Thursday, November 26, 2015

Evening Headlines

Posted by Gary .....at 12:08 AM
Bloomberg:
  • France Usurps Germany as Terror Refocuses EU Toward Hard Power. French warplanes taking off from the Charles de Gaulle aircraft carrier may not remake the Middle East, but are already reshaping Europe’s balance of power after years of German economic dominance. Refugees, Syria’s civil war, Libya’s dissolution, rumblings from Russia, terrorism in Paris and a red alert in Brussels put hard power back atop the European agenda, burying the notion of the economically bold but militarily shy Germany as Europe’s unchallenged leader. France, never comfortable with Germany’s low-deficit strictures, has cast them off; President Francois Hollande first huddled with U.K. Prime Minister David Cameron to hammer out war plans against Islamic State, not with German Chancellor Angela Merkel; and Merkel is under fire at home for letting in too many refugees, amid fears that future terrorists are among them. 
  • The Turkish Wild Card in Syria That Russia and U.S. Both Need. Turkey just reinforced its role as a wild card in the Syrian civil war, and one that both sides of the conflict ultimately have to deal with. After becoming the first NATO country in more than half a century to shoot down a Russian warplane, it sent the alliance scrambling to deescalate tension with Moscow as President Recep Tayyip Erdogan vowed to continue to protect his country’s airspace. It was a reminder of how Turkish priorities for Syria, its southern neighbor, remain out of step as its unflinching opposition to Kurdish separatists and Syrian President Bashar al-Assad overshadows the fight against Islamic State.
  • ECB Warns Asia Risks Rising. (video) 
  • Yuan Fixing Near Post-Devaluation Low Is Bearish Sign to SocGen. China’s reference rate for the yuan is approaching the weakest level since an August devaluation and a breach of the low would likely fuel speculation that policy makers are prepared to let the currency depreciate, according to Societe Generale SA. The People’s Bank of China on Aug. 11 surprised global investors by switching to a more market-driven fixing regime that sparked the yuan’s steepest plunge in two decades. It set the currency’s reference rate at 6.3896 per dollar on Thursday, about 0.3 percent stronger than an Aug. 27 level that was the weakest in four years. The spot rate in Shanghai is allowed to trade a maximum 2 percent on either side of the fixing.
  • China Fishery Bonds Drop 34% After HSBC Asks Court to Wind It Up. Bonds issued by China Fishery Group Ltd. plunged 34 percent on Thursday after HSBC Holdings Plc said it asked the Hong Kong High Court to wind up the company and appoint a liquidator.
  • China's Winsway Proposes Restructuring on Defaulted Dollar Debt. Winsway Enterprises Holdings Ltd., the Chinese coking-coal importer that has defaulted on dollar bonds, has proposed terms for a restructuring on the debt that some investors have accepted.
  • Australian Business Investment Falls by Record as Mining Slumps. Australian business investment fell by the most on record last quarter as spending by firms in mining and other industries slumped, sending the currency lower. Capital expenditure plunged 9.2 percent in the three months through September from the prior quarter, the largest decline in records going back to 1989, according to calculations by Bloomberg based on government data released Thursday. 
  • Asian Stocks Rise as Japan Advances on Yen; BHP Billiton Drops. Asian stocks rose as a weaker yen boosted Japanese exporters and health-care shares led the advance. BHP Billiton Ltd. slumped in Sydney. The MSCI Asia Pacific Index gained 0.4 percent to 134.37 as of 9:00 a.m. in Tokyo. Japan’s Topix index added 0.4 percent after the yen slid 0.2 percent against the dollar on Wednesday.
  • Copper Faces at Least Two More Years of Pain, Rio Estimates. The copper market is facing two or three years more of pain, though the good news for the metal, which hit a six-year low this week, is that it will recover faster than other commodities, according to Rio Tinto Group. Copper has tumbled 27 percent this year as China’s faltering expansion curbs demand and with the dollar trading near its highest level since at least 2005, making commodities more expensive for buyers in other currencies. 
  • Big Banks Accused of Monopolizing Interest Rate-Swap Market. Twelve of the biggest players in interest-rate swap trading were sued for allegedly conspiring to block fund managers from entering the exchange market. The antitrust complaint filed in New York federal court by a public pension fund names most of the biggest U.S. and European investment banks among the defendants as well as trading platforms ICAP Capital Markets LLC and Tradeweb Markets LLC. Big banks have been accused of colluding in other areas of trading such as interbank rates, currencies and credit default swaps. Financial institutions have paid billions of dollars to settle some of the cases brought by investors and governments. 
  • Junk-Bond Issuance Surges to $26 Billion in the Last Stages of Boom. The U.S. junk bond market reopened for business in November -- but only for a select group of companies.Speculative-grade borrowers raised about $26 billion of debt this month, more than double what was sold in October. That made it the busiest month for the riskier borrowings since May. Issuance was dominated by companies whose credit profile is on the rise and those who were willing to pay up.
  • UMich Survey Director: We're Witnessing the Decline of American Economic Aspirations.
 Wall Street Journal:
  • Russia-Turkey Tensions Simmer After Jet Shootdown. Moscow resumes airstrikes in Syria near border, calls strike ‘planned provocation’. A day after Turkey shot down a Russian warplane, Russia resumed its airstrikes in Syria on Wednesday, hitting near the Turkish border even as both sides steered clear of further direct military confrontation.
  • The Pressure on Corporate Profits May Last Longer Than Expected.
  • Congress Can Cool Off Obama’s Climate Plans. At the Paris talks next week, the U.S. may make harmful commitments on spending and carbon. When the U.N. climate-change talks convene in Paris next week, the risks will be high for American taxpayers. President Obama wants a climate deal and is willing to pay dearly to get it. The inevitable outcome is a plan with unproven benefits and unreachable goals, but very real costs. It will be up to Congress to check the president’s ambition of committing the U.S. to an international green scheme that will produce little or no return.
Fox News: 
  • Paul campaign slams CNN, says emails show reporter 'colluding' with Clinton aide. Rand Paul’s presidential campaign slammed CNN on Wednesday after emails were released that the campaign claimed showed a reporter “colluding” with a Hillary Clinton aide to “attack” the Kentucky senator. The CNN global affairs correspondent, Elise Labott, already has been suspended over a separate incident – a tweet last week criticizing a House bill limiting Syrian refugees. But her communications with then-Clinton State Department official Philippe Reines turned up Tuesday in a batch of emails obtained and published by Gawker.
CNBC: 
Zero Hedge:
Reuters:
  • Fed gives largest U.S. banks extra year for debt rule calculation. The Federal Reserve said on Wednesday that bigger U.S. banks would have an extra year to calculate a capital requirement known as the supplementary leverage ratio for stress testing. Institutions subjected to the leverage ratio requirement will have to show regulators what the ratio would be in a stressed scenario beginning in 2017. The extension applies to banks with more than $50 billion of assets, of which there were 39 at the end of the third quarter, according to data from the Federal Deposit Insurance Corp.
  • Brazil central bank keeps interest rate at 14.25 pct. Brazil's central bank kept interest rates on hold for the third straight meeting on Wednesday as expected in a move to avoid further damage to an ailing economy, despite a surge in inflation. In a divided vote, the bank's monetary policy committee, known as Copom, maintained its benchmark Selic rate at 14.25 percent, its highest in nine years and well above that of emerging market peers like India and Mexico. Two of the 8-member Copom voted to raise the Selic to 14.75 while the rest voted for the rate to remain steady.
  • Brazil corruption probe widens; Senate leader, BTG Pactual CEO arrested. The chief executive of Brazil's biggest independent investment bank and the leading senator in the governing coalition were arrested on Wednesday on suspicion of obstructing the country's most sweeping corruption investigation ever. The detention of such prominent power brokers on orders from the Supreme Court raised the stakes dramatically in a bribery scandal that started with state-run oil company Petrobras and now threatens the heights of Brazilian banking and politics.
The Economist: 

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