UK News
BOE doesn't see inflationary threat, says UK Business Secretary Cable. (Sky News) Ireland loan won't add to UK deficit, says Osborne (Telegraph) George Osborne, the Chancellor, said Britain's bilateral emergency loan to Ireland will not add to Britain's deficit, and will earn GBP 440mln for the public coffers. Public sector workers hit the hardest as unemployment reaches 16-year high. (Times) Tens of thousands of public sector workers lost their jobs soon after the Chancellor’s emergency Budget, helping push unemployment up to a near 16-year high, official figures showed.
Coalition wields axe over Christmas as 100,000 jobs to go by spring (Guardian) At least 100,000 public servants will receive grim news over the Christmas holidays or soon after as councils, police forces and other public services race to meet a deadline of 1 January to formally announce job cuts. The expected return of severe winter weather to Britain in the coming days could plunge retailers into the red over their peak Christmas trading period, according to market research, in a survey by GfK NOP. (RTRS) UK faces 20-year-high inflation, says Wellcome Trust (Telegraph) Britain’s biggest charitable investor has warned that the UK faces “levels of inflation not experienced for more than 20 years” because of monetary expansion policies.
US News
T-notes finished lower, retracing earlier gains following the approval of the Obama-Republican tax cut bill by the US Senate. Treasuries did surpass the 3.55% yield; however in the final 20 minutes of trade pared back some of the losses after touching session lows. Finally, at the pit close t-notes finished down 13 ticks at 118.28. It is worth noting, at the closing bell the DJIA closed down 0.17% at 11457.47, the S&P 500 closed down at 1235.23 and the NASDAQ 100 closed down 0.46% at 2202.45. At 0630GMT UST’s were trading up 6 ticks to 119.03 paring back some of yesterday’s declines and ahead of a slew of US economic data. US Senate gets needed majority to pass Obama-Republican tax deal; voting expected to end within minutes US Senate passes tax cut bill, sending measure to House for final approval. (RTRS)
European News
Spain’s auction of new bonds to test the market after ratings firm Moody’s rekindled worries about the country’s ability to service its debt. (WSJ FrontPage) Spanish Treasury will be selling EUR 2-3bln combined in 10yr and 15yr bonds today with results due around 0930GMT. Separately, Moody's said late last night that Spanish banks may need EUR 90bln in additional capital. Irish support for the ruling Fianna Fail party fell 7 percentage points to 17%, according to a latest poll.
(Irish Times) Backing for Fine Gael rose 6% to 30%. Portuguese banking association chief expects borrowing from ECB by country's banks to keep falling. Expects Portuguese banks to have no financing problems in 2011 and adds that likelihood of bailout is now lower than two months ago. (RTRS) Germany’s economic recovery will broaden next year as Europe’s largest economy benefits from faster growth in consumer demand and business investment, according to Standard & Poor. (Sources)
Asian News
JGB’s slipped, taking cues from a continuing slide in US Treasuries, with liquidity-enhancing auction eyed as a chance to gauge investor demand after this week’s sharp sell-off. However by 0603 GMT JGB’s had managed to pare back initial loses to trade near flat, down just 1 tick to 138.94. (RTRS) The Chinese Academy of Social Sciences forecasts China’s economy will grow about 10% this year. (Financial News) India’s RBI keeps repurchase rate unchanged at 6.25% and leaves reverse repurchase rate unchanged at 5.25%. (RTRS)
Forex
Australian Consumer Inflation Expectation (Dec) M/M 2.8% vs. Prev. 3.1% (RTRS) New Zealand NBNZ Activity Outlook (Dec) M/M 34.5 vs. Prev. 35.3 (RTRS) New Zealand NBNZ Business Outlook (Dec) M/M 29.5 vs. Prev. 33.2
Commodities
Oil prices were steady to lower as the prospect of a downgrade to Spain’s sovereign credit rating sparked Eurozone debt concerns, outweighing positive US economic data. WTI crude futures were trading USD 88.47 (-0.15) at 0618 GMT.
Company News
Tesco – Co. to start search for Successor to Chairman Reid. (Sky)
UK
BP - Co. faces penalties of USD 21bln-plus, if found fully liable for damages in a lawsuit over the oil accident in the Gulf of Mexico launched by the US government on Wednesday. In other news co. are seeking buyers for a system of plants and pipeline in Canada that may fetch USD 2bln or more, said people with knowledge of the matter. (FT/Sources) BG Group – Co. says the eleventh well on the BM-S-11 concession in the Santos Basin, offshore Brazil, was successful. The well, known as Tupi W contains light oil accumulation. (Sources) Rexam – Co. is thinking about selling its bottle top manufacturing unit. (Daily Telegraph)
US
Equities finished lower, with the DJIA outperforming its peers and being the sole index near the unchanged mark. Caterpillar (+1.12%) and Coca-Cola (+1.31%) lead the index after co. got its price target raised at RBC Capital and the beverage giant provided an optimistic forecast. In terms of sectors, consumer goods is the only sector to finish in the green, while financials and utilities are the main lagged as the Treasury yields continued to rise. It is worth mentioning BP ADRs fell (-1.31%) on confirmation that the Obama administration was suing co. and four other companies for the Gulf of Mexico oil spill. Finally, at the closing bell, the DJIA closed down 0.17% at 11457.47, the S&P 500 closed down at 1235.23 and the NASDAQ 100 closed down 0.46% at 2202.45. Bank of America – Co. in discussions to settle dispute with large mortgage investors, says talks include NY Fed, Pimco and BlackRock (WSJ) Anadarko – Co. says not involved in decisions aboard the Deepwater horizon at the time of Gulf of Mexico spill. However adds that it recognizes may have obligations under Federal law, will look to BP to pay all legitimate claims. (RTRS) Transocean – Co. says not liable, indemnified for Gulf of Mexico oil spill lawsuit. (RTRS) Boeing – According to co. CEO, co. to hire 4,000-5,000 workers next year as exports drive growth. (Sources)
Europe
EDF – Co. has won exclusive negotiating rights to buy a 51% stake in Poland’s state-controlled utility Enea worth over USD 1.7bln. (Sources) Carrefour – Co. will decide in the first quarter whether to sell shares in its real-estate unit, or whether to carry out a partial or complete spin-off. (Les Echos) Areva – France’s FSI fund says has submitted offer for Areva’s STMicroelectronics stake. (RTRS) Siemens – Co. may make more divestments, and sees an IPO as an option for its lighting subsidiary Osram. (Frankfurter Allgemeine Zeitung/ Wirtschaftsblatt) ArcelorMittal – Co.’s stainless-steel division Aperam published its European prospectus and demerger plan, following a board decision to spin off the unit. (Sources) Telefonica – Co. plans to invest more than EUR 450mln to strengthen its Brazilian mobile business in the face of increased competition. For the latest updates PRESS CTR + D or visit Stock Market news Today
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