Good morning! Here’s what you need to know.
Alcoa Surges. The aluminium giant reported strong top- and bottom-line figures after the bell Tuesday, and shares were up 2% pre-market Wednesday. The company reaffirmed its 2014 outlook for global aluminium demand growth of 7%, and increased its 2014 estimate for the North America commercial transportation market to a range of 10% to 14%, from a previous range of 5% to 9% in the first quarter on rising truck orders and backlogs.
Carlos Slim Is Dismantling His Empire. The FT’s Jude Webber says he faces punitive measures if he doesn’t. “América Móvil said it would sell off assets to bring it below a 50% market share threshold to prevent it from being classed as the dominant group in the market, subject to onerous new rules. Barring such a move, Mr. Slim’s empire faces being forced to share infrastructure with rivals for free — something América Móvil has slammed as ‘confiscatory.'”
INDONESIA: Both Candidates Claim Victory. Jakarta governor Joko “Jokowi” Widodo was shown
to be leading ex-general Prabowo Subianto in unofficial polls. “Financial markets would favour a victory for Joko Widodo, the current mayor of Jakarta, and would almost certainly take a turn for the worse if his opponent, Prabowo Subianto, a former Suharto era general, were to emerge as the winner,” Capital Economics’ Gareth Leather said in a note before results came in. “But in reality there is enormous uncertainty over how either of the candidates would perform once in office.”
China Inflation Leaves Wiggle Room. June data came in at 2.3%, underneath 2.4% consensus forecasts and well below the government’s 3.5% target. “…it leaves enough room for the government to roll out small-scale supportive measures to deliver the around -7.5% annual growth target, while the steadily rise of yoy PPI inflation may help alleviate some concerns about deflation,” BAML’s Ting Lu writes.
No Let-Up In The Middle East. “We are killing terrorists of different ranks, and this operation will persist and intensify,” Israeli Defence Minister Moshe Ya’alon said after an IDF offensive entered its second day. “For our part, this doesn’t have to be a short battle. We will continue hitting Hamas and other terrorist groups hard.” But the Guardian reported that NGO Defence for Children International Palestine said it has confirmation of the killing of seven children in the Israeli offensive. “Most were killed in an air raid that targeted Hamas activist Odeh Ahmad Mohammad Kaware in the southern Gaza city of Khan Younis, it said.”
FOMC Minutes At 2:00. Notes will be from the June 18 meeting; Pantheon Macro’s Ian Shepherdson is interested in what Fed members have been saying about inflation. ” …the May CPI numbers showed that core CPI inflation had jumped to 2.0%, thanks to increases across a broad array of components. Chair Yellen dismissed this as ‘noise’ at her press conference, but we wonder if the upturn in the numbers triggered a more substantive discussion at the meeting.”
Citi Settlement. Citigroup is reportedly going to pay $US7 billion to settle mortgage fraud charges, twice what analysts were expecting. Reuters said analysts had expected, on average, that Citi would have to pay $US3.4 billion to settle the case. The FT said analysts were expecting a $US1.5 billion payout.
Obama Seeks Border Surge. The President will ask Congress for nearly $US4 billion to address a recent flood of young migrants that’s created unsafe conditions at the border.
Markets. U.S. futures were flat. European stocks saw mixed gains. Shares in Asia were mostly lower.
No Major Economic Data. Argentina-Netherlands kicks off at 4 p.m. ET.