Good morning. Here’s what you need to know.
- Asian markets started the week down, with the Hang Seng off 0.8% and the Nikkei shedding 0.7%. In Europe, both the DAX and CAC fell more than 1.5%. U.S. markets have opened in the red.
- Japan stepped in to weaken the rapidly appreciating Yen. Finance Minister Jun Azumi said the move followed increasing speculative moves in the market that had pushed the currency to post-WWII record highs. The Yen is down 2.7% to 77.98 per dollar. Other currencies have been hit hard during the third quarter.
- Even with European leaders agreeing to a levered EFSF and Greek haircuts, optimism is fading as economists begin re-evaluating Portugal and Italy. Italian 10-year yields continue to move higher, hitting 6.07% this morning. The Portuguese 2-year yield is at 18%. Spreads between Italian and German debt have topped 400 basis points. Remember, not everyone has been happy with Italy under Bunga-Bunga Berlusconi >
- MF Global may have finally found a buyer. The Wall Street Journal reports the investment bank could be at least partially taken over by Interactive Brokers as it faces increasing liquidity concerns. MF Global is hoping to shore itself up before clients begin to withdraw assets. Meanwhile, there are also rumours that the firm is preparing to file for bankruptcy. The stock has been halted in premarket trading.
- Barclays reported pretax profit growth of 5%, before accounting gains, topping analyst estimates. Investment banking revenues held up better at the firm than European peers, even as debt issuance dropped on E.U. concerns. Shares in the British bank are trading modestly lower on the London Stock Exchange.
- German retail sales increased 0.4% in September, below analyst expectations for a 1% improvement, but reversing last month’s 2.7% decline. Sales were bolstered as unemployment fell for the 27th straight month, to 6.9%.
- A second sale of AIG shares may be delayed because of unfavorable market conditions, sources close to the Treasury Department say, according to the Wall Street Journal. The federal government owns 77% of the insurance giant and is looking to recoup some $41 billion. Analysts expect AIG to report a 30 cent loss on Thursday.
- Australian airline Qantas resumed flights after two days of labour strikes grounded its global fleet. Meanwhile, Air France has cancelled 15% of flights due to its own labour strikes. U.S. carriers have generally been insulated from the same labour disputes, as fee increases bolster earnings.
- Chicago PMI just came out at 58.4, slightly below analyst expectations for 59 and down from 60.4 last month. A reading over 50 is expansionary.
- Today in earnings Allstate, Loews and Humana report. Health insurance firm Humana beat expectations with earnings of $2.54 a share. Check out everyone who reports this week here >