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Good morning. Here’s what you need to know.
- Asian markets rallied in overnight trade, with Hong Kong’s Hang Seng advancing 1.7 per cent. Markets in Europe are rising and U.S. stocks opened higher.
- Spain was forced to pay sharply higher borrowing costs when issuing €2.981 billion of medium and long-term debt today, as demand plunged. The country issued two- and five-year bonds at steep 5.3 and 6.54 per cent yields. Here’s how Germany ate everyone else’s lunch >
- France secured record low rates at auction this morning. The country issued €8.958 billion worth of medium term debt. Yields on the five-year fell to 0.86 per cent.
- U.K. retail sales climbed just 0.1 per cent sequentially in June, below expectations for a 0.6 per cent gain. Weather was blamed for poor food sales. Meanwhile, Italian industrial orders recovered in May, rising 1.7 per cent from a month earlier.
- Crop prices hit record highs today, as the U.S. drought rages on. Corn topped $8.10 a bushel for the first time, while benchmark soybeans now trade at $17.12. Here are 10 companies getting crushed by the drought >
- The ongoing LIBOR investigation is now targeting four of Europe’s largest banks, the Financial Times reports. Credit Agricole, HSBC, Deutsche Bank, and Societe Generale are all being investigated for ties to Barclay’s euroswaps trader at the centre of the probe. More on the LIBOR investigation here >
- Sales at IBM missed expectations yesterday, falling three per cent during the second quarter to $25.78 billion. IBM blamed weakness in Europe and sluggish hardware sales for the declines. However, the company reported better-than-expected bottom line results, earning $3.51 per share.
- Sales of Nokia’s flagship phone, the Lumia, grew to 4 million units in the second quarter. However the company’s net loss widened to €1.41 billion as revenue fell 19 per cent to €7.54 billion. That was slightly better than the €7.32 billion estimate. Chart: A devastating fact for Nokia and Microsoft >
- U.S. economic announcements kick off at 8:30 a.m. with initial jobless claims, which are expected to increase to 364,000. At 10:00 a.m., both the Philadelphia Fed manufacturing report and existing home sales will be released. The Philly Fed is expected to remain negative, at -8, while home sales improve 1.5 per cent. Follow it all live on Money Game >
- Earnings on tap before the opening bell include Morgan Stanley, Verizon, and travellers Co. Investment banking giant Morgan is expected to post earnings per share of $0.38. Consensus is for Dow components Verizon and travellers to report earnings of $0.64 and $1.40, respectively. This is what the world’s largest companies are telling us about the economy >
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