- Cypriot Bailout Didn’t Cause Euro-Area Deposit Flight, Data Show. The European Union’s bailout of Cyprus, which involved taxing deposits at Cypriot banks, didn’t prompt savers to withdraw funds in other euro-area nations last month. While Cypriot banks lost 1.8 billion euros ($2.4 billion) in deposits in March, deposits rose in all other euro-area countries except Belgium and Finland, European Central Bank data showed today. Cypriot deposits dropped 3.9 percent from February to 44.6 billion euros, the 10th straight decline.
- U.K. Banks Said to Be Rattled by Regulator’s Capital Silence. Britain’s new banking regulator has rattled lenders by holding off disclosing how much capital each firm will have to raise after ordering the industry to plug a 25 billion-pound ($38 billion) shortfall by the end of the year, three people with knowledge of the discussions said.
- Probe Risk Sends AAA Spreads to Three-Month High: China Credit. Borrowing costs for top-rated Chinese companies rose to a three-month high as the central bank’s probe into the $3.7 trillion interbank bond market drove investors into safer government securities. The People’s Bank of China asked market participants to examine trading histories as it cracks down on short-term transactions designed to bypass month-end risk evaluations, two people with knowledge of the matter said this week. The extra yield on 10-year AAA bonds over sovereign debt climbed to 172 basis points yesterday, the highest since Jan. 22, ChinaBond indexes show. The comparable U.S. gap is 83 basis points, according to Bank of America Merrill Lynch indexes. The investigation will force some investors to cut their bond investments as they can no longer ask others to hold the debt during regulatory reviews, according to Bank of America Merrill Lynch and Guotai Junan Securities Co. That may damp demand just as Premier Li Keqiang seeks to spur fundraising to revive the world’s second-biggest economy. “The bond market investigation is intensifying,” Ethan Mou, a rates strategist at Bank of America Merrill Lynch in Hong Kong, said in an email interview on April 25. “Many small banks, securities companies and funds are de-leveraging their credit holdings due to fear of exposure.”
- Yuan Strengthens to 19-Year High on Record Fixing, Fund Inflows. China’s yuan advanced to a 19-year high after the central bank set a record reference rate for the currency amid signs capital inflows are gathering pace. China’s financial and capital account surplus was $101.8 billion in the first quarter, the most since 2010 and almost double the $56.1 billion reported for the same period of 2012, official data showed yesterday.
- North Korea Threatens South After Rejecting Joint Factory Talks. North Korea threatened retaliation against South Korea for demanding talks aimed at re-opening a jointly-run industrial park that has been shuttered for more than two weeks. The North will take “final, decisive and serious measures” if President Park Geun Hye’s government continues to issue ultimatums, the National Defense Commission said in a statement on the official Korean Central News Agency. Kim Jong Un’s regime today ignored a noon deadline to accept an offer for talks on the Gaeseong industrial zone or face what the South’s Unification Ministry said would be “serious measures.”
- Aluminum Leads Declines as Soybeans Gain: Commodities at Close. The Standard & Poor’s GSCI gauge of 24 commodities dropped 0.8 percent to 620.31 by 5:17 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was down 1 percent at 1,466.394.
- Alcoa(AA) Outlook Revised to Negative by S&P on Aluminum Price Drop. Alcoa Inc. (AA), the biggest U.S. aluminum producer, had its credit rating outlook revised by Standard & Poor’s Ratings Services to negative after a slump in the price of the metal. At current aluminum prices, Alcoa’s cashflow and debt are “well outside our expectations” for the company’s BBB- corporate credit rating, Standard & Poor’s said in a statement today. The rating is the lowest investment-grade level. “We expect the company to continue to post lower-than- anticipated credit measures because of continuing weak aluminum prices,” S&P said in the statement. “The company’s credit measures will remain weak at least through 2013, reflecting current weak prices, sluggish European demand, and slower-than- expected growth in China thus far this year.”
- Junk Debt Yields Fall to New Record Low. The party rages on for borrowers tapping the high-yield debt markets. On Thursday, yields on so-called junk bonds slipped to a record low of 5.39%, according to a Barclays index dating back to July 1983. That beat the previous low of 5.47% reached just two weeks ago on debt issued by companies with ratings that fall below investment grade.
- Mother of bomb suspects eyed in radicalizing son; was on terror database. The mother of the Boston Marathon bombing suspects is a "person of interest" to federal authorities seeking to learn who radicalized one or both of her sons, according to lawmakers, and a separate report said she was on a federal terrorism database some 18 months before the attack. Zubeidat Tsarnaeva, who had reportedly become more militant in her Muslim faith around the same time as her son, Tamerlan Tsarnaev, was added to the classified intelligence database known by the acronym TIDE at the CIA's request. Two key lawmakers said authorities now want to know if she helped put her son, who died a week ago following a shootout with police in Massachusetts, on the road to radicalism.
CNBC:
- What's the Economy's Big Problem? In a Word: Washington.
- Job Picture Looks Bleak for 2013 College Grads.
- Spain Slashes "Growth" Outlook, Projects Higher Deficit, Delays Deficit Reduction.
- Overhyped Q1 GDP Grows By Only 2.5%, Biggest Miss To Expectations Since September 2011. (graph)
- Total US Debt To GDP: 105%. (graph)
- Consumer Confidence Drops, Back To April 2012 Levels. (graphs)
- Just Two Charts.
- Europe's Fragmentation Offers Little Hope For Rate Cut "Real" Gains. (graph)
- China 2.0 Is in Trouble.
- European Stocks Have Best Week In 5 Months But Bonds Spoil The Party. (graphs)
- The Noose On The Economy Is Getting Tighter.
- Ken Langone Worked Himself Up To An Epic Paul Krugman Rant On Bloomberg TV. (video)
- Democrats Have Completely Caved On Flight Delays And Budget Cuts.
- We're Witnessing The Biggest Contraction In Defense Spending Since The Korean War.
- The World's Hottest Trade Is Getting Destroyed Today.
- It's Time to Worry About the New Chinese Bird Flu. It's time for the world's public health officials to pay very close attention to the new bird flu outbreak in China first detected in March. To put it bluntly, there are now some seriously dangerous developments occurring around the new disease outbreak in China that infectious disease specialists and international public health specialists need to track closely.
- EMERGING MARKETS-Latam stocks hit by tepid U.S. growth data.
- METALS-Copper down as US data disappoints, China holiday looms.
- French socialists attack ‘selfish’ Merkel. Simmering tensions between Paris and Berlin have been laid bare by a ruling French Socialist party document denouncing Chancellor Angela Merkel’s “selfish intransigence” and accusing her of thinking only about German savers.
- Bundesbank declares 'war' on Mario Draghi bond bail-out at Germany's top court. Germany’s Bundesbank has issued a devastating attack on the bond rescue policies of the European Central Bank, rendering the eurozone’s key crisis measure almost unworkable.
- French Car Registrations Fell Almost 9% April 1-23. Peugeot Citroen new car registrations fell 15% during the period.
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