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Frontrunning: February 2

February 2, 2012 by SteveT   Comments (0)


  • Merkel Seeks to Reassure China (FT)
  • German-IMF Rift Stalls Greece Deal (WSJ)
  • Survey of Banks Shows a Sharp Cut in Lending in Europe (NYT)
  • Bernanke to testify on economy and deficit (AP)
  • House votes to freeze congressional, federal pay (WaPo)
  • Obama Presses Congress to Step Up Aid For Homeowners (Reuters)
  • Spain Poses Six-Pack Rules Challenge (FT)
  • China’s Wen Pledges Billion for Small Firms as Growth Cools on Exports (Bloomberg)
  • Pimco Says Japan Remains ‘Clean Dirty Shirt’ on Current Account (Bloomberg)
  • Moody’s Sees Negative Ratings Trend for Asian Firms (Reuters)

Overnight press digest:

FT

JEFFERIES CONFIRMS HOARE GOVETT ACQUISITION

Jefferies, the U.S.-based investment bank, on Wednesday confirmed its acquisition of Hoare Govett, the UK broker, from Royal Bank of Scotland. http://link.reuters.com/nug46s

BALLS CRITICAL OF UK’S NEW FINANCIAL BILL

The bill to revamp the UK’s financial regulation includes a “gaping hole” that could prevent important warnings from reaching the British finance minister, Ed Balls, shadow finance minister of the UK’s opposition party Labour, has warned. http://link.reuters.com/nug46s

FACEBOOK FILES FOR MASSIVE IPO

Facebook launched the process for its highly-anticipated coming-out, filing papers for its initial public offering, and revealing for the first time details of its business that it has, until now, guarded fiercely. http://link.reuters.com/pug46s

TRINITY MIRROR UNDER PRESSURE TO CUT CHIEF’S PAY

Trinity Mirror is facing renewed pressure to rein in the pay of its chief executive Sly Bailey from some of the biggest shareholders in the media group. http://link.reuters.com/qug46s

DUKE STREET ABANDONS EFFORT TO RAISE FUND

Buy-out investor Duke Street has abandoned efforts to raise its next fund, in a strong indicator that the long-expected shake-out in the private equity sector has started in earnest. http://link.reuters.com/rug46s

EU BLOCKS DEUTSCHE BOERSE TIE-UP WITH NYSE

The European Commission on Wednesday vetoed the proposed billion tie-up between Deutsche Boerse and NYSE Euronext, scuppering an attempt by the German and U.S. groups to create the world’s largest equity and derivatives exchange. http://link.reuters.com/sug46s

UK’S CAMERON URGES INDIA TO RETHINK JET DECISION

David Cameron has vowed to “encourage” India to reconsider its decision to buy France’s Dassault jet fighter instead of Eurofighter’s Typhoon, in which BAE Systems, the UK defence contractor, has a large stake. http://link.reuters.com/tug46s

RADICALS ADMITS LONDON STOCK EXCHANGE BOMB PLOT

Four Islamist extremists admitted on Wednesday that they had plotted a bomb attack on the London Stock Exchange and other targets in 2010 in a conspiracy inspired by al-Qaeda propaganda. http://link.reuters.com/vug46s

WSJ

* Facebook filed for an initial public offering Wednesday that could value the social network between billion and 0 billion, putting the company on track for one of the biggest US stock-market debuts of all time.

* Facebook Inc’s lineup of six major Wall Street banks to manage its initial public offering reflects the social network’s determination to pursue a conventional IPO and avoid an exotic approach to the share sale, people familiar with the company said.

The trio of top underwriters, Morgan Stanley, J.P. Morgan Chase & Co, and Goldman Sachs Group Inc, are three of the best-known brands in stock underwriting. Underwriters help companies going public to price shares, promote the company to investors and allocate shares among investors.

* The next chief executive of Sony Corp promises to forge a new path for a company that once dominated the business of filling free time with the creation of wildly popular consumer products, from Trinitron TVs to Walkman music players and PlayStation game consoles.

The selection of 51-year-old Kazuo Hirai by Sony’s board Wednesday ends the reign of Howard Stringer, the boisterous and charismatic Brit who in 2005 became the company’s first non-Japanese chief executive and over seven years as boss couldn’t turn around Sony’s electronics business.

* US auto sales continued their upward surge in January, climbing 11 percent from a year earlier to their briskest pace in nearly four years.

* The parent of American Airlines said it will seek to cut 13,000 jobs and terminate pensions in pursuit of billion in annual costs savings.

* Federal prosecutors unveiled criminal charges against three former Credit Suisse Group AG employees, providing a window into the way traders allegedly invented inflated values for mortgage bonds during the financial crisis.

Two of the three men pleaded guilty to criminal charges of conspiracy, admitting they attempted to conceal the scheme from managers in a bid to boost their bonuses.

* Pfizer recalled about a million packs of birth-control pills that weren’t packaged correctly and raised the risk of unplanned pregnancies.

* KPMG LLP is buying a tax-compliance business specializing in “indirect taxes” from Thomson Reuters Corp, in a deal that spotlights how taxes and tax collections are becoming as complex and globalized as the economy itself.

* Political headwinds are building against a marketing alliance between Verizon Wireless, the nation’s largest wireless operator, and cable giant Comcast Corp, amid worries that cooperation between the two rivals could blunt competition in the telecommunications market and lead to higher prices.

NYT

* The social network company Facebook announced its billion public offering on Wednesday afternoon, which is expected to value the whole company at billion to 0 billion. Ultimately, that offering will mint a lot of billionaires and millionaires.

* Sony on Wednesday picked Kazuo Hirai, a video game executive who led a turnaround of its PlayStation business, as its next president and chief executive, in a bid to regain some of its magic.

Hirai, 51, Sony’s chief of consumer electronics and games, had been widely expected to succeed Howard Stringer, who has led Sony as chief executive since 2005.

* American Airlines laid out for the first time on Wednesday what it will expect its employees to give up in its restructuring process — and the proposal was far worse than they feared.

The airline, which filed for bankruptcy in November, said it wanted to get rid of 13,000 workers, or 16 percent of its work force.

* New-vehicle sales in the United States were unexpectedly strong in January, an early sign that the auto industry could have its best year since 2007, carmakers and analysts said Wednesday.

Sales increased 11.4 percent from January 2011, according to the research firm Autodata. The industry’s annual selling rate, an important measure of its health, climbed to 14.18 million, the highest in more than two years.

* Despite the best efforts of European politicians to place a quarantine fence around the Greek economy, the crisis there continues to plague Portugal.

The authorities in Lisbon insist otherwise, but investors are predicting that Portugal will be next in line to impose losses on bondholders as it struggles to meet the terms of a 78 billion-euro, or 3 billion, bailout agreement struck with international creditors last May.

* Malaysian regulators granted an initial operating license late Wednesday for a giant rare earth metals refinery that has been at the center of a dispute over radioactive waste management.

The refinery is expected to open in this year’s second quarter. It is intended to offer an alternative for Western companies that now depend on Chinese producers.

* Federal prosecutors accused three former Credit Suisse traders of inflating the value of mortgage bonds in 2007 just as the housing market was deteriorating.

European Economic Highlights

  • Eurozone PPI -0.2% m/m 4.3% y/y – lower than expected. Consensus -0.1% m/m 4.3% y/y. Previous 0.2% m/m 5.3% y/y. Revised 5.4% y/y.
  • Norway Unemployment Rate for January 2.80% – in line with expectations. Consensus 2.80%. Previous 2.40%.
  • Switzerland Trade Balance for December 2.07B – lower than expected. Consensus 2.50B. Previous 2.95B.
  • Switzerland Exports real s.a. for December 6.1% m/m. Previous -6.8%  m/m. Revised -4.8% m/m.
  • Switzerland Imports real s.a. for December 7.6% m/m. Previous -7.7% m/m. Revised -8.2% m/m.
  • UK PMI Construction for January 51.4 – lower than expected. Consensus 52.5. Previous 53.2.

Frontrunning: February 2 is a post from: The Forex Trading System Blog


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