Quartz Daily Brief—#Pfizer’s tax try, #US probes #Pimco, #RBS floats Citizens, #London supermarket mushrooms

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Good morning, Quartz readers!

What to watch for today

Obama addresses the UN. The US president’s speech will discuss the Islamic State again, but the real question is whether David Cameron will announce more British military support. The prime minister may recall parliament to vote on airstrikes as early as Thursday.

BlackBerry’s future is square. The troubled Canadian smartphone maker is holding three events around the world to show off the Passport, a handset with a 4.5- by 4.5-inch display, which it hopes will do better than last year’s disastrous BlackBerry 10.

Will the ruble bounce back? Moscow is set to auction 10 billion rubles ($259 million) worth of bonds in the country’s first debt sale in 10 weeks. Russia’s currency has depreciated 15% against the dollar this year.

Gloom in Germany. The Ifo Institute business climate index is expected to show that corporate confidence levels have hit a 16-month low. Trouble with Russia and a slow recovery are to blame.

A look at US house sales. The Mortgage Bankers’ Association releases its mortgage purchase application index, and the Census Bureau releases new-home sales data.

While you were sleeping

Pfizer tried again for a tax inversion. The US drug company has expressed interest in acquiring Actavis, a smaller rival with a market value of $63.6 billion that recently moved its headquarters to Ireland for tax purposes, according to Bloomberg. The Obama administration is trying to restrict tax inversion deals, but is not blocking them completely.

Starbucks placed a bet on green tea frappuccinos. The coffee chain will spend $913.5 million buying the 61% of its Japanese business it doesn’t already own from public shareholders and Sazaby League, which formed a joint venture with Starbucks in 1996. Starbucks thinks it can sell more ready-made beverages in Japan, where they are popular.

The biggest US port was out of commission. The Port of Los Angeles, a gateway between the US west coast and the Pacific rim, was shut down due to a stubborn fire. Seven of the eight port terminals were re-opened as of 6pm local time on Tuesday.

US regulators investigated Pimco. The Securities and Exchange Commission is looking into whether the bond giant inflated the rate of returns for a fund aimed at small investors, according to the Wall Street Journal (paywall).

A Scotland spin-off that worked, sort of. The Royal Bank of Scotland, which is 80%-owned by the British government, floated 25% of its stake in Citizens Financial for $3 billion. But the partial IPO of the US retail and commercial bank didn’t go perfectly: shares sold for $21.50 per share, below the anticipated $23-$25 range.

Japan’s factory activity stabilized. The Markit/JMMA flash manufacturing purchasing managers’ index fell to 51.7 in September, from 52.4 in August, but factory output rose to its highest level in six months, suggesting possible confidence in the domestic economy hit by a sales tax rise earlier this year. Japan will analyze June-September data when deciding whether or not to raise the sales tax again, from 8% to 10%.

Samsung pulled back in Europe. The Korean tech giant will reportedly stop selling laptops and Chromebooks in the region, despite reports that the PC market is bouncing back. Separately, a Samsung executive promised that the company’s mobile business would rebound “due to its strong fundamentals and technological prowess.”

Quartz obsession interlude

Max Nisen on how wildly high CEO pay has become. “In the US, the average CEO makes an estimated 354 times as much an average unskilled worker ($12,259,894 vs. $34,645). People all around the world are broadly unaware of how wide the pay gap is, and they are almost universally of the opinion that CEOs should be paid much, much less… According to the survey data, people in the US think that the ideal pay gap between an unskilled worker and a CEO is 6.9—or 50 times less than the real gap.” Read more here.

Matters of debate

The US should bomb the Islamic State’s oil installations. It would hit the extremist group where it hurts the most.

Threats against Emma Watson are an affront to all women. The actress is under attack for her gender equality campaign.

Sweden is no longer a role model. Economic inequality is growing, the left is losing popularity, and benefits are being cut.

Climate change refugees should be given asylum. Countries that that buy and sell fossil fuels owe new homes to people driven from theirs.

The German economic powerhouse is a myth. The country isn’t driving growth in the euro zone, and is spreading economic instability.

Surprising discoveries

“Mohammed” is the most popular baby name in Israel. The government was forced to backtrack after initially releasing a list with only Hebrew names.

London is the world’s most expensive city, displacing Hong Kong as the costliest place to both live and work in due to rising rents and the strong pound.

San Francisco redefines business casual. Say hello to the “Suitsy“, a one-piece garment that tries hard to look like a typical suit.

A restauranteur in China put opium in his noodles. He was caught when police drug-tested one of his patrons.

A new species of mushroom has been discovered. Not in an untouched jungle or on on an unexplored mountain, but in a London supermarket.

Click here for more surprising discoveries on Quartz.

Our best wishes for a productive day. Please send any news, comments, black tie jumpsuits, and new mushroom species to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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Annunci

Quartz Daily Brief—#Putin provokes, Pakistan crisis deepens, Muji heads to #India, skipping brunch

Quartz - qz.com
Good morning, Quartz readers!

What to watch for today

Putin picks at the wound. Expect a response after the Russian president called for talks on “statehood” for the eastern part of Ukraine. He also said the country should negotiate directly with pro-Russian rebels. Meanwhile, Ukraine’s prime minister Arseny Yatsenyuk said he would ask parliament to give up the country’s nonaligned status in order to seek membership with NATO.

German and Brazilian economic data arrive. Monday brings the final estimate of Germany’s quarterly GDP figures, ahead of a European Central Bank meeting this week and signs of deflation. And the latest Brazilian import and export reports will be released, days after it was confirmed Brazil is in recession.

Britain acts on homegrown jihadists. The UK is planning to announce measures to block British citizens fighting in Syria and Iraq from returning home, though they could keep their passports. More than 500 British fighters are estimated to be involved. One of three militants dubbed “the Beatles” is suspected of killing journalist James Foley.

Small islands, unite! The third United Nations Conference on Small Island Developing States begins in Apia, Samoa. Some 41 island nations will discuss sustainable development.

Pakistan’s political crisis deepens. Protestors tried to storm prime minister Nawaz Sharif’s home over the weekend, at least three people were killed, and 200 were injured as police fought the crowd with teargas and rubber bullets. Pakistan’s army said that they would not step in and that a political solution was necessary.

Over the weekend

No universal suffrage in Hong Kong. China has told Hong Kong its next leader will be selected via an election committee in 2017—dashing the aspirations of pro-democracy activists. On Sunday, Macau re-elected its chief executive similarly, in a vote where Fernando Chui was the only candidate. The process took 25 minutes. The Hong Kong decision raised a red flag for how Beijing might treat Taiwan.

You’re next, Saudi king warned the West. Jihadist attacks “will reach Europe in a month and America in another month” unless world leaders halt the ISIL, said Saudi Arabia’s King Abdullah. His words echo John Kerry’s call for a global military effort to confront the brutal militants who are sweeping through Iraq and Syria.

Modi began his Japan visit. The Indian prime minister arrived in Japan for a five-day visit on Saturday.  Japanese prime minister Shinzo Abe plans to double Japan’s $2 billion investment in India in five years, and the two are expected to discuss a nuclear pact as well as a defense agreement. Muji will be Japan’s first retailer to enter the Indian market, the Nikkei business daily reports.

A new iPayments system? Maybe Apple and leading payment networks can do what Google hasn’t yet, and make consumers love the mobile wallet. Bloomberg reports that Apple will partner with Visa, AmEx and Mastercard in a new payment product that will be unveiled on Sept. 9, when the iPhone 6 is expected to debut.

Samsung will get bigger. South Korea’s giant conglomerate announced that Samsung Heavy, the group’s shipbuilding division, and Samsung Engineering, which includes refineries and industrial plants, would merge in December. The news caused shares for both to jump. The deal’s estimated value is $2.5 billion.

As Time Warner gives up on Vice, A&E enters the fray. Walt Disney and Hearst’s jointly-owned A&E Networks cable television group is nearing a deal (paywall) to buy 10% of Vice Media, the Financial Times reported. This comes hours after a New York Times report that Time Warner ended months of negotiations to acquire a stake in fast-growing Vice.

China’s economy slowed. The manufacturing purchasing managers’ index fell in August, coming in at 51.1, according to the National Bureau of Statistics, which is lower than a Bloomberg estimate of 51.2. The weak expansion suggests that economic momentum has dropped for the world’s second-largest economy

Quartz obsession interlude

Svati Kirsten Narula on how Americans may soon find out that butter is a luxury. “The amount of butter stored in refrigerated warehouses across the US is 42% lower this summer than last, according to the USDA. On Aug. 29, butter futures reached an all-time high of $2.55 per pound on the Chicago Mercantile Exchange.” Read more here.

Matters of debate

Don’t hire people for what they know. Instead, ask if they can learn to do the job.

Your IQ isn’t constant. It changes over time.

Brunch is a waste of time. And the people who brunch are often people who can’t really afford the time or the money.

Burma is carving out geopolitical leverage. In negotiations with China and India, it’s continuing a long-established tradition of balancing great powers.

Surprising discoveries

Spaniards haven’t swapped a lot of pesetas. They’ve kept 1.7 billion euros ($2.2 billion) worth.

Farming consumes 80% of the US’s freshwater. But it doesn’t have to—one urban farming experiment reduces water consumption by 98%.

Burma’s census showed its population at 51 million. That’s nine million less than last time.

Libraries don’t need books anymore. Not paper ones, anyway.

A South Florida condo development was called, ‘ISIS Downtown.’ The name has since been changed to something more benign.

Ikea catalogs mostly feature computer-generated imagery. Three-quarters of catalog objects are fake.

Our best wishes for a productive day. Please send any news, comments, butter stashes, and alternatives to brunch to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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Market movers today 25/08/2014

Quotes from Danske Bank:

-Focus is likely to be on comments from the Jackson Hole Central Bank conference. Especially Draghi’s dovish ones are likely to be in focus.

-German IFO expectations are expected to continue the downtrend from January. The declines have followed the slowdown in the US and China in Q1 and uncertainty related to the conflict in Russia-Ukraine.

-In the US new home sales are due for release and we expect a recovery after a very weak month of June for the housing market.

-During the rest of the week inflation figures in the US, Europe and Japan are likely to attract attention. Moreover, this week will bring durable goods orders and second release of GDP for the US, euro-area money supply and bank lending and industrial production in Japan.

Source: FxWire Pro

USD and risk sentiment remain the key drivers for USD/JPY

Quotes from Commerzbank Corporates & Markets:

JPY: In July, the Japanese trade balance once again surprised to the downside. However, at JPY 1,023 bn (in seasonally adjusted terms), the deficit remained largely unchanged from June. This is two-fold good news. First, the trade balance did not deteriorate further, so a small current-account surplus is on the cards for July.

-There is therefore still reason to hope that the downtrend in the trade and current-account balance after the VAT hike in April does not continue – which would be a good sign for Japan’s competitiveness. Second, the flat level was due to a rise in exports. This should comfort the Bank of Japan (BoJ), which recently showed increasing concern about weak export growth.

-Overall, yen sentiment remains subdued. JPY weakness and USD strength were sufficient this morning to push the exchange rate above 103. Stop-loss orders directly above the 103 threshold then drove the exchange rate to a new four-month high.

-At the moment, no-one wants to commit to the yen’s future moves. While recent economic data disappointed, the BoJ’s optimistic rhetoric is still having an effect. Any impulses from the yen side remain subdued. Thus, the USD and risk sentiment remain the key drivers for USD-JPY.

Source: FxWire Pro

Morning Market Commentary 1-Aug-2014

 

INFOTRIE FinSentS logo

Morning News

Headlines

▪ Israel, Palestinian Militant Groups Begin Three-Day Gaza Truce

▪ Moody’s Changes Argentina’s Outlook To Negative

▪ DBRS Downgrades Republic Of Argentina To Selective Default

▪ Argentina’s Fernandez Denies S&P Default Ruling After Bonds Sink

▪ China Manufacturing PMI Strengthens To 18-Month High

▪ Spain Manufacturing PMI Eases From June’s 50-Month High

▪ Irish Output Growth Hits Three-Month High In July

▪ Swedish Manufacturing Output Rises In July

▪ G-7 Nations Said To Oppose New World Bank Russia Projects

▪ BoJ’s Kuroda Defends Upbeat Economic View Despite Soft Data

▪ Subdued Performance Of Japan’s Manufacturing Sector In July

▪ ArcelorMittal Cuts Outlook As Ore Prices Hit Mining

▪ France’s Iliad Challenges Sprint For Control Of T-Mobile

▪ SocGen Profit Rises 7.8% As Loan-Loss Provisions Decline

▪ Axa First-Half Profit Rose 22%, Led by Life & Savings

▪ Glencore Reaps $7 Bln From Las Bambas Mine Sale To China’s MMG

▪ British Airways Owner IAG Swings Into Profit

▪ RBS Warns Over ‘Adverse Impact’ Of Independence

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Leaders and Laggers

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Commentary

Euro Flows Reveal Shift In Sentiment As Losses Mount
The international appetite for euro-zone financial assets that underpinned the local currency the past two years is beginning to erode.

While broad data showing real-time flows into and out of the region’s stocks and bonds are hard to find, strategists point to items such as U.S. exchange-traded funds, which pulled $1.1 billion from European assets this month, the first outflow since April 2013. Bonds of Italy and Spain that yielded as much as 7.05 percentage points more than Treasuries two years ago now pay less than their U.S. counterparts, diminishing their appeal.

The result is the euro’s biggest monthly loss since February 2013, and Morgan Stanley said this week selling the 18-nation currency remains the surest bet in the developed world. Rather than a cause for concern, the European Central Bank may see weakness in the euro as a welcome development as it tries to avoid deflation and spur exports to boost the economy. (Businessweek – Continue Reading)

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Here Are Seven Ways Argentine Debt Crisis Could Get Fixed
For the second time in 13 years, Argentina is in default on foreign-currency debt. Government talks with holdout creditors from its original 2001 default, including Paul Singer’s Elliott Management Corp., aimed at averting the crisis ended without resolution. Local and international banks have come with their own proposals, so far without success.

So how will the situation get resolved? Here are seven possible outcomes:

1) Talks between Argentina and Elliott restart and progress to the point where the hedge fund asks a U.S. judge to delay a ruling that has blocked the government from making interest payments unless it first pays in full the firm and other creditors owed from the 2001 default. Such a decision would allow the government to resume debt payments, including $539 million in interest that was due July 30. Economy Minister Axel Kicillof said yesterday that he is willing to to meet again with the holdouts. U.S. Judge Thomas Griesa has called a hearing for the case in New York today. (Bloomberg – Continue Reading)

No-Exit Strategy May Be Fed Burden in Unwinding Stimulus
The Federal Reserve is trying to change as little as possible as it crafts its strategy to exit from record stimulus. The trouble is financial markets have changed so much that the still-developing plan may prove costly and ultimately unworkable.

The approach, sketched out in the minutes of the Fed’s June 17-18 meeting and in officials’ comments since then, retains a focus on the federal funds rate as the central bank’s target. Policy would continue to be conducted mainly through banks rather than via dealings with money-market funds.

“They don’t want to make wholesale changes in the way they interact with markets when they are going to have so many other issues in play” as they raise interest rates, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, who has been watching the Fed for three decades. (Businessweek – Continue Reading)

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Abenomics Charm Fades As Yields Signal Headwinds
Japan’s bond investors are mirroring voters in turning away from Prime Minister Shinzo Abe.

The nation’s implied forward yield, an indicator of traders’ expectations for the 10-year note rate in 2016, fell to 0.83 percent on July 29. That’s the lowest since the Bank of Japan announced record stimulus in April 2013, suggesting reduced bets that an improving economy will depress demand for the safety of sovereign debt.

BOJ Governor Haruhiko Kuroda’s outlook for the 2 percent inflation goal to be met around 2015 contrasts with market indicators signaling price growth of 1.2 percent over the next decade. Abe’s approval rating, which soared to 76 percent last year, plunged to the lowest since his election in December 2012 at 48 percent last month, a Nikkei newspaper survey showed. (Bloomberg – Continue Reading)

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Files and Links

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HEADLINES

Israel, Palestinian Militant Groups Begin Three-Day Gaza Truce

Moody’s Changes Argentina’s Outlook To Negative, Default Will Hasten Econ. Decline

DBRS Downgrades Republic Of Argentina To Selective Default

Argentina’s Fernandez Denies S&P Default Ruling After Bonds Sink

China HSBC Manufacturing PMI Jul F: 51.7 (est 52.0; prev 52.0)

Markit Spain Manufacturing PMI Jul: 53.9 (est 54.5; prev 54.6)

Ireland Investec Manufacturing PMI Jul: 55.4 (prev 55.3)

Swedish PMI Manufacturing Jul: 55.2 (est 54.9; prev 54.8)

G-7 Nations Said To Oppose New World Bank Russia Projects

BoJ’s Kuroda Defends Upbeat Economic View Despite Soft Data

Japan Markit/JMMA Manufacturing PMI Jul F: 50.5 (prev 50.8)

ArcelorMittal Cuts Outlook As Ore Prices Hit Mining

France’s Iliad Challenges Sprint For Control Of T-Mobile

SocGen Profit Rises 7.8% As Loan-Loss Provisions Decline

Axa First-Half Profit Rose 22%, Led by Life & Savings

Glencore Reaps $7 Bln From Las Bambas Mine Sale To China’s MMG

British Airways Owner IAG Swings Into Profit

RBS Warns Over ‘Adverse Impact’ Of Independence

Fiat Investors Vote On Chrysler Merger To Ease Access To Cash, US Investors

MARKET DATA

 

Morning Market Commentary 29-Jul-2014

 

INFOTRIE FinSentS logo

Morning News

Headlines

▪ S&P Affirms Ratings On Australia At ‘AAA/A-1+’

▪ BoE’s Broadbent: STG Fx Rate Is ‘Modestly Overvalued’

▪ German Import Prices Continue To Fall

▪ BoJ’s Ishida Upbeat On Export Outlook, Warns Of Structural Issues

▪ Japan Labour Demand Strengthens, Good Omen For Economic Recovery

▪ Japan June Retail Sales Fall 0.6% (YoY)

▪ Japan June Household Spending Falls 3% Vs Year Ago

▪ China Said To Allow Five Regions To Set Up Bad-Loan Managers

▪ Argentina To Hold Last-Gasp Debt Talks With Mediator Tuesday

▪ BP Profit Rises 34% In Second Quarter

▪ UBS Exceeds Q2 Estimates On Cost-Cutting

▪ Next Raises Profit Forecast After Strong Quarter

▪ Deutsche Bank Q2 Results Rise As Debt Trading Steady

▪ Renault Cost Cuts Lift Profit Despite Sales, Currency Decline

▪ Michelin Keeps 2014 Targets As First-Half Profits Rise

▪ Fonterra Slashes Forecast Payment to NZ Farmers; Kiwi Falls

▪ Klepierre And Corio To Create Retail Property Company In Europe

▪ Bank of Portugal Says BES Loss Can Be Remedied By Capital Hike

▪ Microsoft Targeted In Apparent Chinese Anti-Trust Probe

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Leaders and Laggers

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dax
ibex
ldn
omx
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Commentary

Geopolitical Risk Rises For Global Investors
Since the start of the year, conflicts in Syria, Gaza and Iraq have escalated, China has become more assertive in pursuing territorial claims against Japan, Thailand reverted to military rule, Russia annexed Crimea and separatists in Ukraine downed a civilian airliner.

These crises have had little lasting impact on major financial markets in the U.S., Europe and in Asia. Now Raj Hindocha, a managing director with Deutsche Bank Research in London, is warning that investors and money managers could be in for a rude awakening later this year.

Geopolitical risk is being underestimated and volatility suppressed, thanks in large part to the open monetary spigots at the U.S. Federal Reserve, European Central Bank and Bank of Japan, according to a recent report Hindocha co-authored. (Businessweek – Continue Reading)

Argentine Debt Defiance May Strengthen Holdouts’ Legal Position
Argentina has fought in court for a dozen years against the claims of holdout investors in its defaulted debt, and Argentina has lost. The holdouts, led by Paul Singer’s Elliott Capital Management and Mark Brodsky’s Aurelius Capital Management, are still waiting to collect a single penny or peso.

Argentina defied court-ordered demands to pay all its bondholders by a June 30 deadline, and a 30-day grace period runs out this week. Argentina says a payment to its trustee bank insulates it against charges it doesn’t pay its bills on time. It has described the holdouts as vultures and the judge who made the orders as unjust. The country has enough foreign currency to cover about five months’ worth of imports, and billions of dollars of debt coming due next year. Until it pays the holdouts, it will remain locked out of international capital markets.

Having talked itself into a corner, Argentina now has to either swallow its pride and pay the holdouts, or keep its pride, accept another default and face isolation and penury. Making things worse for President Cristina Kirchner and Economy Minister Axel Kicillof, continued refusal will likely end up strengthening Elliott and Aurelius, two distressed-debt specialists who haven’t amassed billions of dollars in assets by backing down from a fight. (Reuters – Continue Reading)

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China Trade Numbers Still Don’t Add Up Post-Fake Exports
China’s trade numbers still don’t add up.

A discrepancy between Hong Kong and Chinese figures for bilateral trade remains even after a crackdown last year on Chinese companies’ use of fake export-invoicing to evade limits on importing foreign currency. China recorded $1.31 of exports to Hong Kong in June for every $1 in imports Hong Kong tallied from China, for a $6.4 billion difference, based on government data compiled by Bloomberg News.

Analysts offered at least three possible explanations for the gap, including differences in how China and Hong Kong record trade in goods that pass through the city, as well as a persistence in fraud at a lower level. Any discrepancies make it tougher to gauge the impact of global demand on a Chinese economy that’s projected for the slowest growth in 24 years. (Bloomberg – Continue Reading)

BP’s Faustian Pact With Russia Goes Horribly Wrong With Yukos Verdict
The Permanent Court of Arbitration in The Hague has thrown the book at the Russian state, or more specifically at Vladimir Putin and his Soliviki circle from the security services.

The $51.5bn ruling against on the Kremlin unveiled this morning has no precedent in international law. The damages are 20 times larger than any previous verdict.

Lawyers for the Yukos-MGL-Khodorkovsky team tell me that they cannot pursue the foreign bond holdings of the Russian central bank if the Kremlin refuses to pay up when the deadline expires on January 15, as seems likely. Moscow has already dismissed the case as “politically motivated”. (Telegraph – Continue Reading)

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‘Every Little Helps’ For Lloyds Traders Rigging Benchmark Rates
For traders at Lloyds Banking Group Plc (LLOY), “every little helps” when rigging benchmark interest rates, according to transcripts of conversations released by regulators as part of the bank’s settlement.

The internal e-mails, telephone calls and instant messages, laced with expletives, show how rate-manipulation had become a common business practice at Britain’s biggest mortgage lender, according to the Financial Conduct Authority.

“It’s like Tescos,” one Lloyds trader responded when asked to make an artificially low submission to yen Libor in July 2007. “Absolutely, every little helps,” the manager replied, referring to a slogan used by Tesco Plc, Britain’s largest supermarket chain, to promote its discount offers. (Businessweek – Continue Reading)

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Files and Links

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HEADLINES

S&P Affirms Ratings On Australia At ‘AAA/A-1+’

BoE’s Broadbent: STG Fx Rate Is ‘Modestly Overvalued’

German Import Price Index (YoY): -1.20% (est -1.20% prev -2.10%)

BoJ’s Ishida Upbeat On Export Outlook, Warns Of Structural Issues

Japanese Jobless Rate Jun: 3.70% (est 3.50%; prev 3.50%)

Japan Retail Sales (YoY) Jun: -0.60% (est -0.50%; prev -0.40%)

Japanese Overall Household Spending (YoY): -3.00% (est -4.00%; prev -8.00%)

China Said To Allow Five Regions To Set Up Bad-Loan Managers

Argentina To Hold Last-Gasp Debt Talks With Mediator Tuesday

BP Profit Rises 34% In Q2

UBS Exceeds Q2 Estimates On Cost-Cutting

Next Raises Profit Forecast After Strong Quarter

Deutsche Bank Q2 Results Rise As Debt Trading Steady

Renault Cost Cuts Lift Profit Despite Sales, Currency Decline

Michelin Keeps 2014 Targets As First-Half Profits Rise

Fonterra Slashes Forecast Payment to NZ Farmers; Kiwi Falls

Bank of Portugal Says BES Loss Can Be Remedied By Capital Hike

Microsoft Targeted In Apparent Chinese Anti-Trust Probe

MARKET DATA

 

Quartz Weekend Brief—China v Japan, streaming music wars, Putin’s bubble, operatic racism

Quartz - qz.com
Good morning, Quartz readers!

While the the kinetic conflict in Ukraine and the Middle East have dominated this week’s news, a more subtle contest, between China and Japan, has been playing out on an unlikely stage: Latin America. The leaders of Asia’s two largest economies have been hopping across the region, seeking or cementing political alliances as well as new business deals.

Barely had Chinese president Xi Jinping headed home from a week-long trip to Brazil, Argentina, Venezuela and Cuba, when Japanese prime minister Shinzo Abe started his 11-day swing, which will take in Mexico, Trinidad & Tobago, Colombia, Chile and Brazil.

The Chinese media quickly declared Xi’s visit a grand success. The People’s Daily said it “not only fostered closer economic ties, but also led to many commercial contracts.” Expect similar triumphant proclamations from the Japanese media at the end of Abe’s trip.

While both Japan and China want stronger economic ties to a region rich in resources, they are also keen to broaden the nature of their relationships. Xi wants China to be seen as a major player in world affairs, and that means more than striking business deals. Abe is seeking international support for Japan’s long-standing ambition of joining the UN Security Council.  And although Latin America is an ocean away from the main theater of Sino-Japanese friction, the East China Sea, each leader is seeking sympathetic ears for his complaints about the other.

For Latin American nations, the heightened attention from the world’s second and third-largest economies is mostly welcome. But in political and territorial disputes, nobody really wants to pick sides between Beijing and Tokyo. Business deals will receive enthusiasm and fanfare; for the rest, polite nodding is the order of the day.—Bobby Ghosh

Five things on Quartz we especially liked

Who will win the streaming music wars? Will Spotify beat Pandora? Will Deezer surge ahead? Or will they all be swallowed up or steamrollered by a loss-leading music division of Apple, Amazon or Google? John McDuling examines the dynamics of a fragmented industry where only one or two big winners are likely to remain.

How to deal with opera’s inherent racism. A recent Seattle production of The Mikado is eliciting anger over “yellowface,” meaning white performers made up to look Japanese. Gwynn Guilford explores the history of the ethnic parodies that underpin many operas—and some ideas about how directors can treat them in a more modern way.

Ways for the West to put pressure on Russia. Gazprom, Russia’s gas monopoly, is losing its dominance as the state’s foreign-policy tool, but sanctions aimed at it could still bring pressure to bear, Steve LeVine writes. And Tim Fernholz explains how the Netherlands, as one of the chief offshore financial centers for Russian money, could do a little squeezing of its own.

Why Google will remain the king of search. The company’s share of US search queries continues to inch up, and its competitors are far behind. But as Dan Frommer explains, search is such a huge business that it makes more sense to start smaller search engines for specific niches than challenge Google head-on.

The US catches some of the world’s best salmon but eats some of the worst. Why are Americans eating bland, imported, farmed salmon when they could be feasting on the superb wild catches from their own rivers? Gwynn Guilford teases apart a paradox that’s the result of a curious mix of taste and economic history.

Five things elsewhere that made us smarter

A peek inside Putin’s bubble. Over several years of reporting, Ben Judah spoke with a wide range of current and former members of Vladimir Putin’s inner circle, assembling an engrossing, impressionistic account of the inscrutable Russian president’s daily routine for Newsweek. He paints a picture largely of monotony, paranoia, and isolation. “There are no stories of extravagance: only of loneliness.”

Le tour de malaise. In Der Spiegel, Alexander Smoltczyk traces the route of this year’s Tour de France, but cycling is not on his mind. He is on the road to chronicle the “new sick man of Europe,” speaking with anyone he bumps into about the “deep gloom” that seems to be gripping France. “The state is sick, the economy is sick, its education is sick and it is sick from an excessively glorified past that won’t go away,” says one particularly disgruntled Frenchman.

How John Kerry’s Middle East peace plan crumbled. This impressively detailed account of a year of diplomacy from Ben Birnbaum and Amir Tibon in the New Republic is a microcosm of every set of Israeli-Palestinian peace talks ever held, and shows the distrust, back-stabbing and communication breakdowns that have caused them to run aground.

Seeing war through food. National-security writer John Little interviews celebrity chef and TV host Anthony Bourdain, who has made an art of reporting on the cuisine of conflict zones. “Most people seem to be pretty nice—basically good people doing the best they can,” Bourdain says. “There is rarely, however, a neat takeaway. You have to learn to exercise a certain moral relativity.”

Where restaurant reservations come from. From, umm… the need to book a restaurant, right? The seemingly silly question has a much more complicated answer, discovers Alexis Madrigal in the Atlantic—probably stemming from the 19th century, when private rooms in restaurants were the place unmarried men and women could meet without offending public decency.

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