Good morning. Here’s what you need to know.
- Asian indices were mixed in overnight trading with the Shanghai Composite up 0.21%. Europe and the US are violently lower.
- The ECB will likely keep its key interest rates unchanged today. Of more interest is the Jean-Claude Trichet press conference and the chatter about the resumption of euro-zone government bond purchases to stem contagion. Meanwhile, European Commission President José Manuel Barroso spoke of reassessing various bailout funds. That kind of talk is not helping markets, with Italy off over 1.6%. Now here are the eerie similarities between Greece and Italy >
- Japan intervened last night to curb the surging yen, The yen weakened to about 80 per dollar. This followed Switzerland last morning, sending the dollar surging. Check out the ultimate bear case on Japan >
- Kraft Foods Inc. is splitting into two separately listed companies. One would make up the global snacks business and the other would comprise the North American grocery business. The split is expected to be completed by the end of 2012.
- JP Morgan cut its forecast for U.S. third quarter GDP growth to 1.5%, in part because of a slowdown in consumer spending, and lowered fourth quarter growth to 2.5% from, 3%. Meanwhile, there’s rising talks of QE3 if inflation fades. Don’t Miss: why the US is looking identical to Japan >
- Initial jobless claims came in almost flat at 400K
- Lloyds Banking Group PLC posted a net loss of £2.3 billion for the first half of 2011. The loss was expected after the financial services company took on £3.2 billion provision to compensate customers who were sold faulty payment-protection insurance. Meanwhile, ING Groep NV reported a 24% jump in Q2 earnings, despite €310 million in charges for impairments on Greek bonds. ING’s insurance arm, which it expects to spin off or sell, was behind the surge in profits for the quarter.
- Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. are reportedly in talks over what could be Japan’s biggest domestic merger. The move is expected to reduce competition for international projects, as officials fear that a strong yen and power shortages may be pushing companies and jobs abroad.
- The Bank of England kept its key lending rate unchanged at 0.5%, amidst slow economic recovery in the UK.
- The Spanish Treasury sold €3.3 billion of medium-term sovereign bonds today, below its target of €3.5 billion. It sold €2.2 billion of bonds maturing in April 2014, at an average yield of 4.813%, and €1.1 billion of bonds maturing in January 2015, with 4.984% yield. Check out the 15 biggest deficits in the developed world >
- BONUS – Kim Kardashian is posing on the cover of the World’s Most Beautiful magazine, which she says is the world’s first 3-D magazine.