Sunday, December 28, 2014

JPMorgan's Asian Infrastructure fund is in advanced talks to partner with Indian carrier SpiceJet's co-founder, Ajay Singh, for a planned $200M investment into the cash-strapped airline. JPMorgan (NYSE:JPM) and Singh, who have so far invested about 170M rupees in SpiceJet to help it clear dues to oil refiners, plan to finalize the deal in a month’s time.

BOJ under pressure as CPI slowed & contraction seen in factory output

Keeping the BOJ under pressure, Japan core consumer inflation slowed to 0.7% in November, far below the central bank's 2% target. Factory output also unexpectedly fell and real wages marked their steepest drop in five years, dealing a blow to PM Shinzo Abe's stimulus policies aimed at pulling the world’s third-largest economy out of stagnation.

Russia may lose its investment-grade credit rating

For the first time in a decade Standard & Poor’s placed the country on CreditWatch Negative. The move "stems from what we view as a rapid deterioration of Russia’s monetary flexibility and the impact of the weakening economy on its financial system," the agency said in a statement. S&P will resolve the CreditWatch upon the conclusion of its review, which is expected by mid-January.

Monday, December 22, 2014

Oil is climbing again today as investors increased bets on rising prices following Saudi Arabia's confidence that crude will rebound as global economic growth boosts demand. Blaming the fall in oil prices on speculators and the lack of cooperation from non-OPEC producers, Saudi Arabia also announced that it would not cut output even if non-OPEC nations did so. Brent crude is up 1.2% at $62.13/bbl. WTI is up 0.9% at $57.64.

Thursday, December 18, 2014

World shares are on the rise today following a vote of confidence from the Fed on Wednesday that the U.S. economy was on track. The Dow and S&P surged yesterday to their strongest percentage gains of the year on the news, following Janet Yellen's comments that an interest rate increase was unlikely for at least the next two FOMC meetings. Whether hikes come sooner, faster, or on that date, said Yellen, depends on the incoming data.

Wednesday, December 17, 2014

Brent crude oil & WTI continuing their downward slide

Oil prices are continuing their downward slide today, as markets brace for the outcome of the U.S. Federal Reserve meeting this afternoon. Analysts anticipate an upward revision to GDP growth forecasts in response to the slump in oil prices, and expect the Fed to signal that a rate hike is likely in mid-2015. Brent crude is still below the key $60 mark, down 0.7% at $59.62 a barrel. WTI is down 1.2% at $55.24.

Tuesday, December 16, 2014

selloff in crude oil boosted demand for yen.

Japan is considering lowering its corporate tax rate by 2.5 percentage points next fiscal year to increase corporate competitiveness, Prime Minister Shinzo Abe had been planning to lower the corporate tax rate over several years to around 20% from more than 35% currently. Meanwhile, Japanese stocks continued their slump for a second day, dropping to 6-1/2 week lows, as an ongoing selloff in crude oil boosted demand for the safe haven yen.

Russian ruble's collapse morr than 10%

Despite hiking interest rates to 17% from 10.5% in an emergency midnight move, Russia's central bank has still failed to halt the ruble's collapse. The currency fell more than 10% yesterday, its worst intraday drop against the dollar since the 1998 financial crisis. Erasing earlier gains, the ruble last traded at 69.48 rubles per dollar, compared to 65.50 before the announcement.
Brent crude and WTI have turned sharply around after tumbling to fresh 5-1/2 year lows overnight on OPEC's announcement that it will not cut output even if prices fall as low as $40/bbl. The rally is pushing European shares higher. Brent crude is up 1.1% at $62.55, after hovering close to $60/bbl yesterday. WTI fell below $57 last night, but is now up 0.7% at $58.22 per barrel.

U.S. Senate passed a $1.1T spending bill

Lifting the threat of a government shutdown, the U.S. Senate passed a $1.1T spending bill over the weekend that will fund every federal agency through next September except the Department of Homeland Security. The bill, which included a rollback of Dodd-Frank banking reforms, passed by a vote of 56 to 40. The measure will now go to President Obama, who is expected to sign it into law before federal spending authority expires at midnight on Wednesday.

China's economic growth may slow to 7.1% in 2015.

China’s economy may slow to 7.1% in 2015 from an expected 7.4% this year as a sagging property sector weighs on the world’s second-largest economy, researchers from the nation’s central bank said. Stronger global demand could boost exports, but not by enough to counteract the impact from weakening property investment. China’s economic growth came in at 7.3% in Q3, its slowest pace in five years.

Sunday, December 14, 2014

European stocks are on the decline as commodity prices continued to fall while the take-up of the ECB's latest cheap money program, known as TLTROs, met expectations on Thursday, but was still disappointing compared to earlier expectations. Brent crude hit a five and a half year low today, touching $63 a barrel, while WTI dropped as much as $58.80/bbl - also the weakest since July 2009.

Tuesday, December 9, 2014

Weak data from China & Germany spook markets

European stocks fell for a second day as German imports and exports contracted in October, while Tesco (OTCPK:TSCDF, OTCPK:TSCDY) and energy companies plunged. German October imports slid 3.1% from a month earlier, while exports fell 0.5%. Snapping a world-beating rally, highly volatile Chinese stocks tumbled the most since August 2009, with the Shanghai Composite Index closing down 5.4% at 2,856.27 after earlier gains of as much as 2.4%.

Monday, December 8, 2014

The families of four co-founders of Infosys have sold about 65B rupees ($1B) of stock to capitalize on a gain in their price and to fund various philanthropic activities. Together, the group holds a combined 91.5M shares (nearly 8% of Infosys' (NYSE:INFY) outstanding shares), according to the company's annual report. Shares closed down 4.8% at 1,972 rupees in Mumbai.

Japan slipping into recession

Japan’s economy shrank more than initially reported in the third quarter, contracting 1.9% as capital spending declined and private consumption remained weak. Last month, the government estimated that GDP contracted 1.6% during the July-September period. The revised data confirms Japan slipping into recession less than a week prior to general elections that Prime Minister Shinzo Abe has framed as a referendum on his economic policies.

Monday, December 1, 2014

The European Commission has given Belgium, France and Italy until March to bring their budgets in line with legal requirements, saying they were at risk of breaking EU rules. This gives the countries more time to adjust policy before the EU executive decides whether to fine France for missing consolidation targets or put Italy and Belgium under a disciplinary procedure because of their debt. The Commission will also publish the draft budget assessments of the 18 euro zone countries, except Greece and Cyprus which remain under bailout programs.

U.K. manufacturing PMI is at highest level in four months

U.K. manufacturing PMI edged up to its highest level in four months, rising slightly to 53.5 in November from 53.3 in October and topping consensus of 53.0. Domestic demand offset falling exports due to sluggish orders from the euro zone and emerging markets. The pound gets a lift and is up 0.5% at $1.5722, while the FTSE 100 is -0.8%.

Moody's Investors Service has downgraded Japan's Sovereign debt rating

Japan's sovereign debt rating by one notch to A1 from Aa3, citing heightened uncertainty over the achievability of fiscal deficit reduction goals and effectiveness of growth enhancing policy measures. The yen dropped to a seven-year low of 119.14 per dollar immediately following the announcement, but is now trading down 0.1% at 118.48.