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Good morning. Here’s what you need to know.
- Overnight trading in Asia ended with a strong rally, with Japan’s Nikkei up 2.0 per cent. European markets are up nicely and U.S. futures point to a sharply higher open.
- Initial unemployment claims increased to 362,000 as school vacations in Massachusetts and Rhode Island triggered job cuts, the Department of labour said this morning. Economists had predicted a slight increase to 352,000. Meanwhile, layoffs declined by 3.3 per cent in the U.S. in February, new data out of Challenger grey and Christmas shows.
- Japan’s current account deficit soared to a record high of ¥437.3 billion yen, or $5.41 billion in January. Economists had expected ¥317.8 billion, but a shift to energy imports and away from nuclear production pushed the deficit higher. Here’s what Japanese stagnation looks like in one chart.
- German industrial production increased at a faster pace than expected in January, gaining 1.6 per cent. The jump, attributed to increased construction and investment goods production, reversed December’s 2.6 per cent decline.
- French nonfarm payrolls declined 0.1 per cent sequentially in the final quarter of 2011, which was 10 basis points better than forecasts. Excluding temporary employment, the job picture remained mostly stable, shedding just 1,500 jobs.
- The spread between Italian and German bonds fell below three percentage points, as bonds continue to rally lower after the European Central Bank’s three-year long-term refinancing operation flooded the financial system with capital. The 10-year Italian bond dropped to 4.75 per cent, its lowest level in nine months.
- 60 per cent of Greek bondholders are reportedly backing the country’s debt-swap agreement, new data out of Bloomberg shows. Economists have grown confident that more than 66.67 per cent of holders will agree to the plan, which is the needed participation rate to activate the collective action clause. However, Greece has said it will only go ahead with the CAC if it reaches a 75 per cent participation rate. Here’s how everything changed once Greece joined the euro.
- The U.S. Treasury announced that it will sell $6 billion worth of AIG stock and that it reached a deal for the company to pay $8.5 billion towards its government obligations. The agreement brings the government’s interest in the company down to 70 per cent from 77 per cent earlier. This is the AIG headline we wish we read before 2007 >
- The Bank of England held its key benchmark rate steady at 0.5 per cent and announced that it would keep its asset purchasing program at £325 billion. The BoE last increased its asset program when officials met in February.
- The U.S. Justice department has warned Apple and a number of publishers that it plans to file suit over electronic book pricing collusion, the Wall Street Journal’s Thomas Catan and Jeffrey Trachtenberg report. Prosecutors allege that by pushing the industry to a pricing strategy where Apple could not be undercut, prices across publishing were sent higher. See big, beautiful pictures of the new iPad that Apple unveiled yesterday >