Good morning. Here’s what you need to know.Yesterday’s brief rally had faded earlier today, but markets rose on talks of a Franco-German initiative on Greece. After a French spokesman denied the announcement, markets slid only to rally again.
- Asian markets were mostly down in overnight trading with the Shanghai Composite falling 1.06%. Europe is sharply up, and U.S. futures are flat ahead of the market open.
- Markets rallied briefly yesterday on news that China would buy Italian bonds, but demand for Italian debt remained weak today. Italy sold €3.9 billion of bonds of its new five-year bond at an average yield of 5.6% up from 4.93% the last time a similar a bond with similar maturity was sold. Demand was 1.28 times the amount on offer, compared with 1.93 times the last time. Don’t miss: The sad story of how Italy got to be such a wreck >
- France, which closed down 4% yesterday, was down earlier today but is up now. A WSJ story citing an anonymous BNP Paribas executive talking about funding woes really spurred a panic, but the CAC-40 is now in positive territory, BNP Paribas is down 6.1%, Societe General is now up 1% after being off about 6.6%. BNP Paribas meanwhile denied reports that it lacked dollar financing for market operations.
- Angela Merkel continued to try to calm markets over fears of a Greek default. She said Greece exiting the euro would have a domino effect and added that an “uncontrolled Greek insolvency” must be avoided. Merkel and Sarkozy will speak on Greece today. Yields on 2-year Greek debt crossed the 76% mark today. Reminder: Here’s who gets crushed if Greece defaults >
- French inflation jumped to its highest in almost three years driven by the cost of manufactured goods and energy. Inflation rose to 2.4% in August from 2.1% in July.
- Import prices declined less-than-expected 0.4% month-over-month in August, while export prices gained 0.5%.
- HP extended the deadline for its $11.2 billion bid for British software company Autonomy to October 3. HP got acceptance from only 41.6% of shareholders at the first closing date.
- There has been an attack on the U.S. embassy in Kabul and the Taliban has claimed responsibility for the attack. Following a suicide bombing, there is now a battle between gunmen in a Kabul high-rise and the police.
- Republican presidential hopeful Rick Perry came under attack at a debate in Tampa late yesterday. Perry was criticised over his stance on social security and his claims about job creation in Texas. The debate for the most part focused on the economy and the size of the federal government. Don’t Miss: The 10 most shocking moments in presidential debate history >
- UK inflation picked up pace in August. Consumer prices rose 4.5% year-over-year, compared with 4.4% in July, and 0.6% from the previous month. Cost of clothes jumped 3.7% and household utility costs were up 0.5%. The Bank of England however left its key interest rate at a record low at its last meeting, as it focuses on growth. Now here are 10 hyperinflation horror stories of the 20th century >
- BONUS – Jennifer Aniston was at her mother Nancy’s hospital bedside trying to heal a rift, after she suffered a stroke.
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