Good morning. Here’s what you need to know.
- Trading in Asia was mostly lower overnight, with the Shanghai SE Composite falling 1% and the Nikkei off 0.8%. Europe continued those losses, as Italy’s FTSE MIB declined more than 2.7%. U.S. markets have opened lower.
- France completed the first major bond auction of the year, selling nearly €8 billion in 10-year notes. Yields increased slightly to 3.29%, higher than an equivalent auction in December, but in line with current prices. Click here to see what will happen in Europe this year >
- Hungary failed to raise the amount of capital it hoped in a bond sale today. The country raised 35 billion forint, or $140 million, as yields rose to their highest level in more than two years at 8.8%. Hungary had hoped to raise 45 billion forint. At the same time, the forint continues to weaken, down to a record low of 324 forint per euro.
- German retail sales unexpectedly weakened for a second month in a row. Sales in November fell 0.9%, after a 0.2% decline in October. Retail executives in the country pointed to the European debt crisis for the contraction, as it weighs on consumer confidence.
- The Royal Bank of Scotland may lay off as many as 10,000 employees as it pares back its investment bank, the Financial Times reports. Cuts are said to focus around RBS’s equity unit, which has underperformed larger peers this year. RBS’s capital markets unit currently employs some 19,000 employees globally. Here are some of the biggest layoffs in the financial sector in 2011 >
- Japan Airlines plans to file for an initial public offering to raise as much as ¥1 trillion, or $13 billion, this year. The airline exited bankruptcy protection last year, with a government-backed fund holding 97% of shares. JAL has tapped Nomura and Daiwa Securities for the auction.
- Fiat boosted its stake in resurgent U.S. auto manufacturer Chrysler, increasing its holdings to 58.5% from 53.5%. Fiat was allowed to take a higher position after it agreed to produce fuel efficient models. The UAW’s retiree health-care trust retains the remaining 41.5% of Chrysler. Fiat is targeting revenues of €100 billion by 2014 when the merger is complete. Take a look at December auto sales which topped forecasts >
- Jobs data out today has been surprisingly robust, with Challenger reporting that layoffs fell to a six-month low in December and ADP announcing private sector payroll gains of 325K, topping estimates for 178K. Initial jobless claims narrowly beat expectations of 375K, coming in at 372K.
- Same-store retail sales will roll out throughout the day, with Limited Brands already reporting comparable results up 7% for December. International Council of Shopping centres has forecast that the closely watched metric will advance 4% in total for the month.
- Earnings season is just days away, and today two big names announce: Monsanto and Family Dollar. Monsanto topped analyst expectations as emerging markets fuelled results, posting earnings of $0.23 per share on $2.4 billion. Family Dollar is forecast to quarterly results of $0.67.