute with a Chinese company over the iPad name, according to a Chinese court, potentially resolving a case that illustrated new intellectual-property challenges for foreign businesses in China.

* A plan by world powers for a Syrian political transition appeared doomed Sunday, with Bashar al-Assad's regime interpreting the outcome as a fresh lifeline from Russia - its principal international backer - while the lack of any reference in the plan to Mr. Assad's departure from office angered the Syrian opposition.

* Dell Inc is close to striking a deal to buy Quest Software Inc after trumping a private-equity group, and an announcement could come as early as Monday, people familiar with the matter said.



Overview AGIUS TO QUIT OVER LIBOR SCANDAL Marcus Agius will resign as chairman of Barclays on Monday, in the hope that his departure will take the sting out of mounting criticism from politicians and shareholders over the bank's role in the price-fixing of interbank lending rates.

COALITION PUTS HEATHROW DECISION ON ICE The coalition government is planning to delay a decision on increasing airport capacity in the south east of England until after the next general election.

RATINGS AGENCIES FACE PROBE The European markets watchdog is investigating whether the big three credit ratings agencies' methods of evaluating banks are rigorous and transparent enough, its chairman Steven Maijoor said in an interview.

GILT AUCTIONS TO BE PUT ON HOLD FOR OLYMPICS The UK Treasury has called off its weekly gilt auctions for a four-week period between mid-July and mid-August, apparently because it is afraid that too many bond traders will be working from home - or not at all - during the Olympics.VODAFONE REVIEWS MCLAREN F1 SPONSORSHIP Vodafone is reviewing its global sports and events sponsorship including its title sponsorship of the McLaren Formula One team.

EUROPEAN CARMAKERS CLASH ON EMISSIONS A row has broken out between Germany's premium carmakers and their French and Italian competitors over the formula used by the European Commission to assign long-term CO2-cutting targets to manufacturers.

L&G TO OFFER SOCIAL HOUSING LOANS Insurer Legal & General is to start providing loans to housing associations, the latest example of a new lender moving to take advantage of the shortfall in bank finance to the property sector.

ASTRAZENECA EYES MORE DEALS AFTER AMYLIN AstraZeneca has the cash and appetite for more acquisitions, the acting head of the Anglo-Swedish pharmaceutical group said, after finalising his innovative $7 billion joint purchase of Amylin with Bristol-Myers Squibb over the weekend.



- Marcus Agius, the chairman of Barclays Plc, is expected to resign on Monday, less than a week after the big British bank agreed to pay $450 million to settle accusations that it had tried to manipulate key interest rates to benefit its own bottom line.

- Executives at Facebook Inc are pinning much of the blame for the company's botched IPO on Nasdaq, according to several people close to the company and its underwriters, who spoke on the condition of anonymity. Tensions remain so high that Facebook is still considering switching exchanges and is weighing the costs of such a move, these people said.

- Apple Inc has agreed to pay a Chinese company $60 million to settle a dispute over ownership of the iPad name, a court announced Monday, removing a potential obstacle to sales of the popular tablet computer in the key Chinese market.

- Linde AG of Germany said Sunday that it had agreed to buy Lincare Holdings, a Florida-based provider of respiratory therapy equipment for homes, for $3.5 billion to expand its product offerings.




- After more than 25 years of trying to replace the country's fleet of Sea King maritime helicopters, the Canadian Forces have watched another deadline come and go.

Report in the business section:

- The sacking of 5,000 people, or about one-third of its work force, means that Research In Motion , once Canada's most valuable public company, will be a dramatically different place when - or if - it emerges from its current restructuring.


- Finance Minister Jim Flaherty welcomed the "concrete steps" taken by European leaders to resolve the region's crippling debt crisis. The progress made at the Brussels summit "is consistent with what we have been saying for about three years," he said.


- Government-sponsored opinion research conducted in December of last year - and released publicly last week - shows the government tested how Canadians would react to changes to Old Age Security (OAS) well before they announced their plan in Parliament.

European Economic Update:

  • Sweden PMI Manufacturing 48.4 – lower than expected. Consensus 48.5 Previous 49.0.
  • Norway PMI Manufacturing 46.3 – lower than expected. Consensus 54.6. Previous 54.9. Revised 54.5.
  • Spain PMI Manufacturing 41.1 – lower than expected. Consensus 41.3.
  • Switzerland Retail Sales 6.2% y/y. Previous 0.1% y/y. Revised 0.2% y/y.
  • Italy PMI Manufacturing 44.6 – in line with expectations. Consensus 44.6. Previous 44.8.
  • Italy Unemployment Rate 10.1% - lower than expected. Consensus 10.3%. Previous 10.2%.
  • Switzerland PMI Manufacturing 48.1 – higher than expected. Consensus 45.0. Previous 45.4.
  • France PMI Manufacturing 45.2 – lower than expected. Consensus 45.3. Previous 45.3.
  • Germany PMI Manufacturing 45.0 – higher than expected. Consensus 44.7. Previous 44.7.
  • Euro Zone PMI Manufacturing 45.1 – lower than expected. Consensus 44.8. Previous 44.8.
  • UK PMI Manufacturing 48.6 – lower than expected.  Consensus 46.5. Previous 45.9.
  • Euro Zone Unemployment Rate 11.1% - in line with expectations. Consensus 11.1%. Previous 11.0%.


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