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Good morning. Here’s what you need to know.
- Asian markets were mixed in overnight trading; the Japanese Nikkei fell 0.8 per cent while the Shanghai Composite rose 0.4 per cent. European markets are in the red, with Germany and France both down 0.6 per cent. In the United States, markets are opening down slightly.
- European bank stocks are rising after global banking policymakers on the Basel Committee unexpectedly relaxed rules on capital requirements by expanding the type of securities banks could count toward capital ratios to include some equities and highly-rated mortgage-backed securities. Analysts are hoping the move could finally spur credit growth in Europe.
- Treasury yields are rising after last week’s FOMC minutes revealed that the Federal Reserve was considering halting quantitative easing in 2013. The market action has sparked a buzz among investors about when the Fed will take away the “punchbowl” of stimulus, a discussion that has for a long time been in the shadows.
- America’s largest banks are nearing a $10 billion settlement with regulators in which the banks will pay $3.5 billion to defaulted homeowners who were wrongly evicted from their properties and provide another $6.5 billion in mortgage modifications for underwater homeowners. The new settlement replaces a 2011 agreement that required banks to review loan files for evidence of mishandled evictions.
- Japanese vehicle sales fell 3.4 per cent in December from the previous year as automakers registered their first annual sales decline in China since 2003. A boycott of Japanese products in China stemming from a territorial dispute over islands weighed on sales in 2012.
- Eurozone investor confidence rose to an 18-month high in January; the index increased to -7 from -16.8 in December. Expectations were for a smaller increase to -14.2. Any reading below zero indicates pessimism.
- Eurozone producer price growth slowed to a four-month low of 2.1 per cent year-over-year, below expectations of 2.4 per cent. The slowdown was mostly due to lower energy prices.
- Republican Senate Minority Leader Mitch McConnell began shaping the debt ceiling debate when he told ABC on Sunday regarding failing to raise the ceiling, “hopefully, we don’t need to get to that point.” McConnell also said that Republicans would negotiate over spending cuts, but that tax and revenue issues are “behind us.”
- The NHL has finally come to an agreement over a 50-50 revenue split between players and owners. The hockey league now plans to hold a 48-50 game season, and the first puck could drop as soon as Wednesday.
- There are no U.S. economic data releases on the calendar today. The next big datapoint is November consumer credit, due out Tuesday afternoon at 3 PM ET. Follow releases LIVE on Money Game >
- BONUS: Candice Swanepoel may be Victoria’s Secret’s new favourite angel.