Frontrunning: May 2

  • European Unemployment Rate Rises to Highest in Almost 15 Years (Bloomberg)
  • Chinese Activist Leaves U.S. Embassy (WSJ)
  • China April bank loans slide 30 pct from March-paper (Reuters)
  • Moody's warns against lack of tax hike in Japan (Reuters)
  • RIM CEO Bets on BlackBerry Without Keyboard to Challenge Apple (Bloomberg)
  • European visits focus on boosting trade (China Daily)
  • Martin Wolf- After the bonfire of the verities (FT)
  • German Jobless Unexpectedly Up in April as Crisis Flared (Bloomberg)
  • Romney Refuses to See China Progress on Yuan (Bloomberg)
  • Bolivia Following Argentine Takeover Deepens Regional Divide (Bloomberg)
  • Plosser Says Fed Must Guard Against Long-Term Inflation (Bloomberg)

Overnight Media Summary:


* A report by a U.K. parliamentary committee examining the News Corp phone-hacking scandal concluded that lawmakers were misled, and said that Rupert Murdoch is "not a fit person" to run a major company.

* Homeland-security and law-enforcement agencies have objected to administration proposals to relax export curbs on high-powered firearms.

* A director of the Financial Industry Regulatory Authority who was banned last week from running his own firm plans to resign from the self-regulator's board.

* Mounting turmoil at New York law firm Dewey & LeBoeuf LLP threatens to send hundreds of lawyers and other staffers into one of the worst legal-job markets in decades.

The law firm, which employs more than 1,000 lawyers, is struggling to cope with heavy debts and the loss of dozens of partners. It is considering a number of options for preserving jobs, such as transferring practice groups to other firms, even as a bankruptcy filing looms as a possible last resort.

*Bolivian President Evo Morales seized the local assets of Spanish power grid operator Red Eléctrica Corp and ordered the armed forces to take over its installations, the latest move against Spanish corporate interests in Latin America.

* Illinois sold $1.8 billion of debt on Tuesday in its biggest bond offering since February 2011, luring investors willing to overlook the state's myriad financial troubles in pursuit of the relatively high yields on offer.





 A UK parliamentary committee has declared Rupert Murdoch "not fit" to lead an international media company in a damning report that criticised News Corp's handling of the phone-hacking scandal that started at its now closed UK tabloid paper, News of the World.


A significant number of investors are preparing to confront the management of UBS on Thursday by voting against the Swiss bank's 2011 pay award and denying executives formal approval of their actions.


Independent shareholders in Xstrata have signalled that their support of a $90 billion merger of the miner with Glencore should not be taken for granted with a significant protest vote over the re-election of the trading house's chief executive on to the board of the company.


High oil and commodities prices are starting to dent the profitability of the world's largest industrial and consumer goods companies, with businesses from Procter & Gamble in the U.S. to BASF in Europe warning of a strong headwind.


The UK's advertising regulator is stepping up its investigation into Apple's marketing of the new iPad after it said the technology company had failed to comply fully with requests to amend claims about its wireless capabilities.


The European boss of Ford Motor, the continent's fourth-ranked carmaker by sales, has complained about "significant imbalance" in trade in cars under a free trade agreement with South Korea that took effect last year.


Iron Maiden frontman Bruce Dickinson has been urging heavy metal fans to "Run to the Hills" since the 1980s, but the rock anthem may be recast as "Run to the Valleys" as he announced plans to open an aviation centre in South Wales that could bring 800 jobs to the region




* The Federal National Mortgage Association and Freddie Mac approved and even initiated programs to reduce homeowner debt and save taxpayers millions, but halted them before the trials had progressed far enough to measure success, according to documents released Tuesday.

* Pfizer Inc has settled a lawsuit filed by Brigham Young University, over development of the blockbuster painkiller Celebrex, for $450 million, according to a regulatory filing Tuesday.

* Wal-Mart Stores will pay $4.8 million in back wages and damages to more than 4,500 employees nationwide for unpaid overtime, the Labor Department said Tuesday.

* Of all the people rocked by the debt and austerity tumult rattling Europe, the famously prudent but prosperous Dutch were seldom on anybody's watch list. Until now. This bastion of probity became a flash point of euro zone turmoil last week, when the government fell in a showdown over how to cut the budget to keep the nation from getting caught in Europe's long-running debt crisis.





 - Former media baron and convicted felon Conrad Black has engineered his return to Canada, a country whose citizenship he once renounced in pursuit of a British peerage.

The former newspaper magnate is expected to be released from a Florida prison on Friday after completing a 42-month sentence for fraud and obstruction of justice.

- A Toronto city councillor will bring forward a motion next week that, if passed, will call on Ontario to join forces with Quebec in fighting against the deletion of data in the federal long-gun registry.

Reports in the business section:

- After 16 years of profitability, Canada Post recorded a pretax loss of $253-million in 2011 - the result of dwindling mail volume, a costly pay equity ruling and June's strike and lockout.

- Research In Motion Ltd's new Chief Executive Thorsten Heins unveiled an early version of the long-awaited BlackBerry 10 platform, but investors signalled the new software may not be the desperately needed breakthrough to help the company reverse its steep slide.


- The Royal Canadian Air Force remains steadfast in its defence of the F-35 fighter plane, despite the doubts raised about its capabilities, a parliamentary committee heard Tuesday.

Lt. General André Deschamps, the RCAF's Commander, told the Public Accounts committee that the F-35 is the only plane that meets the Air Force's needs and the military is not looking at alternatives.

- The NDP's language critic tabled a private member's bill Tuesday that would require filling positions such as auditor-general and privacy commissioner to be proficient in both official languages.

The bill would require people appointed by cabinet resolutions to be able to express themselves clearly in both official languages and understand both French and English without the help of an interpreter.


- High house prices are not a serious problem in much of Canada due to low carrying costs but in Toronto and Vancouver where values have soared in the last few years it's "a different issue," said former Bank of Canada governor David Dodge.

Foreign investment is a much bigger factor in these cities, something "we know much less about and we know much less about how stable that is likely to be," Dodge said in an interview.


Europe Summary

  • Spain Manufacturing PMI for April 43.5 – lower than expected. Consensus 43.6. Previous 44.5.
  • France Manufacturing PMI for April 46.9 – lower than expected. Consensus 47.3. Previous 47.3.
  • Germany Manufacturing PMI for April 46.2 – lower than expected. Consensus 46.3. Previous 46.3.
  • Italy Manufacturing PMI for April 43.8 – lower than expected. Consensus 47.1. Previous 47.9.
  • Italian PPI for March 0.3% m/m 2.7% y/y – lower than expected. Consensus 0.6% m/m 3.0% y/y. Previous 0.4% m/m 3.2% y/y.
  • UK Construction PMI for April 55.8 – lower than expected Consensus 56.7. Previous 56.7.